All aspects of Europe’s relations with Russia including the energy dimension inevitably have a strong geopolitical overlay which at times becomes distorting beyond recognition. To put it in terms of everyman’s anecdotal Freud: here we have a cigar which is never just a cigar. Read on….
Russia and European Energy Security: The Inevitable Intrusion of Geopolitics
by Gilbert Doctorow, Ph.D.
By way of preamble, it is worth recalling that Russia has been a major European power since the 18th century. Well before Soviet rule over Eastern Europe, Russia was one of a handful of Continental states which shaped the architecture of Europe’s internal balance of power and participated in the regional wars between shifting European alliances that punctuated two centuries.
That is to say, Europe’s relations with Russia today are influenced not only by present interests and recollection of the recent past, which concern in particular the New Member States of the EU, but also by recollection of the distant past, which concerns nearly all of the Continent to whom Russia was alternately friend or foe.
It also has to be borne in mind that for nearly 40 years after WWII Russia moved out of the European arena to the forefront of the world stage, where it ranked as the world’s other superpower rivaling the United States in military power and influence around the globe. The Cold War decades of ideological confrontation and proxy conflicts between East and West in the developing countries left the United States very attentive to the evolution of what President Reagan had called the Empire of Evil well after the demise of Communist rule and keen to ensure that any possibility of its ever again posing a challenge to American interests worldwide was thwarted. For this end, the U.S. has been ready and willing to mobilize its allies in the North Atlantic community, where its voice often carries decisive weight.
Finally, it has to be mentioned that in line with its position as the largest country on earth, with approximately 10% of the world’s land surface, Russia is also the largest producer of hydrocarbons, both oil and gas. Russia’s rise from domestic chaos and bankruptcy in 1998 to levels of prosperity never before seen there five years into the new millennium and its return to the international stage with a self-confident and unique voice, not very favorably disposed to America’s unipolar world view, were all heavily supported by its energy exports. Gazprom alone pays 20% of the federal budget.
This being the case, all aspects of Europe’s relations with Russia including the energy dimension inevitably have a strong geopolitical overlay which at times becomes distorting beyond recognition. To put it in terms of everyman’s anecdotal Freud: here we have a cigar which is never just a cigar. Nothing about Russia is taken at face value, and the aggressive and malevolent motives often attributed to its leadership are always top of mind.
Perhaps the most interesting time in the past decade to see these issues laid out was precisely the period 2008-2009. The Russian-Georgian war of August 2008 put in focus Russia’s relations both with its immediate neighbors and with Europe as a whole. Within the New Member States of the EU, it raised bitter memories of Soviet occupation, of the intervention to crush the Hungarian uprising of 1956 and the Czech Spring of 1967, and so it prompted calls for greater attention to the energy relationship, the single biggest component of Europe’s commercial interaction with Russia.
Then 2009 opened with the Ukrainian-Russian gas dispute going ‘ballistic’ – namely a full shutdown of gas supplies to and through Ukraine and an overall 80% cut in Russian gas deliveries to Europe for two weeks. This midwinter cut-off caused particular hardship in EU Member States Bulgaria and Hungary. It put in focus an EU-wide debate over Russia’s reliability as present and future energy supplier which had been largely theoretical until then.
The literature on Russia, the EU and energy security in the past decade is vast. Putting aside scholarly articles in international relations periodicals, every mainstream news content provider (1) on the Continent, in the US and in the world generally has been constantly reporting all the twists and turns of competing pipeline projects, the proliferating international conferences of state and private actors for promotion of energy security in Europe, the diplomacy between consumer, producer and transit countries, the implementation of the EU directives on liberalization of energy supplies as it bears on acquisitions by Russia’s Gazprom and the unsteady progress towards negotiating a new Partnership and Co-operation Agreement with Russia in which the 1994 Energy Charter has been a key stumbling block.
For the sake of simplicity, I will examine here two publications, one in the United States and the other prepared in Europe, which are emblematic of the underlying dichotomy of positions. A fine and very representative example of how geopolitics has dominated the public debate is the briefing paper entitled “Russian Energy Policy Toward Neighboring Countries” prepared by the Congressional Research Service and published on 2 September 2009. This 22-page paper explains to America’s parliamentarians and the general public the reasons shaping a very interventionist U.S. policy in the affairs of European energy security, namely its urging European countries “to reduce their dependence on Russian energy” and strong advocacy of “building multiple pipelines from Central Asia and Azerbaijan to Europe.”
