Lula's Rings

Andres Soliz Rada

During MERCOSUR's 28th summit in Asuncion on June 22nd 2005, Chile proposed an "energy ring" to supply gas to the region. The project was supposed to start in Camisea in the south of Peru, connecting with the north of Chile, crossing to Argentina and reaching Brazil, Paraguay and Uruguay. The project, described as magnificent by Peru's President Toledo, was crazier than skyscrapers built on air. It had everything - except gas, since of Camisea's 12 Trillion Cubic Feet, half would go to Lima or else meet initial export agreements to Mexico, even without considering demand from Peru's other cities.

The initiative led the ingenuous - perhaps - Cochabamba businessman Oskar Bakir to say that the Mercosur countries had every right to carry out the project without us in Bolivia and that we would be left out of any future transport "ring". Then YPFB president Carlos d'Arlach, who worked for Occidental Petroleum for over 23 years, warned that "the longer we delay entry to the ring, the more the chances increase of being left out." Raul Kieffer of Halliburton remarked that Bolivia should begin to trust in its neighbours again, but that for now we were excluded.

The project relies fundamentally on Bolivia's gas reserves, which, by decision of the multinationals and Petrobras, are to be exported with no value added. Not even the offer of selling gas-generated electricity worked out - despite the north Chilean thermoelectric plants (financed by multinationals) being almost paralyzed for lack of raw material. They either use coal or highly contaminating diesel. For this reason Chile's "El Mercurio" paper calls for Bolivia to sell Chile natural gas and not electricity. For our part, we think the country should feed the "ring" with 50% of our production but on condition that the other 50% be turned inside the country into fertilizer, diesel, liquefied gas, plastics and electricity for export.

National resistance - manifest in the victorious insurrection against Sanchez de Lozada on October 17th 2003, in the gas referendum of July 18th 2005 (despite its limitations), in Evo's electoral triumph of December 18th 2005 and in the third nationalization of May 1st 2006 - has been backed into a corner by Lula's visit to La Paz last December, when he insisted that Petrobras investments in Bolivia would resolve the supply of gas to Brazil, Argentina and Chile. The Brazilian body will supply the domestic market at international market prices (subsidized by the State) and will fix the supply of gas to the Mutun mineral smelting plant owned by Jindall of India, which will only have to pay 50% of the export price of the gas. All this means that the "energy ring" is beginning to work.

Lula arrived in La Paz with Michelle Bachelet who agreed to Bolivia's participation in the Santos Arica interoceanic highway. At the same time MAS abandoned the nationalization of the western rail network which permits US and Chilean companies to take up railway lines from the Bolivian altiplano to be relaid elsewhere in order to export more minerals for foreign benefit, with no value added. In this way the Brazilian leader turns himself into "the Lord of the Rings" of energy and transport in the Southern Cone.

Brazil has made the "Southern Gas Pipeline", proposed by Venezuela, fail. It threatened Lula's regional leadership. He preferred a deal with Bush on bio-fuels - perhaps better called death-fuels. Evo accepted the terms of his big brother (as he calls Lula) in exchange for Lula's help in the fight with the departments calling for outright autonomy.

translation copyleft by tortilla con sal

Republished from Znet