SCENESETTER FOR SECRETARY BODMAN'S VISIT TO

C O N F I D E N T I A L SECTION 01 OF 02 LISBON 001202

SIPDIS

DOE FOR BEN GETTO

E.O. 12958: DECL: 05/13/2018
TAGS: PREL ENRG PO
SUBJECT: SCENESETTER FOR SECRETARY BODMAN'S VISIT TO
PORTUGAL

Classified By: Ambassador Thomas Stephenson for reasons 1.4 (B) and (D)
.


1. (C) Mr. Secretary:

Your visit to Lisbon provides an excellent opportunity to
strengthen collaboration with the Portuguese in the field of
renewable energies, the number one goal of our Mission
Strategic Plan. The centerpiece of your visit will be
signature of an MOU which lays the groundwork for cooperation
in wave energy research, and signature of a Megaports MOU
formally enlisting Portgual in this important program. A
second overarching objective will be, in your public
appearances and private meetings to address the widespread
perception that the United States is a reluctant partner on
energy security and climate change. You are the ideal
spokesman to counter that perspective by underscoring U.S.
initiatives in this area, and your schedule will provide
plenty of opportunities to get out the message. One last
point. The Portuguese government has collaborated closely
with us on a wide variety of initiatives, including sensitive
global counterterrorism efforts. Your visit will underscore
our appreciation and continuing commitment to bilateral
engagement at the highest levels. Minister of Economy Manuel
Pinho, who called on you in Washington in March, considers
himself your principal host on the Portuguese side.
Portugal - Steadfast Ally
--------------


2. (C) Our ties with Portugal date to the 1790's, when
Portugal was one of the earliest countries to recognize the
newly-independent United States. More recently, Portugal has
been a steadfast ally that has consistently stood by our
side, regardless of the party in office. The President and
Prime Minister -- from opposing political parties --
consistently stress that trans-Atlantic relations are a
pillar of Portuguese foreign policy and that NATO is the
primary guarantor of European security. Prime Minister Jose
Socrates had an excellent Oval Office meeting with President
Bush in September 2007, two months after Secretary Rice spent
a very productive day in Lisbon. Some members of the far
left of Socrates's party are uncomfortable with his pro-U.S.
inclinations, but the Prime Minister has so far been
successful at co-opting or marginalizing them.


3. (SBU) Portugal has provided excellent access to Portuguese
air and seaports for military support operations in Iraq and
Afghanistan, with over three thousand flights a year
transiting Lajes Air Base in the Azores, where some 2,000
U.S. service members and their families are assigned.
Despite serious budgetary constraints, its armed forces are
engaged in numerous global hotspots: in Afghanistan (where
it has lost two soldiers),East Timor, Kosovo, Bosnia, and
Lebanon. The government has also been a solid partner in
global counter-terrorism efforts -- it is a founding member
of the Proliferation Security Initiative and the Global
Initiative to Combat Nuclear Terrorism, and it has hosted DHS
personnel as part of the Container Security Initiative since

2005.

Internal Politics: Governing from the Center
--------------


4. (SBU) Portugal's charismatic 50-year-old Prime Minister,
Jose Socrates (with whom we hope you'll have some time to
interact) heads Portugal's moderate Socialist government,
which assumed power in March 2005. The Socialists won an
absolute majority of seats, which has allowed Socrates to
govern from the center without coalitions and helped him
implement an economic reform agenda that has required
significant belt-tightening among the Portuguese public. By
the end of 2007, the government had succeeded in reducing the
budget deficit below the EU-mandated limit of three percent,
a year ahead of schedule, although growth and unemployment
levels remain worse than the EU average.

Multilateralist to the core
--------------


5. (SBU) Portugal places great stock in multilateral
institutions, the European Union foremost among them.
Portugal joined the EU in 1986, and a subsequent infusion of
EU structural adjustment funds made possible the construction
of Portugal's national transportation infrastructure.
Portugal remains a net recipient of EU funds, and a majority
of the public view the EU favorably. In fact, Manuel Durao
Barroso abandoned his Prime Ministership halfway through his
term in 2004 in order to assume the presidency of the
European Commission. On most important foreign policy

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issues, Portugal defers to EU consensus. There are some
exceptions, such as Africa, on which Portugal does assume a
leadership role.


6. (SBU) The Portuguese government was consumed by foreign
policy issues and internal EU matters during its six-month
stint as EU president during the latter half of 2007. In
that role, Lisbon was primarily a facilitator, helping bring
together the other 26 members of the bloc to advance progress
on key issues in a lowest common denominator approach. Two
notable achievements during that period were finalization of
the EU reform treaty (the Treaty of Lisbon) -- which will
make the EU more internally efficient and will aid
trans-Atlantic collaboration in some ways (although it does
not yet provide a good answer to Henry Kissinger's famous
question, "What number do I call when I want to speak to
Europe?") and established a formal structure that will
facilitate regular and vigorous interactions between Africa
and Europe.

Energy: Diversification and renewables
--------------


7. (SBU) Portugal is heavily dependent on energy imports,
with foreign sources responsible for more than 80 percent of
the country's primary energy needs. It imports all of its
crude oil -- much of it from Nigeria and Saudi Arabia;
natural gas -- from Algeria and Nigeria; and coal -- from
South Africa, Colombia, and others. The government has made
a concerted effort in recent years to diversify the country's
energy supply and Galp, Portugal's primary oil and gas
distributor, has recently explored collaboration with Gazprom
and Iran's national oil company, although nothing concrete
has been agreed on. During PM Socrates's mid-May visit to
Venezuela, Galp signed several agreements with Venezuela's
PdVSA, ranging from joint exploration of oil fields to an
oil-for-food arrangement.


8. (SBU) Portugal generates approximately 86 percent of its
electricity needs. In 2005, renewable sources accounted for
nineteen percent of electricity production, and the Socrates
government has moved ambitiously since then to boost that
percentage significantly. In January 2007, Socrates
announced that Portugal planned to increase the percentage of
its electricity needs generated from renewable sources to 45
percent in 2010 by dramatically increasing production
capacity, through a combination of special tax incentives,
subsidies and investment grants. Minister of Economy Manuel
Pinho recently announced he expected investment of 12 billion
euros in the renewables sector by 2012. Portugal offers
fertile terrain for harnessing of wave energy along the
Atlantic coast; solar energy in the south; and hydro and wind
energies in the central and northern regions of the country.
We have shared separately with your staff a more detailed
overview of Portugal's energy sector.

Climate change
--------------


9. (SBU) When it comes to addressing climate change, the GOP
is very much in sync with its EU brethren. Portugal
attended the first MEM meeting as EU President, and both
subsequent gatherings as part of Slovenia's EU presidency
delegation. The GOP welcomed the MEM initiative but remains
skeptical of U.S. intentions and approach (although it
usually refrains from criticizing us publicly). In October
2007, the GOP hosted in Lisbon the inauguration of the
International Carbon Action Partnership (ICAP),a coalition
of countries, U.S. state governments, and the European
Commission that will share best practices on how to design
emissions trading schemes and work toward development of a
global carbon market. The governors of New York and New
Jersey were in attendance, and Governor Schwarzenegger
addressed the group by video.

Press
--------------


10. (U) The Portuguese media are much less aggressive than
their counterparts elsewhere in Europe. On substance, they
and the public at large are generally poorly informed about
U.S. and Portuguese policies in the renewable energy sector.
Minister Pinho told us the main reason for asking you to
participate with him in a seminar on this topic at one of
Portugal's most prestigious universities is to educate the
media and the public about the positive things the GOP and
U.S. Government are doing in this area.
Stephenson