Europe's struggle for energy independence from Russia
An excellent new piece in the Economist describes Europe's yet-again-divided and weak approach toward energy supplies. The first two graphs:
WESTERN failures in recent energy tussles with Russia have been persistent and spectacular. Key allies have drifted off into private deals. The big picture has been ignored. The gloomy drift accelerated this year with the signing of a three-cornered deal between Russia, Kazakhstan and Turkmenistan to pump the Caspian’s huge gas reserves north through Russia. Now Uzbekistan, according to Russia’s Vladimir Putin, is going to join too.
Europe’s only chance of getting gas along pipelines that Russia doesn’t control is a project called Nabucco. Its aim is to connect the gas riches of the Caspian and the Middle East to Europe via the Caucasus and Turkey. Read rest of article
From Steve: In addition to a hilarious account of State Department energy authority Matt Bryza in action, the piece points up how Russia yet again has triumphed by relying on Europe's propensity for going multiple ways at once. It also highlights the persistently short-sighted attitude of Kazakhstan and Turkmenistan, which so far have refused to concretely back an independent export pipeline for their lucrative natural gas reserves and so are subject to Russia's whims on price. The Economist piece is by Edward Lucas
WESTERN failures in recent energy tussles with Russia have been persistent and spectacular. Key allies have drifted off into private deals. The big picture has been ignored. The gloomy drift accelerated this year with the signing of a three-cornered deal between Russia, Kazakhstan and Turkmenistan to pump the Caspian’s huge gas reserves north through Russia. Now Uzbekistan, according to Russia’s Vladimir Putin, is going to join too.
Europe’s only chance of getting gas along pipelines that Russia doesn’t control is a project called Nabucco. Its aim is to connect the gas riches of the Caspian and the Middle East to Europe via the Caucasus and Turkey. Read rest of article
From Steve: In addition to a hilarious account of State Department energy authority Matt Bryza in action, the piece points up how Russia yet again has triumphed by relying on Europe's propensity for going multiple ways at once. It also highlights the persistently short-sighted attitude of Kazakhstan and Turkmenistan, which so far have refused to concretely back an independent export pipeline for their lucrative natural gas reserves and so are subject to Russia's whims on price. The Economist piece is by Edward Lucas
Labels: European energy, Kazakhstan, Nabucco, natural gas, oil pipelines, Russia, Russian pipelines, Turkmenistan
4 Comments:
I'm not well familiar with the situation re: Caspian Sea oil. But some things seem straightforward:
a) both the EU and the US want the Trans-Caspian pipeline.
b) Central Asians know the pipeline is in their interest.
c) it costs $4-$5 bln.
Why can't the EU and the US act on this together by:
1) putting up most of the money. $4-$5 is a big chunk of money in absolute terms. But it's a small price to pay to achieve such a tremendous geopolitical change.
2) pressuring Central Asians to commit to the pipeline. Also, the EU and the US could help them withstand Russia's pressure by providing diplomatic or economic support or both.
What am I missing? As I've admitted, I'm no expert on the issue.
P.S. What can Russia realistically do to prevent the pipeline from happening? The existing agreements don't give Russia the veto right. Also, Russia can offer economic incentives to Central Asians not to build the pipeline but the West is still wealthier and can easily counter the incentives.
Hi Peter. Your remarks raise an excellent point: Does Russia's revived, oil-founded global influence raise the risks for the West of disregarding Moscow's warnings and pushing ahead with a trans-Caspian pipeline, say under the terms that you suggest? More to the point -- could it be done? In the case of the Baku-Ceyhan pipeline, Washington's risk was diminished because the most proactive stance was taken not by the U.S., but by the three transit states -- Azerbaijan, Georgia and Turkey. In the case of the trans-Caspian proposal, the transit states -- Kazakhstan and Turkmenistan -- are talkers and not doers. Could the U.S. obtain reliable, long-term support from these countries through pressure?
Doubtful. The countries themselves are going to have to undergo an intellectual transformation, and then the U.S. and E.U. can finance the pipeline. Thanks, Steve
Peter, I neglected an important question of yours -- what could Russia do if the West and the countries involved simply proceeded? In the 1990s, the answer apart from bluster was 'nothing.' Today, the West, and particularly Europe, is far more sensitive, or instance, to repercussions in terms of Russia's supply side influence in energy. All that aside, I believe you are correct -- if Kazakhstan, Turkmenistan, the EU and the U.S. were on one page, they could probably pull it off.
Steve: Thank you for your explanation. I feel the EU and Central Asians have an unwarranted apprehension of Russia's retaliation if they built the pipeline.
Russia was seen as using energy as a stick against Ukraine, Georgia and Azerbaijan. If, indeed, true, the policy failed: those countries continued to move closer to the EU and NATO and their economies didn't collapse. Equally importantly, Russia can no longer use that threat: it has lost its potency.
So, if that's the worst case scenario, what is there to be afraid of?
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