Counting the Geopolitical Winnings on the Caspian

John C.K. Daly has an interesting article on the latest geopolitical fallout in pipeline politics on the Caspian.

ANNAPOLIS, Md. (UPI) -- The death of Turkmen leader Saparmurat Niyazov last Dec. 21 set off an unseemly but discreet scramble among a number of nations eager for access to the world's fourth-largest reserves of natural gas. Seven months later, the clear winner for the race to control Turkmenistan's energy is Russia, with China as also-ran, while the United States and other Western nations essentially lost. What happened? The answer might be the Realtors' creed, "location, location, location." Read rest of article

Steve's comment: From the mid-1990s, Washington played a brilliant game on the west side of the Caspian, and a massively inept one on the east. The difference was that in Azerbaijan and Georgia, it had strong, far-sighted partners in Heydar Aliyev and Eduard Shevardnadze. In the east, however, Kazakhstan's Nazarbayev and Turkmenistan's Niyazov never joined the geopolitical combat posed by their Azeri and Georgian neighbors, and maneuvered Washington into an embarrassingly absurd diplomatic exercise.

U.S. officials paraded into Astana and Ashkabad to persuade the Kazakhs and Turkmen to do what was manifestly to their advantage -- build an energy pipeline link independent of Russia, and the Kazakhs and Turkmen delivered platitudes on how, yes, they would cooperate before promptly forgetting they had done so.

The recent Kazakh and Turkmen decision to sign a long-term contract for most of their natural gas to Gazprom -- and to build yet another pipeline north to Russia -- appears to be a nail in the coffin for the eastern half of the grand U.S.-backed East-West Energy Corridor to Turkey.

The biggest question is why have Nazarbayev and Turkmenistan's Berdimukhamedov signed such a deal. One answer is that it is the easiest short-term option -- avoid the sparks of geopolitical conflict, and simply sell to one's traditional northern trading partner. They may believe that they retain the opportunity in the future to balance out the increased leverage they have granted to Russia. It is difficult to see how, given the agreement, such a trans-Caspian pipeline could be built any time in the foreseeable future.

Here is an interesting piece on how, contrary to the prevailing wisdom, Italy may not have entirely bet the store on continued good will from Gazprom. Instead, Italy appears to be hedging its bets.