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During a recent trip to Venezuela, I found myself in my Caracas hotel room watching President Hugo Chavez give a speech on TV. I had come to the country as a guest of the Venezuelan Institute of Scientific Investigation (known by its Spanish acronym IVIC), which was helping to organize an environmental conference about Lake Maracaibo.
I had long been interested in ecological concerns: my dissertation focused on the environmental history of the Venezuelan oil industry. In my recent book, Hugo Chavez: Oil, Politics, and the Challenge to the U.S. (St. Martins' Press, 2006), I touched on the role of American oil companies in the Lake Maracaibo area.
As usual, Chavez was thundering against the United States, in this case striking an environmental theme. North Americans, he charged, had pursued an "egotistical" model of development. Chavez denounced the consumerist lifestyle in the United States, predicated on having more than one car per family.
On other occasions, Chavez has argued that powerful nations are responsible for causing global warming. What is more, he has publicly regretted pollution resulting from traditional sources of energy. He has called on developed nations to look more favorably on alternative energy such as gas, hydro and solar power. To its credit, Venezuela has ratified the Kyoto Protocol reducing greenhouse gas emissions.
Venezuela emits only 0.48% of the world's greenhouse gases. According to government officials, the country is in fourth place in Latin America regarding greenhouse emissions after Brazil, Mexico and Argentina. Nevertheless, Venezuela exports 1 million barrels of oil per day to its northern neighbor and thus contributes to global warming.
For Venezuelan environmentalists, the country's dependence on oil exports is worrying. In an effort to learn more about energy policy in Venezuela, I caught up with Jorge Hinestroza, a sociologist at the University of Zulia in Maracaibo and the former General Coordinator of the Federation of Zulia Ecologists. We met in Maracaibo, where I was attending the environmental conference dealing with Lake Maracaibo.
"In the next fifty years we should be going through a process of transition, to substitute oil for another source of energy," he remarked. "I think from a scientific and technical standpoint we are not doing sufficiently enough to look for oil alternatives," he added.
There are encouraging signs, however, that the government is taking some action. For a country whose economy is almost wholly dependent on oil production, Venezuela has taken some positive steps.
Brazil: An Ethanol Giant
Since 2002, Venezuela and Brazil have fostered an alliance through the promotion of joint energy projects. For example, the Venezuelan state-run oil giant PDVSA has joined with Brazil's Petrobras to construct the Abreu de Lima refinery, located in dirt poor Pernambuco state. The refinery will process crude oil resulting from joint exploration projects in Venezuela.
The energy alliance has in turn bolstered political ties. During the 2002-3 oil lock out, in which the opposition sought to topple the Chavez regime, Brazilian President Lula also shipped oil to Venezuela.
Now, Brazil is helping to spur alternative energy in Venezuela by shipping ethanol to its neighbor. In South America, ethanol is an alcohol fuel made from sugar cane. According to a recent study from the University of Minnesota, ethanol produces 12 percent less greenhouse gasses linked to global warming than gasoline.
For three decades Brazil has used fuel alcohol on a large scale, but it's only more recently that the country has been able to reap the full reward from its ethanol production. Because of the Kyoto Protocol, which calls for the reduction of pollutant emissions, there are now great opportunities for sale of ethanol.
With its eye on this great potential, Brazil has dived straight into the foreign alcohol market. Authorities have announced that Brazil will invest heavily in transport infrastructure over the coming years. Almost all Brazilian cars have flex-fuel engines running on both gasoline and ethanol, and the country has reduced its gasoline consumption by nearly half over the last four years.
For Paulo Roberto Costa, Supply director at Petrobras (the Brazilian state oil company), ethanol shipments to Venezuela should "strengthen [Petrobras'] position as an energy company [and] generate great gains to the environment." Costa added that Petrobras stood to benefit, as the company would "enter new markets and sectors, sponsor the growth of Brazil and collaborate to the integration of the countries of South America."
