Development & Aid, Economy & Trade, Energy, Environment, Global Governance, Headlines, Latin America & the Caribbean

SOUTH AMERICA: Leaders Seek Regional Energy Sovereignty

Humberto Márquez

ISLA DE MARGARITA, Venezuela, Apr 16 2007 (IPS) - The South American energy summit that got underway Monday marks a point of convergence between the certainty that the region has the energy resources needed for its development and the political will to translate that into socially and economically viable undertakings.

In South America, “several countries are net exporters of energy, and there is a group of importers with large needs. That is what must be complemented,” Venezuelan Energy Minister Rafael Ramírez said at the start of the summit on the country’s Margarita Island in the Caribbean.

As a whole, Latin America and the Caribbean “have a healthy energy balance, and what is needed is to create energy grids that are complementary,” Álvaro Ríos, secretary-general of the Quito-based Latin American Energy Organisation (OLADE), told IPS.

According to late 2005 figures from OLADE, which is comprised of the region’s energy ministers, Latin America and the Caribbean had an annual offer of close to 5.17 billion barrels of oil equivalent or BOE (crude oil, gas, coal, hydropower, geothermal energy or biomass), while consumption stood at 4.06 billion BOE. (The BOE is a unit of energy equivalent to the amount of energy contained in a barrel of crude oil.)

Most of what is consumed directly in the region, some 3.1 billion BOE, reaches the final consumer in the form of electricity, liquefied gas and petroleum derivatives like fuels.

The region, which accounts for 11 percent of the world’s oil reserves, produces some 3.5 billion barrels and consumes 2.1 billion barrels of oil a year, while it produces around 240 billion cubic metres and consumes 220 billion cubic metres of natural gas annually.

Within a decade, electricity generation, which totals 1.116 terawatt-hours (trillion watts), could reach 1.9 TWh within a decade, in a scenario marked by a low level of integration, and 2.3 TWh if a much deeper level of integration is achieved, according to OLADE.

The countries in this region “are undergoing a shift in the criteria used for energy planning, to give priority treatment to our own needs,” said Ramírez.

This is the first summit dedicated exclusively to the energy question, as part of the strategy to create a South American Community of Nations. The leaders will adopt a final declaration that will serve as a framework for agreements on integration and joint business ventures in the energy industry.

“The current tendency is towards stronger integration and coordination in the subregions than in the region as a whole,” remarked Ríos, who said the reasons for that range from “cross-border electricity exchange to the new key role that natural gas is playing.”

At Venezuela’s initiative, a South American organisation of natural gas producers and exporters is being created by Argentina, Bolivia and Venezuela, who have also insistently invited Peru to join.

The new organisation is in line with the global strategy that Venezuela is sponsoring along with Iran, for the creation of an OPEC-like cartel of gas producers. But that aim has tripped up over Russia’s lack of interest.

The presidents are reviewing the gas pipelines that are on the drawing board or in construction, such as the 8,000-km pipeline that will carry gas from Venezuela’s Caribbean region all the way south to the Río de la Plata, with connections from Bolivia and Peru, the pipeline connecting northern Colombia and Venezuela, and several projects for gas prospecting and production.

In terms of oil, there is a multiplicity of accords and cooperation projects, like Petroandina and Petrosur, based on supplies from Venezuela on soft terms in agreements between governments, and the building of refineries like the “Abreu e Lima”, which Brazil’s state-owned oil giant Petrobras and Venezuela’s state oil company PDVSA are building in Pernambuco, Brazil.

There are also downstream developments like a petrochemical plant whose cornerstone was laid Monday in Barcelona, Venezuela, on the mainland across from Margarita Island, by presidents Luiz Inácio Lula da Silva of Brazil and Hugo Chávez of Venezuela.

After the energy and foreign ministers meet Monday, the presidents will get together on Tuesday to pledge to make efforts to achieve “energy sovereignty” for South America.

The idea would basically involve developing the infrastructure and market needed to make it possible for South America to use its energy resources within the region, to shore up development and reduce poverty.

Taking part in the summit are all of South America’s presidents with the exception of Uruguayan President Tabaré Vázquez, whose government will be represented at the meeting by Vice President Rodolfo Nin Novoa. The heads of state will also hold a number of bilateral meetings during their brief stay on Margarita Island.

The run-up to the summit was marked by a debate on ethanol, after Lula and U.S. president George W. Bush, whose countries produce three-quarters of world output of the alternative fuel, agreed in March to promote production of the biofuel.

Since that agreement was reached, Chávez, like his close friend Cuban President Fidel Castro, has lashed out against the production of crops for ethanol, which is produced from corn or sugar cane, invoking environmental and ethical reasons, and arguing that “food should be produced for people, not for rich people’s cars.”

Lula’s foreign affairs adviser Marco Aurelio García said his government would explain in Margarita that the plans to increase Brazil’s sugar cane ethanol output twelve-fold from the current 17.3 billion litres a year “will not imply cutting a single tree” in the Amazon jungle.

Republish | | Print |