VZCZCXRO6751
RR RUEHRG
DE RUEHRI #0404/01 3371724
ZNR UUUUU ZZH
R 031723Z DEC 09
FM AMCONSUL RIO DE JANEIRO
TO RUEHC/SECSTATE WASHDC 0042
INFO RUEHBR/AMEMBASSY BRASILIA
RUEHRG/AMCONSUL RECIFE 0014
RUEHRI/AMCONSUL RIO DE JANEIRO
RUEHSO/AMCONSUL SAO PAULO

UNCLAS SECTION 01 OF 03 RIO DE JANEIRO 000404 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EPET ENRG ASEC PGOV TBIO EAIR BR
SUBJECT: Rio Radar - December 3 
 
REF: BRASILIA 1383; BRASILIA 1099; RIO DE JANEIRO 369 
RIO DE JANEIRO 329; RIO DE JANEIRO 365 
 
¶1. (U) Rio Radar is a regular compilation of key economic, 
political, commercial, and other developments in the states of Rio 
de Janeiro, Bahia, Minas Gerais, Espirito Santo, and Sergipe.  This 
week's subjects: 
 
 
 
BLACKOUTS HIT RIO DE JANEIRO...AGAIN AND AGAIN 
 
 
 
¶2.  (U) Beginning the afternoon of November 23, a power outage hit 
major parts of the affluent Zona Sul area of Rio de Janeiro, 
affecting approximately 40,000 residents.  Some neighborhoods well 
north of Zona Sul were also affected.   This blackout, which lasted 
almost 24 hours in some areas, was less widespread, but longer in 
duration than the country-wide blackout that also struck Rio de 
Janeiro on November 10 (reftel A).  Roberto Alcoforado, Vice 
President of the Rio de Janeiro's utilities company, "Light", 
provided three possible causes for the outage: Theft of underground 
electric cables; a spike in energy consumption due to 
higher-than-average temperatures; or, an overall increase in 
consumption due to an increase in domestic electronic appliances 
thanks to a reduction in the IPI (Industrialized Products Tax). 
Helder Queiroz, Professor of the Energy Group of the Economics 
Institute at the Federal University of Rio de Janeiro (UFRJ), 
however, placed the blame on poor infrastructure, noting Light 
spent 10 percent less on capital investments in 2009 than it did in 
¶2008.  On November 30, yet another blackout hit the Zona Sul area, 
lasting approximately three hours.  According to utility provider 
"Light," problems involving underground electric cables caused the 
power outage. 
 
 
 
PRE-SALT ROYALTIES DEBATE POSTPONES KEY VOTE IN CONGRESS 
 
 
 
¶3. (SBU) On November 26, Brazil's President Lula promised Rio de 
Janeiro Governor Cabral (PMDB) that he would ask the House of 
Deputies to postpone voting on the principal bill of the regulatory 
framework for the pre-salt oil deposits, due to the ongoing debate 
over the distribution of royalties, in areas already licensed under 
the concession model.  Four bills make up the proposed framework, 
and the House of Deputies has already passed one bill (reftels B 
and D).  This heated debate over the distribution of royalties 
under the framework has pitted Rio Governor Cabral and Espirito 
Santo Governor Paulo Hartung (PMDB) against Deputies and Governors 
from non-oil producing states, mainly in the Northeast, as well as 
the Federal government, with major disagreements even among members 
of the same party.  Since the framework was announced on August 31, 
non-oil producing states have demanded a greater share of royalties 
from Pre-salt blocks to be licensed going forward.  Beginning last 
month, however, they also began demanding royalties on pre-salt 
blocks already licensed under the existing concession model, 
causing staunch opposition from Cabral and Hartung.  The State of 
Rio de Janeiro alone stands to lose billions of dollars annually 
under the proposals.  The PMDB's leader in the House of Deputies 
Henrique Eduardo Alves promised to present a new proposal on 
royalties distribution during the first week of December.  Major 
international and independent oil companies that oppose the 
framework tell us the ongoing debate on royalties, and associated 
delays, can ultimately help their lobbying efforts against the 
bill, by holding up full Congressional passage. 
 
 
 
RIO EXTENDS FAVELA PACIFICATION, DRUG GROUPS FIGHT BACK 
 
 
 
¶4. (SBU) On November 30, some 300 Military Police officers - 
supported by armored helicopters - launched operations to enter two 
favelas in Rio's affluent Zona Sul area, in order to expel drug 
trafficking elements and prepare the community for "pacification," 
i.e. a sustained police and state presence (reftel D).  The two 
favela communities, "Pavao-Pavaozinho" and "Cantagalo" border the 
Copacabana and Ipanema neighborhoods, and are home to some 28,000 
residents.  Both communities have been under the control of the Red 
 
RIO DE JAN 00000404  002 OF 003 
 
 
Command, the same group responsible for downing a police helicopter 
in October (reported in Rio 346).  Press reports indicate police 
killed one drug gang member and apprehended two during initial 
firefights.  The office of the State Secretary for Public Security 
told us on December 1 the police had successfully entered the 
favelas and were patrolling the community. 
 
