Castro and Chavez talk ethanol.

The latest proof of Fidel Castro's improving health came Tuesday in a publicly released recording on a lengthy phone call with Venezuelan president Hugo Chavez.

In the conversation the two leaders briefly discuss ethanol, among other subjects. They are not fans of U.S. production of ethanol from corn, arguing (as do many others)  that this represents an inefficient use of valuable land for food crops.

They begin by discussing how much land it takes to produces a million barrels of ethanol from corn. Castro describes the use of food crops (corn and sugar cane) for biofuels as "tragic," warning that "no-one is certain how high the prices of foods will go when soy becomes a fuel."

Castro continues, "with the scarcity that exists in the world, to produce eggs, to produce milk, to produce meat, it's one more tragedy, of the many that there are at the moment. I am very happy that you have raised the banner to save the species, because it's hard to struggle to save the species because there are many new and very difficult problems and you are like a preacher."

Chavez returned to the same theme on his regular TV show 'Alo Presidente' on Wednesday. This time though he pointed out some widely recognized concerns about water usage in ethanol production, as well as the effect on food prices.

"The United States now wants the countries of the south to produce ethanol for its vehicles.  As I said yesterday, and Fidel who know everything knows, no?  To produce a million barrels a day of ethanol, a year, you'd need to plant and harvest something like 20 million hectares of corn. And the water you have to use to do this?  And the machinery?  The labor?  All the effort to produce grain and foodstuff, not for the people but rather for vehicles. It is a question one has to begin to ask oneself, no?"

Yes, Chavez is right. These are serious questions everyone should be asking. But, at the same time this is no reason to dismiss the case for corn-ethanol out of hand. It should be noted that corn ethanol technology is improving. Also, the likely introduction of cellulosic ethanol in the next few years should greatly relieve the pressure on corn.

Criticism of corn-based ethanol may not be much of a surprise from someone like Chavez who is the head of a major oil producing country. It is perhaps more surprising coming from Castro who has expressed progressive views on energy efficiency and the reduction of greenhouse gases.

What is at stake here is food security versus energy security, or what some have dubbed the 'food versus fuel' debate (see my earlier Jan 6 2007 posting)

The fact that Chavez is raising the issue now is also an indicator that the U.S.'s new "ethanol diplomacy" is getting Chavez's attention, especially with president Bush's upcoming visit to Brazil next week. Only the other day Chavez blasted Bush's efforts to use ethanol to counter  his own "petro-diplomacy" in the region. Bush's attempts to isolate Venezuela, he said, were destined to "the abyss of failure."

(UPDATE: in his latest March 9 attack on US corn-based ethanol, Chavez dismissed Bush's energy plan for the region as "a crazy thing, off the wall," during a speech in Argentina while Bush was visiting Brazil. He accused Bush of trying to "substitute the production of foodstuffs for animals and human beings with the production of foodstuffs for vehicles to sustain the American way of life.")

Chavez's problem is that the U.S. has finally come up with a new and attractive policy for the region. Biofuels presents poor Latin American countries with a huge potential for job creation, rural development and a domestic fuel to substitute for expensive imports.

U.S. officials are acutely aware of this and know it could be an effective weapons to restore the political balance in the region in Washington's favor.

It also raises interesting issues for Cuba. The island has increased its own domestic oil production, and has high hopes for offshore exploration in the Straits of Florida. But it is also currently discussing increased cooperation with Brazil and Venezuela to help Cuba revive its sugar cane industry for biofuels production. Petrobras, in Brazil and Venezuela's PdVSA also are cooperating over ethanol.

It should be noted that while Castro sounded critical of biofuel production from corn, he made no reference to sugar cane for ethanol, perhaps in respect for his relations with Brazil? In fact,  Cuba and Venezuela last week signed an agreement to build 11 ethanol plants in Venezuela and to develop Cuba's sugar cane industry for that purpose.

This program is part of the joint efforts of Cuba and Venezuela to preserve the environment, reduce the use of fossil fuels and develop alternative energy sources, reported Granma, Cuba's main  state-run newspaper. (click here to read report in Granma)

Granma also reported that this decision was based upon the principle of not using cereals, like soy beans or corn, for making fuels, due to the possible effects on food supplies (and prices). It was not made clear how this cooperation agreement would work. Cane must be milled as soon as it is cut and thus cannot be transported large distances. Cuba could distill the cane to ethanol locally. It could then be shipped to for blending with gasoline in Venezuelan refineries, much as Brazil currently does for the United States.

There are of course legitimate concerns about ethanol's impact on food crops (witness the recent price increase in Mexican tortillas which are made from corn). But these are balanced by equally legitimate concerns over global climate change and the need to diversify away from fossil fuels.

Most experts believe that the land use issues of biofuels can be worked out with good planning. New plants with higher yields are being developed by scientists, as well as better crop management, which will dramatically increase the efficiency of biofuels production.

Here is a transcript of the Chavez-Castro discussion:

Chavez: Do you know how many hectares of corn are needed to
produce one million barrels of ethanol?

Castro: To do what?

Chavez: To produce one million barrels of ethanol?

Castro: Ethanol. I believe you told me about that the other 
day. Somewhere around 20 million hectares.

Chavez: [Laughing] Just like that.

Castro: Go ahead, remind me.

Chavez: Indeed, 20 million. You are the one with an except-
ional mind, not me.

Castro: Twenty million. Well, of course. The idea of using
food to produce fuel is tragic, dramatic. No one is sure
how high the price of food will rise when soy is being
used for fuel, with the need there is in the world to
produce eggs, milk, to produce meat. It is one more tragedy,
one of many at this time.

I am happy to know that you have taken up the flag to save
the species because ... there are new problems, very
difficult problems and therefore to see someone become
a great preacher of the cause, a champion of the cause,
an advocate of the life of the species. For that, I 
congratulate you. Continue fighting [words inaudible]
to educate the people so they can understand.

- David Adams