ENERGY SECRETARY ABRAHAM MEETS BRAZILIAN MINISTERS

UNCLAS SECTION 01 OF 03 BRASILIA 001005

SIPDIS

SENSITIVE

NSC FOR DEMPSEY
DOE FOR GWARD
COMMERCE FOR 4332/WBASTIAN/JANDERSON/DMCDOUGALL
COMMERCE FOR 3134/010/DEVITO/ANDERSON/OLSON

E.O. 12958: N/A
TAGS: ENRG OVIP EINV EFIN PGOV ECON BR
SUBJECT: ENERGY SECRETARY ABRAHAM MEETS BRAZILIAN MINISTERS

REF: BRASILIA 972


1. (U) SUMMARY: Energy Secretary Spencer Abraham traveled
to Brasilia April 19 to meet with Brazil's Science and
Technology Minister Campos, Mines and Energy Minister
Rousseff, and Foreign Relations Minister Amorim, as a follow-
up to the June 2004 Presidential Summit between President
Bush and Brazilian President Lula. Also pursuant to the
Presidential Summit, the GoB/USG joint working group for the
hydrogen economy met for the first time; Secretary Abraham
and Minister Rousseff signed an agreement on the hydrogen
economy. Foreign Minister Amorim and Mines and Energy Dilma
Rousseff co-hosted a luncheon in honor of Secretary and Mrs.
Abraham. End summary.

Ministry of Science and Technology Meeting
--------------


2. (U) Science and Technology (MCT) Minister Eduardo
Campos, accompanied by MCT Executive Secretary Luiz
Fernandes and seven specialists, welcomed Secretary Abraham,
Ambassador Hrinak, six DOE staff members, and Science
Counselor Rubenstein. Secretary Abraham set the tone by
applauding Brazil's recent memberships in the Carbon
Sequestration Leadership Forum and the International
Partnership for the Hydrogen Economy (IPHE),and expressed
the desire to explore other areas of cooperation. Minister
Campos mirrored this wish to intensify bilateral energy
cooperation. There was agreement that particular areas of
interest within both governments are collaboration on
nanotechnology, renewables, nano-manufacturing,
biotechnology, and scientific exchanges. To facilitate
expanded cooperation, Campos named Executive Secretary
Fernandes as Brazil's point of contact, and Secretary
Abraham named DOE's Office of Science Director Ray Orbach.


3. (SBU) Secretary Abraham urged that the GoB sign the
Statement of Intent (SOI) concerning cooperation in the
fields of nuclear non-proliferation and counter-terrorism.
He pointed out that the President had asked him to
officially convey that Brazil is considered among the ten
Nonproliferation Treaty states to have existing enrichment
facilities and that Brazil will not be subject to
restrictions to their nuclear supply under the President's
enrichment and reprocessing proposal. The Secretary also
emphasized that Brazil's decision to sign the Additional
Protocol is an issue between the International Atomic Energy
Agency (IAEA) and Brazil, not a bilateral one. Secretary
Abraham offered DOE technical assistance to help Brazil with
safeguarding challenges in implementing the Additional
Protocol. Minister Campos stated that the GoB has
safeguards at 35 installations and intends to negotiate the
safeguards for the 36-th installation. Campos appreciated
the offer of potential US help in protecting proprietary
technology during this process.


4. (SBU) Campos expressed GoB's strong interest in
executing the International Nuclear Energy Research
Initiative (I-NERI) it signed last year. Secretary Abraham
and Minister Campos extolled the benefits of nuclear energy
and its importance to the overall energy supply matrix.
Points of contact designated during this meeting for I-NERI
are DOE's Director of the Office of Nuclear Energy, Science
and Technology, Bill Magwood, and the president of Brazil's
National Nuclear Energy Commission, Odair Goncalves.


5. (U) Minister Campos listed some of the Lula
administration's priorities, including alternative energy
programs, biodiesel, and rural electrification. Secretary
Abraham expounded on the latter theme and stated that DOE,
at times in conjunction with USAID, has worked with several
countries on rural electrification programs, the Philippines
being an example. Secretary Abraham added that using fuel-
cell technology to bring electricity to remote communities
is an area of cooperation with GoB that DOE encourages.

Lunch at the Foreign Ministry
--------------


6. (U) Foreign Minister Celso Amorim and Mines and Energy
(MME) Minister Dilma Rousseff co-hosted a lunch in honor of
Secretary and Mrs. Abraham. Seventeen Brazilians attended,

SIPDIS
including four ministers, five ambassadors, four secretaries
and two chiefs of staff. Other especially notable attendees
were Development, Investment and Trade Minister Luiz Furlan,
MME Executive Secretary Mauricio Tolmasquim, and Ambassador
Antonio Guerreiro, Director-General of International
Organizations. In addition to the Secretary and Mrs.
Abraham, U.S. guests included Ambassador Donna Hrinak, Chief
of Staff Joe McMonigle, Senior Advisor Majida Mourad, Senior
Policy Advisor Mary Alice Hayward, Deputy Assistant
Secretary for International Energy Cooperation David

SIPDIS
Pumphrey, Dr. Moustafa Soliman, Dr. Robert Dixon and Embassy
EconCouns Wasilewski.


