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Viewing cable 07CARACAS597, CHAVEZ' ETHANOL HYPOCRISY

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Reference ID Created Released Classification Origin
07CARACAS597 2007-03-20 21:01 2011-08-24 01:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Caracas
VZCZCXRO0646
RR RUEHAO RUEHCD RUEHGA RUEHGD RUEHGR RUEHHA RUEHHO RUEHMC RUEHNG
RUEHNL RUEHQU RUEHRD RUEHRG RUEHRS RUEHTM RUEHVC
DE RUEHCV #0597/01 0792101
ZNR UUUUU ZZH
R 202101Z MAR 07
FM AMEMBASSY CARACAS
TO RUEHC/SECSTATE WASHDC 8187
INFO RUEHWH/WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
RHEBAAA/DEPT OF ENERGY
RUCPDOC/DEPT OF COMMERCE
UNCLAS SECTION 01 OF 02 CARACAS 000597 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
COMMERCE FOR 4431/MAC/WH/MCAMERON 
ENERGY FOR CDAY, DPUMPHERY, AND ALOCKWOOD 
 
E.O. 12958: N/A 
TAGS: ECON ENIV ENRG PREL VE CU
SUBJECT: CHAVEZ' ETHANOL HYPOCRISY 
 
REF: A. 06 CARACAS 3374 
     B. SAO PAOLO 212 
     C. CARACAS 584 
 
1.  (SBU) Summary: Subsequent to the ethanol cooperation 
agreement President Bush signed with Brazil on March 9, 
Chavez has labeled ethanol as "immoral," accusing the United 
States of turning "food into fuel."  The BRV's reaction is 
indicative of its hypocrisy.  It has actively pursued a 
domestic ethanol program since 2005, imported ethanol from 
Brazil, and only three weeks ago signed new agreements with 
Cuba to develop 11 ethanol processing plants in Venezuela. 
Chavez' contradictions on ethanol show that substantive 
policies are less important to him than opposing the United 
States.  This 360 degree about-face also reflects his 
insecurity that U.S. initiatives in the region - particularly 
with a giant such as Brazil - will limit his own influence. 
End Summary. 
 
------------------------------------------ 
2005: Chavez' Ethanol Politics Take Shape 
------------------------------------------ 
 
2.  (SBU) The BRV's ethanol politics began to take shape in 
2005 (Ref A).  Energy Minister Ramirez announced that 
Venezuela would replace leaded gasoline with an ethanol-based 
mixing component as a more ecologically sound solution. 
Ramirez added that Venezuela would be self-sufficient in 
sugar cane-derived ethanol by 2012.  Chavez used his weekly 
television program "Alo Presidente" on September 4, 2005 to 
announce that Venezuela would pursue domestic production of 
ethanol, "We are going to start to produce ethanol, we 
already have a plan of 200 thousand hectares to grow sugar 
cane."  Again, using "Alo Presidente" as a platform, Chavez 
added in October 2005, "And I have already given the green 
light on the ethanol project, and with Cuba, and Venezuela of 
course, do you know how many hectares of sugar cane we need 
to grow in the next few years to produce all the ethanol that 
we need to inject into gasoline? 300 thousand almost!" 
Despite Chavez' criticism of President Bush's "ethanol 
diplomacy," PDVSA signed a deal to purchase ethanol from 
Brazil's petroleum giant Petrobras in February 2005. 
 
--------------------------------- 
2006: PDVSA Launches Ethanol Plan 
--------------------------------- 
 
3. (SBU) PDVSA officially launched its Ethanol Agro-Energy 
Development Project in October 2006 (Ref A).  The project's 
goal would be to produce over 10 million barrels of 
ethanol/year at 17 processing plants from sugar cane, rice, 
and yucca by 2012.  This would enable Venezuela to meet its 
ethanol needs domestically.  PDVSA estimated the cost of the 
project at USD 1.3 billion.  PDVSA's 2006 financial report 
also references a USD 153 million investment in ethanol 
projects in 2005, an amount sufficient to construct three 
small plants. 
 
