If you want some idea why the Western Energy Corporations, with the full backing of the foreign policy establishment, pushed so hard for the Baku-Tbilisi-Ceyhan pipeline, look no further than this Q & A with the New York Times’ Clifford Levey and James Traub:
Q. In the background Russia is threatening to use oil and natural gas as a weapon. How much is this a two-edged sword? It would appear that the bulk of all the oil and natural gas Russia sells is going to Western Europe via fixed pipelines (versus via oil tankers out of the Black Sea and Primorsk). If that is the case, then are the Russians setting themselves up for an economic shock if Western Europe decides that they can no longer trust Russia and thus begin as quickly as possible to diversify their importation of energy from other sources; e.g., liquefied natural gas from North Africa, pipelines through Turkey, etc. If Europe stops buying its oil, where else can Russia sell it? After this episode with Georgia, will China want to be tied to Russian oil?
— Norman OppenheimerA. As is so often the case when it comes to oil and gas, the question is timing. Europe can certainly decide that it can no longer assume the risk of relying on natural resources from Russia because it fears that its Russian supplies are being used as a weapon in all sorts of geopolitical disputes. Yet how long will it take to diversify? What would happen next winter when tensions flare, Russia retaliates and people in Berlin can’t heat their homes? This is essentially the bind the Europeans find themselves in. And it seems to color their relations with Moscow, often causing them to shy away from confrontation. The Kremlin has from time to time gone out of its way to offer assurances that it will be a reliable partner. Yet at the same time, Europeans can’t help but notice incidents like the one that occurred last month: three days after the Czech Republic signed an agreement with the United States to host a tracking radar for an antiballistic missile system that Russia vehemently opposes, the flow of Russian oil to their country was curbed. At this point at least, the Russians don’t have to worry about finding other places to sell their oil and gas. With prices so high, Russian leaders, like their counterparts in places like Iran and Venezuela, have become emboldened — at least in the short term. In the long term, higher prices and concerns about Russian suppliers could of course put pressure on Europe to embrace new technologies and new sources of energy, just as in America people are now giving up their big cars. But this process takes time.
— Clifford J. Levy
The Soviet Union did not make the required capital investments to develop its Caspian Basin oil and gas resources. Western oil companies came in and did that after the collapse of the USSR. It wasn’t just greed that drove the West’s decision to move into the Caucuses and Central Asia. It was with just these kind of strategic considerations (Russian energy blackmail) in mind. It isn’t all that different, and certainly no more cynical, than the strategic decision we made during World War Two to cast our lot with the House of Saud and help them consolidate power on the Arabian peninsula. It’s hard to blame Franklin Roosevelt for the profligate Royal princes and their empowerment of the Wahhabi version of Islam. It pays to remember that foreign meddling has very high costs. Cheap, reliable oil and gas from the Persian Gulf fueled the economic miracle of the 1950’s and virtually created the American Dream. It also kept us free to confront the spread and influence of Soviet totalitarianism in a way that we (and Europe) are not currently free to stand up to Russian aggression. Russia can swallow Georgia whole today and Ukraine tomorrow, and we can’t do a damn thing about it because they are the ones with the oil and gas. If they move south to take over the Baku-Tbilisi-Ceyhan pipeline, we’ll know they are back in the game. And, this time, they’ll be making no pretenses about looking out for the proletariat.
And, this time, they’ll be making no pretenses about looking out for the proletariat.
So – kind of like the US post-Reagan?
Gee, I guess invading Iraq on false pretenses with no exit strategy wasn’t such a good idea after all.
Ya know, it’s kinda like the credit crisis and the bankruptcy bill that I keep yapping about at BC. It’s not like the credit card companies were dying before the bankruptcy bill: they just got greedy and wanted more and more profits. The result was that they squeezed to hard and invested too stupidly and came away with less than nothing.
That’s almost precisely what we could say about the current situation. We may be occupying Iraq but it’s sure not paying for itself. we’re sure not getting barrel after barrel of oil We sure haven’t intimidated anyone.
Funny, those unintended consequences…
It wasn’t just what Iraq did to our military. Our credibility, the functionality of international institutions, the soaring national debt, and our failure to address our energy security in other ways, all have contributed to this resurgence of Russia. Our high-handed attitude toward Russia has really made things a lot worse, too. It’s driven them to lose faith in working within the Euro system and caused them to seek a rebalancing of power. There is blame all around. Clinton’s policies would not look so bad right now if Bush hadn’t been such a disaster.
my comment only addressed the iraq facet of the clusterfuck.
everything you point out is true as well.
the BushCheney’s and the Brits’ doctrine – invasion of a sovereign state comes home to bite. No leg or moral standing to wag fingers at Russia and talk of violation of Georgia’s sovereignty.
The Telegraph, UK
Russia has thrown down a gauntlet to the United States, challenging President George W Bush to “choose” between Washington’s relationship with Georgia and its future ties with Moscow.
It’s not just a cold chill we’re facing; it’s getting icy and slippery.
Hope that Bush is not counting on Russia’s cooperation with the Iran stand-off.
The Russians do read..in this age of the internet
On the money front, Bush should not forget that Wall Street may need a loan or two.
They’re smiling in Moscow and Tehran…They know the US money center banks are in meltdown, our troops stressed and stretched.
