Venezuela’s Chavez shifts ethanol stance |

Venezuela’s Chavez shifts ethanol stance

PORLAMAR, Venezuela – Venezuela President Hugo Chavez appeared to soften his opposition to a U.S.-Brazil ethanol deal Tuesday after running up against a staunchly defiant Brazil.Chavez insisted that he doesn’t object to ethanol, which the U.S. and Brazil have agreed to jointly promote, but that he does oppose U.S. plans to step up production of ethanol made from corn. He called it “taking corn away from people and the food chain to feed automobiles – a terrible thing.”He said he has no objection to Brazilian ethanol produced with sugar cane.”We aren’t against biofuels,” Chavez said at a two-day South American energy summit that ended Tuesday. “In fact we want to import ethanol from Brazil.” He said Venezuela needs some 200,000 barrels of ethanol a day to be used as a fuel additive.He also urged the U.S. to lower tariffs on Brazilian ethanol made from sugar cane, a point that has been pressed with Washington by Brazilian President Luiz Inacio Lula da Silva.Chavez came out harshly against a U.S.-Brazil pact last month to promote ethanol’s production in Latin America, warning that rampant production would monopolize cropland and starve the poor. He also raised concerns shared by experts that all the arable land on Earth cannot not meet the full world demand for fuel.Those criticisms were dismissed by the president of Brazil, where about eight out of every 10 new cars are “flex fuel” vehicles that can run on gasoline, ethanol or any combination of the two.”The truth is that biofuel is a way out for the poor countries of the world,” Silva told reporters after the summit. “The problem of food in the world now is not lack of production of food. It’s a lack of income for people to buy food.”A joint summit declaration traced a middle ground, recognizing “the potential of biofuels to diversify South America’s energy matrix” but also stressing the importance a balance with agricultural production and environmental preservation.Amid the differences, Chavez has gradually modified his criticisms, insisting that Brazil’s ethanol plans are fundamentally different from Washington’s.David Fleischer, a political scientist at Brazil’s University of Brasilia, said Chavez appeared to backtrack in order to avoid a confrontation with Brazil.”Chavez was convinced to back off,” Fleischer said. “His main problem is with (U.S. President) Bush.”Chavez denied shifting his position, saying, “We have always said that the bio-ethanol project … that Brazil has had for more than 30 years is very different … from the madness that the U.S. president has proposed. It’s completely the opposite.”Officials from a dozen South American countries attended the summit on Margarita Island, where Chavez was seeking support for a South American natural gas pipeline and other energy projects.Silva said leaders did not discuss the proposed creation of an OPEC-like cartel for natural gas.Silva also questioned the purpose of a Chavez-backed proposal for a regional development bank, asking how it would distinguish itself from established lenders such as the International Monetary Fund, World Bank or Brazil’s own national development bank.”First, we have to decide why we want such a bank, what is its role, in order to tell whether it is worthwhile to participate,” Silva told reporters.Chavez proposed a South American “energy treaty” based on four strategic areas: oil, natural gas, alternative energy, and energy conservation. He said the leaders agreed to create a South American energy council to oversee those plans.Chavez invited South American companies to invest in oil exploration projects in Venezuela’s Orinoco River region, saying the investments would be used to create a $5 billion development fund.—Associated Press writers Natalie Obiko Pearson, in Caracas, Venezuela, and Vivian Sequera, in Brasilia, Brazil, contributed to this report.

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