It is all about forming a certain characterization of Russia as an unsavory regime dominated by authoritarian and corrupt leaders drawn from the security services who use the country’s dominant position as an oil and gas supplier to extract political and economic concessions from their neighbors. Russia is alleged to be aggressively punishing Ukraine, Moldova and Georgia in particular because of their pro-Western governments and pursuit of membership in NATO and the European Union. The possibility that Russia’s moves to bring up to world market prices what the former republics of the USSR pay for its oil is acknowledged as potentially having commercial merit, but the reader’s attention is drawn to the timing of price hikes, which is said to show political coercion.
With respect to Western Europe, Russia’s interest in acquiring downstream energy assets including storage and distribution facilities is presented as guided by a desire to secure control over the domestic markets and to further monopolistic practices of its dirigiste government. The report is long on narrative history, particularly the details of Russia’s conflicts with Ukraine over its gas transmission system, and short on the numerical dimension of Russian energy dominance. We are given here only a couple of relevant facts: that Russia accounted for 29% of European gas consumption in 2004, for 40% of its gas imports in 2008. And we are told that the dependence of Europe on Russian supplies was uneven, with some countries in Central and Eastern Europe relying on Russia for most or all of the oil and gas they consume.
The closest this report comes to a balanced view is to cite the assertion of Russia’s German and Italian partners that there is a mutual dependence between Russia and consuming countries given the importance of the energy exports to Russia’s overall economy and to its state budget in particular. But the text is mostly Russophobe. Even Russia’s attempts to ensure the reliability of its supplies to Western Europe by building new pipelines offshore and avoiding passage through the transit countries are viewed uniquely from the standpoint of possible adverse effect on those transit countries, whose independence from Russian influence the U.S. is keen to support.
If through its Nord Stream and South Stream projects, Russia were able to dispense with the gas transmission system in Ukraine, for example, this would, in the view of the report’s author, allow Russia to apply pressure on Ukraine in other issues. And West European countries ‘could feel they have less of a stake in Ukraine’s future, if they, like Russia, were no longer dependent on Ukrainian gas transport infrastructure.”
In short, this 2009 CRS report shows plainly that issues very far removed from European energy security are driving U.S. thinking. Indeed, the last point indicates that the U.S. would willingly hold European energy security hostage to other, geopolitical interests of the United States such as bolstering Ukraine’s opportunities for interfering with Russia’s vital economic interests.
The section entitled “U.S. ‘Pipeline Diplomacy’ speaks of U.S. advice to Europe to diversify its gas supplies away from Russia and its promotion of the Nabucco and Trans-Caspian projects, which would directly compete with Russia’s existing and planned production sources. As we shall see further on, the U.S. role has gone well beyond observer and avuncular adviser status. But the paper strikes a realistic note in its appraisal of the chances for success of the American and EU backed pipelines over the competing solutions of Nord Stream and South Stream being advanced by the Russians. The author concludes that ‘Russian-supported pipelines appear to have the upper hand because they have supplies available.’
It bears mention that as 2011 comes to a close, nothing has emerged to put in question that conclusion from 2009. It is only in the context of the looming defeat of the U.S. pipeline diplomacy that the report mentions (without detailing) other ways that Europeans can look after the security of their energy supplies which have nothing directly to do with Russia. These include enhancing interconnects within Europe and increasing storage facilities, in the short and medium term, and building additional liquefied natural gas (LNG) terminals in the longer term as economical substitutes for Gazprom’s gas via pipelines.Here, finally, a few numbers are put up: LNG is said to account for 15% of Europe’s gas imports. But these thoughts receive no further development.
I propose now to look at another report dealing with the same issues published 10 months earlier by a think tank headquartered in London, the European Council on Foreign Relations. I reverse the chronological order of my presentation precisely because one might expect a later authoritative report like that by the Congressional Research Service to take into account and respond to a well publicized report issued earlier which disproves virtually everything the CRS was about to say. The fact that it did not acknowledge the existence of the ECFR work demonstrates how the ‘debate’ over European energy security and Russia has typically not been a genuine intellectual dialogue, but only the posturing of various partisan groupings, each with its own agenda, often having little to do with the subject at hand.
