G8, G8+3 ENERGY MINISTERIALS

UNCLAS SECTION 01 OF 03 TOKYO 001834 SIPDIS SENSITIVE STATE PASS DOE FOR KFREDRIKSON, MWILLIAMSON STATE FOR E, G, EEB, OES, AND EAP/J NSC FOR PAUL BROWN AND JONATHAN SHRIER CEQ FOR JAMES CONNAUGHTON E.O. 12958: N/A TAGS: ENRG SENV ECON OVIP JA SUBJECT: G8, G8+3 ENERGY MINISTERIALS REF: TOKYO 1505 SENSITIVE BUT UNCLASSIFIED. NOT FOR INTERNET DISTRIBUTION. ¶1. (SBU) Summary. Representatives from the G8 countries as well as from China, India, and Korea gathered for the G8 and the G8 3 Energy Ministerials in Aomori, Japan, June 8. During the G8-only ministerial, participants reviewed reports on progress made in implementing the St. Petersburg Global Energy Security Principles. Participants in both ministerials expressed concern over historically-high oil prices and the impact they could have on the global economy. Energy Secretary Samuel Bodman and others called for increased investment in energy infrastructure and urged oil-producing countries to create open and transparent legal and regulatory systems to encourage such investment. The G8 3 participants discussed the need to diversify energy sources to include more renewables and biofuels, the importance of increasing energy efficiency, and the need to invest more in and help commercialize new technologies. They also announced the creation of the International Partnership for Energy Efficiency Cooperation. End Summary. ¶2. (SBU) Representatives from the G8 countries as well as China, India, and Korea gathered for the G8 and the "G8 3" energy ministerials in Aomori, Japan, June 8. Topics covered included a review of St. Petersburg commitments, market volatility and the investment climate in the oil industry, and energy security and climate change. Progress Made on Energy Security Initiative -------------- ¶3. (SBU) In the opening session, the G8 countries met to review the progress made to date in implementing the St. Petersburg Energy Security Principles adopted at the 2006 St. Petersburg Summit. International Energy Agency (IEA) Executive Director Nobuo Tanaka presented preliminary comments based on the IEA's review of the national reports submitted by G8 countries and indicated where countries could be praised for their actions consistent with the Principles, as well as where they should devote more effort. Energy Secretary Samuel Bodman and Canadian Minister of Natural Resources Gary Lunn spoke in favor of making the reports public and updating them for the 2009 G8 Summit in Italy. ¶4. (SBU) Echoing the previous day's Five-Country Energy Ministerial (septel),many participants expressed concern over recent oil market volatility and cited the need to promote transparent and stable markets and to improve the investment climate in producing and consuming countries. Participants also highlighted efforts to increase the share of renewables in their country's energy mix. Investment in Infrastructure Needed -------------- ¶5. (SBU) Participants in the G8 3 Energy Ministerial agreed that the unprecedented high oil prices are a serious concern for the global economy. During the oil market and investment climate discussions, Indian Ambassador to Japan, H.K. Singh, stated a lack of investment in energy infrastructure, driven in part by concerns over traditionally cyclical oil markets, is largely to blame for the jump in oil prices. Toward this end, participants agreed to participate fully in the Joint Oil Data Initiative (JODI),providing timely, reliable, and complete data. Singh argued, however, that consumer countries will depend upon fossil fuels for the foreseeable future and called for oil producing countries to create open TOKYO 00001834 002 OF 003 and transparent legal and regulatory environments to encourage investment. ¶6. (SBU) Participants cited the need for consumer countries to develop long-term plans and investment strategies for both traditional and alternative energy sources. They also called for a dialogue between producing countries and consuming countries and suggested the IEA or the International Energy Forum could facilitate such talks. Energy Security and Climate Change -------------- ¶7. (SBU) The discussion on energy security and climate change was divided into three sub-topics -- lower-carbon energy, energy efficiency, and innovative energy technology. Canada's Lunn suggested countries must set their own carbon-reduction targets and develop appropriate action plans. He urged countries to take a market-based approach based on clear and predictable regulatory frameworks. Participants acknowledged that many developed and developing countries will continue to rely heavily on coal in their energy mix and cited the importance of new technologies such as carbon capture sequestration (CCS) to help reduce greenhouse emissions. Most also noted the importance of nuclear technology as a source of clean and secure energy. ¶8. (SBU) Japan's Minister of Economy, Trade and Industry (METI) Akira Amari argued countries must identify key energy consuming industries and then utilize best practices and new technologies to improve those industries' efficiency. Amari and other participants advocated implementing IEA recommendations to the G8 on increasing efficiencies. Chinese National Development and Reform Commission Vice Chairman Zhang Guobao outlined steps China is taking to increase efficiency by closing outdated manufacturing plants, offering tax incentives to businesses that reduce their energy consumption, and labeling consumer products as energy efficient. ¶9. (SBU) Participants in the G8 3 Energy Ministerial formally established the International Partnership for Energy Efficiency Cooperation (IPEEC),an effort to help both developed and emerging economies put in place more effective policies and programs to improve energy efficiency. European Union Energy Commissioner Piebalgs lauded the creation of IPEEC as a way to gain international cooperation and to ensure best practices and existing technologies are deployed globally. ¶10. (SBU) Secretary Bodman, French Energy Minister Jean-Louis Borloo, and Korean Knowledge Economy Minister Lee You Ho all argued for increased inter-governmental and public-private cooperation to develop new technologies. Speakers also called for additional research and development in renewable energies such as wind, cellulosic biofuels, nuclear energy, and clean coal technology. Secretary Bodman discussed USG efforts to help commercialize new energy technologies, most notably through a $42.5 billion loan guarantee program, and stressed the importance that governments create an investment climate that encourages private industry to invest in new technologies. Comment -------------- ¶11. (SBU) One notable sub-theme of the G8 3 Energy Ministerials was the strong intention by nearly all countries to expand the use of nuclear energy in their energy mix. TOKYO 00001834 003 OF 003 This included Italy's announcement of a recent decision to include nuclear power in its future energy mix. Germany did not express opposition to the discussion of nuclear power. End Comment. ¶12. (U) This cable was cleared by State and DOE subsequent to the delegation's departure. SCHIEFFER