Leaders Meet in Venezuela for First South American Energy Summit

In the spirit of integration, 10 presidents of South America met this Monday and Tuesday at the first South American Energy Summit to design an energy strategy for the region. The leaders met on the Venezuelan island of Margarita.


Mérida, April 18, 2007 (venezuelanalysis.com)– In the spirit of integration, 10 presidents of South America met this Monday and Tuesday at the first South American Energy Summit to design an energy strategy for the region. On the Venezuelan island of Margarita, the leaders of the region discussed plans for a regional gas pipeline, the development of biofuel, the creation of the Bank of the South, and the unification of South America. Venezuela and Brazil also launched a joint petrochemical plant in the eastern part of the country.

The Union of South American Nations (Unasur) is the name that the leaders decided to give to the group of countries who will work together for the development of the continent. 10 of the 12 South American presidents attended the Summit including Hugo Chavez of Venezuela, Nestor Kirchner of Argentina, Luiz Inácio Lula da Silva of Brazil, Evo Morales of Bolivia, Rafael Correa of Ecuador, Álvaro Uribe of Colombia, Michelle Bachelet of Chile, Nestor Duarte of Paraguay, and the Prime Ministers of Guayana, Sam Hinds, and of Surinam, Gregory Rusland. Only Tabaré Vázquez of Uruguay and Alan García of Peru were not present.

The next step in the formation of the Union of South American Nations will be the election of a Permanent Executive Secretary. The headquarters of the new institution will be located in Quito, Ecuador, according to initial announcements.

Among the topics discussed was Hugo Chávez´ proposal for a “South American Energy Treaty” in order to guarantee energy, gas, petroleum and alternative fuels to the region for the next 100 years. Chávez warned of the growing energy needs in the future, predicting that by 2020 consumption will have grown by 47 percent in Latin America.

“That requires that we make decisions today, and agreements between countries and oil companies,” he said.

As an integral part of their plans the leaders discussed the construction of the gas pipeline known as the Great Gas Pipeline of the South, and the Trans-Caribbean Pipeline.  With these pipelines Venezuela seeks to supply the region with their gas reserves, beginning with Brazil. The Great Gas Pipeline of the South, which has created doubts about its viability and its environmental impact, will have a length of 8,000 kilometers and will require an estimated investment of about 23 billion dollars.

Regarding the recent controversy surrounding the topic of ethanol, the leaders managed to come to an agreement and resolve the differences between Venezuela and Brazil. After the Brazilian president Lula da Silva launched a plan with U.S. President George W.Bush to produce ethanol, Hugo Chávez and Fidel Castro criticized the plan pointing out that the production of ethanol could reduce the amount of fertile land allocated to produce food. But official sources said that the countries had come to a general agreement regarding the topic.

“Ethanol is important in light of the world energy crisis,” said Venezuela’s Hugo Chávez. “We have never denied it, we’ve just warned about Bush’s proposal.” The Venezuelan president assured that ethanol is an alternative fuel that can complement traditional fuels like gasoline, but it would be “absolutely impossible” to use it as a replacement for gasoline as Bush proposes.

Affirming the strong ties between their two countries, Chávez and Lula began the Summit’s activities with the inauguration of a bi-national petrochemical plant. Accompanied by Evo Morales of Bolivia and Nicanor Duarte of Paraguay, Lula and Chávez celebrated the founding of the plant which will be a joint project between the Venezuelan state-owned Pequiven and the Brazilian private company Braskem, an affiliate of the Brazilian multinational Odebrecht.

“We have signed with Braskem like brothers 50-50,” said Chávez, who made an exception with the Brazilian company given that the Venezuelan government has reserved majority control with all other private oil and gas companies. Although Chávez did state that “Venezuela will maintain strategic control” of the project.

Among other topics discussed at the energy summit were the Bank of the South and the Oppegasur gas cartel.  Venezueala hopes “to consolidate” the Bank of the South with the recent addition of Brazil. The addition of Brazil’s 100 billion dollars in reserves will be significant for the multinational fund comprised of Venezuela, Argentina, Bolivia, Ecuador, and now Brazil. The purpose of the fund will be to finance regional development and combat poverty in South America.

The South American Organization of Gas Producers and Exporters (Oppegasur) was discussed between leaders from Argentina, Brazil, Bolivia, Ecuador, Paraguay, Venezuela, Surinam and Guyana. The project was put together in March between Venezuela, Bolivia and Argentina as a sort of natural gas cartel similar to OPEC for petroleum. The purpose of the organization, being promoted by Venezuela’s Oil Minister Rafael Ramirez, would be regional cooperation in the gas sector, technology transfer and exchange for the development of the gas industry.