Venezuela Seeks Ethanol Self Sufficiency
Though Venezuela has imported ethanol from Brazil, the Chavez government has also taken action to produce the fuel on its own so the country can become self sufficient. Venezuela has in fact taken the step of eliminating its consumption of lead-based gasoline. The country seeks to produce ethanol for domestic consumption and to add 10% of the fuel to all gasoline.
According to Energy Minister Rafael Ramirez, "The elimination of lead from gasoline ... will bring great health and environmental benefits." PdVSA has set up an ethanol producing subsidiary, Alcoholes de Venezuela.
Venezuela will commence construction of 15 sugar cane mills in 2007 and hopes to complete 21 distilleries by 2012. Chavez has pledged to invest $900 million to plant sugarcane and construct processing plants over the next several years. Such a plan is certainly ambitious: Venezuela will have to plant 740,000 acres of sugar cane if it wants to meet its target.
Venezuela and Cuba: Solidifying Ties through Ethanol
Chavez has sought strong ties to Cuba in recent years, and Venezuela is now solidifying an innovative energy alliance with the island nation. For years, Venezuela has exported oil to Cuba in exchange for Cuban doctors who have serviced the poor and disadvantaged through Chavez's Barrio Adentro program.
Now, Chavez has gone further by seeking Cuban assistance for his nascent ethanol program. For Cuba, it is a novel opportunity to take advantage of its dormant sugar industry. Though the country was at one time the largest sugar exporter in the world, the island's sugar industry fell on hard times in recent years when falling prices obliged the country to close almost half its mills. Now, however, Cuba says it will modernize its old distilleries as well as build new ones which would be geared principally towards the production of ethanol fuel.
Venezuela stands to gain from Cuban expertise in the ethanol sector. The island nation shall provide Venezuela with parts from its dismantled mills for use in ethanol production. "Cuba is advising us in the process [of ethanol production] and training personnel," remarked Maria Antonieta Chacon, president of the Venezuelan Agrarian Corporation.
Ethanol: Solving Chavez's Political Imperative
For Chavez, ethanol not only serves an environmental purpose but also relieves political pressure on the government. In Venezuela, rural to urban migration is a thorny social problem. Caracas, a polluted, crime-infested city, has seen explosive civil unrest in the past and needs to stem the flow of new rural migrants.
Chavez's ethanol plans could help to ameliorate some of this migration by encouraging a nascent industry in the countryside. According to PdVSA, ethanol and sugar cane fermentation "cuts dependence on oil and promotes other economic activities." Under the program, sugar cane will be harvested in 12 states throughout the country and will lead to the creation of 500,000 jobs.
PdVSA has announced that it could build several ethanol plants in the central state of Yaracuy, which is one of the top sugarcane producing areas in the country. Nelson Rojas, General Secretary of the state, remarked that the state's plans to create twenty plants in his state would be a boon to the local economy. According to Rojas, each plant would create more than 12,000 jobs.
Chavez at the United Nations
In his 2005 address to the United Nations, Hugo Chavez derided what he called "a socioeconomic model that has a galloping destructive capacity." The Venezuelan president expressed concern about "an unstoppable increase of energy" and added that "more carbon dioxide will inevitably be increased, thus warming our planet even more."
It's rather ironic that Chavez, as the leader of one of the world's leading oil producing nations, would emphasize global warming at the United Nations. Nevertheless, recent moves by the government suggest that Chavez is willing to undertake some modest changes in energy policy.
While it's certainly environmentally vital for Venezuela to move off lead based gasoline and adopt alternative technologies, Chavez also has public relations considerations. The Venezuelan President wants to paint himself as an underdog on the world stage, struggling against U.S. imperialism and the voracious consumerist appetites of North Americans. By moving towards ethanol, Chavez may deflect criticism that he is hypocritical. In adopting alternative fuels, he also gains politically by shoring up ties to Cuba and Brazil, two key allies in the region.