April 10 (Bloomberg) -- Venezuelan President Hugo Chavez called for the creation of a Latin American energy system to prioritize local markets in a ``true energy revolution,'' guaranteeing oil and gas supply to the region for 100 years.

``All the oil and energy that Latin America needs is here in Venezuela,'' Chavez said tonight at a graduation ceremony in Caracas. ``That resource, once in the hands of the empire, is now in Venezuelan hands, and we have it to share with the people of Cuba and the Caribbean, Nicaragua and Central America, Brazil and South America, at least for 100 years.''

Chavez called proposals by U.S. President George W. Bush to substitute gasoline with ethanol in a bid to reduce U.S. reliance on foreign oil, ``true craziness'' that ``go against nature'' and threaten the region's poorest inhabitants.

``To produce the ethanol necessary to replace the gasoline that the U.S. alone consumes, we'd have to plant almost all the land on this continent with corn or sugar cane -- not to feed people, but to feed the cars of the U.S. empire,'' he said. ``That's craziness.''

Chavez said the U.S. proposal would never sabotage relations between Venezuela and its ethanol-producing neighbor, Brazil, as Brazilian President Luiz Inacio Lula da Silva has offered ``serious'' bio-fuel plans that are in fact different from what Bush has led the world to believe.

``We'll never fight with Brazil on this, we'll never fight with Lula,'' Chavez said. ``The world press says, `It's `Fidel and Chavez against Bush and Lula.' No, it's not like that. It's Fidel and Chavez against the U.S. empire.''

U.S.-Brazil Accord

Bush and Lula met last week at Camp David to develop an accord signed in March in Sao Paulo to increase ethanol production in their nations, the world's two largest producers of the bio-fuel.

Lula is seeking to convince his U.S. counterpart to push congress to cut the nation's 54-cent-a-gallon tariff on imported ethanol, boosting Brazilian exports and tempering U.S. reliance on Venezuelan crude.

While Chavez tonight conceded that bio-fuels can be added to gasoline to replace polluting additives, as Venezuela itself has done, he denied it was practical to fully substitute ethanol for fossil fuels.

Should nations really wish to reduce their reliance on oil, Chavez suggested they instead boost natural gas consumption. Venezuela is home to the world's eighth largest natural gas reserves, he said.

To contact the reporter on this story: Theresa Bradley in Caracas at tbradley7@bloomberg.net.

Last Updated: April 10, 2007 21:51 EDT