Message-ID: <21919584.1075846393962.JavaMail.evans@thyme> Date: Thu, 9 Dec 1999 08:22:00 -0800 (PST) From: maureen.mcvicker@enron.com To: steven.kean@enron.com Subject: THORN MEMO - WTO Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Maureen McVicker X-To: Steven J Kean X-cc: X-bcc: X-Folder: \Steven_Kean_Dec2000_1\Notes Folders\Wto X-Origin: KEAN-S X-FileName: skean.nsf ---------------------- Forwarded by Maureen McVicker/HOU/EES on 12/09/99 04:22 PM --------------------------- Terence H Thorn@ENRON_DEVELOPMENT 12/02/99 05:38 PM To: Maureen McVicker@EES cc: Subject: This is the note I want you to distribute. You may have gotten by mistake a shorter version which you can discard. ---------------------- Forwarded by Terence H Thorn/ENRON_DEVELOPMENT on 12/02/99 08:10 AM --------------------------- Terence H Thorn 12/02/99 08:08 AM To: Maureen McVicker@EES cc: Subject: Maureen- would you distribute this note Friday morning to everyone who participates in the Friday call. Thanks.T Again I find myself in a time zone (Korea) that will prevent me from participate in the weekly call. Although I realize that this will do nothing to dispel the rumor that Thorn has become virtual, only an e-mail address that floats in space, it's a good time of year to update you on key activities that I am handling or involved in personally that will carry over to next year. This certainly isn't inclusive for the global affairs group. Hopefully each week Mike or Gia has ben giving you a good run down of the broad range of activities from throughout the world in which the group participates. At the top of the list is Japan where I spent Thanksgiving week with Joe and Nicholas. Although we continue to make the rounds to both gauge reactions to and promote our comments, the most important time was spent internally putting together a market entry plan and objectives for the next few months. The MITI schedule is : November 19 -file comments December 2 -the Joint Working Group meets to submit guidelines to MITI/guidelines are official December 2 -submitted comments are made public December 31- can we get the Japan Fair Trade Commission, the monopoly laws changed to cover utilities? Probably not until the Spring January 4 -The electric utilities publish their tariffs March 21 - the market opens under the published tariff schedule Feed back indicates that our comments to MITI were well received and they may take the extraordinary step of responding in writing. Still we don't expect many if any changes. My read is simple and reflects the advice we received from one Japanese official: don't do seminars, do business. Until we can actually test the system with a transaction, we're spinning our wheels. Wrobel's people hope to lock up some generation from a steel company by the end of the year and then it's up to Hirl, Nick and I to help them do a back to back PPA and navigate the new regulations . That's when all of the obstacles the utilities throw up come out of the wood work and we see if the rates make a sale possible. We're in for a long, incremental battle. I met with the MITI person in New York in Seattle and Edith covered bases with USTR. In January Hirl and I will go to London to work through the European experience and see how the Japanese structure mimics or allows the types of experiences we've seen in Europe. Prior to Tokyo, I was asked to be at APEC's energy working group meeting in Wellington. The APEC Energy Minister's established an energy working group that develops programs and projects for their approval. The Minister's also wanted to have strong business involvement so the Energy Business Network was created this past year with two business men representing each economy. I along with Ken Thompson from ARCO was appointed by DOE for two years to represent the US Energy industry. We have produced such things as the IPP best practices manual and most importantly the Natural Gas Initiative which provided a complete compendium of the things Asia economies would have to do attract foreign investment to develop much needed gas infrastructure. This was followed by approval of a consultative process where economies invite teams in from the business communities to address gas or electric issues. We just finished a very successful visit to Thailand where I used Nancy Gardiner as a key speaker on pipeline deregulation, basically telling PTT there is life after death (privatization/liberalization). She did great and has the temperate, Knowledge and style to get our meessage across. Unfortunately, to some economies such strong business involvement is an anathema to their protected worlds and do everything to eliminate or reduce the EBN influence. Barry Leay, the Chair of the EBN asked me to be at his side to defend against attacks by the Japanese, Mexicans and Chinese. We argued and won a strong endorsement of the EBN and its work, lost a little on the consultative process (DOE was no help) with a little more EWG control/interference and kept energy services alive at least through Spring. Ken and I will met with US energy companies in Houston on December 15 to go over developments and plan for 2000. The US group is split with the majors opposing a strong deregulation agenda and an energy services initiative which they interpret as open access for some reason. This type of involvement keeps us face to face with the ministers and energy ministers of 21 Asian economies and allows us to push through an official government organization a liberalization agenda. Joe Hillings will provide you a complete update on the WTO Seattle Ministerial this week. Any typos in this note can be blamed on the residual effects of tear gas. It seemed odd to me to be on this side of a police line. Everyone is aware of the outstanding job Joe Hllings has done in forming the Energy Services Coalition in less than a year. Our major goal is Seattle was to get energy services on the negotiating agenda. It looks like all services will be included but not broken out by categories. You just assume energy is included. The only thing that worries me is that a three year period has been designated to study the issue with no milestones or deadlines