CNBC’s Eric Bolling told “Morning Call” that President Bush’s trip to Brazil to discuss ethanol may be a warning to Venezuela’s Hugo Chavez--a fierce critic of the United States--and who has nationalized some of his nation's economy.
Bolling said, “I don’t think this does anything other than take a shot across the bow of Chavez and say, ‘Look, we’re going to reduce dependence on your oil maybe replacing it with sugar-based ethanol from Brazil.’ That’s the only positive I can see coming out of this. Maybe Chavez says, ‘Hey, maybe I ought to start playing nice with the Bush administration.’ ”
Demand for ethanol is outstripping supply, driving up the price of corn – the major source of ethanol produced in the United States.
Meeting today in South America, President Bush and Brazilian President Luiz Inacio Lula da Silva agreed to share technology for the production of alternative fuels in an effort to reduce reliance on oil imported from Venezuela.
But it’s unlikely that Bush will reduce the tariff on Brazilian ethanol imported to the United States.
“(Brazilian President Lula da Silva) would love for the U.S. to relax its tariff on imported ethanol which stands at 54 cents per gallon,” said Tony Mercandetti of Energy News Today. “The chances that Bush would warm up to that are slim and none considering that tariff is in place to protect U.S. production, particularly from the Midwest.”