Chavez, Castro bash U.S. ethanol plan

The Latin American leaders say President Bush's push for biofuels takes food from mouths.

Published May 15, 2007

MIAMI - U.S. foreign policy has always gotten its fair share of abuse from Latin America. Some of it - the Bay of Pigs, Iran-Contra and support for a litany of dictators - may be well deserved.

But the latest controversy is perhaps harder to fathom: President Bush's support for alternative energy.

Venezuelan President Hugo Chavez and Cuba's ailing leader, Fidel Castro, have repeatedly attacked Bush's proposal to promote the hemisphere-wide production of ethanol from crops such as corn and sugar. They decry the idea as "crazy, " "sinister, " "tragic" and even a threat to the human species.

"Taking corn away from people and the food chain to feed automobiles" is "a terrible thing, " Chavez said recently.

Biofuels as a substitute for gasoline is fast becoming a major global issue, dubbed the "food-vs.-fuel" debate. But in Latin America, it carries with it heavy political overtones due to Chavez's rising regional influence at the helm of a petroleum powerhouse.

"Chavez wants to use his oil to be more relied upon politically, " said Peter Sommer, commercial manager for Latin America Exploration and Production with Chevron Corp. "He wants everyone to be indebted to him so he can be crowned king of Latin America."

Chavez's petro-diplomacy has earned him extraordinary influence in some countries, principally Bolivia and Ecuador. But U.S. officials deny Bush's biofuels policy is designed to counter Chavez's influence.

"The U.S. and Brazil are both ethanol powers. It's not something we came up with in the last couple of years, " said Matt McManus, a senior State Department official handling energy issues, speaking recently at a packed conference organized by the University of Miami’s Center for Hemispheric Policy.

McManus said the key issue driving U.S. policy was national security. "We are the most oil dependent country in the world, " he said. "That's why ethanol is so important."

Oil imports are responsible for 36 percent of the U.S. trade deficit more than $60-billion a month, McManus said, and that share is rising due to the high price of oil. Because some 80 percent of the world's oil reserves is in the hands of state oil companies, the United States is vulnerable to geopolitical threats. "We have limited access to those reserves, " he said.

Still, Bush administration officials are quick to recognize the political spinoff from biofuels in Latin America, at a time when U.S. influence there has waned.

Ethanol and its sister, biodiesel (made with various seed or plant oils), can create thousands of new jobs stimulating rural development throughout the hemisphere, they say. Latin America's poor, who are fertile recruiting ground for anti-American populists, might be encouraged to rethink their attitude toward Washington.

Until recently, biofuels had been a word barely heard, let alone comprehended, in the hemisphere. The exception is Brazil, which has spent decades quietly developing a huge ethanol industry.

In his January State of the Union address, Bush surprised experts by announcing that he wanted to reduce America's dependence on foreign oil by increasing consumption of biofuels to 35-billion gallons by 2017.

It took a while for the significance of Bush's new "passion" to sink in with his perennial detractors. That changed quickly when the White House announced that Bush would travel to Brazil in early March to sign a biofuels cooperation agreement with Brazilian President Luiz Inacio Lula da Silva, a lifelong leftist and political ally of Castro.

Chavez and Castro framed the debate as one between food security for poor nations and energy security for the world's richest. Most of the hostility was directed at the U.S. method of making ethanol from corn, a food staple.

In one of several articles published in Cuba, Castro predicted 3-billion people would die from hunger as a result.

Chavez argued that to fill up a car with ethanol used the equivalent "grains, food and nutrients" to feed seven people. Ironically, only a few days later Cuba and Venezuela both announced plans to increase their own ethanol programs, in collaboration with Brazil, though Cuba has since abandoned its plans.

The debate reached a crescendo at a South American energy summit in Venezuela last month where Chavez vowed to "overthrow" Bush's biofuels pact with Brazil, later announcing his own plan to supply Latin America and Caribbean countries with half-price oil.

"Most of what Chavez says is empty bluster, " said David Rothkopf, an international business consultant and former senior trade official at the U.S. Commerce Department.

"It's ludicrous to think he can derail the agreement with Brazil. It's not a choice between ethanol and gasoline, " said Rothkopf, the author of the 600-page "A Blueprint for Green Energy in the Americas."

Experts say ethanol should be seen as a complement to gasoline, not as a threat to oil.

"Ethanol is getting blown all out of proportion, " said Jorge Pinon, a former Latin American oil executive with Amoco-BP now at the University of Miami. "Ethanol is a contributor to gasoline. It's not an alternative."

Chavez's ideological approach to biofuels is driven by domestic politics, Pinon and others say. His anti-U.S. rhetoric plays well at home where he has spread oil wealth among the poor and forced foreign oil companies into less favorable contracts.

But Chavez appears to have met his match in Lula. Brazil is proud of its sugar-based ethanol program, which is four to five times more efficient than using corn like the United States.

Brazil needs the United States to create a global biofuels market. Brazil is also aware that the U.S. government is pouring billions of dollars into technology to make more efficient "cellulosic ethanol" from nonfood crops.

In an opinion piece in the Washington Post titled "Our Biofuels Partnership, " Lula defended his alliance with Bush as good for the environment and good for the economies of oil importing countries.

"This is a recipe for increasing incomes, creating jobs and alleviating poverty among the many developing countries where biomass crops are abundant, " he wrote.

David Adams can be reached at dadams@sptimes.com