Identifier
Created
Classification
Origin
10ABUDHABI246
2010-02-18 12:50:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Abu Dhabi
Cable title:  

SCENESETTER FOR THE VISIT OF SECRETARY CHU

Tags:  ENRG EPET SENV KGHG AE 
pdf how-to read a cable
VZCZCXYZ0000
RR RUEHWEB

DE RUEHAD #0246/01 0491255
ZNR UUUUU ZZH
R 181250Z FEB 10
FM AMEMBASSY ABU DHABI
TO RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RUEHC/SECSTATE WASHDC 0319
INFO GULF COOPERATION COUNCIL COLLECTIVE
RUEHAM/AMEMBASSY AMMAN 0016
UNCLAS ABU DHABI 000246 

SENSITIVE
SIPDIS
DEPARTMENT FOR NEA/ARP, EEB/ESC/IEC/ENR (MONOSSON, SECOR),AND OES/EGC (THOMPSON)
DOE FOR S1, S2, O???CONNOR AND SANDOLOW
AMMAN FOR ESTH HUB (BHALLA)

E.O. 12958: N/A
TAGS: ENRG EPET SENV KGHG AE
SUBJECT: SCENESETTER FOR THE VISIT OF SECRETARY CHU

UNCLAS ABU DHABI 000246

SENSITIVE
SIPDIS
DEPARTMENT FOR NEA/ARP, EEB/ESC/IEC/ENR (MONOSSON, SECOR),AND OES/EGC (THOMPSON)
DOE FOR S1, S2, O???CONNOR AND SANDOLOW
AMMAN FOR ESTH HUB (BHALLA)

E.O. 12958: N/A
TAGS: ENRG EPET SENV KGHG AE
SUBJECT: SCENESETTER FOR THE VISIT OF SECRETARY CHU


1. (U) Mission UAE looks forward to welcoming the Feb. 23-25 visit
of Secretary of Energy Dr. Steven Chu.



THE UAE AND THE BILATERAL RELATIONSHIP

--------------




2. (SBU) In the past five years, the United Arab Emirates has
emerged as one of the economic powerhouses of the region and
attained a commensurate level of political influence. The UAE has
troops in Afghanistan, is an important political player in
Pakistan, and its support is sought by leaders throughout the
Middle East, and further

afield. Although a tiny country, geographically and
demographically, the UAE punches well above its weight class in
international circles.



A COUNTRY BUILT ON OIL AND GAS

--------------




3. (SBU) Most of the UAE's development, particularly in the
Emirate of Abu Dhabi, was funded by oil revenues. The hydrocarbon
sector was developed years before the UAE was established (1971)
and provide its population with a high standard of living. Today,
Abu Dhabi - through state-owned Abu Dhabi National Oil Company
(ADNOC) produces approximately 2.2 million barrels per day (mbpd)
of oil although production capacity exceeds 2.6 mbpd. ADNOC is
investing in increased production, largely through the application
of advanced recovery technologies. Abu Dhabi's main export
destinations are Japan and South Korea. ADNOC expects to offer new
concessions in 2014 and 2018, potentially allowing U.S. companies
to increase market share here.




4. (SBU) Although the UAE exports about 4 billion standard cubic
feet a day (scfd),the UAE's gas deposits are largely associated
and a significant portion of production is reinjected for enhanced
oil recovery. The UAE has one large sour gas field, Shah, which is
being developed by ADNOC and ConocoPhillips and could yield over
500 million scfd. Other projects are underway to expand existing
gas production, however, much of this is also expected to be used
for reinjection. Domestic gas production is insufficient to power
the UAE's rapid economic development. In 2001, the UAE (then as
the UAE Offsets Group and now as Mubadala) entered into a long term

gas deal with neighboring Qatar. Named Dolphin Energy, the project
currently imports 2 billion scfd by a pipeline designed to deliver
3.2 billion scfd.




