[A-List] Venezuela: Chávez vs. US on ethanol

[Michael Keaney]

Chávez seeks to defuse Brazil rift on ethanol
By Benedict Mander on Margarita Island
Financial Times: April 18 2007

Hugo Chávez, Venezuela's president, on Tuesday sought to patch up
relations with Brazil following tensions generated by his criticisms of
a US-Brazil ethanol pact agreed last month.

Mr Chávez, hosting a South American energy summit, said he objected only
to the US method of making ethanol with corn. Brazil uses sugar cane to
produce the alternative fuel.

He said the US was "taking corn away from people and the food chain to
feed cars - a terrible thing" which was already having an impact.

"We are not against biofuels. Instead, we want to import ethanol from
Brazil, and without tariffs," the Venezuelan leader said.

"Lula, I ask you to sell to us at the best possible price for the next
10 years," he added, in an aside to Luiz Inácio Lula da Silva, the
Brazilian president.

Venezuela needs to import 200,000 barrels of ethanol a day, according to
Mr Chávez.

Last month he warned that the US-Brazil agreement, which aims to boost
regional ethanol production, would leave less land available for growing
food, which would in turn complicate the fight against poverty. His
Cuban ally, Fidel Castro, has criticised the US's ethanol plans as
"genocidal".

However, Marco Aurelio Garcia, Mr Lula da Silva's adviser, said on
Monday: "Nobody stops eating because of a shortage of food. People stop
eating due to a lack of income. That's the fundamental issue."

Mr Chávez asked Mr Lula da Silva to intervene with the US so that
Caracas could send ethanol made from sugar cane to its eight refineries
in the US run by Citgo, which belongs to Venezuela's state-owned oil
company PDVSA.

The US produces 20bn litres of corn-based ethanol a year, while Brazil
produces 17bn litres a year made from sugar cane - together accounting
for two thirds of the world's ethanol production.

At the summit, Brazil's energy minister, Silas Rondeau, blocked a
proposal by Venezuela and Bolivia to include a warning in the final
declaration about the effect the production of biofuels could have on
agricultural production and deforestation.

Mr Chávez spoke at the summit of a natural gas "alliance" that would
include building more regasification plants in the region as well as
three pipelines - one stretching from Venezuela to Argentina, another
traversing the Andes, as well as a pipeline between Colombia and
Venezuela, which will be inaugurated in August.

Less progress was made in establishing the "Bank of the South", whose
main proponents are Venezuela and Argentina. Brazil asked to be more
actively involved in plans.


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