The ECFR is a fairly new organization, set up with the stated purpose of creating the first multi-center, Europe-wide foreign policy forum. It has both a name and a structure loosely modeled on America’s Council on Foreign Relations, with its iconic Foreign Affairs magazine. The ECFR’s oversight Council has a membership list reading like a who’s who of politics, business and the arts on the Old Continent. Yet, to understand its mission one has to note that the ECFR was established with the financial backing of George Soros and its staff and writers are drawn from among alumni of various earlier Soros pro-democracy offices.
A number of its leading publications have fairly consistently promoted a key Soros message: that the 27 EU Member States should integrate their foreign policy so as to present a united front to the Russian Federation and counter what is alleged to be a successful policy of ‘divide and conquer’ in relations with the EU. “Beyond Dependence: How to Deal with Russian Gas” by Pierre Noël does not disappoint in this sense. It tells us that Russia’s position as gas supplier is indeed a divisive issue which prevents the founding EU Member States and the New Member States in Central and Eastern Europe from coming together.
But at the same time as he hues the company line geopolitically, the author gets across a second message which is very different and which admirably suits the purpose of my essay. Noël makes an excellent case for seeing the notion of any Russian threat to European energy security as a canard. To quote his underlying thesis:
“Russia is the largest external gas supplier to the EU, but it is far from a monopoly provider. Since 1980, Europe’s diversification of its gas supply has seen Russia’s share of EU gas imports roughly halve, from 80% to 40%. Russian gas represents just 6.5% of the EU primary energy supply, a figure that has remained essentially unchanged over 20 years….So calls for Europe to diversify its energy supply even further miss the point. The problem is divisiveness, not dependence. Russian gas is divisive because Europe’s gas market is dysfunctional and segmented. Most of the EU’s imports of Russian gas go to a few countries in Western Europe, where supply is diversified, while several Member States in central and eastern Europe consume relatively little Russian gas but have no other external suppliers….Contrary to popular perception, overdependence on Russia is not a pressing issue for Europe as a whole.”
The obvious point here is that the troubling aspects of the gas supply relationship with Russia are not subjective, i.e., malevolent designs of Russia. They are objective, going back in history to another age and other considerations when the supply routes were laid down or having to do with the failures on the EU side to put its house in order with respect to integration of its own energy market.
Noël is numerically literate and supports each of his assertions about the genuinely diversified present state of European energy supplies with facts and figures. He highlights the shares of EU gas imports represented by other countries (Algeria, Nigeria, Middle Eastern countries) and by other transport modes, including LNG. Within the EU, he explains that the old 15 EU Member States account for 86% of the imported Russian gas consumed, and just two countries, Germany and Italy, together account for nearly half of the Russian supplies, with France in a distant third place, with imports only at one quarter the German level. He argues that the two biggest importers are also states with very well developed alternative supplies of gas to the Russians. Then he deals one by one with the specific situations of those countries, in particular Hungary, Bulgaria and the Baltic states, where dependence on Russian gas supplies was close to 100%. He break down consumption patterns to demonstrate that, in the case of the Baltics, home heating by gas has been negligible, total consumption volumes are tiny, and alternative energy sources could easily provide total security without resort to heroic pipeline solutions.
Having called out several of the strong points in Noël’s paper which seriously challenge the fundamentals of the conventional view in the West of Russia actively and consciously posing a threat to European energy security, I am obliged to point to the weak points in his argumentation over de facto ‘divisiveness’ of the Russian energy presence for the EU.
Noël points critically to what he calls a ‘cozy political relationship’ between Moscow and its largest European consumer countries, Italy and Germany, which works against their making common cause with the other EU Member States over dealing with Russia. As he tells us, German firms which invested in the Nord Stream project have been offered potentially lucrative participations in Russian upstream energy assets. All of this is true, but how could it be otherwise? Noël is speaking on this issue like an academic or EU public servant, not like a businessman or investor.
