R 021117Z MAR 09
FM AMEMBASSY BRASILIA
TO SECSTATE WASHDC 3691
INFO AMCONSUL RECIFE 
AMCONSUL RIO DE JANEIRO 
AMCONSUL SAO PAULO 
DOE WASHDC
DOD WASHDC
CDR USSOUTHCOM MIAMI FL
NSC WASHDC

C O N F I D E N T I A L BRASILIA 000253 
 
 
CONFIDENTIAL 
 
FOR WHA A/S SHANNON, USOAS AMB. MORALES, AMB. DAVIDOW, WHA/EPSC AND 
WHA/BSC 
FOR DOE CGAY, GWARD, RDAVIS 
SOUTHCOM FOR JOANNA GUITIERREZ 
 
E.O. 12958: DECL: 02/05/2019 
TAGS: PREL ENRG ECON KSUM BR
SUBJECT: SOME AVENUES FOR REGIONAL ENERGY COOPERATION WITH BRAZIL ARE 
OPEN 
 
REFTELS: A) Brasilia 158 B) Brasilia 224 
 
Classified By: Ambassador Sobel, Reason 1.4 (b) and (d) 
 
¶1. (SBU) Summary: In separate meetings, both Brazil's Minister for 
Mines and Energy and his Deputy Minister have recently reconfirmed 
their interest in hemispheric energy cooperation.  While other parts 
of the Brazilian government have been less positive in their 
assessments of the chances, or indeed desirability, of energy 
cooperation in the hemisphere (reftels) both Energy Minister Lobao 
and his deputy offered concrete suggestions for ways in which such 
partnerships might be most productive, such as support for 
hydropower, regional research centers, and rural electrification. 
Lobao is very open to meeting with Energy Secretary Chu and has 
opened his schedule to us to try to facilitate such a meeting.  In 
addition to positive engagement on possible hemispheric cooperation, 
both have identified more options for bilateral energy engagement 
including developing natural gas liquefaction technology at deep sea 
oil platforms, increasing use of wind power, and identifying ways to 
increase energy efficiency in water treatment.  END SUMMARY 
 
¶2. (SBU) Ambassador Sobel met with Deputy Minister for Energy 
Mauricio Zimmermann on February 21 to seek Brazilian input for 
further energy collaboration bilaterally and regionally.  Zimmermann, 
who said that he felt regional cooperation was a good idea, indicated 
that energy is one of the biggest challenges and best development 
opportunities facing the region.  According to Zimmermann,  U.S. per 
capita usage of energy is 3000 kilowatts(kw)/year, and Brazil's is 
2013 kw/year, while many other countries in the region use only 
700-900 kw/year.  He also observed that the Mercosul region is one of 
the most mature energy markets in the western hemisphere and as such 
has the most potential for integration. Recent experience for Brazil 
has indicated that integration efforts require the force of treaties 
to be successful.  Of the past five integration efforts, the only two 
that have proven successful, the Itaipu dam which provides hydropower 
to Brazil and Paraguay, and gas supply agreements with Bolivia, have 
treaty agreements supporting them (Note: even these arrangements have 
encountered significant problems).  According to Zimmermann, the 
Ministry of Mines and Energy (MME) is currently conducting a study on 
how to integrate the electrical sectors of Mercosul countries along 
the lines of the European Union.  There is also a project currently 
under way to examine, at the request of the Minister of Mines and 
Energy, Edson Lobao, how to integrate energy issues throughout South 
America.  (Note: In a later meeting, Minister Lobao said he expected 
this study to be finalized in two to three months and would share the 
results with the Embassy. The fact that MME is looking at how to 
integrate energy in South America and is willing to open that process 
to the United States could be extremely useful in deciding how we 
best approach hemispheric cooperation.  End note.) 
 
¶3.  (SBU) Pressed by Ambassador Sobel for examples of how the U.S. 
could add value in integration efforts, Zimmermann cited the 
potential and need for expanded hydropower as one possible area of 
focus.  Zimmermann said that although South America has the potential 
for up to 600,000 megawatts of hydropower production, less than 20 
percent of that was being utilized, due to environmental concerns. 
He suggested that the United States could work with Brazil in 
creating a consensus in international fora, especially the World 
Bank, that hydropower is a sustainable technology.  When asked about 
his awareness of a research center on renewable energy planned in 
Chile, Zimmermann indicated that he was aware of the project and that 
he thought it could be a possible project for regional cooperation. 
Zimmermann also pointed to Brazil's own project financed with UNDP at 
Itaipu for research on hydropower as a possible model for regional 
research.  When Ambassador Sobel, building on these examples, 
suggested that a way forward in regional energy cooperation could be 
regional centers each pooling scientific cooperation and research in 
a "Centers of Excellence" model, Zimmermann concurred. 
 
