KREMLIN CONTROL OF NATURAL GAS ROUTES TO EUROPE STOKES WESTERN UNEASE
By George Jahn, Associated Press Writer

The Associated Press
November 27, 2006 Monday 8:14 PM GMT

For the West, the threat from Moscow was supposed to end with the
collapse of the Soviet Union 15 years ago. But Russia’s growing energy
clout is generating renewed cause for anxiety.

The North Atlantic Treaty Organization, set up in the early days of
the Cold War to keep Soviet-led forces in check, has begun speaking
out about the potent new energy lever being wielded by the Kremlin
in the international struggle for influence.

NATO Secretary-General Jaap de Hoop Scheffer said last week that
energy security would be high on the agenda at its summit starting
Tuesday in Riga, Latvia. He noted that there was "added value to NATO
discussing energy and security policies."

The main issue is natural gas. Russia is an oil giant, second only
to the Saudis in exports, and Europe depends on it for a quarter of
the crude it consumes. But oil supplies can be diversified because
shipping is easy, while the most efficient way of distributing gas
is through pipelines. With Russia the world’s largest gas exporter
and Europe’s neighbor, European dependency has grown to the point
that the EU now counts on Moscow for nearly half of its gas needs.

And Moscow’s control of pipelines that deliver not only gas from
Russia but from much of central Asia is stoking Western unease.

"With gas, control over pipelines is crucial," says energy expert
Michael Klare. "Once you put oil on a tanker you cannot control it, but
gas is different; whoever controls the pipelines controls the flow."

Like NATO, U.S. officials also are warning of the dangers of allowing
Russia a free hand in monopolizing gas shipments. And the European
Union is trying without success so far to pry open the Russian grasp
on gas and gas pipelines supplying EU member countries.

Just last month, Russian energy giant OAO Gazprom announced it would
develop the huge Shtokman gas field without foreign partners, in a
fresh setback to western oil companies looking to exploit the nation’s
vast hydrocarbon riches.

At the same time, companies like BP PLC, Royal Dutch Shell PLC and
Total SA are fighting back-tax bills or threatened license annulments
apparently another reflection of the Kremlin’s push to ensure that
the state has a major role in all key energy projects.

The two sides appeared to come no closer at an EU-Russia summit in
Helsinki last week. Speaking to reporters Friday, Russian President
Vladimir Putin restated his opposition to giving foreign companies
easy access to his country’s energy sources, or breaking up oil and
gas state monopolies.

Western concerns reflect a growing understanding that in the 21st
century control of energy has become more than ever before a weapon
of geopolitical advantage.

Klare, author of "Blood and Oil: The Dangers and Consequences of
America’s Growing Petroleum Dependency," says the world already has
entered "a new era, where energy has replaced nuclear weapons as the
medium of superpower rivalry."

"Vladimir Putin believes that," says Klare. "And he is moving to
accumulate as much energy power as he can."

A study conducted earlier this year for the Swedish Defense Research
Agency concludes that Russia uses its growing energy punch to "extend
influence, avert geopolitical and macroeconomic threats and to reduce
the risk of being blackmailed."

As in the Cold War, Europe is the most vulnerable. It now imports just
over half of its energy needs but will depend on outside suppliers
for 90 percent of its oil and 80 percent of its gas within 20 years.

Moscow insists market forces are driving its price policy. But its
allies, like Armenia, pay much less than its critics, like Georgia.

The Swedish study notes more than 50 cases since 1991 where the
Russian "energy lever has been used for putting political or economic
pressure on Estonia, Latvia, Lithuania, Ukraine, Belarus, Moldova
(and) Georgia."

Other surveys also draw worrying conclusions.

A recently leaked confidential study by NATO economic experts warned
Russia may be seeking to build a gas cartel including Algeria, Qatar,
Libya, the countries of central Asia and perhaps Iran and cautioned
that kind of OPEC-like near monopoly would strengthen Moscow’s leverage
over Europe.

Russian Finance Minister Alexei Kudrin this month denied that Russia
was planning on building a cartel, however.

Washington is also concerned.

U.S. Deputy Assistant Secretary of State Matthew J. Bryza warned this
month that a prospective natural gas pipeline under the Baltic Sea
could further increase Europe’s energy dependence drawing an angry
retort from Moscow, which has cast the project as a key contribution
to the EU’s energy security. And U.S. Vice President Dick Cheney
accused Russia earlier this year of using its energy resources as
"tools of intimidation or blackmail."

Such comments reflect a recognition of the key role of energy and
frustration on the part of "have-nots" like the United States and
most other NATO countries.

"Possessing a rich accumulation of energy is the equivalent of
a nuclear arsenal in the 20th Century," says Klare. "And being a
‘have-not’ creates a strategic vulnerability."

From: Emil Lazarian | Ararat NewsPress