[Peace-discuss] It's all about oil?

[Brussel]

An "gas/oil energy analysis" of the events in Georgia by Michael Klare.

He leaves out other factors, such as the threat that Russia sees to  
being surrounded by antipathetic nations and American bases.


Putin's Ruthless Gambit

The Bush Administration Falters in a Geopolitical Chess Match

September, 04 2008

By Michael T. Klare
Source: TomDispatch


Many Western analysts have chosen to interpret the recent fighting in  
the Caucasus as the onset of a new Cold War, with a small pro-Western  
democracy bravely resisting a brutal reincarnation of Stalin's jack- 
booted Soviet Union. Others have viewed it a throwback to the age-old  
ethnic politics of southeastern Europe, with assorted minorities  
using contemporary border disputes to settle ancient scores.

Neither of these explanations is accurate. To fully grasp the recent  
upheavals in the Caucasus, it is necessary to view the conflict as  
but a minor skirmish in a far more significant geopolitical struggle  
between Moscow and Washington over the energy riches of the Caspian  
Sea basin -- with former Russian President (now Prime Minister)  
Vladimir Putin emerging as the reigning Grand Master of geostrategic  
chess and the Bush team turning out to be middling amateurs, at best.

The ultimate prize in this contest is control over the flow of oil  
and natural gas from the energy-rich Caspian basin to eager markets  
in Europe and Asia. According to the most recent tally by oil giant  
BP, the Caspian's leading energy producers, all former "socialist  
republics" of the Soviet Union -- notably Azerbaijan, Kazakhstan,  
Turkmenistan, and Uzbekistan -- together possess approximately 48  
billion barrels in proven oil reserves (roughly equivalent to those  
left in the U.S. and Canada) and 268 trillion cubic feet of natural  
gas (essentially equivalent to what Saudi Arabia possesses).

During the Soviet era, the oil and gas output of these nations was,  
of course, controlled by officials in Moscow and largely allocated to  
Russia and other Soviet republics. After the breakup of the USSR in  
1991, however, Western oil companies began to participate in the  
hydrocarbon equivalent of a gold rush to exploit Caspian energy  
reservoirs, while plans were being made to channel the region's oil  
and gas to markets across the world.

Rush to the Caspian

In the 1990s, the Caspian Sea basin was viewed as the world's most  
promising new source of oil and gas, and so the major Western energy  
firms -- Chevron, BP, Shell, and Exxon Mobil, among others -- rushed  
into the region to take advantage of what seemed a golden  
opportunity. For these firms, persuading the governments of the newly  
independent Caspian states to sign deals proved to be no great  
hassle. They were eager to attract Western investment -- and the  
bribes that often came with it -- and to free themselves from  
Moscow's economic domination.

But there turned out to be a major catch: It was neither obvious nor  
easy to figure out how to move all the new oil and gas to markets in  
the West. After all, the Caspian is landlocked, so tankers cannot get  
near it, while all existing pipelines passed through Russia and were  
hooked into Soviet-era supply systems. While many in Washington were  
eager to assist U.S. firms in their drive to gain access to Caspian  
energy, they did not want to see the resulting oil and gas flow  
through Russia -- until recently, the country's leading adversary --  
before reaching Western markets.

What, then, to do? Looking at the Caspian chessboard in the  
mid-1990s, President Bill Clinton conceived the striking notion of  
converting the newly independent, energy-poor Republic of Georgia  
into an "energy corridor" for the export of Caspian basin oil and gas  
to the West, thereby bypassing Russia altogether. An initial, "early- 
oil" pipeline was built to carry petroleum from newly-developed  
fields in Azerbaijan's sector of the Caspian Sea to Supsa on  
Georgia's Black Sea coast, where it was loaded onto tankers for  
delivery to international markets. This would be followed by a far  
more audacious scheme: the construction of the 1,000-mile BTC  
pipeline from Baku in Azerbaijan to Tbilisi in Georgia and then on to  
Ceyhan on Turkey's Mediterranean coast. Again, the idea was to  
exclude Russia -- which had, in the intervening years, been  
transformed into a struggling, increasingly impoverished former  
superpower -- from the Caspian Sea energy rush.

