Identifier
Created
Classification
Origin
09BRASILIA158
2009-02-06 17:52:00
CONFIDENTIAL
Embassy Brasilia
Cable title:  

Hemispheric Energy and Brazil? Depends who you ask

Tags:  PREL ENRG KSUM ECON BR 
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R 061752Z FEB 09
FM AMEMBASSY BRASILIA
TO SECSTATE WASHDC 3501
INFO AMEMBASSY BUENOS AIRES 
AMCONSUL RECIFE 
AMCONSUL RIO DE JANIRO 
AMCONSUL SAO PAULO 
DEPT OF ENERGY WASHDC
NSC WASHDC
C O N F I D E N T I A L BRASILIA 00158 


CONFIDENTIAL

DEPARTMENT FOR WHA/BSC, WH/EPSC, AND USOAS
DOE FOR GWARD, CGAY, AND RDAVIS

E.O. 12958: DECL: 02/05/2019
TAGS: PREL ENRG KSUM ECON BR
SUBJECT: Hemispheric Energy and Brazil? Depends who you ask

Classified By: Ambassador Sobel, Reason 1.4 (b) and (d)

C O N F I D E N T I A L BRASILIA 00158


CONFIDENTIAL

DEPARTMENT FOR WHA/BSC, WH/EPSC, AND USOAS
DOE FOR GWARD, CGAY, AND RDAVIS

E.O. 12958: DECL: 02/05/2019
TAGS: PREL ENRG KSUM ECON BR
SUBJECT: Hemispheric Energy and Brazil? Depends who you ask

Classified By: Ambassador Sobel, Reason 1.4 (b) and (d)


1. (C) Summary: Ambassador Sobel recently met with Brazil's Under
Secretary equivalent for Energy and Technology at the Ministry of
External Relations (MRE),Ambassador Andre Amado, to discuss
continuing bilateral biofuels efforts. Over the course of the
meeting, the idea of hemispheric energy cooperation arose and Amado
used the occasion to voice his adamant opposition. Despite various
attempts to find an opening in his position, it was clear that Amado,
and as a result MRE, will be very unlikely to support hemispheric
energy initiatives currently under consideration, barring the strong
engagement of other ministries. There is support in other quarters
of the government, including from the increasingly powerful Minister
of Mines and Energy Edson Lobao. The success of any attempts to
enlist Brazil's support in these efforts will depend heavily on
approaching the right elements within the GOB and packaging the
proposal appropriately. END SUMMARY


2. (C) During a meeting with Ambassador Sobel on February 4 to
discussing ongoing biofuels efforts, Ambassador Andre Amado described
his plans for a visit to the U.S on February 25; the Brazilian
Embassy has proposed meetings with WHA A/S Tom Shannon, U/S Bill
Burns, and Senator Lugar. Amado noted he wasn't sure it was a good
idea for him to meet with Senator Lugar. When pressed for the
reasons, Amado said it would be a difficult meeting for him given his
disagreement with the basic premise of Lugar's proposal for a
Hemispheric Energy Compact. He said he didn't believe it was
advisable to engage "hostile nations" that may not want our help. He
felt we would both do better to concentrate on working where we can
"be all encompassing," such as in developing nations in Africa and
South Asia (he cited the Philippines, Thailand, and Vietnam) that
would welcome all aspects of assistance. Amado pressed to include
this type of focus on developing countries in other regions for our
bilateral biofuels cooperation under the 2007 Memorandum of
Understanding, stating that the United States was "behind the
starting line and needs to overcome the heritage of the Bush years."

In Amado's view, most U.S. assistance in this area has focused on
opening business markets but to be successful, he argued, it should
be more about assisting poor nations. (Note: Brazil advocated and we
agreed to extend our bilateral biofuels cooperation in third
countries to Africa - Senegal and Guinea Bissau - but the GOB is
still working to secure funding for the studies they agreed to
finance and execute in those countries.)


3. (C) Ambassador Sobel agreed that working together bilaterally in
developing countries could be positive but noted that need not
exclude the possibility of hemispheric cooperation. Amado grew
visibly more agitated as he demanded, "Do you want another FTAA in
energy?" Ambassador Sobel made the point that resistance by five or
six countries to hemispheric wide cooperation should not limit all 34
nations. Amado then replied, "If you insist on doing this, we won't
be there holding your hand." Ambassador Sobel then cautioned that
this was an issue of immense interest in Washington and that Amado
should not be surprised to hear a great deal about hemispheric energy
during his upcoming visit.


