US embassy cable - 04BRASILIA1005

UNCLAS SECTION 01 OF 03 BRASILIA 001005 
 
SIPDIS 
 
SENSITIVE 
 
NSC FOR DEMPSEY 
DOE FOR GWARD 
COMMERCE FOR 4332/WBASTIAN/JANDERSON/DMCDOUGALL 
COMMERCE FOR 3134/010/DEVITO/ANDERSON/OLSON 
 
E.O. 12958: N/A 
TAGS: ENRG, OVIP, EINV, EFIN, PGOV, ECON, BR, Energy 
SUBJECT:  ENERGY SECRETARY ABRAHAM MEETS BRAZILIAN MINISTERS 
 
REF: BRASILIA 972 
 
1.  (U) SUMMARY: Energy Secretary Spencer Abraham traveled 
to Brasilia April 19 to meet with Brazil's Science and 
Technology Minister Campos, Mines and Energy Minister 
Rousseff, and Foreign Relations Minister Amorim, as a follow- 
up to the June 2004 Presidential Summit between President 
Bush and Brazilian President Lula.  Also pursuant to the 
Presidential Summit, the GoB/USG joint working group for the 
hydrogen economy met for the first time; Secretary Abraham 
and Minister Rousseff signed an agreement on the hydrogen 
economy.  Foreign Minister Amorim and Mines and Energy Dilma 
Rousseff co-hosted a luncheon in honor of Secretary and Mrs. 
Abraham.  End summary. 
 
Ministry of Science and Technology Meeting 
------------------------------------------ 
 
2.  (U)  Science and Technology (MCT) Minister Eduardo 
Campos, accompanied by MCT Executive Secretary Luiz 
Fernandes and seven specialists, welcomed Secretary Abraham, 
Ambassador Hrinak, six DOE staff members, and Science 
Counselor Rubenstein.  Secretary Abraham set the tone by 
applauding Brazil's recent memberships in the Carbon 
Sequestration Leadership Forum and the International 
Partnership for the Hydrogen Economy (IPHE), and expressed 
the desire to explore other areas of cooperation.  Minister 
Campos mirrored this wish to intensify bilateral energy 
cooperation.  There was agreement that particular areas of 
interest within both governments are collaboration on 
nanotechnology, renewables, nano-manufacturing, 
biotechnology, and scientific exchanges.  To facilitate 
expanded cooperation, Campos named Executive Secretary 
Fernandes as Brazil's point of contact, and Secretary 
Abraham named DOE's Office of Science Director Ray Orbach. 
 
3.  (SBU)   Secretary Abraham urged that the GoB sign the 
Statement of Intent (SOI) concerning cooperation in the 
fields of nuclear non-proliferation and counter-terrorism. 
He pointed out that the President had asked him to 
officially convey that Brazil is considered among the ten 
Nonproliferation Treaty states to have existing enrichment 
facilities and that Brazil will not be subject to 
restrictions to their nuclear supply under the President's 
enrichment and reprocessing proposal.  The Secretary also 
emphasized that Brazil's decision to sign the Additional 
Protocol is an issue between the International Atomic Energy 
Agency (IAEA) and Brazil, not a bilateral one.  Secretary 
Abraham offered DOE technical assistance to help Brazil with 
safeguarding challenges in implementing the Additional 
Protocol.  Minister Campos stated that the GoB has 
safeguards at 35 installations and intends to negotiate the 
safeguards for the 36-th installation.  Campos appreciated 
the offer of potential US help in protecting proprietary 
technology during this process. 
 
4.  (SBU)  Campos expressed GoB's strong interest in 
executing the International Nuclear Energy Research 
Initiative (I-NERI) it signed last year.  Secretary Abraham 
and Minister Campos extolled the benefits of nuclear energy 
and its importance to the overall energy supply matrix. 
Points of contact designated during this meeting for I-NERI 
are DOE's Director of the Office of Nuclear Energy, Science 
and Technology, Bill Magwood, and the president of Brazil's 
National Nuclear Energy Commission, Odair Goncalves. 
 
5.  (U)  Minister Campos listed some of the Lula 
administration's priorities, including alternative energy 
programs, biodiesel, and rural electrification.  Secretary 
Abraham expounded on the latter theme and stated that DOE, 
at times in conjunction with USAID, has worked with several 
countries on rural electrification programs, the Philippines 
being an example.  Secretary Abraham added that using fuel- 
cell technology to bring electricity to remote communities 
is an area of cooperation with GoB that DOE encourages. 
 
Lunch at the Foreign Ministry 
----------------------------- 
 
6.  (U)  Foreign Minister Celso Amorim and Mines and Energy 
(MME) Minister Dilma Rousseff co-hosted a lunch in honor of 
Secretary and Mrs. Abraham.  Seventeen Brazilians attended, 
 
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including four ministers, five ambassadors, four secretaries 
and two chiefs of staff.  Other especially notable attendees 
were Development, Investment and Trade Minister Luiz Furlan, 
MME Executive Secretary Mauricio Tolmasquim, and Ambassador 
Antonio Guerreiro, Director-General of International 
Organizations.  In addition to the Secretary and Mrs. 
Abraham, U.S. guests included Ambassador Donna Hrinak, Chief 
of Staff Joe McMonigle, Senior Advisor Majida Mourad, Senior 
Policy Advisor Mary Alice Hayward, Deputy Assistant 
Secretary for International Energy Cooperation David 
 
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Pumphrey, Dr. Moustafa Soliman, Dr. Robert Dixon and Embassy 
EconCouns Wasilewski. 
 