Clinton presided over every stage of the BTC line's initial  
development, from its early conception to the formal arrangements  
imposed by Washington on the three nations involved in its corporate  
structuring. (Final work on the pipeline was not completed until  
2006, two years into George W. Bush's second term.) For Clinton and  
his advisors, this was geopolitics, pure and simple -- a calculated  
effort to enhance Western energy security while diminishing Moscow's  
control over the global flow of oil and gas. The administration's  
efforts to promote the construction of new pipelines through  
Azerbaijan and Georgia were intended "to break Russia's monopoly of  
control over the transportation of oil from the region," Sheila  
Heslin of the National Security Council bluntly told a Senate  
investigating committee in 1997.

Clinton understood that this strategy entailed significant risks,  
particularly because Washington's favored "energy corridor" passed  
through or near several major conflict zones -- including the Russian- 
backed breakaway enclaves of Abkhazia and South Ossetia. With this in  
mind, Clinton made a secondary decision -- to convert the new  
Georgian army into a military proxy of the United States, equipped  
and trained by the Department of Defense. From 1998 to 2000 alone,  
Georgia was awarded $302 million in U.S. military and economic aid --  
more than any other Caspian country -- and top U.S. military  
officials started making regular trips to its capital, Tbilisi, to  
demonstrate support for then-president Eduard Shevardnadze.

In those years, Clinton was the top chess player in the Caspian  
region, while his Russian presidential counterpart, Boris Yeltsin,  
was far too preoccupied with domestic troubles and a bitter, costly,  
ongoing guerrilla war in Chechnya to match his moves. It was clear,  
however, that senior Russian officials were deeply concerned by the  
growing U.S. presence in their southern backyard -- what they called  
their "near abroad" -- and had already had begun planning for an  
eventual comeback. "It hasn't been left unnoticed in Russia that  
certain outside interests are trying to weaken our position in the  
Caspian basin," Andrei Y. Urnov of the Russian Ministry of Foreign  
Affairs declared in May 2000. "No one should be perplexed that Russia  
is determined to resist the attempts to encroach on her interests."

Russia Resurgent

At this critical moment, a far more capable player took over on  
Russia's side of the geopolitical chessboard. On December 31, 1999,  
Vladimir V. Putin was appointed president by Yeltsin and then, on  
March 26, 2000, elected to a full four-year term in office. Politics  
in the Caucasus and the Caspian region have never been the same.

Even before assuming the presidency, Putin indicated that he believed  
state control over energy resources should be the basis for Russia's  
return to great-power status. In his doctoral dissertation, a summary  
of which was published in 1999, he had written that "[t]he state has  
the right to regulate the process of the acquisition and the use of  
natural resources, and particularly mineral resources [including oil  
and natural gas], independent of on whose property they are located."  
On this basis, Putin presided over the re-nationalization of many of  
the energy companies that had been privatized by Yeltsin and the  
virtual confiscation of Yukos -- once Russia's richest private energy  
firm -- by Russian state authorities. He also brought Gazprom, the  
world's largest natural gas supplier, back under state control and  
placed a protégé, Dmitri Medvedev -- now president of Russia -- at  
its helm.

Once he had restored state control over the lion's share of Russia's  
oil and gas resources, Putin turned his attention to the next obvious  
place -- the Caspian Sea basin. Here, his intent was not so much to  
gain ownership of its energy resources -- although Russian firms have  
in recent years acquired an equity share in some Caspian oil and gas  
fields -- but rather to dominate the export conduits used to  
transport its energy to Europe and Asia.

Russia already enjoyed a considerable advantage since much of  
Kazakhstan's oil already flowed to the West via the Caspian Pipeline  
Consortium (CPC), which passes through Russia before terminating on  
the Black Sea; moreover, much of Central Asia's natural gas continued  
to flow to Russia through pipelines built during the Soviet era. But  
Putin's gambit in the Caspian region evidently was meant to capture a  
far more ambitious prize. He wanted to ensure that most oil and gas  
from newly developed fields in the Caspian basin would travel west  
via Russia.

The first part of this drive entailed frenzied diplomacy by Putin and  
Medvedev (still in his role as board chairman of Gazprom) to persuade  
the presidents of Kazakhstan, Turkmenistan, and Uzbekistan to ship  
their future output of gas through Russia. Success was achieved when,  
in December 2007, Putin signed an agreement with the leaders of these  
countries to supply 20 billion cubic meters of gas per year through a  
new conduit along the Caspian's eastern shore to southern Russia --  
for ultimate delivery to Europe via Gazprom's existing pipeline network.

