Conflict in Georgia narrows oil options for West

Conflict in Georgia narrows oil options for West

When the main pipeline that carries oil through Georgia was completed in 2005, it was hailed as a major success in the United States policy to diversify its energy supply. Not only did the pipeline transport oil produced in Central Asia, helping move the West away from its dependence on the Middle East, but it also accomplished another American goal: it bypassed Russia.

American policy makers hoped that diverting oil around Russia would keep the country from reasserting control over Central Asia and its enormous oil and gas wealth and would provide a safer alternative to Moscow's control over export routes that it had inherited from Soviet days. The tug-of-war with Moscow was the latest version of the Great Game, the 19th-century contest for dominance in the region.

A bumper sticker that American diplomats distributed around Central Asia in the 1990s as the United States was working hard to make friends there summed up Washington's strategic thinking: "Happiness is multiple pipelines."

Now energy experts say that the hostilities between Russia and Georgia could threaten American plans to gain access to more of Central Asia's energy resources at a time when booming demand in Asia and tight supplies helped push the price of oil to record highs.

"It is hard to see through the fog of this war another pipeline through Georgia," said Cliff Kupchan, a political risk analyst at Eurasia Group and a State Department official during the Clinton administration. "Moving forward, multinationals and Central Asian and Caspian governments may think twice about building new lines through this corridor. It may even call into question the reliability of moving existing volumes through that corridor."...>

http://www.iht.com/articles/2008/08/14/europe/14oil.php


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Conflict In Georgia - Follow The Pipeline

The war in Georgia and the inadequacy of the West's response points again to the power of the Russian energy monopoly.

Europe fears protesting too much, as this might induce Russia to reduce the flow of natural gas to the continent this coming winter (Russia presently supplies 50 percent of Europe's natural gas).

Whether or not Russia marches on to Tibilisi, its assault on Georgia has further strengthened Russia's hold on Europe: Financiers are unlikely to back new proposed pipeline systems bringing Caspian oil and gas to the United States and Europe via Georgia...cont'd

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/08/13/EDCD12A1TQ.DTL&feed=rss.opinion