Book Note

The cover is out of the design shop for the new book, due out this fall.

Notice to Tinkerers: X-Prize Throws $100 Million Into the Biofuels Pot

The folks who jolted space travel, human-genome sequencing and high-mileage vehicles are now looking to stir up the transition away from fossil fuels. The X-Prize Foundation is going to offer up to $100 million in a cluster of awards for transformative innovation in biofuels, electricity storage and transmission, and other clean technology.

I spoke both to X-Prize CEO Peter Diamandis and foundation President Tom Vander Ark for a story on the new prizes for a piece in today's BusinessWeek on-line.

One item not in the piece is how Vander Ark -- who worked previously on education in Bill and Melinda Gates' foundation -- is helping to take the X Prize in the same direction, meaning toward the developing world. These new energy prizes are somewhat geared to bringing cheap electricity, water and broadband to small villages in an effort to spur their economies. In the biofuels component, too, there's a requirement that the technology be easily transportable, which would make it useable in the developing world. Next, the X-Prizes are going directly into medicine and education, the Gates Foundation's forte.

I also asked Diamandis what it takes to be an X-man, or X-woman, as it were -- what is the right stuff to win one of the cachet-filled $10 million prizes?

Brilliance helps, of course, Diamandis said, but "I'm putting my money on tenacity and perseverance. It's asking over and over and over again for capital, refusing to take no for an answer. It's tenacity combined with passion."

Photo: merfam
Rights: Creative Commons

Latest Score in Love versus War

In recent months, Italy’s ENI has seemed to have hit upon the winning formula in Big Oil’s battle for survival against the march of petro-states across the globe. ENI chairman Paolo Scaroni’s approach has been simple – jump in bed with your adversary. So you have had ENI saddling up with Russia’s Gazprom, Hugo Chavez’s PDVZA, and most recently Qatar Petroleum.

Scaroni’s strategy has been the polar opposite and, so far, more successful than ExxonMobil’s confrontational style toward the more assertive petro-states such as Russia and Venezuela.

But a scoop by Guy Chazan in today’s Wall Street Journal shows that co-habitation goes only so far. Turkmenistan, for instance, is so miffed with ENI that it refuses to issue visas to its senior executives. That’s important, because Turkmenistan is one of the world’s only largely untapped petro-states welcoming exploration offers from Big Oil. Chevron, BP and others have put much effort into winning access to fields there.

Based on ENI’s record, don’t be surprised if Scaroni himself tries to swoop into Turkmenistan to smooth over the situation.

Photo: Chrispitality
Rights: Creative Commons

Presidential Candidates on Russia

With Iraq sucking much of the air out of the room, the former Soviet Union and Russia in particular have gotten little attention from the U.S. presidential candidates. The notable exception has been GOP nominee John McCain, who threatened with Bush-like chest-thumping to expel Russia from the G-8, and sophomorically described Vladimir Putin's eyes as containing a "K a G and a B."

Matt Siegel at The Moscow Times weighs in today with a piece in which he interviews McCain's Russia expert, Stephen Biegun, a vice president at Ford Motor and a veteran of the current President Bush's foreign policy team; and Michael McFaul, who is Barack Obama's Russia specialist and acting director of the Institute for International Studies at Stanford University. It's worth reading, in addition to this discussion by a panel of specialists gathered together by Johnson's List a couple of weeks ago.

Both of the Democratic candidates make the point that it's unnecessary to rile Russia at the moment by insisting on a missile-defense shield in Poland and the Czech Republic, when there is no evidence that the technology works. McCain supports installation of the shield regardless.

Much also is made of Putin's crackdown on rival voices.

None of the candidates has said a word as far as I can tell about a serious, omnibus approach to Eurasian energy security stretching from Central Asia into western Europe. As readers of this blog know, Putin -- and by extension Dmitri Medvedev -- have treated this as a paramount issue, while Washington has been looking the other way to Iraq.

