“The Great Southern Gas Pipeline will guarantee gas to all the people of South America for the next 100 years,” Chavez said at a news conference in Argentina last month.
Critics, however, are calling the project “a Pharaonic pipe dream”. Sending gas thousands of miles overland would cost more than shipping LNG, they say. The plan would require huge sums of cash and stacks of environmental and right-of-way permits. “If you look at the Trans-Siberian and the Alaskan pipelines, it’s not impossible,” said Tito Bonadonna of the Venezuelan Gas Processors Association. “But for this dream to become reality, it has to be economically feasible. And that’s where there are doubts.”
Then, there’s the matter of the pipeline’s path, which would cut through the heart of the Amazon jungle. “If you sat down to think up the most damaging scheme for the Amazon, you would come up with something similar to this,” said David Cleary, director of the Amazon basin program at the Nature Conservancy. “Even if it never gets off the drawing board, it’s depressing that governments are even thinking about this.”
According to Venezuela’s state energy company, PDVSA, the first phase of the pipeline would run about 2720km from the Venezuelan port of Guiria south to the Amazon River, then cut east to the Brazilian city of Fortaleza. Later phases of the project would extend into southern Brazil and Argentina, where it would connect with Bolivian gas lines. All told, the network would cover 9920km. Construction could start in 2009, Chavez said, and finish by 2017.
The presidents of Argentina, Bolivia, and Brazil “Ó who all lean to the political left like Chavez “Ó have signalled their initial interest in the project. Along with Venezuela, they have launched a $9.2-million study of the environmental-impact and engineering issues.
But beyond talk about applying for loans from the Inter-American Development Bank, no one has come up with a detailed financial plan, said Adriano Pires, a Brazilian energy consultant. “We’ve heard all about these kinds of mega projects before and we know what happens,” he said. “If the government says it will cost $25 billion and take 10 years, history tells us that it will take twice as long and cost twice as much.”
However, Brazil is searching for new gas supplies. The issue took on greater importance after Bolivia partially nationalized its gasfields in April and took control of some of the holdings of Petrobras, Brazil’s state-controlled energy company. lldo Sauer, director of energy and gas for Petrobras, said that Venezuela could become an important gas supplier for northern Brazil. Writing off the pipeline, he added, would be “a grave mistake.”
But the connection would make Brazil more dependent on Venezuela, where Chavez, like Bolivian President Evo Morales, has been squeezing foreign operators for a larger cut of energy profits. The CEO of Petrobras, Jose Sergio Gabrielli, called the pipeline a “difficult project” that could take until 2025 to build. By then, Brazil, which is sinking billions into exploring and exploiting its own fields, intends to be self-sufficient in natural gas.
Chavez readily acknowledges that profits are not the driving force. “If Venezuela was motivated by economic interest alone, we would not be discussing this,” he said in a speech last month. Instead, Chavez has won friends and influence across the region by selling cut-rate oil to Latin American and Caribbean nations. “There are better options, but this is a very politically driven project,” said Roger Tissot, a consultant at PFC Energy in Washington.
Indeed, the rhetoric sometimes overshadows the knotty particulars, such as the fact that Venezuela has done relatively-little to profit from its rich reserves of natural gas.
With 151 trillion cuft , Venezuela holds the second-largest proven reserves of natural gas in the hemisphere, behind only the United States, according to the US Department of Energy’s Energy Information Administration. But most of the country’s daily production is injected back into oil wells to maintain pressure in the fields, or goes toward other uses in the petroleum industry.
Three offshore projects on Venezuela’s Atlantic coast “Ó the Delta Platform, Mariscal Sucre, and Rafael Urdaneta “Ó as well as several inland sites may hold an estimated 100-134 trillion cuft, and companies such as Chevron and ConocoPhillips have invested millions to get at the gas. According to PDVSA, once these fields start producing, Venezuela will have gas to spare and will send some 5.3bn cuft/d through the Great Southern Gas Pipeline.
But Gonzalez, a former PDVSA engineer, points out that the project would require crossing 50 rivers or tributaries in the Amazon jungle and hundreds of Indigenous communities. Other pipelines built across the South American jungle have caused erosion and sedimentation of rivers while the influx of thousands of temporary labourers has changed the nature of remote Indian villages forever, said Atossa Soltani, executive director of the environmental group Amazon Watch in San Francisco. Nevertheless, apparently undaunted, Chavez presses on. “Some say a South American gas pipeline is crazy,” he said in a recent speech. “But the problem is many people just don’t know. And one who doesn’t know is like a blind man.”