Cablegate: U.S.-Argentina Bilateral Energy Consultations On Renewable

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RR RUEHWEB

DE RUEHBU #1283/01 2591455
ZNR UUUUU ZZH
R 151455Z SEP 08
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 2027
RUCNMER/MERCOSUR COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHMFIUU/DEPT OF ENERGY WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC

UNCLAS BUENOS AIRES 001283

SIPDIS
SENSITIVE

E.O. 12958: N/A
TAGS: ENRG SENV TRGY PREL ETRD EINV EAGR AR
SUBJECT: U.S.-Argentina Bilateral Energy Consultations on Renewable
and Clean Energy

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Summary
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1. (SBU) U.S.-Argentina binational working group on alternative
energy and energy efficiency met September 11 in Buenos Aires to
advance cooperation under the July 2008 U.S.-Argentina Memorandum of
Intention (MoI) on Renewable and Clean Energy. The GoA underscored
its intention to advance bilateral energy cooperation and will send
the USG concrete proposals to collaborate on wind, solar, and energy
efficiency in anticipation of plenary bilateral talks scheduled for
November 12 in Washington. The USDel, which included Embassy
Economic, Agricultural, ESTH, and Commercial officers and visiting
WHA Energy Officer Faith Corneille, highlighted efforts to
accelerate renewable energy deployment in the U.S. and ongoing
regional bilateral and multilateral energy cooperation initiatives.
Separately, Corneille delivered remarks September 9 at an Argentine
biofuels conference, emphasizing USG biofuels developments and views
on sustainability. The successful Argentine private-sector
biodiesel industry, which exports all production to the U.S. and
Europe, is optimistic about its global competitiveness, but
concerned about forthcoming European biofuels sustainability
criteria and the possible expiration of the U.S. "splash and dash"
biodiesel blending credit of $1 per gallon. End Summary.

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U.S.-GOA Advance Bilateral Energy Discussions
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2. (U) On September 11, 2008, the U.S.-Argentina binational working
group on alternative energy and energy efficiency met for the first
time in Buenos Aires to discuss next steps under the U.S.-Argentina
MOI to Advance Cooperation on Renewable and Clean Energy. The MOI
was signed during July 10, 2008 plenary bilaterals in Buenos Aires.
Both governments expressed their desire to explore and agree on
concrete activities under the MOI by high-level bilateral
consultations scheduled for November 12 in Washington. Econ
Counselor Doug Climan, WHA Energy and Agriculture Officer Faith
Corneille, ESTH Counselor James Perez, ESTH Officer Ted Jasik, USDA
counselor David Mergin, Agricultural Specialist Ken Joseph, FCS
Attache Charles Ranado, and FCS Commercial Specialist Marcelo Amden
met with the GoA Planning Ministry's Secretariat of Energy MoI
coordinator Juan Legisa, Secretariat of Energy's Oswaldo Bakovich,
Secretariat of Energy's Francisco Elizondo, Secretariat of Energy's
Alicia Baragatti, Ministry of Science and Technology's Ernesto
Quiles, National Scientific and Research Council's (CONICET's) Jorge
Teson, Secretariat of Agriculture's Miguel Almada, and Ministry of
Foreign Affairs' Ambassador Rodolfo Rodriguez, Deputy of the
Directorate for International Negotiations, Minister Jorge Luis
Riccombeni and Minister Trambetta. Jointly with the GOA, we issued
a press statement available at
http://spanish.argentina.usembassy.gov/rel411 .html

3. (SBU) MFA Ambassador Rodolfo Rodriguez opened the meeting
expressing condolences on this anniversary of September 11, 2001 and
hoped this first meeting of the bilateral energy working group
meeting would help deepen bilateral cooperation. Legisa highlighted
the "strong and capable" interagency GOA team at the meeting which
he attributed to Energy Secretary Daniel Cameron's enthusiasm
following his participation in the March 2007Washington
International Renewable Energy Conference (WIREC) and to the GoA's
interest in promoting "greater and better" cooperation. Legisa
noted that, in regional initiatives such as UNASUR or the OAS,
energy issues have tended to become overly politicized, and he
welcomed this meeting's focus on seeking practical, concrete
cooperation initiatives.

4. (SBU) In a series of presentations, representatives of the
Secretariats of Energy and Agriculture and the Ministry of Science
and Technology GOA presented their research and development
priorities and efforts to promote domestic energy efficiency and
renewable energy use, including biofuels (soy biodiesel, jatropha,
microalgae, and cellulosic ethanol from forestry residue), hydrogen
fuels cells. GoA officials highlighted legislative mandates that 8%
of electrical power be generated from non-hydro renewable energy by
2016, and that refined fuels include a 5% ethanol (E5) and 5%
biodiesel (B5) blend by 2010. On biofuels, they noted that the vast
majority of current production is exported. To encourage local use,
development and additional domestic employment, the GoA is offering
the biofuels sector targeted incentives for manual harvesting
techniques, SME participation, and investment in less developed
areas of Argentina. Legisa noted that the GoA is tracking the
global food versus fuel debate, but called recent heated
international rhetoric "exaggerated." GoA officials expressed
concern on the potential impact of forthcoming EU sustainability
criteria on Argentina's biodiesel industry (para 7). Separately,
GoA officials highlighted recent cooperation with Cuba to install

four million energy efficient lamps throughout Argentina.

