VZCZCXRO3667
RR RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHNP RUEHPOD RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHVI #1819/01 3461202
ZNR UUUUU ZZH
R 111202Z DEC 08
FM AMEMBASSY VIENNA
TO RUEHC/SECSTATE WASHDC 1656
INFO RHEBAAA/DEPT OF ENERGY WASHDC
RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 02 VIENNA 001819 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ENRG EPET ECON PGOV SENV AU IR
SUBJECT: ENERGY SECURITY WEIGHING HEAVIER IN AUSTRIA 
 
REF: (A) VIENNA 1733; (B) VIENNA 1710; (C) VIENNA 1351 
 
Sensitive but Unclassified - not for Internet distribution. 
 
¶1. (SBU) SUMMARY: Energy security has arrived on the agenda 
of Austrian policymakers.  Whereas energy policy was 
heretofore dominated by issues like renewables/biofuels, 
climate change, and a vociferous anti-nuclear stance, now 
diversifying and securing energy supply take equal priority 
(even as public perceptions are slow to catch up).  Recent 
signs of the new agenda include elements of the new 
Austrian governmentQs platform, ministerial appointments, 
the high-profile Turkmen visit to Vienna (ref B), and 
AustriaQs hosting of a high-profile conference November 23- 
¶24.  Unchanged is the commitment to stable energy ties with 
Russia (ref A):  the GoA has now officially endorsed the 
South Stream pipeline project alongside Nabucco.  END 
SUMMARY. 
 
NEW GOA PLATFORM EMBRACES BOTH NABUCCO AND SOUTH STREAM 
--------------------------------------------- ---------- 
 
¶2. (U) The coalition platform for the new Austrian 
government (which took office in early December) devotes 
eight pages to energy issues:  it defines security, 
efficiency, and renewables as the central principles of 
domestic energy policy and the Nabucco Gas Pipeline as the 
Qtop priorityQ for energy diplomacy.  At the same time, it 
characterizes South Stream as a Quseful additionQ to 
Nabucco and says the GOA will introduce an enabling act for 
participation in South Stream.  The program also endorses 
the construction of LNG terminals (NOTE: this probably 
refers to OMVQs planned LNG terminal in Krk/Croatia, but 
might refer indirectly to future OMV gas projects in Iran - 
END NOTE).  The country intends to position itself as an 
Qinternational energy hubQ -- a clear reference to OMVQs 
gas compressor/distribution station in Baumgarten and the 
OMV-Gazprom Central European Gas Hub (CEGH) software-based 
trading platform in Vienna. 
 
¶3. (SBU) The new coalitionQs platform codifies the rise of 
energy security on the GOA agenda.  In 2007, the Economics 
Ministry created a department for QInternational Energy 
RelationsQ and anointed its head, Dr. Maria Reich-Rohrwig, 
to be QSpecial Envoy for Pipeline ProjectsQ.  A seasoned 
WTO negotiator, Reich-Rohrwig was slated to sign an MOU in 
September on AustriaQs participation at South Stream, but 
the meeting (in Moscow) was cancelled at the last minute 
due to the Georgian conflict.  In October, she negotiated 
with Turkmen President Gurbanguly Berdymukhamedov on 
connecting the future trans-Caspian gas pipeline to 
Nabucco.  Berdymukhamedov paid a high-profile visit to 
Vienna in November (ref A), but negotiations are apparently 
still pending. 
 
GOA WATERS DOWN RENEWABLES AND ETS GOALS; 
NO DEMANDS ON CARBON LEAKAGE 
----------------------------------------- 
 
¶4. (U) In the new GoA program, Austria commits itself to 
meeting the EU 20-20-20 goals on climate change by 
developing a Qmaster plan on energy efficiencyQ -- mainly 
in the building and household sectors.  On renewable 
energies, the GoA commits to biofuels production and to the 
EU Action Plan (which foresees an increase of renewables in 
the energy mix from 23% to 34%), but drops its previous 
goal of 45% renewables by 2020.  On a Kyoto follow-on, the 
program says it is Qdecisive to bring the U.S., China and 
India on boardQ but is vague on the Qcarbon leakageQ issue 
(no demands for barriers to market access by non- 
participating countries).  NOTE: Austrian industry is a 
vocal proponent of carbon leakage arrangements -- but 
focuses on free emissions allocations rather than border 
tax adjustments.  END NOTE. 
 