-------------------------------------- 
2007: New Ethanol Agreements with Cuba 
-------------------------------------- 
 
4. (SBU) Only three weeks ago, on February 28, Venezuela 
signed agreements with Cuba to build an additional 11 ethanol 
plants from sugar cane.  The agreements were signed by 
Minister Ramirez and Cuban Minister of Foreign Investment and 
Economic Cooperation Marta Lomas during the Seventh Meeting 
of the Joint Intergovernmental Cuba-Venezuela Commission in 
Havana. 
 
-------------------------------------- 
President Bush's Travel: 
Chavez Attacks "Immorality" of Ethanol 
-------------------------------------- 
 
5.  (SBU) Since Presidents Bush and Lula da Silva signed an 
MOU on ethanol cooperation, Chavez has made an apparent 360 
degree about-face in his views on ethanol.  Chavez has 
continually referred to ethanol as "immoral."  In an 
interview with Argentine press during his visit to Argentina 
March 9, Chavez said "President Bush's ethanol plan is 
totally irrational and anti-ethical.  To try to sow the good 
land that we still have, to claim the countries of the south, 
because in the countries of the north, they don't have any 
fertile land or good water left."  Chavez added, 
sarcastically, "We will need to dedicate ourselves completely 
to educating agronomists, agricultural engineers, 
 
CARACAS 00000597  002 OF 002 
 
 
specialists... to produce food for the cars of the gentlemen 
from the North."  Chavez characterized the agreement the 
President signed with Brazil as an "OPEC for ethanol."  On a 
recent "Alo Presidente," Chavez said "What the United States 
is claiming is impossible.  To sustain with ethanol its style 
of life we would need to cultivate corn six times over the 
land of the earth."  Cuban leader Fidel Castro chimed in from 
his sick bed, saying "the idea of using food to produce 
energy is tragic, dramatic...no one knows where the price of 
food will go when soy is converted into fuel." 
 
6.  (SBU) During his visit to Jamaica on March 13, Chavez 
continued the assault on ethanol using "ethical" arguments. 
"So we are using land, machines, technology, fertilizer and 
water to produce food, not for the people, but for the 
vehicles of the rich!" exclaimed Chavez.  Chavez added he 
would "talk to Lula" and explain his position to Brazil. 
 
7.  (SBU) Minister Ramirez, despite inking ethanol agreements 
with Brazil and Cuba, qualified the use of resources and 
water to produce ethanol rather than food as "barbaric." 
Ramirez opined that ethanol presented no threat to Venezuelan 
oil exports to the United States, "It seems to be more of 
political arithmetic on President Bush's part to increase his 
popularity or his image in his own country...Imagine an OPEC 
with the United States, an OPEC for ethanol," said Ramirez in 
parroting Chavez' remarks. 
 
8.  (SBU) The pro-Chavez media has responded by launching an 
extensive anti-ethanol campaign in the press.  The 
pro-government daily "Vea" ran a series of articles about the 
dangers ethanol posed to food security and the environment, 
while publishing interviews with BRV leaders parroting 
Chavez' recent anti-ethanol comments.  "El Tiempo" ran an 
editorial that quipped Americans would fill their gas tanks 
with arepas (Venezuela's corn-based staple) and tortillas, 
commenting that ethanol production would provoke an 
ecological disaster that would have the dimensions of an 
apocalypse. 
 
------- 
Comment 
------- 
 
9.  (SBU) Chavez' latest campaign against the "immorality" of 
ethanol on the heels of President Bush's visit to the region 
- while the BRV has aggressively pursued its own ethanol 
agenda - captures Chavez' two-faced nature.  He has tried to 
nuance his argument by differentiating between  corn-based 
ethanol in the United States and sugar cane ethanol produced 
in Latin America.  There remain obvious contradictions in the 
BRV's statements and actions.  Substantive positions on 
issues matter less to Chavez than attacking the United 
States.  His ethanol tirades underscore that Chavez finds 
himself in a defensive posture in response to President 
Bush's overtures for increased economic cooperation with 
Brazil, a country where Chavez still considers himself to 
have a large influence. 
 
 
WHITAKER