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South American presidents agree to form strategic energy alliance
Venezuela's President Hugo Chavez, and Argentina's President Nestor Kirchner, Ecuador's President Rafael Correa, Brazil's President Luiz Inacio Lula da Silva, Paraguay's President Nicanor Duarte and Bolivia's President Evo Morales gather at the Energy Summit in Isla Margarita April 16, 2007.
AFP
Porlamar, Margarita Island, Venezuela
Petroleumworld.com 04 18 07
South American leaders agreed at a summit in Venezuela Tuesday to form a strategic alliance to ensure energy security in the region.
The daylong presidential summit on Margarita island concluded with a consensual agreement to create a South American Energy Council.
"I believe the bases are being set for a South American agreement that includes the issues of oil, natural gas, alternative fuels, fuels based on agricultural product, the question of hydro-electric energy, and the issue of interconnection," said Colombian President Alvaro Uribe.
During the summit, Venezuelan President Hugo Chavez tempered his criticism of plans to promote ethanol, announced by Brazil and the United States last month.
"We want to clarify that we are not against biofuels," said Chavez, who had earlier lashed out at a US-Brazilian agreement to promote the use of ethanol, whose global production both countries dominate.
Chavez stressed that Venezuela, the only Latin American member of the Organization of the Petroleum Exporting Countries (OPEC,) needs 200,000 barrels a day of ethanol to inject into its gasoline. But he has insisted that substituting gasoline with ethanol would fuel global hunger by using up arable land needed for food production.
He said the use of biofuels was acceptable as long as it did not "take corn away from people ... to feed cars."
The United States produces ethanol from corn, while Brazil mainly uses sugarcane.
A top aide of Brazilian President Luiz Inacio Lula Da Silva said ahead of the summit that the "tone of the debate" on biofuel had eased. "The temperature went down and today we have the possibility of holding a more rational discussion," said Marco Aurelio Garcia.
But another rift emerged as Argentina, Venezuela and Bolivia outlined their plans to form an OPEC-like group of South American natural gas exporters they said would eventually include other countries and gradually gain international clout.
"I believe we will eventually move from regional markets to a global gas market, and that is when it would be important to have price targets so that prices can be regulated at a global level," said Bolivian Hydrocarbons Minister Carlos Villegas.
Brazil was critical of the proposal, with Brazilian Energy Minister Sillas Rondeau saying: "I have said from the start I do not agree with a segregation between gas producers and consumers."
Lula stressed the proposal was not officially discussed during the summit, and does not figure in the final statement, though he made it clear separate talks were held on the sidelines of the meeting.
Venezuela and Bolivia have the largest reserves of natural gas in Latin America, while Brazil imports half its gas needs, or about 30 million cubic meters (1,000 cubic feet) a day, from Bolivia.
The national leaders at the summit also discussed big-ticket regional projects, several of which are promoted by oil-rich Venezuela.
Uribe said he expected a project to build a natural gas pipeline between Venezuela and Colombia would be approved in August.
The pipeline would initially carry gas from Colombia to the Venezuelan city of Maracaibo.
"Later, Venezuela, with its vast gas reserves, can supply Colombia, and we have reiterated to President Chavez the offer to extend the pipeline to Panama," said Uribe.
On the eve of the the summit, Chavez and Lula laid the cornerstone of a bilateral complex that will produce polyethylene and polypropylene.
The presidents of Argentina, Brasil, Bolivia, Colombia, Chile, Ecuador, Paraguay and Venezuela took part in the gathering as did the prime minister of Guyana and the vice president of Uruguay.
Noted for his absence was Peru's President Alan Garcia, a fierce critic of Venezuela's firebrand leftist leader.
AFP 17 2100 GMT 04 07
Copyright© 2007 AFP. All Rights Reserved.
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