This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 THE HAGUE 002163 
 
SIPDIS 
 
E.O. 12958 N/A 
TAGS: EPET ENRG TPHY EINV KNNP IZ IR NL EUN
SUBJECT: Secretary Abraham's 8/13 Meeting with Dutch 
Economics (Energy) Minister Brinkhorst 
 
 
Summary 
------- 
 
¶1.  (U) Secretary of Energy Spencer Abraham met with Dutch 
Economics (also energy and telecommunications) Minister 
Laurens Jan Brinkhorst on August 13 in The Hague.  In 
response to a question from Brinkhorst, the Secretary 
described the factors that led to the California 
electricity shortages - explaining that there was no link 
between lack of supply and deregulation. Brinkhorst was 
gratified that the first U.S. bilateral agreement on 
installing radiological monitors at a megaport was with 
Rotterdam (septel) but suggested that the U.S. may now want 
to engage the European Commission on making a broader 
agreement with the EU rather than further bilateral 
agreements with EU member states.  The Secretary and 
Minister agreed to explore opportunities for U.S.-Dutch 
collaborative research on carbon-emission reducing 
technologies.  The Secretary expressed the U.S.'s deep 
concern over Iran's nuclear program.  The Minister urged 
that the U.S. ensure a "level playing field" for energy 
companies in Iraq - specifically for Royal Dutch/Shell. 
The Secretary expressed interest in participating in the 
May 2004 International Energy Forum, which will be hosted 
by the Netherlands. End summary. 
 
Energy Deregulation 
--------------------- 
 
¶2.   (U) Minister Brinkhorst told the Secretary that 
California is always raised in Europe as the example of why 
energy deregulation is a bad idea. He supports deregulation 
himself and asked what happened in California.  The 
Secretary explained that California's electricity 
 
SIPDIS 
shortfalls resulted from a series of factors unrelated to 
deregulation: inadequate transmission lines from north to 
south California, below average precipitation in the US 
northwest, political factors which obstructed construction 
of new power plants,  a prohibiton on long-term power 
purchases, and a half-way deregulation whichfreed wholesale 
prices while maintaining caps on retail prices.  He said 
that not only Europeans, but other U.S. states have 
examined the California example.  He recommended that the 
Minister look at much more successful examples of 
electricity deregulation, in Pennsylvania and Texas, for 
example.  Amb. Sobel offered to provide information on 
Pennsylvania to Minister Brinkhorst. 
 
¶3.  (U) Brinkhorst said that the Secretary's description of 
strong local autonomy in the energy sector in the U.S. also 
applies to Europe.  Not only the EU member states, but 
regions within the member states prefer to run their own 
"energy fiefdoms," making a cohesive European electricity 
strategy very difficult. 
 
Radiological Monitors at Rotterdam 
------------------------------------ 
 
¶4.  (U) Minister Brinkhorst lauded the U.S.-Netherlands 
bilateral agreement (which the Secretary signed during his 
trip to the Netherlands, septel) to install radiological 
monitors at Rotterdam, but wondered whether it wouldn't be 
better to negotiate further agreements with the European 
Commission.  He suggested that, as the trailblazer, the 
Dutch government might be able to help facilitate talks 
with the Commission - particularly with Commissioner De 
Palacio.  The Secretary noted his many meetings with EU 
Commissioner. De Palacio.  He and the Ambassador replied 
that the U.S. is open to speaking with anyone and every one 
if the effect would be to speed implementation of 
radiological monitoring. 
 
¶5.  (U) Comment:  Laurens Jan Brinkhorst worked for a long 
time in the European Commission, finishing his career there 
as Director-General in the Environmental Directorate.  He 
is more predisposed towards deferring to the Commission 
than other Dutch Ministers.  End Comment 
 
Research Collaboration 
------------------------ 
 
¶6.  (U) Brinkhorst said, that as someone who worked 
directly on the Kyoto negotiations, he regretted the 
failure of the U.S. to sign the agreement, but added that 
"that is water under the bridge."  He said the point now is 
to discuss mutual efforts to reduce carbon emissions.  The 
Secretary described U.S. policy in detail, and pointed out 
 
SIPDIS 
the ambitious Bush Administration program to reduce carbon 
intensity and eventually to reduce emissions 
 
¶7.  (U) When the Secretary described the importance of 
advanced technologies in reducing carbon emissions, the 
Minister said that the Dutch government completely agrees. 
Even while reducing government spending in almost all 
areas, the research and development budget for energy 
technologies will be increased.  He suggested that should 
the Secretary be able to come to the Netherlands for the 
May 2004 International Energy Forum, they spend time 
further discussing energy research.  The Secretary and 
Minister agreed to have Department and Ministry officials 
talk in the meantime about possible collaboration. 
 
Other topics 
-------------- 
 
¶8.  (U) The Secretary told the Minister that he could not 
let the meeting end without highlighting deep concern over 
issues regarding Iran, in particular Iran's nuclear 
program.  The Minister took note and said, for his part, he 
similarly needed to raise Dutch government interest in 
urging the U.S. to ensure a "level playing field" for 
energy company operations in Iraq.  He noted that Royal 
Dutch/Shell "is as much an American as a European company," 
and understands that Shell is interested in applying its 
regional expertise in Iraq.  The Secretary replied that the 
U.S. is committed to letting Iraq make its own decisions 
about its resources. 
 
¶9.  (U) In a brief discussion of potential drilling in the 
Dutch Waddensee (a major environmental dispute in the 
Netherlands), Brinkhorst said that he wants the issue to be 
resolved quickly and in favor of beginning horizontal 
drilling.  The new government's attitude is that the focus 
should be on how to maintain the sea bottom level and 
mussel fields, not on whether drilling should proceed. 
 
Sobel