Meanwhile, Putin moved to undermine international confidence in  
Georgia as a reliable future corridor for energy delivery. This  
became a strategic priority for Moscow because the European Union  
announced plans to build a $10 billion natural-gas pipeline from the  
Caspian, dubbed "Nabucco" after the opera by Verdi. It would run from  
Turkey to Austria, while linking up to an expanded South Caucasus gas  
pipeline that now extends from Azerbaijan through Georgia to Erzurum  
in Turkey. The Nabucco pipeline was intended as a dramatic move to  
reduce Europe's reliance on Russian natural gas -- and so has enjoyed  
strong support from the Bush administration.

It is against this backdrop that the recent events in Georgia unfolded.

Checkmate in Georgia

Obviously, the more oil and gas passing through Georgia on its way to  
the West, the greater that country's geostrategic significance in the  
U.S.-Russian struggle over the distribution of Caspian energy.  
Certainly, the Bush administration recognized this and responded by  
providing hundreds of millions of dollars in military aid to the  
Georgian military and helping to train specialized forces for  
protection of the new pipelines. But the administration's partner in  
Tbilisi, President Mikheil Saakashvili, was not content to play the  
relatively modest role of pipeline protector. Instead, he sought to  
pursue a megalomaniacal fantasy of recapturing the breakaway regions  
of Abhkazia and South Ossetia with American help. As it happened, the  
Bush team -- blindsided by their own neoconservative fantasies -- saw  
in Saakashvili a useful pawn in their pursuit of a long smoldering  
anti-Russian agenda. Together, they walked into a trap cleverly set  
by Putin.

It is hard not to conclude that Russian prime minister goaded the  
rash Saakashvili into invading South Ossetia by encouraging Abkhazian  
and South Ossetian irregulars to attack Georgian outposts and  
villages on the peripheries of the two enclaves. Secretary of State  
Condoleezza Rice reportedly told Saakashvili not to respond to such  
provocations when she met with him in July. Apparently her advice  
fell on deaf ears. Far more enticing, it seems, was her promise of  
strong U.S. backing for Georgia's rapid entry into NATO. Other  
American leaders, including Senator John McCain, assured Saakashvili  
of unwavering U.S. support. Whatever was said in these private  
conversations, the Georgian president seems to have interpreted them  
as a green light for his adventuristic impulses. On August 7th, by  
all accounts, his forces invaded South Ossetia and attacked its  
capital city of Tskhinvali, giving Putin what he long craved -- a  
seemingly legitimate excuse to invade Georgia and demonstrate the  
complete vulnerability of Clinton's (and now Bush's) vaunted energy  
corridor.

Today, the Georgian army is in shambles, the BTC and South Caucasus  
gas pipelines are within range of Russian firepower, and Abkhazia and  
South Ossetia have declared their independence, quickly receiving  
Russian recognition. In response to these developments, the Bush  
administration has, along with some friendly leaders in Europe,  
mounted a media and diplomatic counterattack, accusing Moscow of  
barbaric behavior and assorted violations of international law.  
Threats have also been made to exclude Russia from various  
international forums and institutions, such as the G-8 club of  
governments and the World Trade Organization. It is possible, then,  
that Moscow will suffer some isolation and inconvenience as a result  
of its incursion into Georgia.

None of this, so far as can be determined, will alter the picture in  
the Caucasus: Putin has moved his most powerful pieces onto this  
corner of the chessboard, America's pawn has been decisively  
defeated, and there's not much of a practical nature that Washington  
(or London or Paris or Berlin) can do to alter the outcome.

There will, of course, be more rounds to come, and it is impossible  
to predict how they will play out. Putin prevailed this time around  
because he focused on geopolitical objectives, while his opponents  
were blindly driven by fantasy and ideology; so long as this pattern  
persists, he or his successors are likely to come out on top. Only if  
American leaders assume a more realistic approach to Russia's  
resurgent power or, alternatively, choose to collaborate with Moscow  
in the exploitation of Caspian energy, will the risk of further  
strategic setbacks in the region disappear.


Michael T. Klare is professor of peace and world security studies at  
Hampshire College and the author, most recently, of Rising Powers,  
Shrinking Planet: The New Geopolitics of Energy (Metropolitan Books).

[This article first appeared on Tomdispatch.com, a weblog of the  
Nation Institute, which offers a steady flow of alternate sources,  
news, and opinion from Tom Engelhardt, long time editor in  
publishing, co-founder of the American Empire Project, author of The  
End of Victory Culture, updated in a newly issued edition covering  
Iraq, and editor and contributor to The World According to  
Tomdispatch: America in the New Age of Empire.]




From: 	Z Net - The Spirit Of Resistance Lives
URL: 	http://www.zcommunications.org/znet/viewArticle/18680

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