A Latin American Pipeline Dream

Presidents Hugo Chavez of Venezuela, left, Nestor Kirchner of Argentina and Luiz Inacio Lula da Silva of Brazil are the main authors of a proposed 5,000-mile gas pipeline from Venezuela to Argentina.
Presidents Hugo Chavez of Venezuela, left, Nestor Kirchner of Argentina and Luiz Inacio Lula da Silva of Brazil are the main authors of a proposed 5,000-mile gas pipeline from Venezuela to Argentina. (Reuters)

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By Monte Reel
Washington Post Foreign Service
Sunday, February 12, 2006

BUENOS AIRES -- South American leaders from Venezuela to Argentina are proposing to build the world's largest fuel pipeline across Latin America, and they hope it will deliver much more than natural gas: They portray the plan as the first blueprint for a new era of regional cooperation, greater independence from international markets and a more prominent voice on the world stage.

President Hugo Chavez of Venezuela has labeled the proposal a 5,000-mile symbol of diminishing U.S. influence in Latin America. Enthusiastic support for the project from regional heavyweights, including Brazil and Argentina, has prompted others to describe the project as the first true joint venture of a political coalition determined to forge a new South American identity.

"This is the end of the Washington consensus," Chavez told reporters in Caracas last month, using the term for the market-driven economic policies that many Latin American countries adopted in the 1990s with U.S. encouragement. "It's the beginning of a South American consensus."

But the pipeline is a long way from being built, and many potential obstacles -- finding the estimated $20 billion to pay for it, resolving the environmental concerns of burrowing through the Amazon rainforest, dealing with competing interests of individual nations -- have caused some analysts to wonder whether the public pledges of unity can withstand a concrete test.

Instead of illustrating the ideological solidarity of the region, some analysts say that the pipeline proposal could expose the political fault lines that divide participating countries.

"This is a region that is moving toward more disintegration and political fragmentation -- not the other way around," said Michael Shifter, vice president for policy at the Inter-American Dialogue, a Washington-based group concerned with Latin American issues.

According to preliminary proposals, the pipeline would begin in Puerto Ordaz, southeast of Caracas, stretch south the length of Brazil and end in Argentina, with possible branches serving Uruguay and Bolivia. In the past four years, the five countries have elected presidents who seek to promote more regional teamwork and less dependence on international financial markets.

Energy-related issues have been instrumental in determining the outcomes of several of those elections, in some cases serving as a lightning rod for public discontent. Energy is increasingly seen as a tool to achieve greater economic independence in the region.

Chavez, thanks to record profits in Venezuela's the oil and gas industries, has become the continent's most prominent voice and most active alliance-builder, using fuel to barter trade deals with Latin American neighbors and to secure goodwill. In Bolivia, disputes over how to manage natural gas reserves toppled two presidents in the past two years and helped propel the rise of Evo Morales, a socialist who has vowed to increase state control of the sector, to the presidency.

The countries with the region's largest economies, Brazil and Argentina, are struggling to keep up with rising domestic demand for natural gas and are eager to make deals with ideological allies to preserve flows.

The three principal authors of the pipeline plan -- Chavez, and presidents Luiz Inacio Lula da Silva of Brazil and Nestor Kirchner of Argentina -- promise more details next month, when they meet for discussions in Argentina. Each has good reasons for wanting the project to progress quickly.

Venezuela would benefit from greatly expanded markets for its natural gas. Argentina, a longtime gas producer, recently has had to reduce exports to meet rapidly increasing domestic demand. Brazil already depends on gas imports, largely from Bolivia, and is predicted to triple its consumption by the end of the decade.


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