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.