One amusing aspect of the foreign policy debate that has taken place is hoopla among some in the expert community over Obama's reliance on Zbigniew Brzezinski, the Carter-era national security adviser, as a chief foreign policy expert. These experts see Brzezinski as a relic of the Cold War. Perhaps such younger specialists see themselves as more authoritative. But a reading of his writing over the last decade and a half shows Brzezinski proving himself again and again as one of the most realistic and wise hands on the former Soviet Union. He does so again here in the current issue of The Washington Quarterly.

At core is a subjective issue that will not be settled to anyone's satisfaction -- is Russia a normal country, meaning should it be treated the way one would approach, say, France? Brzezinski would be on the reasonable side of those who reply 'no,' at least at the moment. Those for whom the answer seems to be yes seem to include Stephen Kotkin of Princeton and Anatol Lieven of King's College in London.

Russia's Anti-Virus Champion

When I bought my laptop a year ago, the sales guy suggested I install Internet security software I hadn't heard of from a company called Kaspersky. I'd used McAfee for years, but I also knew from my time in the former Soviet Union that some of the most virulent viruses, and the best virus killers, came out of Moscow. So I did.

I like Kaspersky. I've had no trouble (as far as I know at least) over the last year. And I see in a dog-and-pony show put on by the company in January that its co-founder, 42-year-old Yevgeni Kaspersky, is a fairly ambitious and colorful guy.

But, if my latest experience is any indicator, the company is having some growing pains. When I tried to renew the service last week, I couldn't get Kaspersky to respond to two emails. When I turned to the phone, I was on hold for almost an hour before I gave up. I finally got a response when emailed the media contact, saying that I wanted to do this -- write up a piece for the blog. Rapidly I was contacted not by one, but two Kaspersky people, and provided precisely the right link to get renewed. Kaspersky's representative claimed to have responded to one of the emails and not to have received the second. Whatever. Kaspersky isn't the only company with a communications problem.

I did renew. It's good software.

Photo: David Orban
Rights: Creative Commons

Job Change

Judging by the emails I'm receiving, the word is out, so here is an official announcement: I'm shifting over to Business Week. I'll be its Washington-based foreign affairs writer, and will additionally continue to write about energy, although on a larger canvas and not only on the former Soviet Union. Story ideas are welcome.

The blog will continue. There is serious talk about absorbing it into Business Week's on-line presence, and I'll keep you informed if and when that happens.

The Children of the Autocrats

Last summer, Timur Kulibayev, Kazakhstan President Nazarbayev's son-in-law, was fired from his position atop Samruk, the fund that invests the country's oil earnings. Then, he vanished from the public eye. That didn't seem all that important -- after all, Kulibayev was always an exceedingly low-profile official despite directing Kazakhstan's oil industry, and also the Nazarbayev family wealth. Even when rumors started that Kulibayev was in serious trouble with his father-in-law, one recalled previous occasions when Nazarbayev removed family members from positions of importance, only to restore them a year or two later.

Yet, I raise Kulibayev because a story from the British tabloid News of the World has been circulating the Internet about a London-based Kazakh socialite who has recently given birth to his son. Despite the story's yellow-press providence, I'm told reliably that it's essentially true -- the woman, a former Oxford University student named Gaukhar Berkalieva (pictured with Kulibayev), did give birth in December to a boy named Adam, and Kulibayev is indeed the father. (The story rated tabloid real estate because Berkalieva, who goes publicly by the name Goga Ashkenazi, had a couple of dates with Prince Andrew; in addition, the paper somehow obtained topless shots of her.)

As we learned in trials and news conferences last month, Nazarbayev has exiled his other son-in-law, Rakhat Aliyev, over alleged crimes that make the Alexander Litvinenko affair look mild. Aliyev is accused of smuggling all manner of weapons, radioactive materials and poisons into Kazakhstan, with the goal of overthrowing his father-in-law and seizing power. Aliyev lives in Austria, where he depicts himself as a democratic oppositionist.

So is Kulibayev in a fix over humiliating Nazarbayev's second daughter? Perhaps not, since Kulibayev was included on the official guest list to pass the Olympic torch in Almaty a couple of days ago. And Nazarbayev himself has done a similar thing, fathering a daughter with Gulnara Rakisheva, a former stewardess from the presidential jet. Whatever the answer, it will be important for those wishing to do oil business in Kazakhstan.