4. (C) When asked whether he made room for the possibility of
building a positive agenda for the hemisphere, focusing on the areas
we can agree on, even if relatively modest to start, Amado asked
"what have you been doing hemispherically? We've been working on
integration, bilaterally. Brazil-Paraguay, Brazil- Venezuela,
Brazil- Argentina, Brazil-Bolivia, look where that's gotten us!"
(Note: Amado was referencing bilateral energy cooperation projects
such as Itaipu dam, an oil refinery with Venezuela, and sales of
natural gas between Bolivia, Argentina, and Brazil: all of which have
fallen victim to contract difficulties and have become quite
controversial in Brazil.)


5. (c) In stark contrast to Amado's opposition to hemispheric
cooperation, which echoes prior conversations with various officials
at MRE, the Ministry of Energy has been positively inclined. In a
meeting on January 14 with Minister of Mines and Energy Edson Lobao,
the Ambassador, at the request of Department of Energy, solicited
Lobao's support for a possible hemispheric energy conference.
Ambassador Sobel noted that it was important to send the new
administration the message that Brazil wanted to work with the United
States, especially in light of the December 2008 Brazil-sponsored
Bahia summit with all the countries of the hemisphere other than the
U.S and Canada, and to demonstrate that such initiatives do not
preclude hemispheric cooperation. Lobao immediately indicated his
eagerness to participate and work with the United States. When the
Ambassador suggested that active Brazilian support of such an effort
might help encourage the participation of other countries in the
hemisphere, Lobao seemed inclined to agree to that as well, but his
international advisor, Ambassador Rubem Barbosa (on detail from MRE),
preempted his response and noted that sponsorship or promotion of
such an event would require MRE approval and they would have to
consult the appropriate people at MRE (i.e., Amado).


6. (C) Anticipating this response, Econoff had previously raised
the conference idea with the Director of the Renewable Energy
Division at MRE, Claudia Vieira Santos. Santos's initial reaction
was that there was much negativity in the region against the United
States and it wasn't in Brazil's interest to work too cooperatively
with the USG in South America, recalling that the 2007 Biofuels MOU
had cost them significant political capital with their neighbors.
When she learned that UNDP/ECLAC, the Inter-American Development
Bank, Andean Development Corporation, OLADE and others might be
involved in the potential conference, she indicated that this fact
could change the picture significantly and might make Brazilian
participation in such an event more possible.


7. (C) In a subsequent meeting between the Ambassador and Defense
Minister Jobim, Jobim counseled the Ambassador to let Amado's
comments "go in one ear and out the other." He indicated that he
felt the balance of power within the GOB on energy matters had
shifted to Minister Lobao and as a result MRE would not have the
final word on hemispheric energy cooperation.


8. (C) COMMENT: As Washington considers various formulations for
the Summit of the Americas, Energy Partnership of the Americas, and a
DOE-sponsored Energy symposium, there are two primary factors that
will determine USG success in gaining Brazilian participation or
support.

-- Factor 1: It is critical to approach the issue through the right
channels. Whatever the proposal, if it involves hemispheric energy
cooperation, MRE has the interagency lead on the issue and will
likely try to veto positive GOB response absent pressure from other
players within the GOB and legislature. There are parts of the GOB
that would support such initiatives, such as Mines and Energy where
it is widely acknowledged that Minister Lobao has won the contest
within the GOB for leadership in the wide range of energy sector
issues. His friendship with the newly elected President of the
Senate, fellow party member - and former President of Brazil - Jose
Sarney, may give him added clout in intergovernmental territory
disputes. These players need to be brought into the calculations
early so that we avoid filtering all information through the
Brazilian Embassy and MRE, thereby allowing them the opportunity to
exercise negatively their preemptory perogative over international
affairs. To cultivate support from other increasingly powerful
ministries, approaches should made directly to them without filtering
the request through MRE channels, although being sure to keep MRE
apprised of our efforts. That said, there may be a more direct and
more effective route. Given the intense desire here to demonstrate
good will with the new administration, post judges that the most
effective path to yes on any of these initiatives would be a direct
request from President Obama to President Lula - or the White House
to Brazil's Presidential Office Planalto - without giving MRE the
chance to campaign against it in advance. Jobim's comments hint at a
territorial struggle that must be considered in any approach.
According to Jobim's comments, the decision makers on this issue will
be at Planalto or the Ministry of Mines and Energy.

-- Factor 2: The Summit of the Americas (SOA) is viewed skeptically
at best in Brazil, due to the perception that it is a U.S. initiative
and U.S. dominated forum. The extent to which hemispheric energy
proposals are separated from SOA, spearheaded by other nations in the
hemisphere other than the United States (especially countries not
commonly viewed as being aligned with the United States),or
sponsored by regional organizations, will positively impact the
chances of gaining Brazilian acceptance.


SOBEL