- The Washington Times - Sunday, June 3, 2007

PANAMA CITY — Cutting high energy costs throughout the Western Hemisphere will be high on the agenda of the leaders meeting today at the Organization of American States’ General Assembly in Panama.

The three-day meeting is expected to witness a clash of ideas on alternative sources of fuel, with the United States and Brazil — the world’s two leading producers of ethanol — facing opposition from Venezuela, the country with the largest oil reserves in the hemisphere, and Cuba.

The assembly will feature talks on energy security, or what State Department officials refer to as “the supply of reliable, affordable energy that encourages economic growth while protecting the environment.”

In a paper prepared to be delivered at the assembly, the OAS says that although the hemisphere is “endowed with abundant natural resources for energy production,” the bloc’s leaders should discuss alternatives to the region’s continuing dependency on fossil fuels.

In the case of the United States, it would mean reducing dependence on fuels originating in nations hostile to U.S. interests and promoting increased production of biofuels already widely used in countries such as Brazil, the world’s largest producer of sugar-based ethanol.

The ethanol issue, however, promises to be a contentious one at the OAS meetings.

Leaders from Venezuela and Cuba have criticized further expansion of ethanol production in Latin America and the Caribbean, claiming it would deplete food supplies in the region.

Mexico’s center-right president, Felipe Calderon, could become an unlikely ally of the region’s leftists in the debate.

Increased demand for corn used to produce the starch-based version of ethanol made in North America has driven corn prices higher in recent months, subsequently raising Mexico’s tortilla prices.

Higher prices for Mexico’s staple food have prompted protests among poorer Mexicans and given some regional leaders reason to question just how beneficial food-based fuels will be for the region’s populace as a whole.

Venezuela is the world’s sixth-largest exporter of oil, and the country’s anti-American president, Hugo Chavez, has been using its oil wealth to win the support of countries in the region. In the long run, the world’s reduced dependence on oil could lower Venezuela’s influence on international politics.

Brazil and the United States recently forged a pact by which the two nations would work together to promote and expand sugar production in the hemisphere specifically for ethanol use.

While visiting Brazil in March, President Bush noted that the U.S. dependence on imported oil is the impetus for “a national-security issue.”

“In other words, dependency upon energy from somewhere else means that you’re dependent upon the decisions from somewhere else,” Mr. Bush said.

As part of the agreement, the United States and Brazil will promote ethanol production throughout Latin America as a way of reducing dependency on oil, improving the environment and providing more jobs.

International lenders like the Inter-American Development Bank and the OAS are also expected to play a role in the agreement.

“The United States and Brazil are the world’s two largest biofuels producers, so cooperation is natural,” State Department spokesman on Latin American affairs, Eric Watnik, said in March. “Our goal is to advance global energy security by helping countries diversify their supply.”

Brazil produces sugar-based ethanol, while the United States backs the corn-based variety. In terms of fuel efficiency and emissions cleanliness, sugar ethanol is considered superior.

Brazil’s ethanol industry and success with combining bio- and fossil fuel for vehicles has already caught the attention of European nations, which in 2006 expressed interest in promoting the production of ethanol in Africa using Brazilian technology.

But not everyone in Washington is convinced that the plan for expanded ethanol production is in the best interest of the region.

“For starters, food crops would certainly be less economically viable” and lessen the food supply, said Larry Birns, director of the Washington-based Council on Hemispheric Affairs. “You can’t push biofuel forward until you’ve fully investigated the next generation’s food supply.”

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