March 9 (Bloomberg) -- President George W. Bush and Brazilian President Luiz Inacio Lula da Silva agreed to share technology to develop alternative fuels and reduce reliance on oil imports from Venezuela and its Bush administration critic, President Hugo Chavez.

``If you're dependent on oil from overseas, you have a national security issue,'' Bush, 60, said in Sao Paulo the first stop in his six-day visit to Latin America. ``Dependency on energy from somewhere else means you're dependent on the decisions from somewhere else.''

The biofuels partnership between the U.S. and Brazil, the two biggest global produces of ethanol, is also designed to help reduce pollution and improve local economies.

Brazil, the biggest Latin American economy, is the world's only major exporter of ethanol, and total ethanol shipments from Brazil may more than triple in eight years as production outpaces domestic demand, according to Brazil's agriculture minister. Brazil and the U.S. account for more than 70 percent of world production.

``Other countries want to share Brazil's experience,'' Lula said today, adding that avoiding use of fossil fuels helps combat global warming.

Sugarcane

Farmers in Brazil have increased planting of sugarcane to meet surging demand for ethanol, the Brazilian government's statistics agency said yesterday.

Bush earlier today toured a facility of Petrobras Transporte SA, a unit of Petroleo Brasileiro, Brazil's state- controlled oil and natural gas company. The company operates in South America and elsewhere around the world.

Developing energy alternatives offers political benefits to the U.S., Brazil and their allies, as a counterweight to Venezuela's oil reserves, the seventh largest in the world, and Chavez. About 10 percent of total U.S. crude oil imports, or 1.04 million barrels a day, in December came from Venezuela, according to Department of Energy data.

After the joint announcement, Chavez said the agreement was another tilt to benefit Americans. ``That's the Bush plan,'' he said at the presidential residence of Argentina's President Nestor Kirchner. ``They want to replace the production of food so they can sustain their American way of life.''

Development Issues

The Bush administration sees it differently. Creating energy from agriculture ``will increase the independence of these countries and improve their ability to address social and development issues,'' said U.S. Assistant Secretary of State Thomas Shannon on March 7 in Washington.

The U.S. president is on a five-country swing of Latin America to polish the U.S. image after criticism of inattention because of the wars in Iraq and Afghanistan.

Bush, who is making his eighth trip to Latin America, also will confer with Latin leaders on trade and U.S. aid for health and education. He'll stop in Uruguay, Colombia, Guatemala and Mexico before returning to Washington March 14.

Brazil has been producing ethanol from sugarcane for about 30 years. The crop now replaces 40 percent of gasoline consumption. More than 70 percent of the automobiles are ``flex- fuel'' vehicles, meaning they can run on gasoline or ethanol.

One point of contention between the U.S. and Brazil is tariffs. Ethanol producers in Brazil want President Lula to press Bush to end the 54-cent-a-gallon tariff on fuel shipped to the U.S, a request that White House National Security Adviser Stephen Hadley rejected on March 5.

``The tariff is not under negotiation and we have no intention to propose altering the tariff,'' Hadley said. Removing the tariff would provoke strong opposition from farm- state members of Congress.

Protesters and police clashed in Sao Paulo yesterday ahead of Bush's visit. Activists from the environmental group Greenpeace said increased ethanol production might result in more clearing of the Amazon rain forest, the Associated Press reported.

To contact the reporter on this story: Cathy Dodge in Sao Paulo, Brazil at Cdodge1@bloomberg.net; Roger Runningen in Sao Paulo, Brazil at rrunningen@bloomberg.net

Last Updated: March 9, 2007 12:14 EST