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Cablegate: Energy Security Weighing Heavier in Austria

VZCZCXRO3667
RR RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHNP RUEHPOD RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHVI #1819/01 3461202
ZNR UUUUU ZZH
R 111202Z DEC 08
FM AMEMBASSY VIENNA
TO RUEHC/SECSTATE WASHDC 1656
INFO RHEBAAA/DEPT OF ENERGY WASHDC
RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 02 VIENNA 001819

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ENRG EPET ECON PGOV SENV AU IR
SUBJECT: ENERGY SECURITY WEIGHING HEAVIER IN AUSTRIA

REF: (A) VIENNA 1733; (B) VIENNA 1710; (C) VIENNA 1351

Sensitive but Unclassified - not for Internet distribution.

1. (SBU) SUMMARY: Energy security has arrived on the agenda
of Austrian policymakers. Whereas energy policy was
heretofore dominated by issues like renewables/biofuels,
climate change, and a vociferous anti-nuclear stance, now
diversifying and securing energy supply take equal priority
(even as public perceptions are slow to catch up). Recent
signs of the new agenda include elements of the new
Austrian governmentQs platform, ministerial appointments,
the high-profile Turkmen visit to Vienna (ref B), and
AustriaQs hosting of a high-profile conference November 23-
24. Unchanged is the commitment to stable energy ties with
Russia (ref A): the GoA has now officially endorsed the
South Stream pipeline project alongside Nabucco. END
SUMMARY.

NEW GOA PLATFORM EMBRACES BOTH NABUCCO AND SOUTH STREAM
--------------------------------------------- ----------

2. (U) The coalition platform for the new Austrian
government (which took office in early December) devotes
eight pages to energy issues: it defines security,
efficiency, and renewables as the central principles of
domestic energy policy and the Nabucco Gas Pipeline as the
Qtop priorityQ for energy diplomacy. At the same time, it
characterizes South Stream as a Quseful additionQ to
Nabucco and says the GOA will introduce an enabling act for
participation in South Stream. The program also endorses
the construction of LNG terminals (NOTE: this probably
refers to OMVQs planned LNG terminal in Krk/Croatia, but
might refer indirectly to future OMV gas projects in Iran -
END NOTE). The country intends to position itself as an
Qinternational energy hubQ -- a clear reference to OMVQs
gas compressor/distribution station in Baumgarten and the
OMV-Gazprom Central European Gas Hub (CEGH) software-based
trading platform in Vienna.

3. (SBU) The new coalitionQs platform codifies the rise of
energy security on the GOA agenda. In 2007, the Economics
Ministry created a department for QInternational Energy
RelationsQ and anointed its head, Dr. Maria Reich-Rohrwig,
to be QSpecial Envoy for Pipeline ProjectsQ. A seasoned
WTO negotiator, Reich-Rohrwig was slated to sign an MOU in
September on AustriaQs participation at South Stream, but
the meeting (in Moscow) was cancelled at the last minute
due to the Georgian conflict. In October, she negotiated
with Turkmen President Gurbanguly Berdymukhamedov on
connecting the future trans-Caspian gas pipeline to
Nabucco. Berdymukhamedov paid a high-profile visit to
Vienna in November (ref A), but negotiations are apparently
still pending.

GOA WATERS DOWN RENEWABLES AND ETS GOALS;
NO DEMANDS ON CARBON LEAKAGE
-----------------------------------------

4. (U) In the new GoA program, Austria commits itself to
meeting the EU 20-20-20 goals on climate change by
developing a Qmaster plan on energy efficiencyQ -- mainly
in the building and household sectors. On renewable
energies, the GoA commits to biofuels production and to the
EU Action Plan (which foresees an increase of renewables in
the energy mix from 23% to 34%), but drops its previous
goal of 45% renewables by 2020. On a Kyoto follow-on, the
program says it is Qdecisive to bring the U.S., China and
India on boardQ but is vague on the Qcarbon leakageQ issue
(no demands for barriers to market access by non-
participating countries). NOTE: Austrian industry is a
vocal proponent of carbon leakage arrangements -- but
focuses on free emissions allocations rather than border
tax adjustments. END NOTE.

