Brazil to double ethanol production

At the end of an energy summit of South American nations, Brazil said it plans to double its ethanol production in a decade, while Venezuelan president Hugo Chavez has asked it to scale back output.

During the summit, Chavez expressed concern about Brazil''s tie-up with the US to jointly promote ethanol as an alternative to fossil fuels. The Venezuelan president, who is at odds with the US, said he was not opposed to bio fuels as such, but only to fuel produced from US corn.

While the US has developed processes for making bio fuels from corn, Brazil, the world''s largest exporter of bio fuels, produces the bulk of its ethanol from sugar cane. Brazil said it could potentially increase production by up to 10 per cent a year and would lobby for the US to reduce tariffs on its imports.

Chavez is critical of cultivating corn for fuels saying it uses up valuable land and contributes to rural poverty. However, Brazilian President Luiz Inacio Lula da Silva countered this, saying, "The truth is that bio fuel is a way out for the poor countries of the world."

Nonetheless, President Chavez, said Venezuela would buy 200,000 barrels of ethanol a day from Brazil for use as a fuel additive.

Concluding their meeting, Brazil, Venezuela and the eight other South American countries agreed to fund joint infrastructure projects and boost co-operation between state energy companies.

The Latin American neighbours have proposed a continental bank to rival institutions like the IMF and discuss plans to build a 5,000-mile natural gas pipeline between Venezuela and Colombia at a $10 million investment, that would also help improve the quality of life in villages along the route of the pipeline.