5. (SBU) In addition to its oil and gas production, Abu Dhabi-owned
companies have also made significant investments in global energy
assets. State-owned investment corporation Mubadala purchased
Singapore's Pearl Energy and owns assets across the Middle East and
North Africa, as well as its Dolphin stake. Government-owned
International Petroleum Investment Corporation (IPIC) has made both
domestic and international investments in refineries, pipelines,
and other production facilities. Abu Dhabi Energy Company ("Taqa")
has purchased power facilities as far afield as Jamaica, invested
in storage in Europe and owns domestic power assets.



...TURNS TO GREEN ENERGY

--------------




6. (SBU) In 2007, Abu Dhabi Emirate began a study of the UAE's long
term electricity needs and determined that the UAE would be unable
to produce enough gas or develop sufficient renewable capacity to

meet growing demand. After dismissing oil and coal as
environmentally unfriendly, Abu Dhabi determined that nuclear power
would best serve the Emirate's long-term electricity needs. The
UAE choose to publically renounce uranium enrichment and
reprocessing (ENR). In addition to codifying this policy in the
US-UAE 123 Agreement, which took effect in late December, the UAE's
October 2009 nuclear law also bans ENR. The law established an
independent regulator, the Federal Authority for Nuclear Regulation
(FANR),which is headed by a former US NRC official (Bill Travers).
In December 2009, Abu Dhabi awarded a USD 20 billion tender for the
UAE's first four nuclear power plants to Korea's KEPCO, whose
significantly lower price beat competitors GE/Hitachi and AREVA. A
delegation of U.S. firms will be visiting Abu Dhabi the week of
your visit to explore related subcontracting opportunities.




7. (SBU) Concurrently, Abu Dhabi is also investing heavily in
renewable energy. The Government set a target to produce 7 percent
of total electricity demand from renewable by 2020, an effort led
by Masdar, the Abu Dhabi Future Energy Company, which is owned by
Mubadala. Masdar (Arabic for "source") has four main divisions:
Masdar Power, Masdar Carbon, Masdar Sustainable Cities and Masdar
Institute. The first invests in renewable technologies, the second
supports the reduction of carbon emissions, the third develops
model zero-carbon, zero-waste cities, like Masdar City in Abu
Dhabi, and the last promotes research, through a partnership with
MIT. The selection of Abu Dhabi to host the new International
Renewable Energy Agency (IRENA) in June 2009 is in part
demonstrative of Masdar's success. Masdar CEO Dr. Sultan Al Jaber
is very enthusiastic about your visit and hopes to finalize
discussions about the proposed DOE-Masdar MOU to pave the way for
signature in the coming weeks.



THE POLICY

--------------




8. (SBU) While the UAE has taken a number of steps to promote
energy diversification and green technology development and
application, it has yet to institutionalize these efforts in
policy. Abu Dhabi has drafted a broad energy policy which is
expected to be released sometime in the spring. This policy is
likely to be a significant shift for an OPEC member, as it is
expected to highlight the UAE's commitment to combating climate
change. The UAE has not yet associated with the Copenhagen Accord,
but is very interested in being part of future negotiations and
plans to associate once its comprehensive review is completed.



THE AGENDA

--------------




9. (SBU) More broadly, the UAE - particularly Abu Dhabi - sees
itself as a global energy provider. Officials recognize that the
country was blessed with a competitive advantage in hydrocarbons
and seek to exploit that position and knowledge as they diversify
into clean energy production (both renewables and nuclear). Given
the UAE's ambitions and financial strength, we can expect the UAE
will remain a dominant player in global energy markets.




10. (SBU) U.S. firms are involved in almost all of the UAE's energy
initiatives, either as consultants, exporters or innovators.
However, we have only scratched the surface of USG collaboration
opportunities. The President's Cairo speech highlighted the
importance of greater science and technology cooperation with the
Muslim world. Your visit presents a unique opportunity to cement
real UAE commitments to furthering such collaboration, particularly
with Masdar.
OLSON