Sunday, September 14, 2008

Bolivia Protests - Brazil Short Natural Gas

Brazil yesterday faced severe shortages of natural gas after violent protests in Bolivia caused the temporary closure of a pipeline that supplies about a quarter of Brazil's daily needs.

At least three people died in Bolivia during yesterday's violent clashes between pro- and anti-government demonstrators.

Residents of the more developed eastern lowlands have been demanding autonomy from the government in La Paz in protests that have escalated since last year.

President Evo Morales accused the US of supporting the anti-government demonstrators and on Wednesday expelled Philip Goldberg, the US ambassador. Mr Morales said Mr Goldberg had conspired with demonstrators in what a Bolivian government spokesman called "an attempt to spark a civil war".

The US state department last night declared Gustavo Guzman, Bolivian ambassador to Washington, persona non grata.

The department earlier said Bolivia's accusations were "baseless" and described the move as "a grave error that has seriously damaged the bilateral relationship".

Luiz Inácio Lula da Silva, Brazil's president, yesterday called on the "group of friends of Bolivia", formed six months ago and consisting of Brazil, Colombia and Argentina, to help bring about a peaceful settlement. He had telephone conversations yesterday with Mr Morales, and presidents Hugo Chávez of Venezuela and Cristina Fernández of Argentina. His office also spoke to Colombia's foreign minister and Mr Lula da Silva was expected to speak to President Michelle Bachelet of Chile last night.

"The president is keen to help bring about a negotiated solution," a presidential spokeswoman said.

Brazil's foreign ministry earlier said the government was following the situation "with grave concern".

Local news agencies reported that, privately, members of the Brazilian government had expressed dissatisfaction at Mr Morales's handling of the crisis.

For nearly three weeks, anti-government protesters have held roadblocks in south-eastern Bolivia near pipelines that carry 30m cubic metres of gas to Brazil each day. An explosion on Wednesday evening damaged one pipeline, reducing supplies by 3m cubic metres a day. Early on Thursday saboteurs damaged a valve on another pipeline carrying 14m cubic metres, although the damage was repaired later in the day according to Transierra, the company that runs the pipeline.

Edson Lobão, Brazil's mines and energy minister, was expected to announce measures yesterday evening to deal with the shortage.

"This is very serious," said Adriano Pires, an oil industry analyst in Rio de Janeiro. "Half the gas we consume comes from Bolivia, and up to 100 per cent in southern Brazil."

He said supply shortages would be felt among residential and industrial users, by drivers of vehicles running on natural gas - many taxis in Brazil use the fuel - and by the ceramics industry, which is dependent on natural gas.

Bolivia has the second largest reserves of natural gas in South America after Venezuela, all located in the insurgent eastern half of the country.

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