4)  (C) Zimmermann then responded separately to Econoff's queries on 
other areas that could be opportunities for cooperation; agreeing 
that one possibility is rural electrification, an area in which both 
the United States and Brazil have great experience to share in the 
hemisphere, as well as the possibility to work together to develop 
remote generation sources (Note: post understands this may be an area 
of Defense Department interest).  He also expressed curiosity about 
the possibility that the U.S. may have technology applicable for deep 
sea liquefaction of natural gas, which Brazil will soon undertake in 
the areas of deep sea oil discoveries announced in 2007, to try to 
capitalize on the attendant natural gas.  He also offered that in the 
area of energy efficiency, Brazil would welcome the opportunity to 
focus on improving efficiency in water treatment plants, a large 
challenge for Brazil.  Zimmermann said that given the lack of 
commercial interest in Brazil's marginal oil blocks, technology in 
that field would be of less interest.  He agreed that there are many 
possibilities for expanding the 2003 Bilateral MOU for energy 
cooperation between DOE and MME, a vehicle we have recently used to 
establish new bilateral working groups on nuclear energy, energy 
efficiency, and clean coal. 
 
5)  (SBU) Ambassador Sobel met with Minister Lobao on February 25 to 
continue the discussion on possible regional cooperation.  Lobao 
reconfirmed his support for hemispheric energy cooperation and 
committed to have Deputy Secretary Zimmermann further flesh out some 
possible ideas - bilaterally under the 2003 MOU, as well as 
hemispherically.  He agreed that rural electrification is an area in 
which Brazil has much to share and that any U.S. expertise available 
on floating platforms for liquefaction of natural gas would be 
greatly welcome.  Noting that Petrobras would begin building a 
platform in May to exploit resources in the very promising but 
challenging new deep sea blocks in the Tupi area, he would welcome a 
visit by Energy Secretary Chu to witness the work and discuss what 
type of bilateral cooperation might be possible there.  Noting that 
the Brazilian sugar cane and ethanol trade association, UNICA, is 
planning a major biofuels conference June 1 -3, to which Secretary 
Chu is invited, Ambassador Sobel committed to look into that 
timeframe for a possible visit by the Secretary of Energy.  Lobao 
also indicated Brazil's interest in developing more wind power, 
particularly in a new wind turbine being made by Boeing with two 
propellers instead of three, to allow generation from wind at any 
angle and much greater heights. 
 
¶6. (C) Comment:  It is clear that Brazil's Ministry of Mines and 
Energy is convinced of the benefits of hemispheric cooperation and 
has some creative ideas as to how to best pursue a collaborative 
agenda.  To the extent that any questions regarding a possible energy 
partnership of the Americas are routed through energy ministries, we 
believe they will be met with great receptivity in Brazil.  Post 
would recommend a meeting between Secretary Chu and Minister Lobao at 
the earliest opportunity, particularly in advance of the late June 
regional energy symposium as conceived of by DOE, perhaps using the 
occasion of the June 1 - 3 UNICA conference for a visit.  Such a 
meeting would allow the USG to coordinate positions with one country 
that will be a key to success or failure in a hemispheric energy 
initiative.  As reported reftels, other channels for pursuing this 
agenda may offer less auspicious prospects.  While hemispheric energy 
cooperation will clearly require finding ways to work with others in 
the Brazilian government who may be less inclined towards such an 
approach, the positive engagement offered by the Ministry of Mines 
and Energy could be a building block for a hemispheric partnership. 
In the meantime, Embassy Brasilia is working closely with the 
Ministry of Mines and Energy and the U.S. interagency community to 
identify promising areas for bilateral cooperation - a partnership 
that would seem to offer opportunities limited only by resources. 
Mines and Energy and DOE appear to have settled on a group of dates 
for teleconferences in March to bring together the three working 
groups on nuclear energy, clean coal, and energy efficiency.  These 
three groups represent the tip of the iceberg of the numerous options 
for the United States and Brazil to work together to advance energy 
security in our two countries, and the hemisphere, while continuing 
to build strong bilateral relations. 
 
SOBEL