Saturday, September 23, 2006

"Russia sets the pace in energy race"

Article in the Asia Times:

Speaking at a conference under the rubric "Summit on Energy Security" at West Lafayette, Indiana, this month, the powerful chairman of the US Senate Foreign Relations Committee, Richard Lugar, characterized Venezuela, Iran and Russia as "adversarial regimes" that were using energy supplies as "leverage" in foreign policy.

Lugar said: "We are used to thinking in terms of conventional warfare between nations, but energy is becoming a weapon of choice for those who possess it."

(big snip).....In conclusion, the Caspian Great Game is fraught with serious contradictions cutting across different levels. On the one hand, Russia is arrayed against the US and the EU in controlling Central Asian energy flows to the West. But having thwarted the latest US-EU plans of sourcing Caspian energy bypassing Russia, for the time being at least, Russia and the EU have a commonality of interests in meeting the energy security of the European market. The US becomes the odd man out in the cold, while European countries are busily negotiating their bilateral energy supplies from Russia.

For the EU, the viable alternative supply source of gas is Iran. But the policy of its US ally apropos containment of Iran precludes any near-term possibility for the EU to enter any form of expanded energy dialogue with Tehran. On the other hand, in keeping Iran out of the European market, Russia and the US would have a common interest at this juncture, though Washington ought to be aware that any realistic possibility of reducing its European allies' dependence on Russian energy supplies would depend on Iran being allowed into the European market.

Again, Russia and China are finding themselves competing for Central Asia's energy reserves, while the Central Asian exporting countries are gaining space to maneuver between Russia and China for extracting better prices for their oil and gas. And all this is while all three protagonists are members of an ambitious forum of regional cooperation called the SCO.

To the extent that the US realizes that it has become the "underdog" with regard to Russia in the Caspian energy race, it is keen to coordinate with China and India in evolving a common platform of "energy consuming countries". But would Washington succeed in subsuming the economic nationalism of the Asian giants, when it miserably failed to marshal the EU? After all, India just led a bruising dissenting campaign against Washington's move to give increased voting rights to China in the International Monetary Fund.

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