¶5. (U) In his first statement on energy issues, new 
Economy/Energy Minister Reinhold Mitterlehner applauded the 
EU CommissionQs updated Strategic Energy Review and its 
focus on energy security, accelerating infrastructure 
projects (especially Nabucco), and energy efficiency.  On 
GHG emissions, Mitterlehner remains very critical of the 
updated Emissions Trading Scheme (ETS): the Commission 
should not QpunishQ highly efficient energy intensive 
industries by QexilingQ them from Europe.  The GoA program 
advocates continuing free CO2 permits after 2013 for steel 
and related industries. 
 
AUSTRIA WILL REMAIN A THORN ON NUCLEAR ENERGY 
--------------------------------------------- 
 
¶6. (U) On nuclear energy, Austria will continue to lobby 
 
VIENNA 00001819  002 OF 002 
 
 
against nuclear energy in all international fora, according 
to an early interview with new ForMin Michael Spindelegger. 
Austria maintains that nuclear energy is Qnot sustainable 
and does not increase energy securityQ and supports the 
creation of a nuclear-free zone in Central Europe. Austria 
promotes abandoning nuclear power stations that cannot be 
QmodernizedQ (Kosloduy, Bohunice, Ignalina) and favors 
creating Qhigh, common EU safety standards on nuclear 
energyQ.  Within the EU, the Austrians have always tried to 
minimize financial support for building or modernizing 
nuclear energy plants. 
 
HOW WILL THE ENERGY SECURITY AFFECT THE IRAN OUTLOOK? 
--------------------------------------------- -------- 
 
¶7. (U) In late November, the GOA and non-profit European 
Forum Alpbach (a much smaller, German-language counterpart 
to the Davos forum) co-hosted a conference on QEurope Q a 
Global Player in Energy?Q  High-ranking participants from 
the EU Commission (including Commissioner Piebalgs), the 
GoA, and the private sector examined energy security and 
the EUQs and AustriaQs role in the future.  Piebalgs 
lobbied for EU Member State adoption of the CommissionQs 
Third Energy/Climate Package, which empowers the EU to act 
and pave the way for innovation and investments in 
renewables, energy efficiency, and more security.  MinEcon 
section head Alfred Maier (Reich-RohrwigQs boss) agreed 
with the EUQs goals of but expressed skepticism that Member 
States will cede full power, since the landscape is diverse 
-- particularly with regard to the national energy mix (an 
important point for Austria which will remain Qnuclear 
power freeQ in any case). 
 
¶8. (SBU) Ambivalent on Iran -- QWe need to tap Iranian 
energy sources as soon as possible because the Russian 
pipelines are hard to fill, and Central Asian promises are 
vague.Q  This argument, by prominent Austrian political 
scientist/Russia expert Gerhard Mangott, apparently fell on 
fertile ground at the conference.  Mangott cited Russian 
energy ministry sources for his claim that Russia will have 
to throttle gas exports to the EU given RussiaQs soaring 
domestic consumption.  RussiaQs plans for energy efficiency 
and diversifying its domestic energy mix (more nuclear) 
will fail, Mangott argued, due to the upcoming recession, 
and new gas fields on the Yamal peninsula and Barent Sea 
will be slow to materialize.  In addition, China is 
promising a $20 billion loan to Gazprom and Rosneft, if 
they sell significant amounts of gas to China.  Shakier 
still are empty promises to Europe by the four Central 
Asian countries, Mangott claimed:  proven gas reserves 
there are 7.6 tcm, while Iran sits on 27.8 tcm. 
Turkmenistan might produce only 7 bcm gas per year, but has 
already concluded a contract with Russia over future 
delivery of 80 bcm according to Mangott.  Mangott 
downplayed the Iran nuclear issue and argued for moving 
more quickly to conclude gas supply contracts with Iran as 
QindispensableQ for EuropeQs energy security.  In the 
following Q/A session, private-sector Austrian energy 
stakeholders appeared to share his view that Europe must 
move -- sooner or later -- to develop Iranian gas 
resources. 
 
GIRARD-DICARLO