Azerbaijan's Heydar Aliyev managed to shepherd his gambling-and-drinking son Ilham into respectability and eventual succession into the presidency. And Uzbekistan's Islam Karimov is said to be trying with his daughter, Gulnara.

But what of Nazarbayev's successor? If he does consider his position dynastic, who is left?

Let’s be friends, Guys

Vladimir Putin's remark just about sums up the NATO Summit that ended today in Bucharest. "Let’s be friends, guys, and be frank and open,” he told reporters on the topic of whether a new cold war was in the making. The sentiment will carry over into Sunday's meeting between Putin and President Bush in the Black Sea resort of Sochi, where the two leaders will sign an affable "Strategic Framework" agreement.

As those familiar with the ways of Moscow know, such empty, toothless pacts -- known as the "protocol" in that part of the world -- are what companies and countries sign when they can't agree to anything conclusive.

In short, the NATO gathering ended with the U.S. attempting to dress up a setback against Putin as by and large a show of unity by Europe.

Bush put much on the line by announcing that he would seek to push forward Ukraine's and Georgia's bids to join NATO. But what did he walk away with? European agreement to a missile defense system that doesn't work. European agreement to add troops to a conflict -- Afghanistan -- about whose merits there's almost no disagreement anywhere in the world.

On the question of Ukraine and Georgia, Europe buckled, at least for now, to Putin's objections to their obtaining so-called MAP -- or Membership Action Plan -- status.

So Putin closed out another week of diplomatic triumphs. There will be no advance for now in NATO's expansion to the Russian border. And, with Bush's appointment of a harmless old family friend this week as Eurasian energy czar, there will be no serious challenge to Putin's policy of dominating European energy.

As for the Strategic Framework agreement to be signed Sunday, it's Putin's stated sentiment on paper -- gosh, can't we be friends?

I personally think that Georgia and probably Ukraine will eventually join NATO as full members. But it could be going more smoothly.

For a solid commentary on the spectacle from the perspective of Germany, this piece by Ulrich Speck at RFE-RL is highly recommended reading.

Photo: StuSeeger
Rights: Creative Commons

Baku oil legend Nikolai Baibakov Dies at 98

As readers of O and G know, many historians think the second half of the 20^th century would have been dramatically different had Hitler’s troops reached Baku. Hitler needed Baku’s oil to fuel his war machine, and when his army failed to penetrate the Caucasus after its 1941 invasion of the Soviet Union, it was the beginning of the end for Nazi-era Germany.

Just in case Hitler’s troops were not stopped before they reached Baku, Stalin entrusted one man with making sure that the Nazis could not avail of the city’s legendary oil. This man, who ordered the fields plugged up with cement, was Nikolai Baibakov, who died yesterday in Moscow at the age of 98.

Baibakov – Stalin’s oil commissar and for two decades the director of Soviet economic planning – was born in the Baku oilfield of Sabunchi; his father had worked in the Baku oilfields before him. So he knew intuitively what Stalin was so worked up about. A superlatively colorful actor in the biggest events of recent history, Baibakov recalled with black humor some of his encounters with the murderous Stalin.

In a 1998 interview with The Petroleum Economist, Baibakov said Stalin pointed two fingers at his head and said, “If you fail to stop the Germans getting our oil, you will be shot. And when we have thrown the invader out, if we cannot restart production, we will shoot you again.”

Those were the tenor of the times. Oil engineers from Baku, accused of crimes such as being the relative of the Czarist-era oil barons, were loaded into railcars with their families like cattle and shipped to Siberia to start new oilfields.

A New York Times obituary quotes Baibakov's reply as to whether his fellow oil officials were shot during those days: “Yes, several.”

Then, as now, Russia’s entire economy was dependent on oil and the revenue from oil exports

C. Boyden Gray: Ho-hum on the Caspian

The Bush administration has finally named a senior diplomat to challenge Russia in the pipeline war in Europe. He is C. Boyden Gray, the Bush family friend and GOP partisan lawyer.

