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PP RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHNP RUEHPOD RUEHROV RUEHSK RUEHSL RUEHSR RUEHVK
RUEHYG
DE RUEHMO #2499/01 2741257
ZNR UUUUU ZZH
P 011257Z OCT 09
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 4958
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RHMFIUU/DEPT OF ENERGY WASHINGTON DC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY

UNCLAS SECTION 01 OF 03 MOSCOW 002499 
 
SIPDIS 
SENSITIVE 
 
DEPT FOR EUR/RUS, EEB/ESC/IEC GALLOGLY AND GREENSTEIN, 
S/EEE MORNINGSTAR 
DOE FOR HEGBURG, EKIMOFF 
DOC FOR JBROUGHER 
NSC FOR MMCFAUL, JELLISON 
 
E.O. 12958: N/A 
TAGS: EPET ENRG ECON PREL RS
SUBJECT: DOE PDAS ELKIND'S VISIT TO MOSCOW 
 
------- 
Summary 
------- 
 
¶1. (SBU) DOE Principal Deputy Assistant Secretary for Policy 
and International Affairs, Jonathan Elkind, visited Moscow 
September 21-22 to meet with his counterparts at the 
Ministries of Foreign Affairs, Energy, Science and Education, 
Economic Development and Natural Resources. As Coordinator 
for the Energy and Environment Working Group (WG) under the 
Bilateral Presidential Commission (BPC), he discussed the 
structure of the WG and potential areas of cooperation. 
Meetings were also held with the World Wildlife Fund, the 
American Chamber of Commerce (AmCham) and the Petroleum 
Advisory Forum (PAF). 
 
¶2. (SBU) The Russian consensus was that Environment needs its 
own WG.  PDAS Elkind emphasized DOE's desire to be flexible 
and pragmatic on the WG structure.  He promised to convey the 
GOR message to Washington, but cautioned that the decision to 
change a WG would be made at a higher level.  Elkind told 
each of his counterparts that Russia's intellectual capital 
and resource endowment puts it on a short list of countries 
in a position to lead the development of the energy future 
for the planet.  End summary. 
 
--------------------------- 
Ministry of Foreign Affairs 
--------------------------- 
 
¶3. (SBU) Deputy Director for the North American Department, 
Nikolay Smirnov, said he expected some overlap among the WGs, 
and that it was not a problem.  The MFA would leave it up to 
the Energy Ministry and Ministry of Natural Resources to work 
out their differences.  He supported a sub-WG on energy 
security (to be chaired on the US side by Ambassador 
Morningstar) and emphasized the importance of finding a place 
for Arctic issues in the BPC.  Smirnov thought the Energy 
Ministry would provide a counterpart for Morningstar, but was 
not sure.  Elkind noted that the U.S. side would be 
supportive of a structure that allows the WG to move forward. 
 He also sought to clarify the role of outside experts in the 
WG, stating that their input would be crucial, but an 
official seat at the table could cause legal problems. 
 
------------------ 
Ministry of Energy 
------------------ 
 
¶4. (SBU) Deputy Energy Minister Anatoly Yanovsky told Elkind 
that it would be best to split energy and environment into 
separate working groups.  Ministry of Natural Resources 
representative Andrey Peshkov, who attended the meeting, 
agreed.  Yanovsky and Elkind shared the opinion that 
DOE-Ministry of Energy cooperation would only include those 
environmental issues directly related to energy.  Yanovsky 
also expressed a desire to see the Energy Security and 
Markets sub-group set up, and wanted it to address "legal 
regimes for international cooperation." 
 
¶5. (SBU) PDAS Elkind delivered a letter from Secretary Chu to 
Energy Minister Sergei Shmatko, inviting him to meet in the 
fourth quarter of 2009, perhaps in Europe on the sidelines of 
a multilateral gathering.  Yanovsky said the Russian side had 
not yet designated a counterpart to Elkind to coordinate WG 
activities, but that it would provide that information in the 
near future. 
 
¶6. (SBU) Both sides agreed to finalize the DOE-Energy 
Ministry MOU on cooperation in preparation for a Chu-Shmatko 
meeting this fall, at which both sides could sign the 
document.  The MOU was drafted in June by the USG as 
follow-up to a meeting between Minister Shmatko and Deputy 
Energy Secretary Poneman in Moscow.  The document was cleared 
by the U.S. interagency and submitted to the Russian side 
before the BPC was created at the Summit between President 
Obama and President Medvedev.  The MOU, it was agreed, would 
be revised to reflect the role and structure of the BPC. 
 
--------------------------------- 
 
MOSCOW 00002499  002 OF 003 
 
 
Ministry of Science and Education 
--------------------------------- 
 
¶7. (SBU) The Head of the International Department of the 
Ministry of Science and Education, Vladislav Nichkov, said 
there were abundant existing avenues for cooperation in 
addition to the three WGs that FASI was involved in.  He 
asked that DOE check on the status of three bilateral 
agreements on science and technology cooperation up for 
review or renewal.  Elkind promised to do so. 
 
