August 14, 2008

War in Georgia Threatens US Energy Security

In an article in the New York Times yesterday Jad Mouawad said that:

Energy experts say that the hostilities between Russia and Georgia could threaten American plans to gain access to more of Central Asia’s energy resources at a time when booming demand in Asia and tight supplies helped push the price of oil to record highs.

American policy makers hoped that diverting oil around Russia would keep the country from reasserting control over Central Asia and its enormous oil and gas wealth and would provide a safer alternative to Moscow’s control over export routes that it had inherited from Soviet days.

Marshall I. Goldman, a senior scholar for Russian studies at Harvard and the recent author of “Petrostate: Putin, Power, and the New Russia.” says that:

Russians treasured the fact they had a monopoly on oil and gas pipelines from Central Asia, as it gave them considerable clout. By agreeing to having an oil pipeline, Georgia made itself more vulnerable.

It seems as though the policy makers hopes have now been wrecked, along with the homes of countless families in South Ossetia and the rest of Georgia. The Baku-Tbilisi-Ceyhan (BTC) oil pipeline is closed after an explosion on Turkish territory blamed on Kurdish separatists. It has also been reported that Russian aircraft have attempted to bomb the pipeline, although BP says that the pipeline has not been hit.

Whilst these attacks may still be disputed, Russia certainly had no qualms about using it's economic muscle two winters ago when Gazprom shut off supplies of natural gas to the Ukraine. At that time the United States suggested building a gas pipeline close to the route of the BTC oil pipeline. Now, however, Frank A. Verrastro, the director of the energy and national security program at the Center for International and Strategic Studies in Washington, thinks it will be very hard to build a new Western pipeline. In his opinion:

For the Europeans, the Ukraine gas crisis was like a snooze alarm. We got BTC because there was a confluence of commercial and diplomatic interests, but the United States didn’t learn the right lessons. They thought that all you had to do was lean on these countries and a new pipeline would happen. But that was an abject failure. There is a shift happening in the marketplace. We need a Plan B. But we don’t have a Plan B.

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