 
 
¶5. (SBU) On December 1 and 2, however, suspected drug traffickers 
struck back in Copacabana neighborhoods.  On December 1, they set 
ablaze a bus and threw a grenade at a shop, in what appeared to be 
retaliation against the operations.  The fire set by the suspects 
completely destroyed the bus, which was empty at the time, and 
spread to an adjacent store front.  In a nearby area, a suspected 
drug gang member also threw a grenade, which then exploded, 
damaging a storefront and some proximate vehicles, although it was 
not immediately clear if the two events were coordinated or 
directly related.  Some press reports stated the incidents were 
diversionary tactics so drug gang members could escape from a 
firefight with police in the favelas, but MP contacts could not 
corroborate these reports.  Prior to the bus fire, a group of 
minors warned stores in the area to shut down, to demonstrate 
solidarity "with the traffickers."   The Copacabana MP battalion 
told us they arrested two adults in the bus fire incident, three 
minors in the grenade incident, and 11 minors that ordered 
shopkeepers to close.  There were no reports of deaths or injuries. 
The location where the bus fire took place is only one block away 
from a major internationally recognized hotel where many visiting 
USG officials stay.  On December 2, another explosive device - 
containing nails - was thrown at a bus in Copacabana, according to 
local press, but no injuries were reported.  Rio authorities have 
successfully brought four other communities into the "Favela 
Pacification Program" (FPP), and the November 30 operation fits in 
with the program's overall strategy, timeline, and geographical 
prioritization (reftel E). 
 
 
 
ICAO CONFERENCE ADVANCES AVIATION BIOFUELS DEVELOPMENT 
 
 
 
¶6. (U) On November 16-18, the Brazilian government hosted the 
International Civil Aviation Organization's (ICAO) Conference on 
Aviation and Alternative Fuels in Rio de Janeiro.  During the three 
day event, member states - with input from airline industry 
representatives - debated language that went into an ICAO 
Declaration on the development of alternative aviation fuels.  The 
Declaration endorsed the use of sustainable alternative aviation 
fuel, particularly fuels compatible with existing jet engine 
technology, as a way to reduce CO2 emissions from aircraft.  ICAO 
will present the declaration at the United Nations 2009 Climate 
Change Conference in Copenhagen later this month.   Member states 
also established the Global Framework on Aviation and Alternative 
Fuels, an information-sharing platform for ICAO member states and 
the air transportation industry.  ICAO Secretary General Raymond 
Benjamin declared that as much as 10 percent of all aviation fuel 
could come from alternative sources within the next 10 years. 
 
 
 
¶7. (U) On the margins of the Conference, Brazilian aircraft 
manufacturer Embraer, Brazilian air carrier Azul, General Electric, 
and California-based Amyris announced a partnership to develop a 
bioengineered alternative aviation fuel.   The process for this 
fuel will involve a sugarcane feedstock, processed through 
fermentation, and bioengineered to become a "drop-in" kerosene spec 
fuel, i.e. a fuel that has advantageous elements of diesel, with 
the GHG-reducing benefits of sugarcane-based ethanol, and 
compatible with existing commercial jet engines. 
 
 
 
DENGUE FEVER OUTBREAK IN RIO? 
 
 
 
¶8. (U) On November 24, Brazilian Minister of Health Jose Gomes 
Temporao alerted Rio de Janeiro Health Authorities over the 
possibility of a new dengue fever out-break during the Brazilian 
summer months.  A total of 102 municipalities throughout the 
country, including seven in Rio de Janeiro state, are under a state 
of alert. 
 
RIO DE JAN 00000404  003 OF 003 
 
 
SALVADOR RESIDENTS PROTEST FOR MENINGITIS VACCINE 
 
 
 
¶9. (U) On November 24, Salvador, Bahia residents staged a protest 
demanding free vaccinations against meningitis.  The protest 
blocked traffic for a few hours.  According to the Bahia State 
Secretariat of Health, there have been 128 deaths from meningitis 
this year.  However, the Secretariat claims only the Federal 
Ministry of Health can make changes to the list of vaccines 
included in the free vaccination program.  A meningitis vaccine 
currently costs 120 Brazilian Reals (70 USD). 
HEARNE