Venezuela’s Mega Gas Pipeline Plans Held Up

The South American mega-pipeline project to transport natural gas from the Caribbean to the River Plate, supplying a large part of Brazil en route, "has cooled down because of attacks from within South America itself" and due to attempts by the United States to delay the plans, complained Venezuelan President Hugo Chávez.

CARACAS, Aug 2 (IPS) – The South American mega-pipeline project to transport natural gas from the Caribbean to the River Plate, supplying a large part of Brazil en route, “has cooled down because of attacks from within South America itself” and due to attempts by the United States to delay the plans, complained Venezuelan President Hugo Chávez.

The massive project was launched in Rio de Janeiro in April 2006 by Chávez and Presidents Luiz Inácio Lula da Silva of Brazil and Néstor Kirchner of Argentina. The cost of laying 8,000 kilometres of pipeline to link their three countries as well as Paraguay, Uruguay, Peru and Ecuador, is estimated at 25 billion dollars.

The pipeline would either cross Brazil’s Amazon region or skirt it on the eastern side, and should be capable of carrying 150 million cubic metres a day, equivalent to nearly half of Venezuela’s current consumption of natural gas, from the northeast of Venezuela to the main urban and industrial centres of the countries to the south.

“Fortunately for Latin America, Venezuela has one of the largest gas reserves in the world. The gas here will last a century,” said Chávez last week at a rally of his supporters, west of Caracas.

Venezuela’s gas reserves are estimated at 150 trillion cubic feet, ranking it ninth in the world, but most of its gas is associated with crude oil, which would have to be pumped out to extract the gas. Bolivia has South America’s second largest natural gas reserves, 52 trillion cubic feet, but this is non-associated or free gas.

The initial enthusiasm for the pipeline, which according to the agreement reached in Rio de Janeiro should have been presented to the other South American governments in September, gave way to extended periods between meetings, more time taken for further study of the project, and official silence on the matter.

“We cannot force anybody” to participate in the pipeline project, said Chávez, who added that the proposal had been offered out of a desire for regional cooperation, because “if I were thinking only of money, we’d sell (the gas) to North America.”

The environmental organisation Friends of the Great Savannah (AMIGRANSA), a gigantic national park in southeastern Venezuela, was jubilant. “Fortunately everything that was said about this inviable giant plan was confirmed by the South American experts who did the feasibility study,” the group said.

Alicia García of AMIGRANSA told IPS, however, that “if we look at things from an optimistic standpoint, perhaps President Chávez has information about the impracticability of the gas pipeline; but if we’re pessimistic, perhaps he is putting pressure on his partners to give it their full backing.”

Chávez is scheduled to meet with Kirchner next week. But his description of the mega- pipeline project as having “cooled down” came after Venezuelan Energy Minister Rafael Ramírez met with the Argentine president.

According to reports from the South American governments concerned, seven groups of experts, a total of about 50 people, were studying the economic and technical feasibility of the pipeline as well as engineering aspects, the projected route, the financing, and environmental and social aspects.

Chávez’s disappointment reflects the stagnation of the meetings and studies to make the project a reality, and seems to indicate that the pipeline’s critics were right.

“Even without taking into account the environmental problems or profitability, the project is impossible because Venezuela does not now have the gas to supply it,” Luis Giusti, former president of the state oil company (PDVSA), told IPS, a few hours before Chávez announced the difficulties.

The project has been harshly criticised over the past year, even by those intended to be its beneficiaries.

“It doesn’t make economic sense, it crosses many rivers and forests making it impossible to calculate its cost, and the Venezuelan gas delivered to Argentina would be too expensive,” said the energy secretary of the Brazilian state of Rio de Janeiro, Wagner Victer.

In spite of the political alliance between La Paz and Caracas, the Bolivian deputy minister of hydrocarbons, Julio Gómez, said as early as April 2006 that the gas pipeline “is a crazy project, sheer madness.” The Bolivian parliament also called it “unfair competition” or dumping by Venezuela against Bolivia’s efforts to achieve higher prices for its gas.

But the fiercest battle has been waged by environmentalists, who collected signatures in four continents to appeal to the governments to ditch the project. Letters to presidents, signed by AMIGRANSA, were delivered on the occasion of the South American Energy Summit held in Venezuela in April.

“Integration of our peoples requires a paradigm shift away from the development model dependent on fossil fuels that has been imposed on our civilisation,” said AMIGRANSA’s letter, which argued that the project would “increase our environmental and social debt and, therefore, poverty.”

Laying the pipeline and building the roads and facilities required for its maintenance “would be the final step in the destruction of the Amazon jungle, Venezuela’s Guayana region, and many ecosystems on the Caribbean and Atlantic coasts, creating an imminent risk in the region with devastating consequences for the planet,” the environmentalists said.

Chávez’s complaints about the pipeline may lead to new friction as blame is allocated between Brazil and Venezuela.

“Nothing and no one will manage to separate us,” Chávez has often repeated about his political alliance with Lula, although so far this year Caracas and Brasilia have had several visible differences.

The first, also an energy-related issue, was over the agreement between the United States and Brazil to develop production and the global market for ethanol as an alternative fuel to gasoline, an option criticised by Chávez and Cuban President Fidel Castro as detrimental to the interests of humanity which, they argue, is in need of food crops rather than biofuels.

The two presidents have also clashed over the entry procedures to admit Venezuela to full membership of the Southern Common Market (MERCOSUR), which originated as an association between Argentina, Brazil, Paraguay and Uruguay.

And Lula rebuked Chávez for calling the Brazilian parliament “parrots of the empire (the U.S.)” when some lawmakers criticised Caracas for not renewing the broadcasting license of a private television station opposed to his government. Brazil has still not ratified Venezuela’s entry to MERCOSUR.