METI'S NEW AGENCY FOR NATURAL RESOURCES AND ENERGY

C O N F I D E N T I A L SECTION 01 OF 02 TOKYO 002040

SIPDIS

STATE PASS USTR FOR CUTLER/BEEMAN
FOR EAP/J AND EEB/IEC
STATE PASS DOE/PI KFREDRIKSON/GBISCONTI
PACOM FOR D. VAUGN

E.O. 12958: DECL: 07/23/2018
TAGS: EPET ENRG PREL JA
SUBJECT: METI'S NEW AGENCY FOR NATURAL RESOURCES AND ENERGY
LOOKS FOR CONTINUED COOPERATION ON ENERGY AND CLIMATE


1. (C) Summary: METI's new Agency for Natural Resources
and Energy (ANRE) Director-General, Kazuhiko Hombu, stressed
a strong desire to work closely with the U.S. on energy
issues, including in connection with climate change and other
environment issues, in a meeting with emboffs July 22.
Hombu said energy is a top GOJ policy issue and good
cooperation with the U.S. is essential. On high oil prices
and the demands by Japanese fishermen and other interest
groups for Japanese government help, Hombu said the long-term
structural issues underlying today's situation are different
than the purely OPEC-related supply shocks of the 1970s;
rather than primarily a matter of OPEC supply levels, rising
international demand for oil, particularly in China and
India, is the key factor. He said energy and climate
discussions at the G-8, IEA, and MEM provide a dialogue that
the public can follow, but that there is a need for bilateral
discussion on energy and climate related technology R&D.
Hombu noted energy and climate policy are "two sides of the
same coin." He also noted that Japan is planning to host a
ministerial-level energy forum in Tokyo later this fall. End
Summary.


2. (C) METI Agency for Natural Resources and Energy (ANRE)
DG Kazuhiko Hombu met with EMIN, DOE Energy Attache, and
Econoff July 22 shortly after assuming his new
responsibilities. The new METI ANRE International Affairs
Division Director, Yota Ono, also participated. Recalling
his early GOJ experience, Hombu said U.S.-Japan energy R&D
initiatives launched in the 1970s sent a strong signal to
OPEC nations. He added closer bilateral discussions by the
U.S. and Japan on climate and energy can be a powerful
symbolic message to other countries. Hombu mentioned the
International Partnership on Energy Efficiency Cooperation
(IPEEC) and the Clean Technology Initiative (CTI) as two
important initiatives toward this end. He added U.S.-Japan
leadership would also help the GOJ address domestic
constituencies, such as fisherman and farmers, who are
looking to the government for help in meeting high energy
prices. Hombu noted the GOJ does not want to create new
subsidy programs for agriculture and the fishing industry,
agreeing with EMIN that such subsidies often prove difficult
to reverse. Hombu also stated there is no clear way for
governments to distribute benefits under subsidy or other
price relief programs fairly.

Sectoral Approach and the APP
--------------


3. (C) Noting the enormous potential for energy efficiency
in India and China and these countries' important role in
world energy and other raw materials markets, Hombu said
showcase initiatives should go beyond R&D to include
demonstration and deployment of new technology in emerging
countries under full intellectual property protection. The
ANRE DG emphasized METI's support for a sectoral approach to
greenhouse gas reduction and energy efficiency. He
highlighted the importance of maintaining momentum in the
Asia-Pacific Partnership (APP),which he said keeps China and
India engaged on energy and climate. He said the GOJ would
like to add the land transportation sector to the APP, but
the U.S. has signaled it prefers to wait. He said knowing
the U.S. position would be helpful for the GOJ in preparing
to propose the additional sector in the future. Hombu
praised the APP for helping highlight China's need for a fair
compliance mechanism for local factories and noted China had
agreed in the recent APP meeting in Seattle to host a
ministerial-level meeting in Beijing in 2009. Hombu also
praised DOE and State Department involvement in the APP and
said he hopes the USG will continue its strong support and
leadership.


4. (C) Talking further about China and India, Hombu agreed
that it would be valuable to find ways for the two countries
to cooperate with/engage in the work of the International

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Energy Agency. Again, including the two countries in
research, development, deployment, and demonstration
activities is important both in terms of the success of the
projects themselves and for the success of global efforts to
meet energy and climate change needs.

Bilateral Cooperation
--------------


5. (C) Hombu asked that energy remain a key issue in
U.S./Japan bilateral interaction. He praised the cooperation
between Secretary Bodman and METI Minister Amari and stated
the importance of maintaining the momentum that has resulted
from their relationship. Hombu said construction of new
nuclear power plants in the U.S. will send a strong, positive
signal to other countries. However, he noted there are
questions in Japan over whether this trend will continue
following the November elections.


6. (C) In addition, Hombu stressed repeatedly throughout
the conversation the strong desire to work closely with the
United States in the coming months to develop a viable
post-Kyoto framework. He noted the difficulties facing the
efforts leading up to the Copenhagen meeting, but reiterated
the need for the two countries to continue to cooperate.
Honbu also noted GOJ conversations with the EU on energy
matters, including on new technologies.

The Annual GOJ Staffing changes
--------------


7. (C) Regarding METI staffing changes, Hombu noted the
experience of his new team at ANRE and, noting press
speculation regarding a potential upcoming cabinet reshuffle,
mentioned a new METI Minister will be nominated "at some
point." He said Minister Amari has shown strong will on
energy and climate issues and his continued tenure would
present ANRE with an opportunity for further progress.
Looking to the fall, Hombu mentioned ANRE's plans for a
ministerial-level energy forum in Tokyo likely to be
scheduled for the second or third week of November. The METI
ANRE International Affairs Division Director, Yota Ono, said
Secretary Bodman would be invited to participate.
ZUMWALT