As O and G readers have read over the previous months, Russia and the West, particularly the U.S., have been in fierce competition to control the natural gas supply to Europe, and ultimately to influence the continent's politics. Under Vladimir Putin's determined, hands-on leadership, Russia has been far in the lead and, unless something changes fast, will win the contest.

Hence a push within some circles, including Senator Richard Lugar specifically and the Senate Foreign Relations Committee in general, for Washington to get serious by naming a prominent senior statesman to spearhead the U.S. effort. The first nominee was Thomas Pickering, but his personal finances turned out to be a conflict of interest. Then, someone suggested Bush family friend Donald Evans, the former Commerce secretary, but that also went nowhere.

Now the administration has settled on Gray, who was counsel to George H.W. Bush, and named as a recess appointment by President Bush as envoy to the European Union when the Senate refused to confirm him.

Gray comes from similar aristocratic stock as the Bushes -- with inherited wealth, his father was secretary of the Army under Harry S. Truman, and his grandfather was chairman of R.J. Reynolds Tobacco. He graduated from Harvard, and clerked under Supreme Court Chief Justice Earl Warren.

I'm perplexed. Is this the man to general the West's battle against one of the world's consummate players of brutal market economics, namely Vladimir Putin?

To find out whether I'm simply out of the loop, I took a sampling of some of the best-connected readers of O and G. As usual, this sampling will be anonymously sourced:

1. "Doesn't sound like the person we need to bring some coherency to our policy in that part of the world."

2. "(The Senate Foreign Relations Committee) pressed Condi hard to DO SOMETHING, so, [this is] more or less her saying ‘Get this off my plate!’ This was the political compromise. Politics, not grand strategy.”

3. "[Gray's] pluses -- close to the White House, maybe gravitas (but he is a pompous ass), smart guy. Minuses -- intensely partisan, loves to hector the EU, does not know energy, [does not speak] Russian. Bottom line -- not great but could be worse."

4. "Really lousy appointment. Can hardly think of anyone worse."

What's obvious is that no one of significance would accept the appointment. Which is why you have Rice simply adding new duties onto an existing envoy's portfolio. Which is also why the announcement was made in a one-paragraph statement issued with no fanfare.

In other words, this is a dull spearhead.

Showdown in Bucharest

After the spectacle and fireworks of recent years, we're about to see the latest picture of the balance of power in Russia-West relations. The venue will be the NATO summit that begins tomorrow in Bucharest. The issue is whether to advance Georgia and Ukraine's applications to join the military alliance.

The two former Soviet countries want to push forward their status to what’s called MAP – a Membership Action Plan. True membership would come down the road, once they meet the various necessary qualifications. France and Germany oppose moving to a MAP for the two. "France will not give its green light to the entry of Ukraine and Georgia," French Prime Minister Francois Fillon told France-Inter radio. "We are opposed to Georgia and Ukraine's entry because we think that it is not the correct response to the balance of power in Europe, and between Europe and Russia."

Stephen Fidler and Stefan Wagstyl of the Financial Times rang up Georgia's Mikheil Saakashvili, who has a reputation as a hothead, but sounds eminently sensible on this issue. "No matter what some Europeans might be thinking, it's basically giving [Russia] direct veto rights, because that's how they'll perceive it," Saakashvili told the FT.

Saakashvili has that right. Russia’s foreign minister, Sergei Lavrov, suggests that Georgia will use NATO membership to force the breakaway regions of Abkhazia and South Ossetia back into the Georgian fold. This is a red herring – it’s absurd to suggest that NATO would commit troops to crushing Abkhazian or South Ossetian politics. It can't even raise sufficient troops for Afghanistan.

Instead, the issue is simple -- Vladimir Putin wishing to demonstrate Russia’s influence now, and to retain its pressure points on its former colonies in the future.

Saakashvili has done smart political spadework. He has offered power-sharing to Abkhazia, and 500 Georgian troops to Afghanistan. The latter move at minimum could quiet France’s objections.

The ultimate decision will indicate whether Putin has at last succeeded in shifting the balance of power more toward Russia's direction.

Photo: neurmadic aesthetic
Rights: Creative Commons