South America's New Drug

Written By Brian Hicks

Posted February 20, 2007

At the upcoming Biofuels Americas Conference and Expo in Cartagena, Colombia, I will bear witness to a crucial development in Latin American history – the development of alternative energy.

As a focal point of several resource-related issues in the international marketplace, Latin America (including the Caribbean and Central America) plays an inestimably large role in deciding the direction of the world’s energy supplies and consumption habits.

The governments of strong economies and emerging ones alike must confront the political and economic correlates of fossil fuel use and its results while dealing carefully with national populations who are hungry for prosperity and, in many cases, dissatisfied with the current state of international patronage and its hierarchy.

Colombia, the host country of the conference, has as unfortunate familiarity with cartels. The cities of Medellin and Cali were almost synonymous with narcotics trafficking as those two locales became hubs of cocaine conglomerates during the 1970s and 80s.

Now that the infamous illicit cartels have been restrained, the governments of the Western Hemisphere are wrestling with the supply and demand controls of the world’s largest commercial cartel, OPEC.

Addiction is Addiction

In his 2006 State of the Union address, U.S. President George W. Bush spoke like a junkie at a turning point:

"America is addicted to oil, which is often imported from unstable parts of the world."

Though its wares are counted in barrels instead of vials and transported in mega-tankers instead of false-bottomed briefcases, the twelve-member Organization of Petroleum Exporting Countries is your pusher.

Bush’s reference to the instability of oil exporting regions highlights another similarity to the blatantly criminal supply control that drug dealers wield. Through their perversion of supply and demand, OPEC countries have created conditions where it has never been more profitable to fight over fossil fuel.

So it follows that the Movement for the Emancipation of the Niger Delta, Iraq’s Sunni Muslims and the socialist anti-market governments of countries like Venezuela are seizing on scarcity and insecurity to reach for short-term financial and political gain.

The temptation to nationalize is high, especially below the Caribbean, where Venezuela’s Hugo Chavez is spearheading a socialist revival called the Bolivarian Alternative for the Americas (whose Spanish acronym ALBA translates poetically to "dawn").

This realignment against US hegemony aims to redefine what "America" means to the rest of the world, diffusing might down across the isthmus of Panama and into the budding economies of the South.

But this political alternative must be coupled with a smart start that deviates from the industrial standard the United States set as it rose to economic eminence.

The U.S. Department of Energy, in its 2006 International Energy Outlook, estimates annual growth of oil use averaging 1.8% in Central and South America until 2030. This comes in behind Asia’s 3% annual thirst increase, but well ahead of the U.S., where total petroleum deliveries fell by about 1% in 2006, according to the American Petroleum Insitute.


A Real Alternative

The conference in Cartagena will be attended by national and industrial leaders, including a keynote address by Colombia’s president, Alvaro Uribe. He is surely thankful for his country’s transformation away from the infamy of the drug cartels, but Colombia is still the producer of some 75% of the world’s annual cocaine yield.

Large-scale production of cocaine is not just a social or political question, it is an economic one. In the dense jungles of coastal Colombia, the choice is often one of legal poverty vs. illegal prosperity.

Since the waning years of the Clinton administration, a program originally championed as a "Marshall Plan for Colombia" has taken aim at the country’s illicit coca agriculture (some coca is grown legally for indigenous ceremonial use), attacking major production sites with defoliants and criminal arrests.

But the real Marshall Plan for Colombia must align the administration’s stated commitment to reducing dependence on fossil fuel with the goal of enhanced trade with Latin America. By contributing momentum to development of native feedstocks, the U.S. can add a proactive dimension to its activity in Colombia, Peru, and elsewhere.

Even regional oil companies are taking part in the potentially monumental shift towards sustainable consumption practices. Representatives of Petrobras, Brazil’s national oil company, will be at the Cartagena conference, where they are sure to demonstrate their country’s commitment to the development of sugar-based ethanol (Brazil leads the world in pure ethanol production).

Petrobras officials must deal honestly with the difficulty their pacesetting industry has in handling environmental concerns, especially deforestation brought on by larger cultivation areas for cane sugar.

Honesty, though, is the addict’s first step towards freedom. It may be difficult to look oneself in the mirror and face the problems, but when long-term viability is at stake, early action is essential.

Regards,

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Sam Hopkins

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