7. (U) After the lunch, Minister Amorim, five senior
Brazilian Foreign Ministry officials, Secretary Abraham,
Ambassador Hrinak, DOE Chief of Staff Joe McMonigle, Senior
Policy Advisor for National Security Matters Mary Alice
Hayward, and DOE Foreign Affairs Advisor Margaret Manning
and Embassy PolCouns Hearne(notetaker) met in Minister
Amorim's office (Ref).

Joint Team for the Hydrogen Economy
--------------


8. (U) Concurrent with Secretary Abraham's morning
sessions, a separate experts' meeting took place on the
subject of the hydrogen economy. MME Executive Secretary
Mauricio Tolmasquim headed a delegation of seven from his
ministry, and was joined by the following from other
Brazilian entities: Maria Frank from Petrobras, Mauricio
Cantao from the Institute of Technology and Development,
Claudio Judice from MCT, and Paulo Miranda from Business
InCUBAtor COPPE/UFRJ. Dr. Robert Dixon represented DOE and
was accompanied by Energetics consultant Richard Scheer.


9. (U) This joint working group on hydrogen energy
development committed to several bilateral collaborative
activities. Brazilian and U.S. technical experts will share
information on hydrogen technologies, and identify potential
joint projects that will be funded through public-private
partnerships. The experts' group also agreed on information
exchanges through reciprocal "study tours". The aim is to
plan a strategy to stimulate interest in hydrogen-energy
development in the Americas; a follow-on meeting was
scheduled within three months. The working group is to use
the March 2005 IPHE meeting in Brazil to publicize and
advance hydrogen technologies in the hemisphere.

Ministry of Mines and Energy
--------------


10. (U) Minister Dilma Rousseff convened a meeting at MME
including MME Executive Secretary Tolmasquim, various
employees of MME, Secretary Abraham, Ambassador Hrinak,
USAID General Development Officer Armstrong, five DOE staff
members, and EconOff. Minister Rousseff lauded the strong
bilateral relationship between the U.S. and Brazil. She
highlighted the collaboration on the working level in the
areas of carbon sequestration, biomass, and biodiesel.
Rousseff reviewed other activities that have been completed
since the June 2003 Presidential Summit in Washington,
including the September 15-16, 2003 energy information
exchange between MME and the Energy Information Agency, the
October 28-29, 2003 meeting between the US and Brazilian
energy regulators, and the November 21, 2003 energy
symposium in Washington.


11. (U) Both Secretary Abraham and Minister Rousseff
praised the results of that day's first meeting of the
U.S./Brazil hydrogen working group, which presented them
with its formal report. Rousseff called the meeting "a
milestone, leading to another chapter in our partnership,
which sets the tone for consistent interaction." She added
that the joint hydrogen technology meeting set the framework
for technical exchanges as well as for hydrogen road-
mapping, and represented a breakthrough in public-private
partnerships (PPP). Note. So-called PPPs are vital to the
Lula government's economic agenda and hopes for
infrastructure investments. End note.


12. (U) Press was then allowed in the meeting room for the
Secretary's and Minister's signing of the Memorandum of

SIPDIS
Cooperation Between the United States and Brazil for
Hydrogen Energy Technology. Secretary Abraham expressed his
deep thanks for the productive visit and emphasized the
importance of this agreement for developing hydrogen
technologies as different fuels become scarcer in the world.
He emphasized that he had committed to visit Brazil during
the June 2003 Presidential Summit, and that this Memorandum
of Cooperation was a culmination of hard work over the eight
months since.

13. (U) The Secretary and Minister took questions from the
press, the majority of which were directed to Secretary
Abraham regarding the U.S. stance on nuclear inspections and
the IAEA Additional Protocol. Saying, "The U.S. is not here
to tell Brazil what to do," Secretary Abraham stressed that
the issue was directly between IAEA and Brazil. The
Secretary emphasized that the overall purpose of his trip

SIPDIS
was to augment the already-robust energy cooperation between
DOE and MME, and that he was in Brazil to follow-up on
decisions made last June.


14. (U) COMMENT: Although the prospective meeting with
President Lula failed to materialize, all the rest of the
GoB's top levels gave the Secretary's visit a great deal of
attention. Belying Brazilian media speculation in advance
of the trip that the Secretary's objective was to pressure
Brazil on nuclear inspections, all meetings went in an
undilutedly positive atmosphere, without contention. The
relationship between DOE and MME ameliorated as a result of
this visit, and will remain a cornerstone in our bilateral
partnership. The hydrogen working group in particular
should serve as a blueprint for deeper cooperation and
regularly scheduled technical-level dialogue between our
governments.

HRINAK