It is also unclear how he expects Europe to forge a thoroughly integrated domestic gas market solely through implementation of the 3rd directive on unbundling transmission ownership from supply. He does not look into the infrastructure deficiencies which have to be addressed. Noël mentions, in passing, French and German protection of their national champion energy companies as working against integration. Until or unless this is changed by fait du prince, the dysfunctional gas grid that he cites without explaining will not be remedied. In all of this, the Russians are just innocent by-standers.
In fact, the gaps in the pre-2009 European infrastructure were stunning. These exist both on the levels of transmission and also underground storage facilities. Let us consider, for example, what the absence of linkages has meant for imported gas coming from the EU’s second largest external supplier, Algeria, which accounts for 20% of all European gas imports. Its LNG shipments are received directly in various ports around the Continent, including in Belgium, the south of France and Slovenia. Meanwhile its pipeline deliveries reach across the Mediterranean into Italy and Spain. The Spanish line apparently serves only the Iberian Peninsula. For reasons that remain cloudy, the Algerian gas supply ends somewhere in the southwest of France and the French have not seen fit to tie it into their own national grid. These various cul-de-sacs in domestic EU natural gas distribution surely result from its being a public utility in private hands pursuing profit.
Ever since the January, 2009 cut-off of Russian gas supplies to Europe in the dispute with the Ukraine, European Commission press releases and public papers (2) have mentioned correcting the holes in the European gas grid which made it impossible to move gas around the Continent when crisis struck. Alongside the gas pipelines of the ‘Southern Corridor’ to access directly the gas wealth of the Caspian basin and diversify sources of supply away from Russia and its transmission routes traversing Belarus and Ukraine, the notion of building interconnects and reversible gas flows across Europe’s own national grids has been an invariable part of the envisaged solution, though without much specific information about the existing bottlenecks and how much it will cost to eliminate them. We have only the project name, North-South Corridor, without details and timetable. This is intended to address the present impossibility of moving gas entering France, Spain, Italy and Greece north to Central and Eastern Europe.
As of 2011, there are occasional announcements of progress on improving and integrating the European infrastructure. New LNG gas terminals are being brought on line in Poland and in Romania. Gas flows have, in fact, been made reversible in such major lines as between Poland and Germany. Here and there, as in the case of Slovakia and Hungary, interconnects are being put in place. But the allocations from EU sources remain paltry, very likely under 2 billion Euro, whereas the major supply diversification pipelines like Nabucco which grab front page attention call for (private) investments at least five times greater. And the critically important addition of underground storage facilities seems to be linked exclusively to Nabucco and Russia’s competing South Stream pipelines.
If the EU’s planned actions to improve gas security may be described as being only sketchy and poorly communicated to the public, Russia’s policies on gas and pipelines are kept very close to the chest, with even the press pool who travel regularly with Putin and his deputies kept largely in the dark. The Russian daily Kommersant’s lead reporter on the oil and gas industry, Natalya Grib, does better than most. The author of more than 2,000 articles on Russian energy policy since 2002, Grib wrote a book entitled Gazovy Imperator (3) which tries to make sense of all the gas-related headline news since Vladimir Putin came to power. And she does find convincing evidence for a couple of common threads through this period.
The first is the determination to reinstate Russian control over the Soviet-era gas pipeline systems which carry the 130 billion cubic meters of natural gas to Western Europe via Belarus (20%) and Ukraine (80%). The issues flagged to the world media, namely disagreements over gas pricing to the former Soviet republics, allegations of arrears and nonpayment for past deliveries, were all, in fact, secondary issues if not pure smoke screen, says Grib. With respect to Belarus, the contest for control of Belgaztrans goes back to 2004, when a ‘gas war’ of short duration ended with Russia’s taking a 50% (minus 1 ‘golden share’ reserved for Minsk) holding in the pipeline system.As we now know, in December 2011, Russia succeeded in buying out the remaining 50% in return for price concessions on gas for Belarus domestic consumption and a very advantageous separate settlement on oil deliveries to Belarus for processing and re-sale of petroleum products in the West.
