The yearender in the geopolitics of energy security ain’t going to be the Afghan oil deal China struck with Kabul. The dying hours of Wednesday also brought in the news that Russia and Turkey have reconciled their differences over the mammoth South Stream gas pipeline bringing Russian energy to southern Europe.
What made Turkey change its heart finally remains unclear. Could it be that Russia offered concessions that Turks found attractive? At any rate, the geopolitics of energy security have overnight transformed. The two events — Sino-Afghan deal and South Stream — are in a way ‘co-related’ insofar as China is dipping into the Central Asian energy reserves while Russia is looking west and fortifying its prime status as Europe’s energy supplier.
Indeed, the uncertainties in the regional security in Central Asia do not deter China from putting big money on the table and looking for innovative methods to create ‘win-win’ situations. Nor are the strains in ties with the West (and in the reset with the US in particular) dampening Russia’s enthusiasm even a wee bit for tying itself with apron strings to the affluent European.
Now, let me sit upon the ground for a moment and lament a bit inconsolably why our policy wonks in Delhi lack the wisdom — or the grit — to see that the troubled relationship with Pakistan could actually be turned on its head to provide the raison d’etre for robustly pushing forward the Iran gas pipeline project. Time and tide wait for no man.
What Russia is doing is to instal rings after rings of engagement with the european countries (Germany, Italy and France) so that they become ‘stakeholders’ in Russia’s integration with Europe and will be mindful of Russian sensitivities on controversial issues such as NATO’s expansion or the deployment of the US’s missile defence system, which Washington is promoting with a contrarian purpose.
South Stream is Vladimir Putin’s brainwave and now becomes his historic legacy to Russian foreign policy. Detractors poured scorn but he kept pushing the proposal tirelessly against heavy odds. Alongside the Nord Stream (also a legacy of Putin) that was commissioned a few months ago, South Stream integrates Russia further with the European energy market and could strengthen Moscow’s bid for making investments in the highly lucrative retail sector in the european countries.
In sum, the integration is going to deepen even further. The coming year will also unfold how the pipeline diplomacy is going to lead to upstream cooperation over the development of Russia’s fabulous Shtokman gas fields.
China will be watching attentively. By the way, 2012 is also going to be a watershed year for Russia-China energy cooperation, assuming that the trillion-dollar gas deal under protracted negotiations and persistent haggling over pricing differences will be wrapped up. Putin has a personal involvement in the project.
Clearly, Moscow outwitted the US’s Caspian energy diplomacy. The South Stream, which Russia is aiming for speedy completion by 2015, dampens the enthusiasm for the rival Nabucco project supported by the US. The interdependency between western Europe and Russia in energy security is viewed with disquiet in Washington as it erodes the ‘containment’ strategy toward Russia and loosens up the US’s trans-Atlantic leadership.
A keen battle of wits between the US and Russia is unfolding to gain access to the gas reserves in Turkmenistan and Azerbaijan. Equally, South Stream drastically reduces Russia’s dependence on the Ukraine as transit country for gas exports to Europe. Which, in turn, impacts on the Russian-Ukrainian equations.
Kiev has a choice to make whether to join Moscow’s Customs Union and to derive concessional pricing for energy from Russia or to pay market prices. Of course, if Ukraine joins a ‘common Eurasian home’ with Russia, Kazakhstan and Belarus, Moscow will be putting behind the collapse of the Soviet Union, which many thoughtful Russian leaders such as Evgeny Primakov still consider wasn’t so inevitable as has been made out often. To be sure, the prospect of Putin returning to the Kremlin unnerves the folks in Washington.
– December 29, 2011