ON BOARD, ALMOST: BIOFUELS INITIATIVE IN ST. KITTS

UNCLAS SECTION 01 OF 03 BRIDGETOWN 001195

SIPDIS

SIPDIS

WHA/CAR FOR KAREN WILLIAMS
WHA/EPSC FOR FAITH CORNEILLE
EEB/ESC/IEC FOR MATT MCMANUS AND BRENDA HAENDLER
OES/ENV FOR LORI BRUTTEN

E.O. 12958: N/A
TAGS: ENRG EAGR EINV KPAO EAID EPET SENV
SUBJECT: ON BOARD, ALMOST: BIOFUELS INITIATIVE IN ST. KITTS

REF: A. STATE 40124


B. STATE 73635

C. STATE 80334

D. STATE 107076

Summary
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1. (SBU) A successful biofuels conference hosted in St. Kitts
on August 28 encouraged the Government of St. Kitts and Nevis
(GOSKN) to move forward on a biofuels development plan.
However, with tourism development competing for scarce land
and resource dollars on the island, continued USG engagement
will be necessary to convince Prime Minister Denzil Douglas
to keep biofuels as a priority. The Ambassador will use her
upcoming visit to St. Kitts to reiterate our strong interest
in and commitment to biofuels in St. Kitts. End Summary.

Biofuels Conference in St. Kitts
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2. (U) On August 28, Embassy Bridgetown hosted
representatives in St. Kitts from the Department (EEB),
Organization of American States (OAS) and the Government of
Brazil (GOB) to present OAS' year-long study of biofuel
development potential in St. Kitts. To advance public
diplomacy efforts, the Embassy also hosted an expert speaker
from Florida International University who presented biofuel
technologies and best practices in the Western Hemisphere.
EconOff also used the event to highlight the Secretary's
announcement of the Washington International Renewable Energy
Conference in 2008. EEB and OAS representatives remained in
St. Kitts for follow up meetings with key government
stakeholders in order to gauge the GOSKN's political
commitment and determine tangible next steps.


3. (U) Prime Minister Denzil Douglas set a positive tone for
the biofuels event, praising the U.S.-Brazil Biofuels
Initiative and expressing gratitude to the United States for
being chosen as one of the first four target countries.
Following the PM, the OAS presented the results of its
year-long assessment of biofuel potential, inspiring
constructive exchange between the event's participants to
greater advance the issue. In the afternoon session, EconOff
presented the USG's commitment to alternative energy
development as well as the Secretary's May 1 announcement of
the upcoming Washington International Renewable Energy
Conference in March 2008. Following EconOff's remarks,
Department's EEB representative, Dr. Brenda Haendler, and
Brazilian Foreign Service Officer, Emerson Kloss, covered the
U.S.-Brazil Initiative, while the featured guest speaker from
Florida International University, George Philippidis, focused
on best practices in the hemisphere. Brazilian Ambassador to
Barbados, Orlando Oliveira, remained for the full program and
could be heard reiterating his support for the
U.S.-Brazil-St. Kitts Initiative during side-bar
conversations with PM Douglas and others. The Permanent
Secretary from the Ministry of Sustainable Development, the

SIPDIS
lead government agency on biofuels, was accompanied by her
technical assistant who appeared energized to carry the
biofuels agenda forward in St. Kitts after returning from her
Department-sponsored participation in the August 2007
Minnesota Biofuels Conference.

Gauging Commitment and Signing on the Dotted Line
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4. (U) In the morning session with key stakeholders, the OAS
immediately focused on the political crossroads that
currently faces St. Kitts between biofuels development and
tourism, which will both compete for access to significant
land and resources. The afternoon speakers reiterated that
biofuels development in St. Kitts will require considerable
investment, not just in terms of resources, but most
importantly, long term political will. Whereas PM Douglas
did not exactly commit to the next stage of the biofuel
development process, his Ministry representatives expressed
enthusiasm for participation in the biofuels initiative.
When one conference participant suggested a region-wide
CARICOM biofuels policy, Ministry of Sustainable Development
representatives responded that "St. Kitts cannot depend on
CARICOM to care about the needs of St. Kitts, since it has a
history of not doing so in the past, and needs to move
forward now."