With Ukraine, Russian attempts at gaining participation if not outright control of the gas infrastructure (Naftogaz) reached a preliminary solution in 2003 with agreement on an international consortium to operate deliveries of Russian and Central Asian gas to Europe via Ukraine. Initially the consortium was also expected to include Gaz de France and Ruhrgas. However, the Ukrainian authorities did not implement this. The Orange Revolution brought in a 2006 law prohibiting the sale of strategic assets, including the gas storage facilities and pipelines. Despite everything, Russia persevered in its policy, pursuing the January 2009 gas war with Ukraine over control of the gas infrastructure.
Moving beyond Grib’s book, we now know that the issue is still in play with the post-Orange government of Viktor Yanukovich. Help from the EU and the United States to invest the 2.5 billion Euro needed, at a minimum, to renovate the Ukrainian system remains elusive, and Ukraine is politically isolated after the incarceration of former Prime Minister Tymoshenko. The Russians have weakened Ukraine’s negotiating position with the recent start-up of the first phase of Nord Stream. Ukraine has responded by issuing a call to revive the consortium project of 2003. The denouement is still unforeseeable.
The second thread which Grib has identified in Russian gas policy over the past decade is to control the way to market of Central Asian gas supplies, which traditionally were priced cheaper than Russia’s production but were not disruptive because the pipelines leading to Europe were Russian. This is what has motivated Russia’s buying up all the spare production capacity of its neighbors even at European market prices just before the 2009 recession and collapse of world energy prices to ensure none would be left for American-EU pipelines
In both policy threads, it is as reasonable to see a strictly defensive motivation for Russian strategy as it is to read the predatory motivation which prevails in Western literature. From the standpoint of Russian state interests it is unacceptable for its vital gas exports to be blocked or diverted by transit countries like Ukraine and Belarus seeking to extract from Russia multi-billion dollar annual subsidies in the form of artificially cheap hydrocarbons, all the more so when those countries are being wooed by Russia’s ill-wishers to enter into military alliances directed against Russia. From the standpoint of Russian state interests, it is unacceptable for those same ill-wishers who help to obstruct the existing landline transmission via Ukraine and oppose construction of new Russian direct pipelines at sea to also encourage construction of new pipelines skirting Russian control and under special protection.
I propose to conclude this essay with a step back in time, into the 1990s, to the precise origins of the whole geopolitical strategy that the U.S. administration and the EU Commission under Jose Manuel Barroso have jointly pursued since 2009 in the form of the ‘Southern Corridor,’ comprising the Nabucco and Trans-Caspian pipeline projects. At this point we shall descend from abstractions to the very concrete level, looking at the authors and implementers of programs which are very closely related, the Baku-Tbilisi-Ceyhan oil pipeline, negotiated in 1997 and commissioned in 2006, and the present day Nabucco gas project, with its extension across the Caspian to Turkmenistan. They share not only a common route segment for moving Caspian Basin hydrocarbons to European markets but also a common geopolitical design which outweighs and at times contradicts their stated commercial benefits.
Behind both has been the guiding hand of the U.S. government and of Ambassador Richard Morningstar (4) who served the Clinton Administration as its Special Adviser to the President and Secretary of State for Caspian Basin Energy Diplomacy in 1998-1999 and since April 2009 has served the Obama Administration with the title of Plenipotentiary Envoy for Eurasian Energy.
The clear intent of both projects from the American perspective has been not so much to enhance European energy security as to 1) to prise free the ‘near abroad’ former Soviet republics from the sphere of influence of the Russian Federation and 2) deal a blow to Russian energy exports, thereby depriving the erstwhile foe of the wherewithal to enhance its world standing.
The American policy on Russia which found expression in the pipelines for the Caspian Basin can be traced back to the period immediately before the U.S. presidential elections of 1996, when Bill Clinton and his close advisers decided that it was more important to win the votes of Polish, Czech and Hungarian-Americans than to reach a global accommodation with Russia. This put an end to a couple of years of uncertainty, when the Administration had encouraged the Russians to believe that NATO accession was within their reach.
In 1997, the newly re-elected President, who never much cared for foreign policy anyway, replaced the rudderless Warren Christopher at the State Department with Madeleine Albright, who had a determined agenda for promotion of Eastern Europe in NATO and containment of Russia.
