GERMAN ECONOMICS MINISTER ON ENERGY/CLIMATE IN

C O N F I D E N T I A L BERLIN 001066

SIPDIS

SIPDIS
STATE FOR EUR, EEB
USTR FOR DONNELLY, RHODE

E.O. 12958: DECL: 05/24/2017
TAGS: ENRG ETRD SENV PREL EU GM
SUBJECT: GERMAN ECONOMICS MINISTER ON ENERGY/CLIMATE IN
TALKS WITH RUSSIA AND AT HEILIGENDAMM; EXPRESSES OPTIMISM
ON DOHA

Classified By: Ambassador William R. Timken, Jr., for
Reasons 1.5 B and D


1. (C) Summary. German Minister for Economics and
Technology Michael Glos met with the Ambassador May 24 to
discuss the EU/Russia Summit (in which Glos was a full
participant),energy security and climate change policy, and
the current push to realize a successful conclusion to the
WTO Doha Development Agenda trade talks. The Minister also
raised developments at Siemens, noting the new leadership and
efforts in the firm to move away from the illegal practices
that have been uncovered there. In this regard he noted the
German Government has tools to investigate and take actions
against bribery and other illegal practices, which he said
are on par with those in the U.S.


2. (C) On the Summit, Glos characterized it as not very
constructive due to Putin's attitude. Germany continues to
focus on diversification of energy supplies from an
overwhelming reliance on Russia to increase its energy
security. In this regard, he noted he would travel the week
of May 28 to Qatar to push for German companies' access to
Qatari natural gas. Glos characterized climate change as the
central theme for Germany at the upcoming G-8 Summit, and
emphasized a need to move the conversation forward to include
major CO2 emitting countries, such as India and China, while
respecting every country's right to pursue different policies
to achieve shared climate reduction goals. On the Doha WTO
talks, Glos believes further compromise is possible and that
the Heiligendamm G-8 Summit provides an excellent opportunity
to reach agreement. End summary.

RUSSIA/EU SUMMIT


3. (C) Glos summed up the Russia/EU Summit with one line:
"Putin was not in the best of moods." Glos, who noted he was
in all the Chancellor's meetings with the Russians except the
one-on-ones, noted the talks had been difficult and also
noted he had discussed the recent Russian decision to
construct a pipeline from Kazakhstan around the Caspian Sea
with Russian Economic Development and Trade Minister German
Gref (Energy Minister Viktor Khristenko was reportedly ill).
According to Glos, Gref characterized the pipeline decision
as based on technical and financial considerations. Russia
believes the pipeline's route is necessary to make delivery
of Central Asian gas to Europe economically feasible.
Germany however questions whether Russia will have the gas
capacity to fill this pipeline and existing long-term
contracts without relying on Kazakh and Turkmen gas, due to
Russia's under-investment in its energy infrastructure.

ENERGY SECURITY


4. (C) Glos said that he is not particularly distrustful of
Russia as an energy supplier, but it is important to focus on
energy diversification. Germany is therefore "intensifying"
its energy relationship with Norway and is also encouraging
companies to focus on LNG. He is still looking to move ahead
with constructing Germany's LNG facility at Wilhelmshaven.
The Minister added he will lead a German delegation to Doha
the week of May 28 to discuss getting German firms access to
Qatari gas. (Note: in separate discussions with Economic
Ministry officials, the Ambassador and EMIN noted reports of
German companies looking to Iran as a source of natural gas
because they say they cannot be sure of getting supply
contracts with Qatar. The IAEA report further underlined the
need to send a signal to Iran and that now is not the time
for German companies to be pursuing a business as usual
attitude with Iran. Ministry DG for International Economics
Brauner fully took the point and said there would not be any
contracts for natural gas signed with Iran. End note.)


5. (U) Glos noted concerns over energy security topped a
German poll at the beginning of 2007. While some of this
concern was due to the Russian cutoff of the Druzhba pipeline
to Belarus, Glos believes most Germans continue to be
concerned over the country's reliance on Russia as a major
source of energy imports. At the same time, according to
Glos, German concern over climate change means the country is
reevaluating all CO2-free technologies, including nuclear
energy. He remains optimistic these two trends in the public
will lead to an acceptance of nuclear energy, but admits the


SPD Environment Minister and others strongly disagree.

CLIMATE CHANGE


6. (SBU) Glos characterized climate change as the leading
issue for Germany going into the G-8 Summit. The Minister
noted the importance of including all major producers of CO2,
including China and India, in a strategy to halt the growth
of greenhouse gas emissions. Technological breakthroughs,
Glos continued, will be especially important to achieve this
goal. Glos said the important thing to focus on is the
shared goal of safeguarding the environment and cutting CO2
and other greenhouse gas emissions. Each country, however,
needs to be free to adopt different measures to achieve this
goal. He also stated that an international agreement on
climate change might be something for the future, but should
not be something for Heiligendamm.

DOHA


7. (C) Glos said the G-8 Heiligendamm Summit is an excellent
forum to discuss outstanding issues on the Doha WTO talks.
If small compromises are needed from the European side to
achieve a deal, Glos was confident this was possible.
Unfortunately, Glos said it appears President Bush is more
disposed to free trade than the U.S. Congress appears to be,
citing continued EU concerns over U.S. agricultural
subsidies. In addition, other countries, such as India, are
trying to add issues, e.g., visas, which are unrelated to the
WTO, "digging themselves into a hole" and further slowing the
Round.
TIMKEN JR