VZCZCXRO1210
PP RUEHRG
DE RUEHBR #0355/01 0481456
ZNR UUUUU ZZH
P 171456Z FEB 06
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC PRIORITY 4578
INFO RUEHRI/AMCONSUL RIO DE JANEIRO 1558
RUEHSO/AMCONSUL SAO PAULO 6405
RUEHRG/AMCONSUL RECIFE 4353
RUEHBU/AMEMBASSY BUENOS AIRES 3809
RUEHCV/AMEMBASSY CARACAS 3140
RUEHLP/AMEMBASSY LA PAZ 4387
RUEHPE/AMEMBASSY LIMA 2866
RUEHBO/AMEMBASSY BOGOTA 3621
RUEHQT/AMEMBASSY QUITO 1739
RUEHGE/AMEMBASSY GEORGETOWN 1022
RUEHPO/AMEMBASSY PARAMARIBO 1040
RUEHAC/AMEMBASSY ASUNCION 5243
RUEHSG/AMEMBASSY SANTIAGO 5355
RUEHMN/AMEMBASSY MONTEVIDEO 6069
RHEHNSC/NSC WASHDC

UNCLAS SECTION 01 OF 02 BRASILIA 000355 
 
SIPDIS 
 
SIPDIS 
 
PLEASE PASS TO OES/ETC SCASWELL; 
STATE TO USFS LMAYHEW; 
STATE TO USAID LAC/RSD EGAT DHESS 
 
E.O. 12958: N/A 
TAGS: SENV TBIO KSCA BR
SUBJECT: PROPOSED VENEZUELA-BRAZIL-ARGENTINA GAS PIPELINE TRAVERSES 
THE AMAZON AND RAISES ENVIRONMENTAL CONCERNS 
 
REF: RIO DE JANIERO 0056 
 
¶1. Summary:  In a South-to-South economic integration move, the 
leaders of Venezuela, Argentina and Brazil announced a plan to build 
an 8000km pipeline to ferry gas throughout South America.  The 
proposed pipeline dubbed the "Great Southern Gas Pipeline" would be 
the longest in the world and, according to estimates released by the 
Presidents, cost US$ 18-25 billion.  The pipeline, though only an 
idea at the moment, has environmentalists extremely worried as the 
proposed route would run directly through the Amazon Basin.  The 
project would face lofty environmental licensing hurdles in Brazil. 
End Summary 
 
¶2. According to preliminary proposals outlined in the press, the 
pipeline would begin in Puerto Ordaz, Venezuela, extend the length 
of Brazil and terminate in Buenos Aires, Argentina.  Lula, Chavez 
and Kirchner have promised additional details by March 10 when the 
three plan to meet again in Argentina and a detailed plan by July 
¶2006.  While there are a variety of economic and political 
considerations that will determine the outcome of this vision, 
various environmental and other NGO groups point to potentially 
grave environmental concerns for Brazil. 
 
¶3. These groups have told us that since the pipeline would burrow 
directly through the Amazon forest that, in addition to the 
technical challenges involved, the project will carry severe 
environmental costs, including increased pollution, harm to 
indigenous populations and a loss of vegetation.  Moreover, new 
roads would be especially damaging, allowing loggers, ranchers and 
miners into previously inaccessible areas.  Glenn Switkes of the 
International Rivers Network said that, "if the pipeline were ever 
built, it would inevitably foul the environment... There are a lot 
of issues involved: direct construction, the question of drainage, 
all the roads that need to be built."  Conversely, Roberto Smeraldi 
of the Friends of the Earth Brazil foundation conjectures that, "the 
pipeline theoretically could be built with minimal effect on the 
environment but the cost would be prohibitive."  Industry experts 
have reported to the press that just the technological challenges of 
building through the Amazon could increase the project's price to US 
$40 billion. 
 
¶4.  In Brazil, the project's greatest obstacle could be the 
country's strict environmental licensing requirement, executed 
through Ibama (Brazil's environmental protection agency). 
Historically, development projects in the region have bogged down in 
minutiae over environmental impacts.  The licensing process 
incorporates three stages and involves obtaining a preliminary 
license, a work license and an operating license, each involving 
public hearings and environmental impact assessments (EIA). 
According to Roberto Smeraldi, "a government like Brazil's can't do 
similar studies for projects covering 310 miles after 10 years of 
discussion, and now they are going to manage in-depth studies for a 
(5000 mile) project in six months?"  Smeraldi is referencing plans 
to build a gas pipeline form Urucu, in the central Amazon, to Porto 
Velho.  Another proposal to pave a trans-Amazon road has taken five 
years.  Ibama, for its part, is refusing to make a comment on the 
projects viability "until there is a request for licensing." 
 
¶5. Comment:  It is necessary to keep in mind that the project is, at 
present, a nascent idea.  From an economic standpoint, Brazil would 
be well-served to diversify its natural gas supply at a time of 
surging energy demands.  However, Brazil's Petrobras has already 
committed to developing its own offshore gas reserves, and the two 
efforts would likely compete for both capital and market share. 
Development of Brazil's offshore hydrocarbon reserves, however, is 
already a mature enterprise, which suggests it will have the upper 
hand in this competition for financing.  From an environmental 
perspective, it is difficult to appraise potential consequences, 
prior to seeing detailed plans.  But, it is certain that any 
endeavor which opens remote tracts of forest to industrial processes 
carries with it a serious risk for loss of biodiversity.  End 
Comment 
 
BRASILIA 00000355  002 OF 002 
 
 
 
CHICOLA