Lula and Chavez in ethanol rift

“We have a huge territory, not only in Brazil, but in all South American countries, and Africa, which can easily produce oil seeds for biodiesel, sugar cane for ethanol, and food at the same time,” he said on his weekly radio show before arriving at the two-day, 12-nation summit.

 

The United States and Brazil are the world’s two biggest producers of ethanol – the alcohol-based fuel made from crops such as sugarcane 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.

 

 

Venezuela, the fifth-largest exporter of oil to the US, has urged Latin America to pass over ethanol and instead rely on its vast oil reserves and co-operate in developing ways to reduce energy consumption.

 

US demand for corn-based ethanol has raised prices and sparked protests in Mexico [Reuters]

Chavez has not said what he would do to oppose that plan, other than allude to his lobbying efforts against other US-proposed trade agreements.

 

In public, Chavez and da Silva shared hugs, smiles and quips about football as they toured of a Brazilian-Venezuelan petrochemical project before they flew to the Caribbean tourist island of Margarita for the summit.

 

But they also said they wanted to discuss ethanol behind closed doors. Da Silva’s foreign policy adviser played down the differences and urged the continent to harness both fossil and biofuels for economic development.

 

“If we are intelligent in making this combination, we will completely transform South America into the world’s biggest energy power,” Marco Aurelio Garcia said.

 

Chavez wants the South American summit to focus on regional integration as a counterweight to the US and can expect support from the leaders of countries such as Bolivia and Ecuador.

 

“We are above all South – South – Americans … and we should put all efforts into creating the great homeland that is South America,” he told presidents from the region in a speech denouncing what he said was the US colonialism of the North.