U.S.-Argentina Bilateral Energy Consultations on Renewable

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 -------------- Summary -------------- ¶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. -------------- U.S.-GOA Advance Bilateral Energy Discussions -------------- ¶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. -------------- --- US/Argentina: Current Cooperation and Next Steps -------------- --- ¶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. -------------- Biofuels Markets Americas Conference -------------- ¶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. -------------- Comment -------------- ¶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