INTERNATIONAL PARTNERSHIP FOR THE HYDROGEN ECONOMY:

UNCLAS SECTION 01 OF 02 OTTAWA 001721 SIPDIS SENSITIVE STATE FOR OES (WATSON),OES/EGC (REIFSNEIDER, DEROSA), EB/ESC/ISC (MCMANUS, DUDLEY),WHA/CAN (MASON, RUNNING, NORMAN) USDOC FOR ITA/MAC -- OFFICE OF NAFTA DOE FOR INT'L AND POLICY (PUMPHREY AND PERSON),IE-141 (DEUTSCH) AND BPA (ATKINS) EPA FOR OFFICE OF THE ADMINISTRATOR, INTERNATIONAL AFFAIRS AND BRIAN MCLEAN E.O. 12958: N/A TAGS: ENRG CA SUBJECT: INTERNATIONAL PARTNERSHIP FOR THE HYDROGEN ECONOMY: CANADIAN REACTIONS REF: (A) STATE 146268 (B) STATE 153914 ¶1. SUMMARY: GOC OFFICIALS APPEAR TO BE CAUTIOUSLY INTERESTED IN PARTICIPATING IN THE IPHE, BUT HAVE SIGNIFICANT CONCERNS ABOUT HOW IPHE WILL RELATE TO THE IEA'S HYDROGEN COORDINATION GROUP. THEY ALSO POSED NUMEROUS QUESTIONS ABOUT IPHE'S POSSIBLE STRUCTURE AND PROCESS - SEE ACTION REQUESTED, PARAGRAPH 7. THIS INITIATIVE WILL REQUIRE SOME SELLING AT THE POLITICAL LEVEL, AND TO THIS END WE URGE WASHINGTON AGENCIES TO CONSIDER VISITS TO OTTAWA BY SENIOR OFFICIALS FROM DOE AND STATE TO PROMOTE THE IPHE. END SUMMARY ¶2. EMBASSY ESTH COUNSELOR AND ENERGY SPECIALIST DISCUSSED THE USG'S PROPOSAL FOR THE INTERNATIONAL PARTNERSHIP FOR THE HYDROGEN ECONOMY (IPHE) WITH KEY OFFICIALS AT NATURAL RESOURCES CANADA (NRCAN) ON JUNE 16. NRCAN PERSONNEL WERE FAMILIAR WITH THE PROPOSAL: ALL HAD SEEN THE INFORMATION PROVIDED IN REFTEL A, SOME HAD HEARD SECRETARY ABRAHAM'S INVITATION AT THE IEA MINISTERIAL IN APRIL, AND OTHERS HAD SEEN A PRESENTATION BY DOE'S CHRIS BORDEAUX AT THE MOST RECENT MEETING OF SCIENCE AND TECHNOLOGY EXPERTS UNDER THE NORTH AMERICAN ENERGY WORKING GROUP IN OTTAWA ON JUNE 5. ¶3. CANADIAN OFFICIALS' MOST IMPORTANT QUESTIONS WITH RESPECT TO IPHE PERTAINED TO ITS RELATIONSHIP TO THE IEA'S HYDROGEN COORDINATION GROUP (REF B). NOTING THAT THE WORK BEING PURSUED IN THAT FORUM IS SUBSTANTIVE AND IS ALREADY WELL UNDERWAY, THEY EXPRESSED CONCERN THAT THE IPHE INITIATIVE WOULD DUPLICATE WHAT WAS ALREADY BEING DONE IN THE IEA CONTEXT AND/OR THAT IT WOULD SPREAD THE GOC'S AVAILABLE RESOURCES TOO THIN. IN ADDITION, NRCAN OFFICIALS RAISED QUESTIONS ABOUT HOW THE IPHE PROCESS WOULD RELATE TO IEA EFFORTS ON THE DEVELOPMENT OF INTEROPERABLE CODES AND STANDARDS. ¶4. CANADIAN OFFICIALS INQUIRED BRIEFLY ABOUT SECRETARY ABRAHAM'S EFFORT TO PROMOTE THE IPHE AMONG PROSPECTIVE MEMBERS DURING VISITS TO THEIR CAPITALS. (COMMENT: THE FACT THAT SECRETARY ABRAHAM HAS PROMOTED THE IPHE DIRECTLY WITH THE EU AND OTHER FOREIGN GOVERNMENTS, BUT HAS NOT DONE SO WITH CANADA, MAKES THIS A SENSITIVE TOPIC IN OTTAWA. END COMMENT). ¶5. OUR INTERLOCUTORS WERE INTERESTED IN THE POSSIBLE FORMAT OF THE PROSPECTIVE MEETING TO LAUNCH THE IPHE IN FALL ¶2003. THEY RECOMMENDED STRONGLY THAT WE NOT