during the period. That was as of Wednesday. Again Joe will know how it ended up. The side meetings were excellent: with Eisenstat (the gaza project, the Bolivia conservation plan-he's on the OPIC board, and Sutton's ABAC nomination), Secretary Daly (South America), and Mack McLarty. Mark- Following on a conversation and suggestion with Ken Lay, Mack did talk to Clinton about Blair's swing to the left and the energy tax policy and both of us in separate meetings talked to Al From who is a close friend of one of Blair's key advisors. Al will talk to him about his departure from the third way. Ken Lay had a keynote address Thursday and lots of interviews so I'm sure he knocked them dead. Kelly handled all the interviews and I'll look forward to hearing from her how it went. What's alarming about Seattle is the backlash against the WTO which has become a symbol for globalization. Trade is no longer an economic issue- it's a social issue. Eisenstat said it best. We have five tasks as a governmment and industry: an education effort about trade and it benefits. we can't be defensive demystify the WTO- it is a powerful instrument to make countres abide by the trade rules clarify the US trade agenda give the less developed nations a sense of equity and participation open up the WTO system to be more inclusive to these groups who feel shut out Open markets are critical to Enron's international success. We'll need to decide next year what role we want to play in this debate and right out of the block we've got China's WTO agrement with the US. After my DLC presentation I talked to reps from the unions and from the environmental groups about opening a dialogue and what would be a good forum to discuss the WTO and related trade issues. No one has any answers yet. I continue to work with Shell and the NGO's to set up the US Trust fund for the $15 million dollar Bolivian conservation plan. The Associon de Hecht has cleared it's legal review. It's not going to happen until January. We have also had an open letter to the president of Bolivia criticizing us for violating our agreements with the indigenous peoples. Dennis Vegas is working on this as is Abe Moreno. Meet with them, find out if we're really at fault, and fix it. I have found the person I want to hire for a environmental liaison for the southern cone, based in Bolivia. She will also be our main rep working on the conservation plan and with the indigenous communities. In the end Rachel can be a trouble shooter for the southern cone. I will meet with Jim Broad way in December, our consultant on setting of the Environmental Management System for the Blivian project for a debrief and lessons learned. Mike Dahlke has an optimistic report on our Korean tax issue and it looks like we'll get the percentage reductions we want for the threshold for holding company participation. If the 30% holds it's a great vistory that took a year to accomplish. I am in Korea now working on next years final budget and strategy (I'm on the SK/Enron board) and a new bid for some of KEPCO's genration. They have just told us they want everyone to bid again. Sounds lke Mexico and Vietnam. We had a long discussion over our formal Korean dinner tonight on the best way to collect and prepare mosquito eyes. It looks like we've the Bangdalesh Power Development Board blink and agree that electricity form our proposed plant could be exported to India as long as LPG's from the gas go to Nepal and Bhutan. Jim Steffes dream of going to Bangdalesh may come true. We got caught in a political p------- contest between the two major political factions in Columbia over our legislation to allow exports of Columbiaa Gas through an Enron pipeline to central America. We also had quite an internal debate on open access pipelines. Things are progressing and Amr is doing a great job. We have reached a critical junction in Thailand and if we don't start generating income we'll have to shut down or at least cut back. Merrill, Grimes and Jane and myself will be participating in an all hands strategy session with the Thailand team in December to flesh out priorities and real opportunities and hopefullt make some tough calls. Sue has everyone's comments in on the new enviromental due diligence hand book and module. We can now begin working on the costs tables where we can provide real cost data on different clean up problems. With all the work we have done over the years, we've never kept organized records of actual costs which could provide much better estimates when we bid on a project in the future. Palmisano Whalley and I have agreed on a commercial plan for the carbon trading business for 2000. On the commercialside we'll start pusuing projects that generate credits for sale as well as continue discussions with other companies about participating in an Enron carbon fund. We conducting an inventory internally our carbon position- are we long or short and which projects will generate credits for sale. An internal trading system is inevitable. We are developing contract language for all deals so that any project any Enron company is involved in can capture credits of they are developed. The GHG data base will be carried over to an entire inventory of Enron emissions. When in New Zealand I visited two projects from which we could buy and market credits, one of which looks like the best sequestraton project i have ever seen. We've created an internal working group to assist the GHP on Houston's ozone problem. Our next get together will be around the 16th. I hooked up with Andrew Makk on the Gaza project and we agreed on a work plan for the rest of December with the Israeli's and others to move the project along. Key now will be a future gas supply and I will be working with El Paso, who made the short list on the piplene from Egypt. When I travelled with Daly last month, I met all of teh cabinet members in Israeli, Egypt and Jordan and had private side meetings withteh energy ministers and infrastructure ministers. There is a real cahnce Egyptian or Jordian gas will move to Israel and Gaza, hoepfully to our projects. Mosquitos eyes have a slightly nutty flavor and when cooked properly are crunchy.