South American leaders meeting in Venezuela for the first regional energy summit agreed on Tuesday a declaration that includes traditional and alternative fuels, such as ethanol, plus the creation of the South American Energy Council to follow up hemispheric energy related agreements.
Addressing the closing ceremony host president Hugo Chavez said that the energy summit had concentrated on four basic guidelines: oil, natural gas, alternative fuels and energy saving. The promotion of biofuels to supplement hydrocarbons production which became a controversy issue between Venezuela and Brazil (the world's leading ethanol exporter) was finally ironed out behind doors and a consensus reached. ''We have reached a consensus so that in the final declaration, the use of bio-fuels is encouraged'' said Chilean Energy Minister Marcelo Tokman. Venezuela's Chavez is concerned that increased ethanol production could cut food supplies and worsen poverty adding that the ethanol accord signed last month by US President George W. Bush and Brazil's Luiz Inacio Lula da Silva is ''true craziness' and could end draining agricultural output and tightening U.S. grip on the region's resources. However Chavez denied any controversy on the issue backing alternative fuels as a way to promote increased oil and bio-fuels production. He said the plan can boost both oil- and agriculture-based economies. ''The press is saying there's an ethanol war,'' Chavez told reporters. ''No. Ethanol is a valid strategy as long as it doesn't affect food production.'' Chavez also called for the construction of 13 new Latin American oil refineries to reduce reliance on U.S. processing plants. He said ethanol plants should be built next door to the refineries to boost output of gasoline blended with ethanol. The summit agreed to create a regional alliance, to be known as the Union of South American Nations, UNASUR, instead of the South American Community of Nations, as well as the South American Energy Council to regulate and promote cooperation in the sector. A small functional permanent secretariat for the Union of South American nations will be seated in Quito, Ecuador. All South American presidents were present at the Isla Margarita summit with the exception of Uruguay's Tabare Vazquez and Peru's Alan Garcia.