President Hugo Chavez has been vigorously boosting his ambitious plans to produce ethanol as the eco-fuel of choice in recent times. However, it suddenly emerged as a major point of disagreement with Brazilian leader Luiz Inacio Lula da Silva. The dispute was triggered to some extent by a US-Brazil ethanol agreement signed last month. Chavez had last week stated that Venezuela was contemplating an alternative proposal to ‘overthrow’ the U.S.-Brazil agreement, which he describes as an ethanol cartel that will monopolize arable lands and starve the poor.
The US and Brazil, the world’s two largest producers of ethanol, signed an ‘alliance’ last month to promote ethanol production in the region and create international quality standards to allow it to be traded as a commodity like oil. Along with Chavez, his Cuban ally Fidel Castro has also warned increased ethanol production would fuel global hunger by using up arable land needed for food production.
The Venezuelan president has made his line of attack very distinct saying, ‘We will never fight with Lula, we will never fight with Brazil. Our enemy is the US empire. The issue is not ethanol as an additive. The issue is the U.S. empire wanting to substitute gasoline with ethanol. That’s crazy.’ In fact, Venezuela itself planning to increase its own ethanol production for use as a fuel additive and consequently reducing dependence on Brazilian imports. Venezuela’s $900 million plan envisions becoming self-sufficient in ethanol by 2012 by planting 300,000 hectares of sugar cane, manioc and rice and building up to 17 processing plants.
However, Chavez has criticized Bush’s plan accusing that it is already pushing up the price of corn and sugar in the region. Brazil, the biggest Latin American economy, is one of the world’s largest exporters of ethanol, and total ethanol shipments from Brazil may shot up more than triple in eight years as production exceeds domestic demand, according to Brazil’s agriculture ministry data. Brazil and the US constitutes for almost 70 percent of the world’s ethanol production.
South American leaders have gathered to discuss energy integration projects at a two-day summit hosted by Hugo Chavez on Venezuela’s Margarita Island. These leaders will also discuss ethanol, a biofuel whose global production is dominated by Brazil and the US, along the accord signed by the twocountries last month. In fact, Brazil’s sugar cane-based ethanol is far cheaper to produce compared with the US variety made from corn, although gaining access to the huge US market is entirely depends on convincing Bush and the US Congress to reduce tariffs.
