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Brazil, Venezuela vie for energy clout

Brazil's president Lula da silva toured Mexico and four Central American countries this week as Venezuela's President Chavez visited four South American nations.

By Staff writer of The Christian Science Monitor / August 10, 2007

Mexico City

Brazilian President Luiz Inácio Lula da Silva goes north; Venezuelan President Hugo Chávez heads south.

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Both have energy at the top of their agendas. President Lula da Silva, on a five-country tour of Mexico and Central America, is promoting alternative fuels, particularly ethanol. President Chávez, on a four-nation tour of South America, pledges new deals for gas plants and bonds purchases, all paid for with petrodollars.

A coincidence? Perhaps. But their trips this week underscore, at least symbolically, aspirations to lead Latin America, with energy driving their politics.

"There is a lot of jockeying, a lot of dancing going on these days, on both Chávez's and Lula's part," says Michael Shifter, the vice president for policy at the Inter-American Dialogue in Washington. "There is this subtext of oil versus biofuels, what Chávez has and Lula is trying to promote."

Analysts disagree on the size of the rift between the two leaders who, while friendly, have rival visions. Still, one thing is for sure: it's never been better to be an energy-needy nation in the region.

Lula's trip has been dominated by energy pacts: Earlier this week, he traveled to Mexico – Mexico and Brazil boast the region's largest economies – where he and Mexican President Felipe Calderón agreed to develop technology for oil and gas exploration and cooperate on biofuels expansion. Brazil, with its sugar cane-produced ethanol, wants to position itself as a global biofuels leader.

Lula later traveled to Honduras, Nicaragua, and Panama, announcing plans for biofuel deals. He was expected to inaugurate an ethanol-dehydration plant in Jamaica.

Biofuels vs. gas and oil

Chávez's trip has also focused on energy deals. In Argentina, he bought $500 million in Argentine bonds, and promised to buy another $500 million by the end of the year, and to invest in a regasification plant for liquid natural gas. His other stops included Uruguay, Ecuador, and Bolivia, where he said he would sign a series of energy pacts.

But unlike Lula's trip, which is focused ultimately on domestic goals, analysts say, Chávez's tour is a renewed bid to transform the region, particularly by countering US influence.

"Lula is a man of good instincts. But he doesn't have a vision … He doesn't think in terms of deep-seated transformations," says Larry Birns, director of the left-leaning Council on Hemispheric Affairs in Washington. "Chávez, on the other hand, has nothing but vision.

"The difference between the two," he continues, "is that for Lula, it's basically doing business as usual, it's kind of day-to-day stuff, without ... gigantic reforms, whereas for Chávez, every day is a transformative day."

Divisions between two leaders

Chávez and Lula share the stated goal of regional integration, particularly on the energy front. But divisions have surfaced lately.

When President Bush visited Brazil in March to herald cooperation on ethanol production, Chávez – as well as Cuban leader Fidel Castro – quickly condemned the effort, saying that ethanol production, particularly from corn, will drive up food prices and hurt the poor.