Page 4 of
4 A new dividing line in
Europe By M K Bhadrakumar
the fullness of time with Poland on
the basis of energy cooperation as well as to
ensure that Ukraine will not gravitate to the US.
Almost as dramatic as the signing of the
agreement on the Burgas-Alexandroupolis pipeline
on March 15 has been the announcement coinciding
with it in Budapest that the Hungarian government
has decided to go ahead with the Russian proposal to
extend the Blue Stream
undersea gas pipeline from Russia to Turkey. The
project envisages that Russian gas will flow to
Turkey and to the Balkans and onward to Hungary.
Moscow offered to the Hungarian government that
Russian gas company Gazprom would use Hungary as
the hub of its operations in central Europe.
Again, the Hungarian announcement
sidestepped the vigorous efforts by the US for the
past one year to kill the Russian proposal, which
aims at enhancing Moscow's profile as the energy
supplier in the Balkans and central Europe.
'Gas OPEC' and 'Energy Club'?
Meanwhile, behind a thick fog of
ambivalent and often contradictory statements,
Moscow seems to have been pressing ahead with the
idea of forming a "gas OPEC", a cartel of major
gas-producing countries along the lines of the
Organization of Petroleum Exporting Countries.
Putin had first mooted the idea in 2002, but
Moscow quickly backtracked in the face of stiff
opposition from Western countries. Last month,
Iran revived the idea and alarm bells once again
started ringing in Western capitals. Russia once
again took a public stance shrouded in ambiguity.
But it appears that at the meeting of the
Gas Exporting Countries Forum, scheduled to take
place in Qatar on April 9, there is a likelihood
of the world's biggest gas-producing countries -
Russia, Iran, Qatar, Algeria and Venezuela -
agreeing on the formation of a gas cartel.
Certainly, a gas cartel cannot be identical in
function and mission to OPEC. For one thing,
comparing the gas industry to oil production is
very difficult and hardly any parallels to OPEC
can be drawn. Besides, infrastructures in the gas
industry (such as pipelines and gas holders) serve
a far greater role than oil extraction. On top of
all that, pricing in the gas industry is based on
long-term liabilities.
Nonetheless, what
Russia could hope to achieve through a "gas OPEC"
is to coordinate with the other gas-exporting
countries in the world gas market without getting
into a rigid cartel-like arrangement. The fallout
can be very significant. If a "gas OPEC" takes
shape, Gazprom will move one step closer to its
stated objective of reaching every gas outlet in
the European countries. Besides, the US strategy
of the EU countries reducing their dependence on
Russian gas supplies will take a severe beating.
The geopolitical implications are
self-evident. The Russian daily Kommersant was no
doubt exaggerating when it commented that with a
"gas OPEC" under its belt, "politically, Russia
will be able to dictate any terms it wants in
Europe. And the EU will be totally dependent on
Moscow's political will and will have almost no
leverages of its own left." But as with all such
exaggerations, this one holds a kernel of truth
insofar as Moscow will gain much more maneuvering
space in the pursuit of its partnership with the
EU without having to face constant interference by
the US in the architecture of Russia-EU
relationship, as is happening now.
But the
EU is also increasingly figuring as a direct rival
to Russian interests in central Asia. In the face
of the EU's robust diplomacy in the past year or
two to woo the Central Asian energy-producing
countries, Moscow is stepping up its campaign for
forming an "energy club" (also called the "Asian
Energy Strategy") under the auspices of the
Shanghai Cooperation Organization.
The
proposal aims at creating a special body of the
main energy-producing and energy-consuming
countries within the SCO so as to have SCO-level
oil and gas production and transportation projects
and a coordinated price policy. (The SCO countries
control 23% of world's oil, 55% of natural gas and
35% of coal.)
Clearly, the Russian move
aims at countering the ongoing EU efforts (backed
by Washington) to seek long-term energy-supply
contracts with Kazakhstan and Turkmenistan and to
promote a string of pipelines from Central Asia to
Europe circumventing Russia. The estimation in
Brussels is that Central Asia is in a position to
supply as much as 10% of the EU's gas
requirements.
The EU drive toward the
Central Asian region has lately begun causing
disquiet to Russia. The Great Game is at once
obvious. An expert at the Royal Institute of
International Affairs, Edmund Herzig, noted,
Central Asia "is an important - and potentially
very important - region for European energy
security if we are looking to diversify sources of
energy supply. It's a region that sounds and feels
very remote from us. But, as Europe marches
eastward, it gets progressively closer." He
pointed out that Central Asia is already
practically in the "near vicinity" of Europe.
Washington's strategic objective will be
to pit the EU as a tough opponent for Russia in
the Central Asian region. The US think-tank
Stratfor recently summed up the calculus: "Though
it is Kazakhstan's newest suitor, Europe has the
cash, technology and desire for non-Russian
resources to push for more projects with
Kazakhstan - giving the Kremlin a tough fight in
the energy sector and for Astana's affections."
If bluster ever played a role in the Great
Game, Stratfor was likely indulging in one. The
recent Russian initiatives on the energy front
show that Moscow is determined to remain one step
ahead of Washington, no matter what stratagem the
latter draws up in the Russian back yards in the
Eurasian region stretching from the Balkans to the
Caucasus and Central Asia.
M K
Bhadrakumar served as a career diplomat in the
Indian Foreign Service for more than 29 years,
with postings including ambassador to Uzbekistan
(1995-98) and to Turkey (1998-2001).
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