Page 1 of 2 SINOGRAPH
Russia plays pipeline politics
By Francesco Sisci
BEIJING - While the United States is engrossed in Iraq and Afghanistan - even
planning a troop surge in the latter - a new and bigger strategic risk looms in
a much more sensitive area - Europe and Russia. The challenge is about energy
and influence in the "old continent", still the richest industrial area in the
world.
But first, one needs to take a few steps back.
For three centuries, Russia has attempted to gain access to the Mediterranean
Sea, and all this time the traditional European powers, France and Britain,
have prevented it. The United States, becoming effectively a European power
after World War II, and loaded with ideological anti-communist intentions,
inherited this
strategic vision and fought hard against the Soviet Union, which had taken over
the Russian historical legacy.
Today, 17 years after the US "won" over the Soviet Union and after a brief
honeymoon with the then newly reborn Russia, Moscow is in political limbo with
Washington. Many American pundits, although not all of them, point fingers at
Russia, and for several reasons. Ambiguities in Moscow's international
policies, for instance, leave room for problems in places such as Iran and its
nuclear program; it is not clear whether Russia backs the US-led drive to
impose sanctions on Tehran.
A few years ago, with the war in Iraq raging and oil prices soaring, Russia
became haughty and put pressure on the former Soviet republic of Ukraine and
others. Moscow also strongly objected to the planned American missile defense
installations in Europe - now scrapped - and also denounced the
American-supported "color revolutions" in former Soviet countries. All of this
de facto asserted a sphere of influence, almost as if Moscow were trying to
re-establish the boundaries of the former Soviet Union.
Furthermore, domestically, there has been an autocratic turn against internal
dissent.
These developments, both external and internal, can be justified as a response
to the gradual disintegration of the former Soviet empire after the Cold War.
Russia has the right to exist and defend its borders and interests without
being subjected to process of political erosion - whether slow or fast.
However, Russia's policies could be interpreted as assertive by a country that
is still the only one in the world possessing the nuclear capabilities to
destroy the United States and all its allies.
Moreover, when the US was in great difficulties in Iraq and energy prices were
going through the roof, Moscow sought to use its energy supplies almost as a
"strategic weapon" in Europe, wooing countries and also different political
camps within states.
In this way, Moscow helped to crack the unity of the North Atlantic Treaty
Organization (NATO) and the European consensus on the war in Iraq, although
that consensus was not very strong to begin with. Moreover, the European Union
and its expansion to the east were first conceived as part of an anti-Soviet
and then as an anti-Russian containment strategy. But Moscow has cleverly used
its new foreign policy in the past decade to break the European front by
reaching out for support in Germany, France, Italy and smaller European
countries.
Again, all these moves can be seen as legitimate, friendly and neighborly moves
or as legitimate opposition to a dubious American Middle Eastern policy. In any
case, they form the backdrop to the Russian-sponsored South Stream pipeline
project, which was conceived after and in competition with the US-sponsored
Nabucco pipeline project.
Nabucco will carry gas and oil from Central Asia (the former Soviet republics)
and directly from the Caucasus to Europe via Turkey - bypassing Russia. The
project can be seen as a further effort to contain Russia because it provides a
direct "escape route" to new markets for the former Soviet republics, freeing
them of the umbilical cord with Moscow. Nabucco provides Europe with a major
new source of supplies. This will give them three lines of energy supplies:
From African and Middle Eastern and Organization of Petroleum Exporting
Countries (OPEC); from Russia and thirdly from Central Asia and the Caucasus.
With these supplies, European countries (all consumers) can expect to negotiate
better prices for their fuel.
The strategic implications of Nabucco are serious. This pipeline could cause a
further split between Moscow and the former Soviet countries, which still
supply Russia at a cheap rate. Moscow then sells its energy in Europe at market
prices. Nabucco would put an end to this. Moreover, Nabucco could become
operational in about a decade - just when Russian domestic energy consumption
threatens to exceed its production. Then Russia would become a net energy
importer, and it would have a greater need for cheap energy.
Faced with the strategic challenge of Nabucco, which is in line with some broad
American and European interests, Russia in a nutshell has two choices. The most
difficult choice is to change its "development model", gradually abandoning its
current system in which over 80% of its exports are of raw materials to create
a modern export industry. The other choice, the easier one, is to try to defend
its current economic model based on large exports of energy and hence its area
of influence, which also broadens the pool of raw materials to sell. [1]
The first choice could also entail a possibly humiliating negotiation with the
United States, a fundamental reorganization of the Russian internal political
balance (which is now heavily dependent on energy tycoons), and the creation of
a class of small and medium businesses (which today is practically
non-existent). The second option is easier because it involves internal
reorganization of present industrial interests, the consolidation of relations
in areas of former Soviet influence, and the projection of influence in
neighboring Europe.
The two pipeline projects, North and South Stream, can help this second choice.
The North Stream pipeline would skip Ukraine to get to Germany via the Baltic
Sea, along the routes taken by ancient ships of the Hanseatic League. South
Stream would be a new pipeline crossing the Black Sea and the Balkans to reach
Europe via Italy or Hungary. North Stream is chaired by former German
chancellor Gerhard Schroeder. South Stream has the support of the Italian
energy company ENI and Italian Premier Silvio Berlusconi.
With these two projects, Russia could have three channels to take its energy to
European countries, including the present pipeline running through Ukraine.
With three pipelines, Russia could be able to divide and rule at will in
Europe, which is not a political unit but a varied collage of some 30 states
often with no or very confused strategies.
It is theoretically true, as observed by some advocates of the Russian project,
that the Europeans supply cash to Russia as Russia supplies Europe with gas -
there is a symbiotic relationship in which neither side can live without the
other. Without Europe's money, Russia dies a minute after the death of Europe
for lack of Russian energy.
In reality, this would be true if Europe was politically united: then it could
deal on equal terms with Russia. In fact, Europe is disunited, and there could
be three Russian pipelines, meaning that Moscow can calibrate its supply and
pressure on various states while minimizing the risk of running out of money.
That is, for example, Russia can cut gas supplies to an unfriendly country
without affecting supplies to friendly ones - and especially without depriving
itself of all of the money flow, which would be political suicide.
In other words, South Stream becomes a strategic weapon by which Russia can get
the upper hand in Europe. As with the best chess players, for Russia, a
situation of defense because of Nabucco can become a position of attack. It can
re-establish the former Soviet influence, attempt to reach the Mediterranean
after three centuries of failures, and take on a dominant position in Europe.
South Stream is supported by the Russian state and therefore has no funding
problems, in contrast to Nabucco, which is a commercial project and needs to
find funding in the market. A simple political and media push for South Stream
could derail Nabucco, which by itself has many political and technical problems
before it can be implemented. For example, there is the big question of how to
cross the Caspian Sea without clear agreements from bordering countries such as
Russia and Iran. Once Nabucco is shipwrecked, South Stream may gain steam and
look even more viable.
With South Stream, Russia has one more instrument with which to negotiate from
a point of strength: other oil- and gas-producing countries could agree to tag
along in Europe. It could become the glue for a new kind of OPEC centered on
Russia. Pipelines are strategically important because they are a long-term pact
between states, they are very expensive, and completing them takes many years.
They can't be changed easily, unlike shipping lines, which in theory can be
diverted to another port at will.
This could have global consequences. If Russia corners the European gas market,
it gains a strong hand in also determining overall prices for oil to America
and Asia. The latter is the fastest-growing consumer of energy and
strategically interested in gaining a supply of gas in Central Asia that is
independent from Russia.
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