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Ariel Cohen: Diplomacy by Other Means
23 March 2007 [14:57] - Today.Az
Russia's Widening Energy Ties Rankle the West.
Three major Eurasian energy developments announced this month have
made Washington policymakers jittery.
First, Hungarian Prime Minister Ferenc Gyurcsany announced his country
favors Gazprom's Russian gas pumped via Turkey to the much-lauded but
long-delayed Nabucco gas pipeline project. Nabucco, spearheaded by the
Austrians, was supposed to bring up to 30 billion cubic meters of gas
per year (cm/y) from the Caspian to Europe through Turkey, Bulgaria,
Romania, Hungary and Austria.
Second, Russia, Bulgaria and Greece signed an agreement to construct
the Burgas-Alexandroupolis oil pipeline, which will bypass the
Turkish-controlled Bosphorus Straits, a dangerous oil transport
chokepoint. The project, which some call "the Orthodox Pipeline," will
neutralize Turkey's control of the vital oil artery and reduce the
danger of supply disruption stemming from a catastrophic event, such
as a tanker fire or explosion in the middle of Istanbul.
In addition, the Burgas-Alexandroupolis pipeline will be 51% owned by
three Russian government companies ` Transneft, Gazpromneft and
Rosneft ` with the remaining 49 percent split between Bulgaria and
Greece. Washington energy watchers noted the March 6 announcement by
Vagit Alekperov, head of Lukoil, that his firm and Gazpromneft ` the
state-owned gas monopoly Gazprom's oil unit ` will create a joint
venture to develop a future project, which will also be 51 percent
controlled by Gazpromneft.
Finally, British Petroleum hinted that its Russian partner TNK may
sell out its share in TNK-BP to a Russian state-owned company. At the
same time, Russia is developing plans for building the second
Bosphorus bypass from a port on the Black Sea such as Samsun, to the
Mediterranean.
Washington sees these projects as strategic moves. All announced
within less than a month, they clearly indicate the Russian state is
pursuing a comprehensive strategy that masterfully integrates
geopolitics and geo-economics.
Strategy trumps economics
Ã?n the geo-economic side, Washington insiders say, Russia is
aiming to pre-empt the transport of oil and gas from the Caspian to
world markets through countries and pipelines not under its
control. Moscow viewed with a jaundiced eye the respective
Baku-Tbilisi-Ceyhan (BTC) and Baku-Erzurum gas pipelines. Now it is
dead-set against the creation of the trans-Caspian arteries ` from
Kazakhstan and Turkmenistan ` that would enhance the viability of
those two pipelines by providing them with extra oil and gas.
Thus, pumping Russian gas via Blue Stream across the Black Sea to
Turkey, and then through connectors to Greece, Italy, and possibly
Bulgaria and Romania to Hungary, makes a lot of sense. It would
preclude or delay the construction of the Trans-Caspian gas pipeline
which would transport Turkmen or Kàzakh gas.
It also makes Gazprom a direct competitor of Iranian and eventually
Iraqi and Gulf gas, which could be transported via Turkey to Europe.
Pumping more oil to the Mediterranean through the
Burgas-Alexandroupolis pipeline - or in the future via the
Samsun-Ceyhan pipeline which will be supplied with Kazakh oil from
Novorossiisk - makes sense as well, denying Kazakhstan a viable
trans-Caspian pipeline option to connect to BTC.
But there is more. The proposed additional sea-pipeline routes are
going to be problematic: tanker loading and unloading of crude in the
trans-Black Sea leg, or extending the gas route under the Black Sea
and via Turkey and Southern Europe make these pipelines very expensive
ànd environmentally hazardous. By selecting these routes,
Russia is clearly choosing strategic considerations over economic
ones.
Money talks
Washington understands that Russia's strategic goals include
preventing countries on its borders from becoming pro-American. By
locating pipelines and gas storage facilities in Hungary, Bulgaria,
Greece and Turkey, Russia connects them to Moscow by "ties that bind"
` pipelines.