TRY TO HOLD MEETINGS AT THE POLICY AND TECHNICAL LEVELS SIMULTANEOUSLY (CITING THE CASE OF THE CARBON SEQUESTRATION LEADERSHIP FORUM),BUT RATHER THAT WE PUT POLICY ISSUES FIRST AND THEN DEAL SEPARATELY WITH STRUCTURAL AND TECHNICAL MATTERS. ¶6. OTHER ISSUES IN WHICH NRCAN SHOWED INTEREST INCLUDED: -- THE APPROPRIATENESS OF THE IPHE'S TIME FRAMES (I.E. IS IT REALISTIC TO MAKE HYDROGEN THE "TRANSPORTATION FUEL OF CHOICE" BY 2020?); -- WHETHER INDIA AND CHINA WERE LIKELY TO PARTICIPATE; -- HOW THE IPHE SECRETARIAT WOULD BE STRUCTURED AND WHERE IT MIGHT BE LOCATED; -- HOW INDUSTRY/PRIVATE SECTOR GROUPS WOULD BE INVOLVED IN THE PARTNERSHIP; -- HOW WILL IPR ISSUES BE HANDLED; -- WHETHER U.S. STATES AND/OR LOCAL GOVERNMENTS BE INVOLVED IN THE PARTNERSHIP (NRCAN UNDERSTANDS THAT CALIFORNIA AND OTHER STATES HAVE BEEN ACTIVE ON HYDROGEN AND FUEL CELL DEVELOPMENT); -- WHETHER THE IPHE WILL ENGAGE IN ACTUAL PROJECTS, OR JUST BE A FORUM FOR EXCHANGE OF INFORMATION; AND -- HOW IPHE MIGHT CONNECT TO CSLF. ¶7. ACTION REQUESTED: BASED ON OUR DISCUSSIONS THUS FAR, IT IS CLEAR THAT THE GOC IS INTERESTED IN THE IPHE AND GIVING IT CAREFUL CONSIDERATION. HOWEVER, OFFICIALS ARE ALSO CONCERNED ABOUT ORGANIZATIONAL DETAILS AND ABOUT THE POSSIBLE IMPLICATIONS OF THIS NEW PARTNERSHIP INITIATIVE FOR EXISTING BILATERAL AND MULTILATERAL (PARTICULARLY IEA) COOPERATION ON HYDROGEN TECHNOLOGIES AND FUEL CELLS. REQUEST THAT WASHINGTON PROVIDED RESPONSES FOR QUESTIONS AND CONCERNS RAISED IN PARAGRAPHS 2, 4 AND 5 ABOVE SO THAT WE CAN REASSURE THE GOC ON THESE ISSUES TO THE EXTENT POSSIBLE. END ACTION REQUESTED. ¶8. OUR MEETING WITH NRCAN OFFICIALS WAS CLEARLY INCONCLUSIVE WITH REGARD TO CANADIAN PARTICIPATION IN THE IPHE, PARTICULARLY SINCE IT INVOLVED ONLY ONE AGENCY OF THE SEVERAL IN THE CANADIAN GOVERNMENT THAT WOULD PRESUMABLY PLAY A ROLE IN DECIDING ON CANADIAN PARTICIPATION. THE U.S. PROPOSAL FOR AN INTERNATIONAL PARTNERSHIP HAS RAISED A NUMBER OF BASIC QUESTIONS THAT THE GOC WILL HAVE TO WRESTLE WITH AS THEY CONSIDER HOW TO RESPOND. ANY ADDITIONAL INFORMATION THAT WASHINGTON AGENCIES MAY BE ABLE TO PROVIDE TO US WILL BE USEFUL IN ENGAGING NRCAN AND OTHER CANADIAN GOVERNMENT AGENCIES ON THE IPHE PROPOSAL. FINALLY, BEYOND ALL THE TECHNICAL AND BUREAUCRATIC ISSUES THAT WE HAVE ENCOUNTERED IN OUR INITIAL DISCUSSIONS WITH GOC OFFICIALS, THERE IS A NEED TO SELL THE CONCEPT AT THE POLITICAL LEVEL IF WE ARE SERIOUS ABOUT ENGAGING CANADA IN THE IPHE. THAT IS AN EFFORT THAT WE EXPECT THE AMBASSADOR TO BE FULLY INVOLVED IN, ONCE WE HAVE THE INFORMATION TO RESPOND TO SOME OF THE BASIC ISSUES RAISED ABOVE. HOWEVER, WE WOULD ALSO URGE WASHINGTON AGENCIES TO CONSIDER VISITS TO OTTAWA BY SENIOR OFFICIALS FROM DOE AND STATE TO PROMOTE THE IPHE. CELLUCCI