-------------------------------- 
Ministry of Economic Development 
-------------------------------- 
 
¶8. (SBU) Oleg Pluzhnikov, Deputy Director for Structural 
Reforms at the Ministry of Economic Development, told Elkind 
that he expected the State Duma to pass a new law on energy 
efficiency by the end of the year.  In principle, the codes 
and standards would mirror EU standards and would, among 
other things, provide incentives for consumers to install 
power meters and cause a phase-out of incandescent light 
bulbs, which would no longer be allowed for sale.  The 
Ministry of Economic Development has not been involved to 
date with the Energy and Environment Working Group, but did 
not anticipate problems in working with the Energy Ministry 
under the BPC.  Pluzhnikov said his Ministry is responsible 
within the Russian Federation for energy efficiency 
legislation, some climate change issues, and energy saving 
mandates.  Pluzhnikov noted that Kyoto implementation was not 
a priority for the GOR. 
 
----------------------------- 
Ministry of Natural Resources 
----------------------------- 
 
¶9. (SBU) After spending 20 minutes reciting the Ministry's 
charter and summarizing its work under bilateral agreements 
with the US dating back to 1972, Vladimir Ivlev, Head of the 
International Cooperation Department of the Ministry of 
Natural Resources, said that MNR wanted an independent WG for 
environmental issues.  He also expressed an interest in more 
direct cooperation with DOE.  Elkind reiterated DOE 
flexibility, but left it to the Russian side to arrange their 
WG representation.  He agreed to look into new areas of 
cooperation for DOE and MNR. 
 
------------------- 
World Wildlife Fund 
------------------- 
 
¶10. (SBU) WWF Climate Change Program Coordinator Alexey 
Kokorin said that policies to reduce gas flaring and increase 
energy efficiency will help lower Russia's greenhouse gas 
emissions, but the GOR was not motivated by climate change to 
pursue these goals.  He said that unlike their fellow 
ministers, Yury Trutnev (MNR) and Sergey Shoigu (Emergency 
Situations) understand the scope of the problem because they 
have to deal with the consequences of climate change.  The 
problem, Kokorin said, is that the danger is not felt in 
Moscow, only Kamchatka; "Russia has had no equivalent to 
Hurricane Katrina."  Kokorin does not believe that Russia 
will make a meaningful commitment at the UN Framework 
Convention on Climate Change (UNFCCC) Conference of Parties 
in Copenhagen in December 2009.  Russia's declared emissions 
reduction target represents in fact an increase over current 
levels, but he cautioned that little fuss should be made over 
Russia's lack of ambition here, as the target was based on 
unrealistically high annual economic growth projections and 
won't, in reality, be reached.  What matters is that the GOR 
is considering treating the 30 billion tons of carbon it will 
have avoided emitting over the 30 years between 1990 and 2020 
due to the fall of the USSR and subsequent economic collapse 
as a "donation" toward global carbon reduction targets. 
Kokorin recommended that USG and EU leaders recognize 
Russia's "30-30" commitment as "a big deal" and praise 
Russia's leadership.  Kokorin hoped Minister Trutnev would 
lead the Russian delegation to the UNFCCC negotiations in 
Copenhagen, as it would raise the stature, but he thought 
this was unlikely.  Kokorin noted the impact of more extreme 
 
MOSCOW 00002499  003 OF 003 
 
 
weather on energy infrastructure, including power 
transmission lines, suggesting this as an area for fruitful 
bilateral cooperation.  He also suggested the USG might seek 
ways to support the development of Russia's biomass (wood 
pellet) industry, given the volume of timber waste and unused 
agricultural land. 
 
------ 
AmCham 
------ 
 
¶11. (SBU) Elkind met with two groups convened by the American 
Chamber of Commerce.  With AmCham's energy committee, he 
discussed current obstacles and opportunities in the oil and 
gas sector in Russia.  With a small group that included 
representatives GE, Alcoa, and Chevron, he discussed energy 
efficiency business opportunities for American firms.  On 
efficiency, the businessmen's general message was that joint 
ventures with state-owned companies and procuring Russian 
content, or setting up local manufacturing were keys to 
success.  Heavy energy users like Alcoa are not likely to 
make major energy efficiency upgrades until there are tax 
incentives to support that. 
 
--- 
PAF 
--- 
 
¶12. (SBU) PAF Executive Director Vlad Konavalov told Elkind 
that the Ministry of Energy is not open to advocacy by his 
organization, which represents Western oil and gas sector 
firms.  Instead, the Energy Ministry is open to lobbying from 
Russian energy firms and represents their interests within 
the government.  However, PAF does have good relations with 
MNR, specifically Deputy Minister Donskoy, who heads the 
Foreign Investment Advisory Council and oversees policies on 
subsoil use.  Konavalov said there had been a noticeable 
decrease in negative attitudes toward American firms in 
recent months.  Konovalov noted that Western direct and 
indirect investment, including portfolio and minority equity 
stakes, amounts to approximately 20 to 25 percent of the 
Russian oil and gas sector -- a far higher number than widely 
thought. 
 
¶13. (U) PDAS Elkind has cleared this cable. 
Rubin