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5. (U) In an attempt to further gauge the GOSKN's commitment,
the Department, Brazilian Government, and OAS held joint
follow-up meetings from August 29-30 with key ministries and
stakeholders, where they stressed the transformational
benefits of biofuels development. In their meeting with the
Minister of Sustainable Development, Nigel Carty, Carty
admitted that he is under significant pressure to utilize the
remaining sugar cane lands and that "people, particularly the
remaining unemployed cane workers, want to return to the
fields and are getting restless for a solution." In what
appeared to be genuine interest in moving forward, Carty
requested on-the-ground technical assistance to first develop
an issue paper that would lay out the terms of reference for
a request for proposals and at the same time requested
assistance for soil and crop testing. The Department of
Physical Planning and Environment, also under Carty's
authority, admitted that the last soil study was conducted in
1966, and is currently sitting in a museum.

Remaining Obstacles
--------------


6. (SBU) Many obstacles yet to be overcome are bureaucratic
in nature, such as the GOSKN's inability to account in a
timely fashion for exactly how much land is available or is
being sold. In addition, the lack of coordination across
government agencies, which is shocking for a country the size
of St. Kitts, and the micromanagment style of the Prime
Minister, who is de facto head of just about every major
decision-making body in the country, creates a very
centralized structure where no one but the Prime Minister is
empowered to make policy decisions. The greater obstacles,
however, appear to be physical: a recent tour of St. Kitts'
power plant and sugar mill revealed outdated machinery, the
recent investment in diesel generators, and poor maintenance
of the remaining cane fields, all of which pose significant
challenges to reviving cane production. Permanent Secretary
Hillary Hazel from the Sustainable Development Ministry
emphasized that a brand new mill will be needed for ethanol
production. Hazel also stressed that additional technical
assistance from the United States and Brazil will be needed
for any E10 program, especially in efforts to work with
petroleum companies currently providing energy resources to
St. Kitts.

What's Next?
--------------


7. (SBU) From both the biofuels event and meetings with the
USG, OAS, GOB and GOSKN, it appears that all key stakeholders
agreed to quick forward movement on biofuels development in
St. Kitts. To overcome remaining obstacles, the Department
and OAS agreed to coordinate the collection and distribution
of agricultural data from monthly rainfall and crop testing.
The OAS will generate an issue paper with the GOB to present
to Minister Carty, who agreed to present it promptly to his
Cabinet for review and approval. Both the Department and GOB
hope to have a draft request for proposals for the GOSKN
completed before October, and a firm commitment from the
GOSKN on specific land allotments.

Comment
--------------


8. (SBU) Substantial momentum was generated in St. Kitts
during the August 28 biofuels conference and in private
high-level meetings with GOSKN representatives afterward.
Whether this enthusiasm will turn into tangible action,
however, depends on how PM Douglas balances the serious
competing interests between renewable energy production and
tourism development. So far, PM Douglas has invested his
political and economic capital into making St. Kitts a top
tourist destination. The GOSKN has already sold off half of
the former cane lands to tourism developers, spent millions
on infrastructure development (especially for Cricket World
Cup) and created job development programs for former cane
workers to transition into the hotel and tourism sector. At
the same time, not all former cane workers have found
employment and close to 5,000 acres of cane fields are lying
idle, growing weeds and threatening soil erosion and water
aquification. Ambassador Ourisman will utilize her St. Kitts
and Nevis' National Day visit on September 19 to reiterate to
PM Douglas the USG's support for biofuels development in St.

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Kitts and to press the GOSKN to formally commit to a national
biofuels plan.
FISHER