DOE DEPUTY SECRETARY PONEMAN'S MEETING WITH

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SUBJECT: DOE DEPUTY SECRETARY PONEMAN'S MEETING WITH
RUSSIAN MINISTER OF EDUCATION AND SCIENCE FURSENKO ON
BILATERAL ENERGY AND SCIENCE COOPERATION

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1. (SBU) SUMMARY. DOE Deputy Secretary of Energy Poneman and
Ambassador Beyrle met with Russian Federation Minister of
Education and Science (MES) Andrey Fursenko on June 10, 2009,
in Moscow to discuss future DOE-MES cooperation in energy
efficiency, carbon capture and sequestration, and
nanotechnology. Ambassador Beyrle reinforced the energy
cooperation message and offered two additional opportunities
for future scientific cooperation including the upcoming 50th
anniversary of Russian Academy of Science and United States
National Academy of Science cooperation in Moscow on June 17,
2009 and President Obama,s Moscow visit in early July, 2009.
Fursenko concurred with the need for increased cooperation
and raised three potential areas of cooperation: exchanges of
energy efficiency expertise between American companies and
Russian cities, nanotechnology, and Russian and American
university partnerships. END SUMMARY.


2. (SBU) Fursenko recalled other DOE officials with whom he
has worked and noted that he had met previously with
Secretary Chu in Okinawa in his capacity as a Nobel Prize
winner. Fursenko, who conducted the meeting in English,
seemed relaxed and happy to be meeting with Poneman and
offered to discuss science and energy issues. He informed
Poneman that he would prefer to listen to Poneman on where
the U.S. and Russia could work together because Poneman comes
to the job fresh. (Embassy Comment: This openness is a
marked departure from MES's previous behavior since September
when Fursenko's staff repeatedly declined to schedule an
introductory meeting with the Ambassador. End comment.) He
was flanked by MES Head of International Relations Department
Vladislav Nichkov, and MES Head of the International
Relations Department's Bilateral Section Konstantin Chinkov.
Fursenko was pleased to hear from Poneman that Secretary Chu
is looking forward to a future meeting in Russia or the U.S..


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ENERGY EFFICIENCY
--------------

3. (SBU) Fursenko recalled the helpful, informal discussion
on climate change at the most recent Carnegie ministers'
meeting. He posited that the U.S. and Russian positions on
climate change are closer to each other than those of Japan
and the European Union. He called climate change a
complicated problem requiring a dispassionate study of
empirical data to track hundred-year trends, rather than
emotional talk about melting Arctic ice. He immediately added
that the Russian Federation needs to work on the science to
seize any opportunity to minimize loss of heat and carbon
dioxide emissions and to strive for energy efficiency.
Arguing that focusing on technology can compensate for future
resources limitations, he pointed out that the political
decision is important, as Sr. David King, a senior British
climate change specialist has shown by demonstrating
technology can improve the environment without worsening the
economic situation. Fursenko stated that such new technology
was his responsibility and he proposed starting joint work on
energy-efficient lighting in buildings and more efficient
fuels such as bio and hydrogen fuel. Fursenko stated that
MES, and FASI in particular, had had some cooperation with
U.S. institutions on carbon sequestration projects, but we
have to develop these projects further. MES's goal is not to
interfere with Russian scientists. MES recognizes that
Russia needs to evaluate its own efficiency, because
according to OECD measures, the energy expenditure in Russia
for one GDP unit is fifteen times more expensive than Japan
and five times more expensive than the United States. But
Fursenko hastened to point out that this is not Russia's
fault because its GDP is based on manufacturing and raw
materials. He suggested that the U.S. and Russia join forces
to study, consult, and then explain to the international
community the reasons behind for the differences.


4. (SBU) Concurring with Fursenko's mention of building
efficiency, Poneman explained that 40 percent of U.S.
greenhouse gas emissions comes from buildings and that modest
investments in such areas as insulation can reap immediate
energy savings. Poneman commented that it would be useful for
U.S. and Russian experts, perhaps from the U.S. National

MOSCOW 00001612 002.2 OF 005


Academies and Russian Academy of Sciences, to meet in the
near future to identify needs and technological capabilities,
possibly by creating sister city relationships. Poneman told
Fursenko that the U.S. National Security Council desires
practical Presidential Summit deliverables to implement
President Medvedev and President Obama's joint statement on
April 1 in London. Offering Fursenko a list of proposed,
concrete areas for joint work (attached at the end of this
cable),Poneman expressed DOE's and other U.S. government
agencies' preparedness to work with MES to identify areas of
scientific expertise and to define concrete ways to work
together in the near term. Poneman specifically mentioned
energy efficiency, carbon capture and sequestration,
nanotechnology, and research in energy related fields as
potential areas of cooperation.

