Foreign Policy Blogs

The EU's Got a Gas Problem

put.jpegSo it appears that Ukraine and Russia have finally come to terms on a Gas Transportation deal that will allow the former Soviet state to receive gas and send it on to Western Europe.  This is just the latest in a long line of dramas involving the transport and ownership of energy reserves between the triangle of Russia, Central Asia, and the EU.  For Russia must first acquire most of the gas it sells to Europe from its former Soviet states to its south, Kazakhstan, Turkmenistan, and Uzbekistan.

Seasoned journalist Jon Daly has written the latest installment analyzing Central Asia's Energy ‘Chessboard’ which includes a detailed history of major energy deals made and not made, consortiums, and geopolitical complications and consequences.  Daly contrasts the post-Soviet leadership of Azerbaijan's Heydar Aliyev in moving his country to have a diversified, east and west, energy exporting policy with the 'stans, who have been held under Russia's Gazprom's heel.  He quotes Aliyev: We used oil in order to achieve our primary goal – to become a truly free independent state.  And we have achieved this goal.”

Sadly, Daly exemplifies how Azerbaijan is not exactly free.  After the Russian-Georgian war, several oil pipelines stemming from Azerbaijan into Turkey and then on the EU, were slowed or completely halted for a multitude of reasons.  Daly acknowledges that even a visit from US VP Dick Cheney could not pull Aliyev's son and successor Ilham Aliyev completely out of the Russian orbit.  Russia's power play in Geogria has definitly had an impact on its smaller, energy holding neighbors, exemplified by its post-invasion energy shopping spree throughout its former states.

Daly also discusses the West/EU's attempts to diversify their independence from Russian controlled gas, especially their hopes for the Nabucco and Trans-Caspian pipeline, but he is not optimisitc.  Though the EU is strongly emphasizing the importance of diversification for its future (EU Energy Security and Solidarity Action Plan. European Commission President Jose Manuel Barroso outlined some sobering statistics, noting, “Energy prices in the European Union rose by an average of 15 percent last year. Europe imports 54 percent of the volume of energy resources that it needs, which comes to 700 Euros ($876) from every citizen of the EU. We must really tackle this, and adopt measures to increase our energy efficiency and reduce our dependence on imports. We must invest and diversify.”), Daly sees the current situation, with the BTC as the only major Eurasia energy pipeline circumventing Moscow on its way to Europe, as a ‘high water mark.’  He argues that there is just not enough gas and oil to go around and that Russia has taken out a major CA state complaint issue by paying them market prices for their energy reserves in the last year or so.  The EU's only viable alternative….Iran.

 

Author

Patrick Frost

Patrick Frost recently graduated from New York University's Masters Program in Political Science - International Relations. His MA thesis analyzed the capabilities and objectives of the Shanghai Cooperation Organization in Central Asia and beyond and explored how these affected U.S. interests and policy.

Areas of Focus:
Eurasia, American Foreign Policy, Ideology, SCO

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