---------------------- Forwarded by Terence H Thorn/ENRON_DEVELOPMENT on 
11/22/99 05:24 AM ---------------------------


Terence H Thorn
11/22/99 05:22 AM
To: "Michael J. Farrar" <MFARRAR@mail.arco.com>, Edith 
Terry/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc: "Ken Thompson" <KTHOMPS1@mail.arco.com>, sburns@pecc.org 

Subject: Re: EWG meeting  

The Energy Business network survived the EWG meeting in Wellington. I'll give 
you a quick recap and my impressions and  we can decide if I should send a 
note out to everyone next week or wait until we meet on the 15th for my 
report. The official  report should be on the internet Monday.  A meeting of 
the EBN has been scheduled in Melbourne on March 18-19 to coincide with the 
Davos Meeting.  They are also talking about an EWG meeting in March also.

I will be late for the meeting on the 15th. I have a black tie dinner on 
Tuesday night and will take the first plane to Houston from New York 
Wednesday  AM. Sorry but I can't get out of the dinner, it's been planned for 
a long time and I have guests.

20 countries were present. If you look back on the agenda for the 18th 
meeting of the EWG business network  on November 18-19 in Wellington, four 
agenda items were of particular interest to the Energy Business Network:

 1) the report on the 2nd meeting of the  EBN meeting:  we were forewarned 
that the activities of the EBN would be under attack by the Japanese, Chinese 
and Mexicans.
 2) the discussion and report on the EWG implementation Committee's Visit 
Team to Thailand, 8-10 November 1999.
 3) the DOE recommendation on a Proposed Plan of Work on Energy Services- 
again very controversial.
 4) the proposed Energy Ministerial in the US in the Spring.

Mexico, China and Japan were not happy with the proactive push of the EBN.  I 
assume it was Mexico that made sure we were excluded from the discussions on 
the Thai visit and energy services, two EBN initiatives  Barry and I would 
only be allowed in the room for the EBN report, something I protested prior 
to the meeting. With the help of Tim Mackey,  we somewhat circumvented the 
restriction by his going around the room one by one after Barry's report  
asking for reaction to what was said.  This forced a discussion with us in 
the room.  Both Barry and I responded to the issues raised.

The dissenters maintained that the EBN was working too fast  and that we were 
taking the initiative away from the EWG and becoming too independent. Japan 
supports the concept of the EBN but made it clear that it was the EWG that 
sets initiatives.  The EBN "summary of decisions" was a particular affront.  
We had strong support from Australia, Canada, Korea, Malaysia, New Zealand, 
the Philippines (they are concerned that the EBN not duplicate EWG 
initiatives) Singapore, Thailand, and the US.  China surprised us by 
complaining that the EWG and EBN meetings were now separate, not back to 
back. Barry explained this was more an accident that anything else.

It took some effort, but I think we made our case. I emphasized strongly that 
the EBN consisted of some of the best and brightest in the energy industry 
and that we would not be shy about  offering our ideas. We operate with a 
great sense of urgency seeing that APEC will eventually $30 trillion of 
investment to meet their energy needs. Each economy could accept of reject 
these ideas but I doubted they wanted to be a rubber stamp for the EWG. As 
for energy services, as I understood it, the DOE program was designed to get 
the EWG up to speed on what energy services are, an educational effort that 
compliments what is going on at the WTO.  Services represented stage three in 
energy development that would increase the efficiency of the infrastructure 
and offer new products and services to users of energy.  The key discussion 
would occur on Friday in our absence.

There were two official reports on the Thai meeting, one by the secretariat 
which was more of a recap of the process and agenda with no evaluation of the 
success and one by the Thai's, the last paragraph of which was very 
favorable.  Ironically, the controversy concerned the process by which we 
participants were chosen. No one has been able to explain to me why the EWG 
would care about this issue and I honestly believe that the USG was a major 
factor in stirring this up and when you cut through the bull, it's about 
exerting control over the EWG.  Again, everyone was in support of the 
consultative process and the value it  brings in opening dialogues on 
difficult issues.  I noted that the Thai's should get particular credit  for 
being so open and candid in the discussions.

In our absence there was a long discussion on the Energy principles endorsed 
by the EBN which were turned back into an Energy Charter.  They agreed that 
an Energy Charter statement would be drafted by the secretariat and 
circulated to member economies.

The implementation committee discussion on Friday was supportive but as I 
noted but  focused on the process, not as I emphasized it should be- on the 
results which were a success. They was strong support led by DOE/USG to 
eliminate the steering and implementation committees. I did not see the final 
language and was presented with two conflicting versions: one that letters 
requesting a visit would go to the secretariat who would forward them to the 
EWG and EBN for suggestions on who should participate, the Secretariat 
deciding, and one where the Secretariat sends the request to the EWG and they 
consult with their EBN representatives and decide.  I made it clear that the 
latter process was unacceptable and the EBN would strongly oppose it. This 
process would take months and the EWG was in no position to decide who could 
best provide the people to address an economies specific request.  I told 
this to the USG delegation and they assured me the former would be the model. 
We'll see.

Energy services was also a long discussion and the Japanese focused on 
severing this initiative from anything to do with the WTO. In my private 
discussions with the Japanese, they expressed the concern that this could be 
considered an endorsement of the liberalization of energy services and used 
against them in the WTO negotiations.  Again, I didn't see the final outcome, 
but I understand that at the next EWG meeting, will present a trimmed own 
version of the work plan minus any reference to the WTO. It was agreed that 
there should be a seminar on the topic  but the EWG would only consider a 
seminar at the next meeting. This is way to slow and Barry and David think we 
need to get a white paper before the EWG in the next few months and push for 
a seminar at the next EWG meeting.  This is awkward for me since the US EBN 
has no position, but the entire EBN supports this effort as does the USG and 
we need to work with everyone to make the effort a success.

With great skepticism that the US can organize a Ministerial in five months 
(Edmonton took ten months), the EWG agreed to a Ministerial May 8-12.  At the 
EWG meeting on Thursday, I pushed the idea that the day before the official 
meeting should be dedicated to a series of direct interactions with the 
business community much like the Latin meeting in New Orleans.  The USG said 
they will include this idea in their proposal at the January steering 
meeting. The Ministerial will be on the west coast.

I am glad that I was there even though many of the discussions were painful. 
We beat down and reconfirmed strong support for the EBN, although it may be 
watered down, energy services is still on the table and can still be a 
valuable  educating process while meeting the concerns of some of the US EBN 
members, the consultative process is alive and well -- we'll see if it's been 
wounded -- and we may have a great opportunity in May for direct interaction 
with the energy ministers.

Wish you had been there. It rained for four days.