VZCZCXRO3879
OO RUEHDE RUEHDH RUEHDIR
DE RUEHAD #1117/01 3351132
ZNR UUUUU ZZH
O 011132Z DEC 09
FM AMEMBASSY ABU DHABI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3146
INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE
RHEHNSC/NSC WASHDC
RHMFISS/DEPT OF ENERGY WASHINGTON DC

UNCLAS SECTION 01 OF 02 ABU DHABI 001117 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT FOR S/CIEA, ISN/NESS, EEB/ESC, EEB/CBA AND NEA/ARP 
DOE FOR PERSON 
NSC FOR JOST 
 
E.O. 12958: 11/22/2019 
TAGS: ENRG EPET KNNP PGOV ECON ETRD AE
SUBJECT: SCENESETTER FOR THE VISIT OF DOE DEPUTY SECRETARY PONEMAN 
 
REF: ABU DHABI 1101 
 
¶1.  (U) Mission UAE looks forward to hosting Deputy Secretary of 
Energy Poneman's December 8-10 visit to Abu Dhabi. Reftel provided a 
separate classified scenesetter. 
 
THE UAE AND THE BILATERAL RELATIONSHIP 
-------------------------------------- 
 
¶2.  (SBU) In the past five years, the United Arab Emirates has 
emerged as one of the economic powerhouses of the region and attained 
a commensurate level of political influence.  The UAE has troops in 
Afghanistan, is an important political player in Pakistan, and its 
support is sought by leaders throughout the Middle East, and further 
afield.  Although a tiny country, geographically and demographically, 
the UAE punches well above its weight class in international circles. 
 
A COUNTRY BUILT ON OIL AND GAS 
------------------------------ 
 
¶3.  (SBU) Most of the UAE's development, particularly in the Emirate 
of Abu Dhabi, was funded by oil revenues.  The hydrocarbon sector was 
developed years before the UAE was established (1971) and provide its 
population with a high standard of living.  Today, Abu Dhabi - 
through state-owned Abu Dhabi National Oil Company (ADNOC) produces 
approximately 2.2 million barrels per day (mbpd) of oil although 
production capacity exceeds 2.6 mbpd.  ADNOC is investing in 
increased production, largely through the application of advanced 
recovery technologies.  Abu Dhabi's main export destinations are 
Japan and South Korea.  ADNOC expects to offer new concessions in 
2014 and 2018, potentially allowing U.S. companies to increase market 
share here. 
 
¶4. (SBU) Although the UAE exports about 4 billion standard cubic feet 
a day (scfd), the UAE's gas deposits are largely associated and a 
significant portion of production is reinjected for enhanced oil 
recovery.  The UAE has one large sour gas field, Shah, which is being 
developed by ADNOC and ConocoPhillips and could yield over 500 
million scfd.  Other projects are underway to expand existing gas 
production, however, much of this is expected to be used for 
reinjection.  Domestic production is insufficient to power the UAE's 
rapid economic development.  In 2001, the UAE (then as the UAE 
Offsets Group and now as Mubadala) entered into a long term gas deal 
with neighboring Qatar.  Named Dolphin Energy, the project currently 
imports 2 billion scfd by a pipeline designed to deliver 3.2 billion 
scfd. 
 
¶5. (SBU) In addition to its oil and gas production, Abu Dhabi-owned 
companies have also made significant investments in global energy 
assets.  In addition to Dolphin, state-owned investment corporation 
Mubadala purchased Singapore's Pearl Energy and owns assets across 
the Middle East and North Africa.  Government-owned International 
Petroleum Investment Corporation (IPIC) has made both domestic and 
international investments in refineries, pipelines, and other 
production facilities.  Abu Dhabi Energy Company ("Taqa") has 
purchased power facilities as far afield as Jamaica, invested in 
storage in Europe and owns domestic power assets. 
 
...TURNS TO GREEN ENERGY 
------------------------ 
 
¶6. (SBU) In 2007, Abu Dhabi Emirate began a study of the UAE's long 
term electricity needs and determined that the UAE would be unable to 
produce enough gas or develop sufficient renewable capacity to meet 
growing demand.  After dismissing oil and coal as environmentally 
unfriendly, Abu Dhabi determined that nuclear power would best serve 
the Emirate's long-term electricity needs.  The UAE choose to 
publically renounce uranium enrichment and reprocessing (ENR).  In 
addition to codifying this policy in the US-UAE 123 Agreement, which 
is expected to go into effort in late November, the UAE's nuclear law 
(# 6/2009) published in October also bans ENR.  The law also 
established an independent regulator, the Federal Authority for 
Nuclear Regulation (FANR), which is headed by a former US NRC 
official (Bill Travers).   The program has moved quickly toward 
awarding a tender for the UAE's first four nuclear power plants. 
There are three consortia bidding for the project: GE/Hitachi, 
Korea's KEPCO, and AREVA. 
 
¶7. (SBU) Concurrently, Abu Dhabi is also investing heavily in 
renewable energy.  The Government set a target to produce 7 percent 
of total electricity demand from renewable by 2020, an effort led by 
Masdar, the Abu Dhabi Future Energy Company, which is owned by 
Mubadala.  Masdar (Arabic for "source") has four main divisions: 
Masdar Power, Masdar Carbon, Masdar Sustainable Cities and Masdar 
Institute.  The first invests in renewable technologies, the second 
supports the reduction of carbon emissions, the third develops model 
 
ABU DHABI 00001117  002 OF 002 
 
 
zero-carbon, zero-waste cities, like Masdar City in Abu Dhabi, and 
the last promotes research, through a partnership with MIT.  The 
selection of Abu Dhabi to host the new International Renewable Energy 
Agency (IRENA) in June 2009 is in part demonstrative of Masdar's 
success. 
 
¶8.  (SBU) Given Abu Dhabi'S energy investments, protection of these 
investments is paramount.  The Critical National Infrastructure 
Authority (CNIA) is responsible for this task, and seeks to rapidly 
develop appropriate expertise and implement advanced security 
solutions.  CNIA has expressed renewed interest in greater 
cooperation with the United States Government, and is currently 
reviewing a draft agreement for critical energy infrastructure 
protection cooperation. 
 
THE AGENDA 
---------- 
 
¶9. (SBU) U.S. firms are involved in almost all of the UAE's energy 
initiatives, either as consultants, exporters or innovators. 
However, we have only scratched the surface of USG collaboration 
opportunities.  The President's Cairo speech highlighted the 
importance of greater science and technology cooperation with the 
Muslim world.  Your visit presents a unique opportunity to explore 
UAE interest in such collaboration.  Nuclear and renewable power 
officials are particularly interested in establishing closer 
relationships with the USG. 
OLSON