It’s a great game we can’t win. As to the Russians, they have more to gain by being on good terms with the world’s currently great economic power (the EU) than acting like an unreliable partner. The Czech’s essentially asked for retaliation by accepting anti-Russian missiles. We did the same when the Cubans accepted anti-American missiles on their soil. When all is said and done, the eastern EU nations are bit players, and the French, Italians Spanish and Germans, and Dutch, who are the real owners of that association are not going to have their relations with Russia endangered because the eastern EU is troubled by the Russian resurgence.
Russia is protecting its legitimate national interest in Georgia. We do not have a legitimate national interest there. As we have seen in Iraq, the cost of driving less is a lot lower than the cost of
military intervention.
To my mind, the smart European play if McCain is elected is to change sides and ally with the Russians. Tough for the Belgians, as they lose the NATO headquarters, but good for just about everybody else, including us.
it is your closing point that sums it all up. And I just love the way mccrap and his leader have decided to rattle the sabres.(ooops- no sabres left)
There are so many questions that will go unanswered after the dust settles but I wonder just how 10.00/gallon gas will goover here in the good old us of a!
And, (and I won’t use any term that will annoy you- boo) how about good old condi! boy did she sound tough. I guess thats what happens after golf and some shopping.
the russian expert!
Russia is toying with the west and testing how far they can go. What can when we say when we went halfway around the world to invade a sovereign nation. The administration looks hypocritical when they complain about Russia. Hypocritical and impotent. Whether we leave now or years from now Iraq is with us to stay. Bush has wrecked our country economically and morally. He should be arrested and tried for treason.
The Soviet Union didn’t make the required capital investments? I thought the story was that Reagan bankrupted the Soviet Union.
Maybe Sukarno didn’t make the required capital investments either. We know that Saddam didn’t make the required capital investments.
I read somewhere that Herbert Hoover had the rights to all that oil around Baku pre-revolution. That was one of the reasons why when Hoover was in charge of relief after WWI he held back aid to the starving millions in Russia. I guess he witheld the capital investments required to keep Russians from starving.
FDR’s negotiators were the Dulleses. And the Dulleses were already involved in Mideast oil while the Turks were still slaughtering Armenians. And while the House of Saud was our buddies eventually, the good king was also supplying oil to the Nazis through Franco’s Spain.
American oil companies haven’t made the required investments in offshore drilling. Millions of acres are sitting there. But unpumped oil is still money in the bank.
All of which is partly why Germany has poured millions into solar energy.
http://www.globalresearch.ca/index.php?context=viewArticle&code=CHO20060726&articleId=2824
Thanks for posting this – it really got me searching for various perspectives. The easiest for my rotten political science teeth to chew was a great post by a linguist here: http://cluborlov.blogspot.com/2008/08/trouble-with-georgia.html.
(my diary about it is here: http://www.boomantribune.com/story/2008/8/14/35414/7984 )
In some ways there is a new game in town – Russian resources, particularly oil and natural gas. How skillfully the Bear plays this game will affect the EU and the USA in the years ahead, and, of course, Russia itself.
You can almost feel events swinging on a new axis. What a fascinating time in which to live. The Neocons, however, with their essential backward view and their uncomprehending ways may preside over a most unpleasant happening, the decline of the American Empire. Dependent upon oil from overseas and with most of its army tied down in the Mideast, America resembles a fighter with a broken arm and a battered brain (with GWB as president anyway).
Russia and China, now allied through the Shanghai Cooperative Organization, look tougher and tougher. Throw in the resources of Iran and the “Stans” and, maybe, the EU should begin to look East rather than West. What a switch that would be.
When an area is unknown, you need more time. And, don’t be afraid to ask questions.
We started the game first, figuring we could get a jump on the rest of the playing field.
Russia intends to finish the game first.
That is the difference.
.
My diary – George Bush and His Legacy: the Georgian Airlift
"But I will not let myself be reduced to silence."The West needs to change its mindset- the great oil and gas game depends on the rules of the game but as with any resource, it’s the luck of the draw.
Peak Oil has arrived in the Saudi and Mexico fields – an established fact – which many are in denial.
In the Great Oil & Gas Game, Russia holds the jackpot.
Let’s take a look at the map of the Caspian Sea basin for Russia’s and Iran’s littorial. Now let’s plug in that the US Geological Survey made a significant announcement on July 23, 2008, that went largely unnoticed – the Paris Hylton Celeb Ad distracted:
And btw, most of that crude lies off the coast of Russia.
Last year, while we are occupied in Iraq and Afghanistan, Russia planted its flag on the Artic sea bed.
Look at this map – Maritime Boundaries of the Artic, that was just released. At the BBC link…map is in PDF file. Click to enlarge}
Peak oil is a fact and if the EU won’t buy Russia’s oil and gas, I doubt they’ll lack for customers. No trouble supplying the 2.5 billion clients in China and India.
This editorial in The Independent, UK is worthy of a read –
We are still fighting the Cold War
Matt Yglesias has these nuggets on Russia-Georgia conflict:
I pretty much concur with all of this, IR.
.
“It wasn’t just greed that drove the West’s decision to move into the Caucuses and Central Asia.”
Nonsense BooMan … it’s only greed that counts in this world, it’s the basic rule of capitalism.
"But I will not let myself be reduced to silence."