On the eve of this week's G8 summit in Germany, our eyes were turned to Europe. The discussion centered on climate change and Russia-U.S. relations. Meanwhile, the yearly general assembly of the Organization of American States (OAS) from June 3 to June 5 in Panama passed by virtually unnoticed.

The indifference is understandable. To many observers, this organization appears to have lost its way since the signing of the Democratic Charter, which took place at almost the same moment in 2001 that the World Trade Center towers were crumbling.

But the tide is changing, and this year there was, and is, ample reason to pay attention, especially if Canada wants to become anything close to an energy superpower.

The theme of the meeting, "Energy for Sustainable Development" reflected the region's hopes that the promise of viable sources of alternative energy will rebalance the geopolitical chart.

Aside from loosening Hugo Chavez's grip on the most vulnerable countries in the hemisphere -- most of them in Central America and the Caribbean -- it would also open possibilities for these countries to gain some independence in the provision of their energy needs. That is certainly a win-win situation for everyone except Mr. Chavez.

The populist Venezuelan president has been systematically using his country's oil wealth to promote his vision of development and integration. His Bolivarian Alternative for Latin American and the Caribbean comes complete with guaranteed oil deliveries and extremely attractive financial terms. The catch is that to secure these benefits, countries must create national oil companies, which are then the only ones that can accept the commodity.

These poor governments have few alternatives. With oil prices in an upward spiral, Chavez's initiative provides a measure of economic stability that is crucial for development. On the other hand, saddling the state with the burden of running an oil company with any degree of efficiency is at best, perverse. Plus, any chance of developing local entrepreneurial talent is lost.

Meanwhile, energy-security woes, added to environmental concerns and a powerful agricultural sector, have revolutionized the alternative-energy markets in the United States. Ethanol production has risen from 1.6 billion gallons in 2000 to 4.9 billion gallons last year. The U.S. is now the world's largest producer, surpassing Brazil, which has been producing ethanol for transportation fuel for 40 years and is still the world's largest consumer.

However, Brazilian ethanol production comes from sugar cane, while American ethanol is delivered from corn. And when it comes to environmental sustainability, there simply isn't any comparison. According to industry figures, the ratio between energy output/energy input for corn varies between 1.3 to 1.8 while the figure for sugar cane is an impressive 8.3. Brazil has succeeded in developing production systems capable of delivering the product without using fertilizers or irrigation, in mills capable of producing either sugar or ethanol, and using the sugar cane bagasse (crushed sugar cane) to fuel the operation. If this production know-how can be transferred to Central America and the Caribbean, it could enhance the economics of the region.

 

Even though North America has embarked on the ethanol bandwagon, with Ontario mandating five per cent in the fuel mix and the federal government making mention of doing the same at the national level, that product might not be the alternative fuel of choice for us. However, given the southern part of the hemisphere's long tradition of sugar cane production, it is conceivable that, for them, ethanol could deliver a more sustainable energy fuel mix. The product would also bring a degree of self- reliance, and, since ethanol production from Central America and the Caribbean is exempt from U.S. import duties, it would also provide a potential value-added export product.

Undoubtedly the potential for regional development and a vision of more stable and productive energy integration was behind last March's "memorandum of understanding to advance co-operation on biofuels" signed between the United States and Brazil. And the possible shift from several countries' dependency on Mr. Chavez's largesse to a more balanced equilibrium that includes Brazil and the United States is probably behind both Fidel Castro's and Hugo Chavez's increased rhetoric against biofuels. They have spared no efforts alerting the world to potential starvation from the increased demands of fuels on agricultural production.

However, even Mr. Chavez knows that some battles are not worth fighting. He lifted all objections to the OAS working document, allowing for consensus on the Declaration of Panama two weeks before the meeting. This is a first, and so significant that one can overlook the many weaknesses of the declaration.

Although it is full of pie-in-the sky statements, there is one item that holds promise. In it is a request that the OAS convene an inter-American meeting of national authorities and experts before the next general assembly to discuss how contributions to this vision of sustainable development can take place. And this is where Canada can play a role.

One can argue that among alternative fuels, ethanol makes little sense to Canada. And that might be true. However, an aspiring energy superpower leads the way by thinking beyond its own interests, especially when it leads to an improvement in the lives of others less fortunate. This OAS initiative offers Canada the perfect opportunity to showcase its own energy sector, including its world-class research on the next generation of ethanol production.

We should simply say: There isn't a better place for this meeting than right here in Canada.

The opinions expressed in this article/multimedia are those of the author(s) and do not necessarily reflect the views of CIGI or its Board of Directors.