Streetwise Professor

May 16, 2007

Get in the (Great) Game

Filed under: Energy,Politics,Russia — The Professor @ 9:21 am

Not long ago (April Fool’s Day, in fact) I wrote that “the most important thing” that could be done vis-a-vis Russian energy imperialism is to court aggressively the Transcaspian states, especially Turkmenistan and Kazakhstan. These states could be the Russian Achilles Heel, as Gazprom is acutely dependent on cheap gas from these countries. A Transcaspian pipeline would provide a competitive alternative for gas from east of the Caspian, resulting in an increase in prices for the producers, lower prices for consumers–and much slimmer margins for Gazprom.

Apparently the US and the EU don’t take this seriously enough. Last week Putin waltzed into Kazakhstan and Turkmenistan, and secured deals to move gas out of these countries via Russia on a to-be-built pipeline on the east side of the Caspian. Kazakhstan and Russia also approached a deal on transporting Kazakh oil via Russia, although Kazakh president Nazarbayev is apparently driving a hard bargain.

While Putin spent a week in the area, the US and EU apparently can’t be bothered to send high-powered delegations to Kazakhstan and Turkmenistan. My sources in the region tell me that US and EU diplomacy has been ineffectual, not to say incompetent. Specifically, the US and EU have merely announced their support for a Transcaspian pipeline without adequately consulting the Turkmen and Kazakh governments, and without a serious effort to woo them to support the endeavor. This has given the Russians an opening that Putin has exploited brilliantly. While the Americans and Europeans engage in long distance happy talk, they are not doing the face-to-face horse trading (almost literally–Putin left Kazakhstan with a beautiful stallion) needed to do business in that part of the world.

Not to say that it is easy. The governments in the region are authoritarian and corrupt. Moreover, Russia is next door, while the US and Europe are far, far way; like I said many months ago, Turkmenistan is so close to Russia, so far from God. These governments fear color (color revolutions, that is)–as does Russia; Turkmenistan and Kazakhstan fear that US/EU support will be tied to demands for reform, demands that the Russians will never make. Moreover, Kazakhstan has a large Russian population. It is surely paying close attention to how Russian nationalists are making trouble in Estonia. Indeed, I would not be surprised to learn that the FSB is stirring up the Nashiniks in Estonia in part to send a message to other countries with a large Russian population.

It is one thing to lose when the odds are against you. It is something else altogether not to get in the game at all. The Russians have some strategic advantages in this region, but we certainly have some arrows in our quiver as well, but we are not even forcing Putin to break a sweat. The matter should be particularly pressing for the Europeans, but they can’t seem to get their energy act together.

The Transcaspian is still the most important theater of energy geopolitics. Putin has recently gained some major victories in that theater, but the game is not over–if we decide to play. So jock it up, folks. If you can’t, one has to wonder why we have a State Department in the first place.

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