As you may know, Enron has ceased all funding of the efforst made by the Energy Services Coalition an entity that it was instrumental in establishing.  However, Linda recognised that we could not completely abandon our involvement with the ESC and the USTR effort to negotiate an energy services section of GATS.  Otherwise, Enron would risk damaging its reputation within USTR and among the other members of the coalition.  In fact, carol Ballassa of USTR spoke with me privately about her concern (and, alledegedly, Zoellick's concern) that Enron would abandon the effort. Therefore, Linda set me on the task to "rationalize" our ESC involvement.

Upon further scrutiny of the ESC effort, it became apparent that the GATS effort on energy services had absolutely nothing to do with deregulation or liberalisation of the energy sector.  In fact, mention of open access - particularly gas pipelines - caused some of the ESC members to break out into a cold sweat.  Unfortunately, few, if any, of the energy services that could be provided by Enron can be offered in a monopoly market.  Therefore, there was little for Enron to gain in these negotiations unless the deregulation was adressed as a prerequisite to opening trade in energy services.

I met privately with the USTR negotiating team and made the case that deregulation had to part of the negotiating agenda.  Otherwise, I told her that there would be little to gain for Enron and we would not be an active participant as a result.

We met today with USTR and other members of the coalition and in fact, deregulation was on the USTR negotiating agenda.  GE and Enron supported the way in which USTR would raise the issue in negotiations, but other members of the ESC (from the oil and gas sector) objected strenuosly to pipeline access provisions.  As it stands, the ESC will split or fold on this provision.  If the USTR agrees to water down its negotiating provision, they know that Enron will likely leave the ESC.  If the provision remains, then the USTR effort may actually prove beneficial to Enron in the long run. Regardless of the outcome, Enron's time and expenditure on this effort will be minimal to non-existant.

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