Every time we hear about Russia in the news in reference to oil and gas, it seems to be about Russian muscle flexing. In the past few years alone, Russia has used her vast energy reserves as a weapon in times of disagreement against not only the European Union, but also Georgia, Ukraine, her ally Belarus and, most recently, Estonia. But credit must be given where credit is due: Moscow is in a league of its own when it comes to securing her energy interests.
The proof? Just today (May 12, 2007) Russia announced an agreement with Kazakhstan and Turkmenistan to build a new natural gas pipeline north from the Caspian Sea, carrying gas from Turkmenistan through Kazakhstan to Russia. This is a major smack in the face of the EU, which had hoped to lessen their dependence on Russian gas by finding an alternative
supplier in the form of Turkmenistan. This was to be done by creating a new pipeline under the Caspian Sea that would go through Turkey to Europe, thereby bypassing Russia. The gas routes as they stand today can be seen in the picture above (source: the Economist).
Even if the idea proposed by the EU were to take hold, some analysts doubt whether it would make a significant difference. ICG energy analyst Charles Esser pointed out that the EU could count on at most 20bn cubic metres of gas per year from a Caspian pipeline, which amounts to no more than 4% of EU consumption in 2004. Nevertheless, given the fact that the exact amount of gas present in Turkmenistan is unclear, a significantly high number could lead to the expansion of current plans and seriously reduce EU dependency on Russian gas in the long term. In any case, the deal announced today is a clear victory for Russia, as it effectively means that Turkmen and Kazakh gas will only be exported to Europe via Russia, putting the Europeans at the mercy of Russian caprice more than ever before.
China will no doubt see this deal as a loss as well, since they too were vying for direct control of Turkmen gas in their global quest to secure their energy needs in the most far-flung of places. In April 2005, deceased Turkmen President Saparmurat Niyazov had blessed the construction of a pipeline to China that would send 30 billion cubic meters of gas to China starting in 2009. Whether this deal will now go through is uncertain, though it seems unlikely that the Russian-Turkmen agreement will affect it. It does, however, give Gazprom and Russia a powerful bargaining tool in any future discussion, negotiation or conflict with China.
Say what you will of the Russian mafia-like monopolizing tactics, but effective they most certainly are.
supplier in the form of Turkmenistan. This was to be done by creating a new pipeline under the Caspian Sea that would go through Turkey to Europe, thereby bypassing Russia. The gas routes as they stand today can be seen in the picture above (source: the Economist).Even if the idea proposed by the EU were to take hold, some analysts doubt whether it would make a significant difference. ICG energy analyst Charles Esser pointed out that the EU could count on at most 20bn cubic metres of gas per year from a Caspian pipeline, which amounts to no more than 4% of EU consumption in 2004. Nevertheless, given the fact that the exact amount of gas present in Turkmenistan is unclear, a significantly high number could lead to the expansion of current plans and seriously reduce EU dependency on Russian gas in the long term. In any case, the deal announced today is a clear victory for Russia, as it effectively means that Turkmen and Kazakh gas will only be exported to Europe via Russia, putting the Europeans at the mercy of Russian caprice more than ever before.
China will no doubt see this deal as a loss as well, since they too were vying for direct control of Turkmen gas in their global quest to secure their energy needs in the most far-flung of places. In April 2005, deceased Turkmen President Saparmurat Niyazov had blessed the construction of a pipeline to China that would send 30 billion cubic meters of gas to China starting in 2009. Whether this deal will now go through is uncertain, though it seems unlikely that the Russian-Turkmen agreement will affect it. It does, however, give Gazprom and Russia a powerful bargaining tool in any future discussion, negotiation or conflict with China.
Say what you will of the Russian mafia-like monopolizing tactics, but effective they most certainly are.
3 comments:
I would personally have been very surprised if Russia didn't do such a thing to secure it's energy interests. All this is part of the game and any other country in a similar posuition would do the same. Kazakhstan and Turkmenistan are right in their backyard for heaven's sake!! Does anyone really think they will let the EU siphon off all that natural gas right under their very noses?
When the US can invade other countries (on laughably silly false pretenses) to secure its interests, what is so surprising about Russia signing an agreement with its neighbours?
Btw i'm not a blind supporter of Russia (in case you feel inclined to conclude that way based on this comment from me). I'm looking at this whole thing as a case of realpolitik at work.
Sundeep
I think Putin has shown again that he is the right person for Russia and that he is a very talented leader. As long as the agreement was not extracted forcibly (which I expect is not the case)his actions are fully legal. It just shows that the EU is much too complacent and has little real understanding of the rest of the world.
So in this sense I agree with the comment of Sundeep. What I do not understand in that comment is the reference to the United States. That comments is completely irrelevant to this subject even if one does not relate to its correctness which is quite doubtful...
Just a clarification based on the above comment. The reason I mentioned US foreign policy is to indicate the extent to which a really powerful country will go to secure it's interests. Russia doesn't seem to have used any coercion here at all. I don't see why there is a big fuss over this.
The US and the EU wanted to screw Russia and they find it isn't as easy as they thought it would be. Hence the temper tantrums.
Sundeep
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