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NEED TO SHOW CONCRETE FOUNDATION FOR SUMMIT
--------------


5. (SBU) Fursenko repeated that Russia has no choice but to
find a way to save energy in buildings. Prices are rising
for heat and electricity. But if proper technology is
installed, prices won't increase even though the city and
government will need to find a way to pay for the investment
in technology. Fursenko suggested three concrete projects.
First, he recalled that when he was Deputy Minister of
Industry, Science and Technology, he had pushed an important
bilateral energy efficiency project with the U.S. company
Emerson in the city of Chelyabinsk that both saved consumers
money and addressed climate change. Second, he proposed
working on with the Kurchatov Institute on new energy through
nanotechnology and basic research under ITER. Third,
Fursenko pointed to Russian and American university
partnerships like that between the University of Texas and
Moscow,s Engineering and Physics Institute (MEPhI) that
train people and increase scientific research, particularly
if they are focused on energy, environment, and climate
change. Fursenko concluded that it is important to show a
concrete foundation for the next meeting of the Presidents.
But he recalled that he discussed with former science advisor
Marburger, his co-chair of the Joint Science and Technology
Committee, that the U.S. and Russia have very different
systems. Russia, like the European Commission, can direct
that institutes cooperate - the United States cannot. The
United States focuses instead on scientist-to-scientist
exchanges. Nonetheless, both sides have potential partners
whom they can agree should be ordered to prepare some
cooperation in time for the July summit.

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SEIZE WINDOW NOW TO MAKE PROGRESS
--------------

6. (SBU) Ambassador Beyrle stated that current
government-government science cooperation between our two
nations is weak and was stronger ten years ago. He stressed
that Russia and the United States have two opportunities to
move beyond a general wish for more cooperation to concrete
action. The first is the June 17-18 50th anniversary of
cooperation between Russian Academy of Sciences and United
States National Academies when the academies will brainstorm
on concrete tasks. The second is President Obama,s Moscow
visit in early July 2009 during which the Joint Science and
Technology Committee could once again become one of the
subgroups under a binational commission. This committee
would develop mechanisms to implement concrete ideas on how
to improve energy efficiency and increase cooperation in
education and science. Russia has much to teach the U.S. in
science education, the Ambassador continued. It would be
wonderful to bring the top 500 Russian science students to
science summer camps in the United States, but we would need
Fursenko's help. Happily, the academies and the joint
science and technology committee will tell us what to do.


7. (SBU) Poneman echoed Ambassador Beyrle,s remarks, noting
that our two governments have a short window of opportunity
to take advantage of the direct benefits of working together
and that we need to act now to ensure that the strong
foundation is reinforced by concrete accomplishments. This

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way the foundation will hold up even when the inevitable
problems arise. Fursenko agreed that both countries need to
use the opportunity of the summit to find a way to turn
proposals into concrete actions. Both sides have homework
and should propose concrete ideas that could be mentioned by
the presidents. Poneman commented that bringing in the
private sector is important so that technology can be
smoothly transferred and its effect amplified. Fursenko
concurred that this is very important, adding that he works
closely on energy efficiency with Rosatom's Director General
Kiriyenko and Minister of Energy Shmatko, with whom he
interacts outside of formal government meetings, which
facilitates things. Once there is industry demand to save
energy, Fursenko said, the Russian government can study the
science on how to save energy. Poneman replied that
Secretary Chu is committed to removing the stovepipes that
separate science and industry.


8. (SBU) Ambassador Beyrle noted that administrative
processing for Russian scientists to receive visas was
recently shortened from 150 days to approximately 30 days and
that most scientists would receive visas within 15 days.
This should significantly enhance cooperative scientific
partnerships. Fursenko recalled that at a conference in
Europe and another conference in Khanty-Mansiysk, he met with
Americans of Russian origin from Minnesota and Salt Lake City
who work in science and medicine. Although they were not
interested in moving back to Russia, they wanted to help
develop Russian life sciences by inviting young Russians to
the United States. Fursenko promised to get their names to
the Embassy. He commented that this is in line with
President Medvedev's instruction to cooperate with the
Russian diaspora and he thinks Medvedev will be positive
about it. (Embassy Note: Reaching out to the Russian
diaspora was also an important part of Rusnano chairman
Anatoliy Chubays's meetings in May in California. End Note)
The Ambassador noted that we still need to resolve the
problem of taxation of grants, which the National Institutes
of Health and CRDF are experiencing. Fursenko cut the
Ambassador off by waving a hand and brusquely interjected
that he is not talking about U.S. money, but about a
cooperative project in which each side would fund its own
participants.

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ISTC IS A GYPSY
--------------


9. (SBU) Poneman inquired about the future of the
Moscow-based International Science and Technology Center
(ISTC),which he recognized was created at an earlier phase
in the bilateral relationship. However, in the same spirit
of cooperation, Poneman hoped that we could find a way to
take its benefits and transform the center so that it could
continue to play a useful role. Introducing his comment with
"Frankly speaking," Fursenko said that he had worked with the
ISTC and it was not unlike a RAS institute that created a new
lab to solve a specific problem. When the problem is solved,
it is like a suitcase without a handle. "It's not easy to
take it with you because it's so heavy, but it's a pity to
leave it behind as well." Fursenko continued that ISTC was
created for a very concrete, serious purpose that is now
mainly solved. Although Rosatom and not MES is ISTC's main
partner, ISTC needs to become a new institute or be used for
an absolutely other purpose. This is like the "unkind joke
about a gypsy father who comes home from work to find his
children all dirty and haggard. He asks himself, which one
should I wash and which one should I burn?" Fursenko ended by
saying that he thought it would be more efficient to build a
new institution for this new purpose because it often takes
more time and resources to transform an old organization to
respond to a new purpose. Poneman parried by noting that
although he does not know the details, it seems likely to be
less expensive to buy a new handle than a whole new suitcase.
Responding to Poneman's offer to solve this together,
Fursenko proposed that the two sides conduct a Strengths,
Weaknesses, Opportunities, Threats (SWOT) analysis to
determine what kind of an instrument is needed.