5. (U) In his first statement on energy issues, new
Economy/Energy Minister Reinhold Mitterlehner applauded the
EU CommissionQs updated Strategic Energy Review and its
focus on energy security, accelerating infrastructure
projects (especially Nabucco), and energy efficiency. On
GHG emissions, Mitterlehner remains very critical of the
updated Emissions Trading Scheme (ETS): the Commission
should not QpunishQ highly efficient energy intensive
industries by QexilingQ them from Europe. The GoA program
advocates continuing free CO2 permits after 2013 for steel
and related industries.

AUSTRIA WILL REMAIN A THORN ON NUCLEAR ENERGY
---------------------------------------------

6. (U) On nuclear energy, Austria will continue to lobby

VIENNA 00001819 002 OF 002


against nuclear energy in all international fora, according
to an early interview with new ForMin Michael Spindelegger.
Austria maintains that nuclear energy is Qnot sustainable
and does not increase energy securityQ and supports the
creation of a nuclear-free zone in Central Europe. Austria
promotes abandoning nuclear power stations that cannot be
QmodernizedQ (Kosloduy, Bohunice, Ignalina) and favors
creating Qhigh, common EU safety standards on nuclear
energyQ. Within the EU, the Austrians have always tried to
minimize financial support for building or modernizing
nuclear energy plants.

HOW WILL THE ENERGY SECURITY AFFECT THE IRAN OUTLOOK?
--------------------------------------------- --------

7. (U) In late November, the GOA and non-profit European
Forum Alpbach (a much smaller, German-language counterpart
to the Davos forum) co-hosted a conference on QEurope Q a
Global Player in Energy?Q High-ranking participants from
the EU Commission (including Commissioner Piebalgs), the
GoA, and the private sector examined energy security and
the EUQs and AustriaQs role in the future. Piebalgs
lobbied for EU Member State adoption of the CommissionQs
Third Energy/Climate Package, which empowers the EU to act
and pave the way for innovation and investments in
renewables, energy efficiency, and more security. MinEcon
section head Alfred Maier (Reich-RohrwigQs boss) agreed
with the EUQs goals of but expressed skepticism that Member
States will cede full power, since the landscape is diverse
-- particularly with regard to the national energy mix (an
important point for Austria which will remain Qnuclear
power freeQ in any case).

8. (SBU) Ambivalent on Iran -- QWe need to tap Iranian
energy sources as soon as possible because the Russian
pipelines are hard to fill, and Central Asian promises are
vague.Q This argument, by prominent Austrian political
scientist/Russia expert Gerhard Mangott, apparently fell on
fertile ground at the conference. Mangott cited Russian
energy ministry sources for his claim that Russia will have
to throttle gas exports to the EU given RussiaQs soaring
domestic consumption. RussiaQs plans for energy efficiency
and diversifying its domestic energy mix (more nuclear)
will fail, Mangott argued, due to the upcoming recession,
and new gas fields on the Yamal peninsula and Barent Sea
will be slow to materialize. In addition, China is
promising a $20 billion loan to Gazprom and Rosneft, if
they sell significant amounts of gas to China. Shakier
still are empty promises to Europe by the four Central
Asian countries, Mangott claimed: proven gas reserves
there are 7.6 tcm, while Iran sits on 27.8 tcm.
Turkmenistan might produce only 7 bcm gas per year, but has
already concluded a contract with Russia over future
delivery of 80 bcm according to Mangott. Mangott
downplayed the Iran nuclear issue and argued for moving
more quickly to conclude gas supply contracts with Iran as
QindispensableQ for EuropeQs energy security. In the
following Q/A session, private-sector Austrian energy
stakeholders appeared to share his view that Europe must
move -- sooner or later -- to develop Iranian gas
resources.

GIRARD-DICARLO

© Scoop Media

 
 
 
 
 
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