Politics Of the Pipelines

Russian President Vladimir Putin said last year that energy would be the
Russian President Vladimir Putin said last year that energy would be the "key topic" of this year's Group of Eight meeting, which opens Saturday in St. Petersburg. (By Mikhail Metzel -- Associated Press)
By Steven Mufson
Washington Post Staff Writer
Tuesday, July 11, 2006

For a low-profile State Department official, Matthew J. Bryza gets around. A member of the bureau of European and Eurasian affairs, he frequents places such as Turkey, Georgia and Azerbaijan. This year, he's also popped in on people in Brussels, Rome and Berlin. One key item on his agenda: persuading governments and energy companies to build natural gas pipelines that skirt Russia.

New routes that avoid Russia would "make the market function better" and enhance energy security, a senior State Department official said. "We're sharing information and a vision."

Russia doesn't share that vision. The Kremlin has been conducting its own campaign to lock producing countries in Central Asia and consumer countries in Europe more tightly into Russia's pipeline network.

The politics of gas pipelines has added friction to the preparations for the Saturday to Monday meeting of the Group of Eight industrial nations, to be hosted by Russian President Vladimir Putin in St. Petersburg. A year ago, Putin said this meeting's "key topic" would be energy. "The country which is definitely a leader in the world market is ordained by God to deal with this issue," he said after last July's G-8 summit.

Despite Putin's boast, the summit's focus on energy will only highlight why Russia remains a troublesome issue for the West. The oil and gas industry reflects Russia's autocratic nature, diplomats and energy experts say; it is controlled by the state, opaque to Western investors and difficult for foreign firms to enter.

Although the United States and Russia may strike a deal on reprocessing waste from nuclear power plants, the pipeline politics has highlighted the mutual mistrust between Russia and the West, especially after Russia briefly cut gas supplies to its neighbor Ukraine in January. While Russia said it wanted to end subsidies on natural gas sold to Ukraine since Soviet days, squeezing supplies in winter shortly after the ouster of a pro-Russian president smacked of a crass political maneuver. "No legitimate interest is served when oil and gas become tools of intimidation or blackmail," Vice President Cheney said in a May 4 speech in Vilnius, Lithuania, angering Russians.

Because much of the Russian gas bound for Europe flowed through the Ukraine route, people in European capitals took notice. "This sharpened the attitudes of Europeans even more than the Americans," said a senior European diplomat who spoke on condition of anonymity because talks are ongoing. "This was very much an important thing for us."

Europe relies on Russia for about a third of its natural gas supplies. Those supplies arrive via two major pipeline routes constructed in the 1980s over the objections of the Reagan administration. Today the United States realizes that Russian gas will remain vital to Europe, but it is pushing nations to diversify supplies so that Russia cannot exploit Europe's energy dependence for political purposes.

"What does it mean to achieve energy security when you're reliant on one country?" Karen Harbert, assistant secretary for policy and international affairs at the Energy Department, asked at a meeting at the Carnegie Endowment for International Peace.

At the same time, however, Russia sells 80 percent of its natural gas to Europe and is worried about European plans to increase gas purchases from Algeria and Libya, as well as about liquefied natural gas from Qatar, which plans to triple its exports.

Bryza and more senior U.S. officials have been promoting pipeline routes that would bring gas from fields in Kazakhstan, Turkmenistan and Azerbaijan near the Caspian Sea through Turkey to Europe. One such pipeline, from Azerbaijan through Georgia to Turkey, opens Oct. 1. U.S. officials have been saying that reserves in Azerbaijan alone could justify bigger pipelines even if territorial disputes over the Caspian Sea are not resolved. (Missing from the U.S. vision: supplies from Iran, whose natural gas reserves are second to only Russia's.)

Former Soviet Bloc countries are enthusiastic, especially since Russia has boosted prices on gas sold to Moldova and Belarus. Georgia President Mikheil Saakashvili said during a recent visit here that he supports a pipeline that would bring gas from the Caspian Sea basin through Azerbaijan and Georgia, then under the Black Sea (to avoid Russia) to Romania and then north to Poland. Building that line would take at least five years.

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