7.  (U)  After the lunch, Minister Amorim, five senior 
Brazilian Foreign Ministry officials, Secretary Abraham, 
Ambassador Hrinak, DOE Chief of Staff Joe McMonigle, Senior 
Policy Advisor for National Security Matters Mary Alice 
Hayward, and DOE Foreign Affairs Advisor Margaret Manning 
and Embassy PolCouns Hearne(notetaker) met in Minister 
Amorim's office (Ref). 
 
Joint Team for the Hydrogen Economy 
----------------------------------- 
 
8.  (U)  Concurrent with Secretary Abraham's morning 
sessions, a separate experts' meeting took place on the 
subject of the hydrogen economy.  MME Executive Secretary 
Mauricio Tolmasquim headed a delegation of seven from his 
ministry, and was joined by the following from other 
Brazilian entities: Maria Frank from Petrobras, Mauricio 
Cantao from the Institute of Technology and Development, 
Claudio Judice from MCT, and Paulo Miranda from Business 
Incubator COPPE/UFRJ.  Dr. Robert Dixon represented DOE and 
was accompanied by Energetics consultant Richard Scheer. 
 
9.  (U)  This joint working group on hydrogen energy 
development committed to several bilateral collaborative 
activities.  Brazilian and U.S. technical experts will share 
information on hydrogen technologies, and identify potential 
joint projects that will be funded through public-private 
partnerships.  The experts' group also agreed on information 
exchanges through reciprocal "study tours".  The aim is to 
plan a strategy to stimulate interest in hydrogen-energy 
development in the Americas; a follow-on meeting was 
scheduled within three months.  The working group is to use 
the March 2005 IPHE meeting in Brazil to publicize and 
advance hydrogen technologies in the hemisphere. 
 
Ministry of Mines and Energy 
---------------------------- 
 
10. (U)  Minister Dilma Rousseff convened a meeting at MME 
including MME Executive Secretary Tolmasquim, various 
employees of MME, Secretary Abraham, Ambassador Hrinak, 
USAID General Development Officer Armstrong, five DOE staff 
members, and EconOff.  Minister Rousseff lauded the strong 
bilateral relationship between the U.S. and Brazil.  She 
highlighted the collaboration on the working level in the 
areas of carbon sequestration, biomass, and biodiesel. 
Rousseff reviewed other activities that have been completed 
since the June 2003 Presidential Summit in Washington, 
including the September 15-16, 2003 energy information 
exchange between MME and the Energy Information Agency, the 
October 28-29, 2003 meeting between the US and Brazilian 
energy regulators, and the November 21, 2003 energy 
symposium in Washington. 
 
11.  (U)  Both Secretary Abraham and Minister Rousseff 
praised the results of that day's first meeting of the 
U.S./Brazil hydrogen working group, which presented them 
with its formal report.  Rousseff called the meeting "a 
milestone, leading to another chapter in our partnership, 
which sets the tone for consistent interaction."  She added 
that the joint hydrogen technology meeting set the framework 
for technical exchanges as well as for hydrogen road- 
mapping, and represented a breakthrough in public-private 
partnerships (PPP).  Note.  So-called PPPs are vital to the 
Lula government's economic agenda and hopes for 
infrastructure investments.  End note. 
 
12.  (U)  Press was then allowed in the meeting room for the 
Secretary's and Minister's signing of the Memorandum of 
 
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Cooperation Between the United States and Brazil for 
Hydrogen Energy Technology.  Secretary Abraham expressed his 
deep thanks for the productive visit and emphasized the 
importance of this agreement for developing hydrogen 
technologies as different fuels become scarcer in the world. 
He emphasized that he had committed to visit Brazil during 
the June 2003 Presidential Summit, and that this Memorandum 
of Cooperation was a culmination of hard work over the eight 
months since. 
13.  (U)  The Secretary and Minister took questions from the 
press, the majority of which were directed to Secretary 
Abraham regarding the U.S. stance on nuclear inspections and 
the IAEA Additional Protocol.  Saying, "The U.S. is not here 
to tell Brazil what to do," Secretary Abraham stressed that 
the issue was directly between IAEA and Brazil.  The 
Secretary emphasized that the overall purpose of his trip 
 
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was to augment the already-robust energy cooperation between 
DOE and MME, and that he was in Brazil to follow-up on 
decisions made last June. 
 
14.  (U)  COMMENT: Although the prospective meeting with 
President Lula failed to materialize, all the rest of the 
GoB's top levels gave the Secretary's visit a great deal of 
attention.  Belying Brazilian media speculation in advance 
of the trip that the Secretary's objective was to pressure 
Brazil on nuclear inspections, all meetings went in an 
undilutedly positive atmosphere, without contention.  The 
relationship between DOE and MME ameliorated as a result of 
this visit, and will remain a cornerstone in our bilateral 
partnership.  The hydrogen working group in particular 
should serve as a blueprint for deeper cooperation and 
regularly scheduled technical-level dialogue between our 
governments. 
 
HRINAK