Without diminishing in any way the independent personality and intellect of the new Secretary of State, it must nonetheless be called out that her policies followed admirably the thinking of, Zbigniew Brzezinski, who was one of the country’s most prominent students of Soviet affairs, co-author of the analytical framework of totalitarian dictatorship to describe the Soviet Union, National Security Adviser to President Jimmy Carter, appointee and expert advisor to the Democratic Party ever since. In fact, Brzezinski was Albright’s mentor during her doctoral studies at Columbia University and she also served as a staff member at the National Security office under Brzezinski.
It was at just this time, in 1997, that Brzezinski published his very widely read book The Grand Chessboard, in which he set out recommendations for cutting Russia down to size and compelling it to be ‘democratic’ and decentralized by various methods, including support for a free Ukraine and providing new routes to market for Caspian/Central Asian hydrocarbons. (5)
To make it clear that the connections between the thinking of Brzezinski and the policies implemented by Madeleine Albright and her deputy, Richard Morningstar, are not supposition but fact, it must be added that Brzezinski was brought in to assist Morningstar in the complex negotiations with Azerbaijan that ended in the agreements on the Baku-Tbilisi-Ceyhan oil pipeline. As for Morningstar himself, he was clearly acting on the policy directives he received from above. His foreign policy experience went back no further than a couple of years. Morningstar was a political appointee whose only claim to a White House appointment was his longstanding service to the Democratic Party both in his native state of Massachusetts and at the national level as co-chair of the DNC National Finance Committee (1988).
Besides successfully pushing through the BTC oil pipeline, during his work for the Clinton Administration, Morningstar also had a go at Caspian natural gas resources. There was already then a Trans-Caspian gas pipeline project with American backing to take gas from Turkmenistan across the Caspian Sea to Baku, where it would then follow the BTC route into Turkey. The project never got launched, because of the eccentric President of Turkmenistan in that period. Turkmenistan instead continued its familiar supply agreements with the Russians. At the same time, there was also resistance to the Trans-Caspian project from Azerbaijan, which had its own dispute with Turkmenistan and its own competitive interest.
On the other hand, on Morningstar’s watch there was one less ambitious gas pipeline project which did succeed: the Baku-Tbilisi-Erzurum project to bring Azerbaijani natural gas from the Caspian into the Turkish gas distribution grid. Like the BTC, it became operational in 2006. It provided Georgia with full energy independence from Russia and it provided a precedent for the much more ambitious project which is the single most important item on Mr. Morningstar’s plate today, Nabucco.
In the period between the 2006 inauguration of the BTC pipeline of which he was the ‘father’ and his re-entering government service under a new Democratic administration, Richard Morningstar was busy lobbying in Europe on behalf of US-favored solutions for transporting the natural gas resources from the Caspian Basin. The Nabucco project already existed on paper, but at that point still had very feeble official EU backing.
In 2007, at the invitation of the Bertelsmann Stiftung, one of the key sponsors of The Brussels Forum, an annual gathering where the great and the good discuss European-American relations, Morningstar published an article for distribution to Forum participants entitled “The New Great Game: Opportunities for Transatlantic Cooperation in the Caspian Region.”
Of course, ‘the great game’ referred to the 19th century Russian-British competition for influence in Central Asia and the north of the Indian subcontinent. Its 21st century equivalent would be the pipeline competition between the EU-USA and Russia, between the Nabucco-Transcaspian and the South Stream gas lines respectively. Morningstar argued that Europe should take an interest in the success of the BTC project and use it as a model for solving its energy needs going forward in close collaboration with U.S. policy-makers. In his paper, Morningstar hammered home the need to overcome “Europe’s over-dependence on Russian natural resources.”
The phrase was repeated 5 times in 14 short pages. His conclusion: “the huge natural gas resources that can be found in Kazakhstan, Uzbekistan, Turkmenistan and the Western Caspian are critical, because they can ultimately lessen Europe’s over-dependence on Russian gas.”