And oil projects tend to leak not just crude, but cash. Elites in
these countries have reportedly personally benefited from Russian
energy developments to the tune of hundreds of millions of
dollars. Just examine the shadowy Russian-Ukrainian gas trader
RosUkrEnergo and the bribery scandals over Turkish ministers' links to
the Blue Stream project, among others.
The best strategy, wrote the great Chinese general Sun Tsu in the 3rd
century BC, is to win a war without a single shot. This also includes,
according to Sun Tsu, penetration and subversion of the enemy camp. To
paraphrase another great strategic theorist, the Prussian Carl
Clausewitz, foreign policy is the continuation of war by other means,
at least in the view of some retired Russian colonels and generals in
the Kremlin.
Thus, there is no better way to "win the war" than to maximize
geopolitical clout without firing a shot ` and making money as you
go. You do it by building and extending a network of politically
influential pipelines to adjacent countries. As a result, a Russian
cordon sanitaire is appearing along its borders.
Washington appears to be taking some diplomatic steps to oppose this
Russian gambit. It is consulting the EU to coordinate energy
policy. Washington wants to raise awareness of Russia's energy
strategy and make Moscow's access to downstream operations in Europe
conditional on Western companies' access to Russian upstream energy
resources.
However, Brussels is split. Germany is already deferential to Russia's
energy interests, with German companies such as E.ON in partnerships
with Gazprom in downstream operations in Russia and Europe as well as
developing gas fields in Russia.
It is also possible the State Department may intervene in Bucharest to
prevent a proposed Gazprom pipeline from Turkey crossing Romanian
territory. Clearly, the two small American military bases in Romania
and Bulgaria and the proposed missile defense base and radar in the
Czech Republic and Poland are not going to stop Russian expansion:
pipelines are much more effective tools of foreign policy than
missiles.
When it comes to its oil and gas strategy, the Kremlin is in a league
of its own. This is like watching a chess grandmaster playing
multidimensional chess with oil and gas fields and pipelines over
decades. Middle Eastern rulers should take a number and attend the
master class.
By Ariel Cohen, Ph.D., Senior Research Fellow in Russian and Eurasian
Studies and International Energy Security at the Heritage Foundation
/www.russiaprofile.org/
23 March 2007 [14:57] - Today.Az
Russia's Widening Energy Ties Rankle the West.
Three major Eurasian energy developments announced this month have
made Washington policymakers jittery.
First, Hungarian Prime Minister Ferenc Gyurcsany announced his country
favors Gazprom's Russian gas pumped via Turkey to the much-lauded but
long-delayed Nabucco gas pipeline project. Nabucco, spearheaded by the
Austrians, was supposed to bring up to 30 billion cubic meters of gas
per year (cm/y) from the Caspian to Europe through Turkey, Bulgaria,
Romania, Hungary and Austria.
Second, Russia, Bulgaria and Greece signed an agreement to construct
the Burgas-Alexandroupolis oil pipeline, which will bypass the
Turkish-controlled Bosphorus Straits, a dangerous oil transport
chokepoint. The project, which some call "the Orthodox Pipeline," will
neutralize Turkey's control of the vital oil artery and reduce the
danger of supply disruption stemming from a catastrophic event, such
as a tanker fire or explosion in the middle of Istanbul.
In addition, the Burgas-Alexandroupolis pipeline will be 51% owned by
three Russian government companies ` Transneft, Gazpromneft and
Rosneft ` with the remaining 49 percent split between Bulgaria and
Greece. Washington energy watchers noted the March 6 announcement by
Vagit Alekperov, head of Lukoil, that his firm and Gazpromneft ` the
state-owned gas monopoly Gazprom's oil unit ` will create a joint
venture to develop a future project, which will also be 51 percent
controlled by Gazpromneft.
Finally, British Petroleum hinted that its Russian partner TNK may
sell out its share in TNK-BP to a Russian state-owned company. At the
same time, Russia is developing plans for building the second
Bosphorus bypass from a port on the Black Sea such as Samsun, to the
Mediterranean.
Washington sees these projects as strategic moves. All announced
within less than a month, they clearly indicate the Russian state is
pursuing a comprehensive strategy that masterfully integrates
geopolitics and geo-economics.
