Friction Between Chavez, Silva on Energy

By NATALIE OBIKO PEARSON

CARACAS, Venezuela – A pointed disagreement over ethanol is creating friction between Venezuelan President Hugo Chavez and his Brazilian counterpart as they join leaders from across the region Monday for a South American energy summit.

The dispute – framed by a U.S.-Brazil ethanol agreement and Chavez’s staunch anti-U.S. politics – appears likely to be a major point of debate at the summit, where Chavez will be seeking support for projects ranging from a regional bank to a natural gas group similar to the Organization of Petroleum Exporting Countries aimed at reducing Washington’s influence in Latin America.

The U.S. and Brazil are the world’s two biggest producers of ethanol – an alcohol-based fuel made from crops such as sugar cane or corn. They signed an “alliance” last month to promote its production in the region and create international quality standards to allow it to be traded as a commodity like oil.

Chavez said last week that Venezuela was working on an alternative proposal to “overthrow” the U.S.-Brazil agreement, which he characterizes as an ethanol “cartel” that will monopolize arable lands and starve the poor – criticisms shared by his Cuban ally, Fidel Castro.

“Bush’s plan is impossible,” Chavez said Sunday during his television and radio program.

Chavez has not said what he would do to undermine the plan, other than allude to his lobbying efforts against other U.S.-proposed trade agreements.

Leaders of Brazil, Argentina, Chile, Colombia, Ecuador, Paraguay and Bolivia are attending the summit, where Chavez will likely push his favored energy proposals: a South American gas pipeline, an alliance modeled after OPEC to promote “a fair price” for natural gas, and a regional “Bank of the South” that could provide an alternative to Washington-backed lenders such as the International Monetary Fund and World Bank.

On ethanol, though, Brazil’s interests appear to lie in its agreement with the U.S., despite Chavez’s disapproval.

“Brazil’s energy options should not be converted into a platform for political-ideological discussion as though there were two opposing camps in the Americas,” Marco Aurelio Garcia, a special adviser to Brazilian President Luiz Inacio Lula da Silva, wrote in a column published in Venezuelan newspapers Friday.

The Brazilian government said in a statement that one key aim of this week’s talks is to deepen dialogue toward regional integration begun at a January meeting of the Mercosur trade bloc in Rio de Janeiro. Those talks were marked by public spats over how best to move toward integration.

Despite Chavez’s criticisms of promoting ethanol as a substitute for gasoline, Venezuela still plans to expand its own ethanol production for use as a fuel additive. Venezuela’s $900 million plan envisions becoming self-sufficient in ethanol by 2012 by planting 740,000 acres of sugar cane, manioc and rice and building up to 17 processing plants.

Chavez denies any conflict with Silva, and Garcia in turn said the Brazilian leader is coming to the summit on Venezuela’s Margarita Island “in peace and love,” to promote ethanol “not as an ideological fuel, but simply a fuel.”

Chavez and Silva plan to meet before the summit Monday morning at a ceremony marking the start of construction of a petrochemical complex involving the Brazilian company Braskem and Pequiven, a division of Venezuela’s state oil company.

—

Associated Press Writers Alan Clendenning in Sao Paulo, Brazil, and Eva Vergara in Santiago, Chile, contributed to this report.