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South American Leaders put Energy Integration on Front Burner
by Odeen Ishmael
Guyana Journal, May 2007

CARACAS, 26 April 2007: In their push for integration, South America presidents on April 16-17 2007 held their first energy summit on the Venezuelan island of Margarita to design an energy strategy for the region. During their discussions, they also exchanged ideas for a regional gas pipeline, the development of biofuels, the creation of the Bank of the South, and the political and economic unification of the continent.

At the end of their summit, the leaders announced the creation of the Union of South American Nations (UNASUR) – a transformation from the Community of South American Nations. They also agreed to set up an energy council, consisting of energy ministers from each member country. The next step in the formation of UNASUR will be the election of a Permanent Executive Secretary and the establishment of headquarters in Quito, Ecuador.

On the sidelines of the summit, a meeting of Foreign Ministers considered a legal framework under which the South American grouping will function. They finally decided that a Committee of Senior Officials comprising a representative each from the 12 countries would consider two proposals presented by Brazil and Chile and report to the next South American summit in Cartagena, Colombia later this year.

In their final summit declaration, the presidents recognized the importance of biofuels in diversifying sources of domestic energy, and committed themselves to harmonizing production of energy with agricultural growth and environmental preservation. They also called for studies to be done on the availability of land to be used for the production of biofuels and insisted that existing land for food and current national forests are not cleared for this purpose. Earlier, a discussion on the issue led by the Venezuelan, Brazilian and Bolivian presidents on the issue concluded that substituting gasoline with ethanol would spur global hunger by using up arable land needed for food production.

The international media’s speculation on a confrontation between Brazil and Venezuela over ethanol did not materialize Agreeing that ethanol would be an alternative fuel to complement traditional fuels like gasoline, President Hugo Chavez of Venezuela said it would be "absolutely impossible" to use it as a replacement for gasoline, as was proposed by President Bush during his South American tour earlier this year. He announced that Venezuela would start producing ethanol on a minor scale while importing larger quantities from Brazil, adding that Venezuela would need more than 200,000 barrels of ethanol daily to inject into its gasoline.

Among the topics discussed was President Chávez’ proposal for a “South American Energy Treaty” aimed at guaranteeing energy, gas, petroleum and alternative fuels to the region for the next 100 years. The Venezuelan President warned of the growing energy needs in the future, predicting that by 2020 consumption will expand by 47 percent in Latin America and the Caribbean.

He noted that with South American integration, the energy supply for the region can be assured and it can become one of the world's energy powers, without ignoring alternative energy. He also suggested the formation of an energy bloc to manage the region’s resources.

As an integral part of their plans the leaders discussed the construction of the gas pipelines known as the Great Gas Pipeline of the South, and the Trans-Caribbean Pipeline. With these pipelines, Venezuela seeks to supply the region with its gas reserves, beginning with Brazil.

The Great Gas Pipeline of the South, which has raised doubts in some quarters about its viability and its environmental impact, will be 8,000 kilometers long and will require an estimated investment of about 23 billion dollars. The project for the Trans-Caribbean Pipeline between Venezuela and Colombia – and which may later be extended to Panama – is expected to be approved in August.

In tackling the issue of global warming, the South American leaders urged conservation of electricity to mitigate the effects of the increasing problem. There was a call for all countries to adopt more efficient conservation mechanisms while noting that some have already introduced programs to conserve on fuel. For instance, Venezuela has completed the process of exchanging 50 million high-energy bulbs to compact fluorescent lamps in households. The country's authorities are now targeting commercial businesses and municipalities to replace high energy bulbs with low energy bulbs.

Guyana’s Prime Minister Samuel Hinds, who represented President Bharrat Jagdeo at the forum, stated that with Cuba's assistance some 440,000 high energy bulbs were also exchanged and distributed in 104,000 Guyanese households last year, thus helping to reduce pressure on the national electricity grid. He also informed the summit that Guyana was examining proposals from foreign investors for the production of ethanol.

And looking to the future, Paraguay’s President Nicanor Duarte pointed out that with mounting pressures placed on traditional energy resources, hydrogen as a fuel will become significant later in this century. He said his country has one of the largest aquifers in South America and that will prove to be a vital asset in the development of hydrogen fuel.

Another significant issue discussed at the summit was the development of a Bank of the South which Venezuela, along with Brazil, hopes to consolidate. The reported announcement that Brazil will financially subscribe to the Bank is significant since the multinational fund it will create will finance regional development and combat poverty in South America.

With the energy issue now taking a central role in the economic and political integration process in South America, it is a foregone conclusion that a series of high level meetings will follow up on the just concluded summit. And a second energy summit will most likely be decided upon by the forthcoming South American presidential summit in Colombia.

The writer is Guyana’s Ambassador to Venezuela, and was a member of Guyana’s delegation at the South America energy summit. The views expressed are solely those of the writer.)

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