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HOME WORK
--------------

10. (SBU) Poneman closed by reflecting that we have many
ideas of how the presidents can showcase science when they
meet. This will demonstrate that our countries do not just
talk together, but they work together. Fursenko, recognizing
that time was short, agreed to contact Russian Ambassador to
the United States Kislyak, who has no reason to limit himself
merely to weapons. Education and science, Fursenko
proclaimed, are key milestones for future development. He
had told Kislyak he was willing to go to the United States to
meet with his counterparts there, or to invite them to
Moscow. The ball is now in the court of the RF Ministry of
Education and Science, and Fursenko stated that he would
forward future cooperative proposals via Post Moscow within
the next few days. In closing, Fursenko invited DOE
Secretary Chu to visit Fursenko,s Ministry in Moscow and
stated that he (Fursenko) desired to visit the U.S. for
further cooperative discussions. He had hoped to meet
Science Advisor Holdren at the July Carnegie meeting, which
Italy postponed until mid-November. Russia will host the
October meeting, before which Fursenko hopes he will have met
with his partners.


11. (SBU) Deputy Secretary Poneman has cleared on this cable.

(SBU) ATTACHMENT

Potential Areas for Energy and Climate Change Cooperation
(non-paper)

Energy Efficiency. Share challenges and exchange best
policy practice in developing building codes and other
standards in the industrial and residential sectors, as well
as training for energy audits. Exchange knowledge on how to
improve energy conservation in federal buildings. Reach
beyond Washington and Moscow to engage local governments
through an Energy Efficiency Blueprint program between
&twinned8 municipal governments, whereby experts in each
locality pursue projects in parallel and exchange their
experience and lessons learned. Exchange views on how best to
advance energy efficiency through market practices.
Renewable Energy. Discuss ways to promote distributed
generation of power from renewable energy sources in remote
areas. Identify barriers to the development of wind power.
Share expertise on the development of second-generation
biofuels and explore options for developing sustainable woody
biomass utilization (e.g., harvesting forest brush and
debris) to provide carbon-neutral energy and decrease air
pollution. Explore potential cooperation on solar,
geothermal, and/or tidal energy.
Clean Energy Innovations. Pursue joint R&D activities
between our scientific establishments. Partner with Russia on
&clean-coal8 technology. Cooperate on developing
technologies that will bridge the transition to a low-carbon
economy, including carbon capture and storage. Jointly commit
to active participation in the Carbon Sequestration
Leadership Forum. Discuss possibility that Russia could host
one of the 20 full-scale demonstration projects the G-8
intends to launch by 2010.
Energy Investment Environment. Assess ways to implement
the G-8,s St. Petersburg Energy Security Principles,
developed under Russian leadership, to create open and
transparent market conditions that attract private sector
investment and competition into the global energy sector,
including both the U.S. and Russian energy sectors.
Global Climate Change. Share information on the U.S.
government,s experience regulating SO2 and NOx through a cap
and trade program, as Russia has signaled its intention to
develop market mechanisms as part of its recent draft
&climate doctrine.8 Explore possibilities for joint work
to help developing countries meet mitigation and adaptation
challenges.
Gas Flaring Reduction. Seek ways to advance efforts to
reduce the volume of natural gas Russian oil producers flare
each year, as this is the source of as much as 10 percent of
Russia,s annual greenhouse-gas emissions and a significant
source of air pollution.

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Oil and Gas System Efficiency. Expand current
bilateral efforts under the Methane to Markets Partnership
and advance technical cooperation to improve efficiency in
the oil and natural gas sectors to reduce leaks and losses of
methane and increase natural gas sales.
Coal Mine Methane Capture and Utilization. Advance
ongoing efforts and cooperation under the Methane to Markets
Partnership to recover and utilize coal mine methane as a
clean energy source
Power Sector Infrastructure. Pursue collaboration on
improving the efficiency of generation, transmission, and
distribution sector operations, including improvements to
power system stability and load management as well as
efficiency gains through the implementation new grid
technologies.
Liquefied Natural Gas (LNG). Discuss cooperation on the
commercial development of additional LNG supplies including
liquefaction facilities in Russia, particularly in the
northern European portions of Russia, as one tool to pursue
mutual goals in energy security and to increase market
flexibility and diversity.
Arctic Cooperation. Jointly discuss ways to preserve
the environment and protect indigenous populations while
pursuing appropriate development in the Far North, in
coordination with our joint membership and growing
cooperation in the Arctic Council.
Data Exchange. Periodically exchange analysis and
projections of energy and electricity demand, production, and
pricing.
BEYRLE