The underlying premise of Morningstar’s paper was that the United States understands the energy security issues facing Europe better than the Europeans themselves. It is interesting to note how Richard Morningstar’s 2009 appointment as Plenipotentiary Envoy on Eurasian Energy was received in Europe. He was perceived by people in the know very positively: “there is no one better placed to give the Europeans the benefit of US advice on Nabucco, a project some energy analysts think may be doomed to failure unless resolute action is taken soon to finance it, secure the necessary gas supplies and get it up and running.” (6)
As 2011 comes to an end, the outcome of the Great Game over Caspian Basin natural gas is still far from certain. The Russian-Georgian war of August 2008 and the cut-off of Russian gas imports due to squabbling with Ukraine changed the atmosphere within the EU commission in favor of new gas pipelines more than any lobbying by Americans in or out of office. Indeed the personal humiliation which the Russians served up to Jose Manuel Barroso over his empty oratory calling for reason to prevail in both cases made the Commission very receptive to American prescriptions both with respect to the Southern Corridor and with respect to the Ukrainian gas infrastructure which would leave out the Russians.
Official EU and American efforts became increasingly coordinated from this point. In particular, the U.S. provided valuable diplomatic assistance with Turkey which finally came around to the proposition that it would be content with transit fees and dropped its demands to be a reseller. The credibility derived from American backing in the face of Russian resistance helped to keep the Nabucco project alive and moved it forward with just nominal funding from the EU budget.
Nonetheless, no southern pipelines have advanced in the last two years for totally unforeseen reasons: namely the European recession which drove down sharply its gas consumption and gas prices, while also making financing of such mega-projects problematic. The EU-US projects have also seen permanently shifting positions of the supplier countries as a disincentive to potential investors (7)
In the end, one thing is perfectly clear: the Southern Corridor gas pipeline projects which take so much of the headline news are serving geopolitical scenarios first and foremost, responding to an exaggerated claim of ‘dependency’ on Russian gas, while the genuine threats to European energy security, which lie elsewhere, in EU infrastructure, seem to be addressed in a hit or miss way and with paltry funding.
1) The sources I monitor regularly include The Financial Times, The Moscow Times, Vedomosti, Kommersant, Foreign Affairs magazine and EU Commission reports and press releases
2) See, for example, “Energy Infrastructure: Priorities for 2020 and Beyond – A blueprint for an Integrated European Energy Network,” especially chapter 4.
3) Kommersant Publishing House, Moscow, 2009 4) See my article “Richard Morningstar: Letter to a Wayward Classmate” for a detailed account of Morningstar’s work on the BTC pipeline and explanation of how this project was pushed through over the objections of the immediate commercial producers of energy in the region who preferred much less costly solutions and over the objections of key U.S. allies who were ostensibly to be its beneficiaries. http://usforeignpolicy.blogs.lalibre.be/archive/2009/05/06/richard-morningstar-letter-to-a-wayward-classmate.html
5) See my detailed analysis of Brzezinski’s writings in chapter 3, Great Post-cold War American Thinkers on International Relations, 2010, Charleston, S.C.
6) The Financial Times Brussels blog, 21 April 2009
7) In this context, it is exceedingly interesting that on December 26, 2011 Azerbaijan and Turkey signed a deal to build a 3.8 billion Euro Trans-Anatolya Natural Gas Pipeline to bring 16 billion cubic meters per year of additional Azerbaijani gas into the Turkish grid as from 2017, of which 10 million would be available for further transport to European markets. The pipeline will be 80% Azerbaijan owned, 20% Turkish. With that, the spare Azerbaijan capacity from the Shah Deniz fields otherwise hoped for by Nabucco’s organizers would appear to be fully committed. Moreover, as project owner, Azerbaijan’s State Oil Company (SOCAR) has resolved the conflict of interest from lending assistance to competing gas from Turkmenistan implicit in the EU-US projects.
Further reading: 1) http://usforeignpolicy.blogs.lalibre.be/archive/2009/11/09/the-strange-case-of-yulia-tymoshenko-s-2007-article-in-forei.html
3) http://usforeignpolicy.blogs.lalibre.be/archive/2009/11/20/balance-of-power-in-play-the-eu- russia-summit-stockholm.html
© Gilbert Doctorow, 2011
G. Doctorow is an occasional guest lecturer at St. Petersburg State University and Research Fellow of the American University in Moscow. His latest book,Stepping Out of Line: Collected (Nonconformist) Essays on Russian-American Relations, 2008-12, is available in paperback from Amazon.com and affiliated websites worldwide. An e-book edition will be issued shortly.