Strategy trumps economics
Ã?n the geo-economic side, Washington insiders say, Russia is
aiming to pre-empt the transport of oil and gas from the Caspian to
world markets through countries and pipelines not under its
control. Moscow viewed with a jaundiced eye the respective
Baku-Tbilisi-Ceyhan (BTC) and Baku-Erzurum gas pipelines. Now it is
dead-set against the creation of the trans-Caspian arteries ` from
Kazakhstan and Turkmenistan ` that would enhance the viability of
those two pipelines by providing them with extra oil and gas.
Thus, pumping Russian gas via Blue Stream across the Black Sea to
Turkey, and then through connectors to Greece, Italy, and possibly
Bulgaria and Romania to Hungary, makes a lot of sense. It would
preclude or delay the construction of the Trans-Caspian gas pipeline
which would transport Turkmen or Kàzakh gas.
It also makes Gazprom a direct competitor of Iranian and eventually
Iraqi and Gulf gas, which could be transported via Turkey to Europe.
Pumping more oil to the Mediterranean through the
Burgas-Alexandroupolis pipeline - or in the future via the
Samsun-Ceyhan pipeline which will be supplied with Kazakh oil from
Novorossiisk - makes sense as well, denying Kazakhstan a viable
trans-Caspian pipeline option to connect to BTC.
But there is more. The proposed additional sea-pipeline routes are
going to be problematic: tanker loading and unloading of crude in the
trans-Black Sea leg, or extending the gas route under the Black Sea
and via Turkey and Southern Europe make these pipelines very expensive
ànd environmentally hazardous. By selecting these routes,
Russia is clearly choosing strategic considerations over economic
ones.
Money talks
Washington understands that Russia's strategic goals include
preventing countries on its borders from becoming pro-American. By
locating pipelines and gas storage facilities in Hungary, Bulgaria,
Greece and Turkey, Russia connects them to Moscow by "ties that bind"
` pipelines.
And oil projects tend to leak not just crude, but cash. Elites in
these countries have reportedly personally benefited from Russian
energy developments to the tune of hundreds of millions of
dollars. Just examine the shadowy Russian-Ukrainian gas trader
RosUkrEnergo and the bribery scandals over Turkish ministers' links to
the Blue Stream project, among others.
The best strategy, wrote the great Chinese general Sun Tsu in the 3rd
century BC, is to win a war without a single shot. This also includes,
according to Sun Tsu, penetration and subversion of the enemy camp. To
paraphrase another great strategic theorist, the Prussian Carl
Clausewitz, foreign policy is the continuation of war by other means,
at least in the view of some retired Russian colonels and generals in
the Kremlin.
Thus, there is no better way to "win the war" than to maximize
geopolitical clout without firing a shot ` and making money as you
go. You do it by building and extending a network of politically
influential pipelines to adjacent countries. As a result, a Russian
cordon sanitaire is appearing along its borders.
Washington appears to be taking some diplomatic steps to oppose this
Russian gambit. It is consulting the EU to coordinate energy
policy. Washington wants to raise awareness of Russia's energy
strategy and make Moscow's access to downstream operations in Europe
conditional on Western companies' access to Russian upstream energy
resources.
However, Brussels is split. Germany is already deferential to Russia's
energy interests, with German companies such as E.ON in partnerships
with Gazprom in downstream operations in Russia and Europe as well as
developing gas fields in Russia.
It is also possible the State Department may intervene in Bucharest to
prevent a proposed Gazprom pipeline from Turkey crossing Romanian
territory. Clearly, the two small American military bases in Romania
and Bulgaria and the proposed missile defense base and radar in the
Czech Republic and Poland are not going to stop Russian expansion:
pipelines are much more effective tools of foreign policy than
missiles.
When it comes to its oil and gas strategy, the Kremlin is in a league
of its own. This is like watching a chess grandmaster playing
multidimensional chess with oil and gas fields and pipelines over
decades. Middle Eastern rulers should take a number and attend the
master class.
By Ariel Cohen, Ph.D., Senior Research Fellow in Russian and Eurasian
Studies and International Energy Security at the Heritage Foundation
/www.russiaprofile.org/