Brazil’s Lula Demands Long-Term Energy Planning

Text of report by Brazilian news agency Estado

[By Tania Monteiro: "Brazil Demands Energy Planning, Rejects Giving Aid to Countries" - Agencia Estado Headline]

Buenos Aires – At the first meeting by the working group consisting of Argentine, Brazilian, and Bolivian ministers to discuss the energy shortage in the region, the Brazilian Government is going to demand up-to-date information on each country’s production and needs. During his visit to Buenos Aires on Friday and Saturday to discuss the problem, President Luiz Inacio Lula da Silva demanded missing information and insisted that the working group needs to think about medium-and long-term actions rather than restricting itself to immediate needs such as the one leading Argentina to ask Brazil to give up some of the 31 million cubic meters of gas it imports from Bolivia. Brazil rejected the request, and according to members of the Brazilian delegation, Lula wants the matter closed.

At a meeting with Presidents Cristina Kirchner of Argentina and Evo Morales of Bolivia early Saturday afternoon, Lula insisted that it is not possible to discuss the lack of gas and the energy shortages “when the problem is imminent.” The president said that instead of solutions for the moment, a strategic energy policy for the region needs to be worked out. And to do that, he said, it is essential to have reliable information on production and demand. Brazilian negotiators mentioned, for example, that there are differing data on Bolivian gas production. There is talk of 39 million cubic meters per day, 42 million, and even 45 million.

Argentina signed an agreement with Bolivia in 2006 to receive 7.7 million cubic meters of gas per day, but President Evo Morales has already made it clear that there is no way he can keep that promise. Morales took Cristina Kirchner’s side and called for a revision of the gas quotas distributed to Argentina and Brazil. President Lula said, however, that the Brazilian economy was growing and that a booming industry prevents the government from transferring part of the gas it receives from Bolivia. Instead of gas, Brazil offered to transfer electricity to Argentina during the winter months, when there will be a risk of shortages in that neighbouring country.

Evo Morales’s presence at Saturday’s meeting at the Argentine president’s invitation surprised the Brazilian delegation even though it was part of the official schedule. The ministers and President Lula himself had understood that the Bolivian president was to be absent and that his presence was not necessary. The Brazilian delegation said that although Bolivian gas was the subject, the impasse concerned only Brazil and Argentina.

According to negotiators contacted by the Estado Group, Evo Morales was expecting to sell the gas to Argentina at a higher price. In the Brazilian delegation’s understanding, Morales had joined with Cristina Kirchner in an attempt to “corner” Brazil, but the strategy did not work. The Brazilians feel that by allying himself with Cristina Kirchner, Evo Morales did not take into account the fact that Brazil, acting through Petrobras, has investments in Bolivia that are crucial to the expansion of gas exploitation in that country.

On returning to Brazil, Lula praised the performance of Minister of Mines and Energy Edison Lobao in the negotiations with Argentina. The president liked the arguments presented by Lobao, who said that Brazilian industry has an absolute need for all the gas that Brazil imports from Bolivia. The president commented that it was necessary to set aside once and for all the talk about the immediate energy problem and deal with the issue in a structural manner.

The meeting by the working group set up last Saturday will take place within 10 days in La Paz. The site of the meetings will alternate among the three countries, and each meeting will be attended by the president of the host country. The objective is to impart a political rather than just a technical character to the group that will discuss the production and distribution of energy in the region.

Originally published by Agencia Estado news agency, Sao Paulo, in Portuguese 1855 24 Feb 08.

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