Chavez Denies `Ethanol War' Divides Venezuela, Brazil

Presidents Nicanor Duarte of Paraguay, Luiz Inacio Lula da Silva of Brazil, Hugo Chavez of Venezuela and Evo Morales of Bolivia join hands at the petrochemical complex of Jose in Venezuela's eastern city of Barcelona April 16.

Despite the proliferation of words like "dispute" and "public spat" in MSM descriptions of the energy policies of Brazil and Venezuela in recent days, the reality is nothing of the sort. The media has long tried to create division in Latin America, obviously afraid at the growing chorus of unity and independence. We saw this last when Lula was supposedly bad mouthing Chavez in privite around election time, only to make a trip to Venezuela (and hugging Chavez) his first event after being elected. Today the issue is ethanol, which most reporters apparently can not conceive as both a good and bad energy source. Good, if properly applied as an additive to gasoline utilizing sugar cane. Bad if meant to compensate for unchecked energy use of the world's largest energy user and utilizing inefficent corn and other food supplies.

By Theresa Bradley and Alex Kennedy
April 17 (Bloomberg) -- Venezuelan President Hugo Chavez denied that Latin American leaders are at an impasse over conflicting Venezuelan and Brazilian goals for supplementing oil production with ethanol output in the region.

``The press is saying there's an ethanol war,'' Chavez said at the first South American Energy Summit in Porlamar, Veneuela, today. ``No. Ethanol is a valid strategy as long as it doesn't affect food production.''

Chavez called for the construction of 13 new Latin American oil refineries to slash reliance on U.S. plants, suggesting that ethanol factories be built next door to boost output of hybrid gasoline, rather than ethanol alone. Chavez has dismissed an ethanol accord signed last month by President George W. Bush and Brazilian President Luiz Inacio Lula da Silva as ``craziness'' destined to misdirect agricultural resources.

Ministers from 11 nations debated regional biofuel goals for 11 straight hours at the summit yesterday. One point of contention is Brazil's agreement last month with the U.S. to boost energy supplies by lifting output of ethanol derived from sugarcane. Venezuelan President Hugo Chavez has said the deal will tighten the U.S. grip on Latin America's resources and that mass output of biofuels will drain food supplies and increase poverty.

Chavez also today invited governments from the 11 nations attending this week's summit to form joint ventures in Venezuela's heavy-crude rich Orinoco Belt region, where his administration is pushing out private, foreign stakeholders in favor of state-run joint enterprises. Venezuela is the world's eighth largest exporter of crude; Brazil is the world's largest exporter of ethanol.