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US/Argentina: Current Cooperation and Next Steps
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5. (U) Climan highlighted U.S.-Argentine energy cooperation to date,
including Secretary Cameron's participation in WIREC; USDA Under
Secretary Buchanan's May 2007 visit to Argentina; Argentine
participation in an August 2007 USDA biofuels event in Minnesota,
USG support for a Southern Cone energy conference, organized by the
OAS in Santiago in July 2008, and the August 2008 State
Department-funded visit of an Argentine private sector
representative to the U.S. on a USDA Cochran/OAS biofuels program.
Corneille reviewed U.S. energy policy priorities and efforts to
advance renewable energy and energy efficiency in the U.S. and
throughout the region. She highlighted U.S.-Brazil biofuels
cooperation, the Chile-California Partnership for the 21st Century,
and bilateral USG biofuels cooperation with Chile, Uruguay,
Colombia, and Peru. Mergen reviewed ongoing USDA efforts to
follow-up on the visit of Under Secretary Buchanan to Argentina and
to develop bilateral cooperation on biofuels research. Perez
summarized recent practical examples of USG bilateral biofuels
cooperation with Uruguay. Ranado explained the types of support
Embassy Buenos Aires offers to U.S. alternative energy sector
companies who wish to explore commercial opportunities in Argentina.
All USG delegation members underscored strong USG interest in
exploring how to deepen bilateral cooperation and promote business
exchanges on renewable energy and energy efficiency.

6. (SBU) GoA officials indicated their preference to collaborate on
wind, solar, and energy efficiency and promised to pass to USG reps
concrete proposals for cooperation. Given that hydro power
comprises nearly 95% of Argentina's renewable energy power, we do
not believe GOA will pursue cooperation in this area. GOA requested
clarification on why USG will not join the International Renewable
Energy Agency, which Corneille agreed to provide. The GOA requested
copies of USG bilateral and regional agreements, noting it may wish
to join multilateral partnerships. Finally, the USDel agreed to
consider a DVC prior to the November 12 bilats and to provide a list
of USG contacts for the energy working group.

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Biofuels Markets Americas Conference
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7. (U) Organized by Green Power Conferences and with over 200
participants, Corneille attended the Biofuels Markets Americas
conference September 9-10, 2008 in Buenos Aires. Most participants
represented Argentina's private biofuels industry that is almost
exclusively producing biodiesel from soy, which is exported to
Europe and the U.S. (and re-exported to Europe after "splashing and
dashing" diesel into the biodiesel to take advantage of the U.S.
blending credit of $1 per gallon or $300 per metric ton). Argentina
has a number of comparative advantages in biofuels production,
including its active research and development programs, a dynamic
and innovative agricultural sector, still expanding oil seed
production, competitive transport and export logistics (much
biodiesel production occurs a short distance from transportation
hubs), heavy investment in crushing plants, and considerable
practical experience in sustainable agriculture techniques,
including no-till sowing techniques. Roughly 90% of the soy under
cultivation is not the result of deforestation.

8. (U) A key theme of the event was biofuels sustainability, with
many Argentine biodiesel exporters preparing for eventual EU
sustainability criteria (mandated greenhouse gas emissions
reductions of 45-55%, and various social and environmental
criteria). Corneille delivered remarks on this issue, noting USG
global and domestic efforts to advance a global biofuels
sustainability framework and comply with biofuels sustainability
provisions of the U.S. Energy Independence and Security Act. Britta
Thompson, Member of the European Parliament, joined via phone noting
that on September 11, 2008, her committee would vote on specific
sustainability criteria under the EU Renewable Energy Directive.
Argentine biodiesel producers expressed concern that an annex of the
directive excludes biodiesel from soy.

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Comment
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9. (SBU) The U.S. - Argentine bilateral alternative energy working
group was held the same day the GoA issued a strong criticism of
alleged "political motivations" behind the Antonini Wilson trial in
Miami (septel). In sharp contrast to trial-related bilateral
tensions highlighted by local media, the GOA energy team warmly

welcomed the USDel and responded positively to our suggestions for
advancing bilateral cooperation on energy. The binational working
group will now work to achieve concrete deliverables in advance of
the next U.S.-Argentina high-level bilateral consultations scheduled
for November 12, 2008 in Washington.

WAYNE

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