A New Era in Caspian Pipeline Politics?

Courtesy of The Oil And The Glory, an interesting analysis of the new era of pipeline politics which has emerged in the Caspian region in the past months.  As the article notes:

“…For the last decade and a half, the main theater for U.S.-Russian fireworks has been pipeline politics. Washington won the first battle with the construction of the Baku-Ceyhan oil pipeline, which broke Russia’s monopoly on energy exports from the Caspian Sea. But Moscow zoomed ahead in the second round, winning overwhelming backing for its proposed new natural gas pipelines to Europe. Then came the global financial crisis, and the plunge in world energy prices. Suddenly pipelines have seemed passe, and the rivalry instead turned to who controls what military base in Central Asia.

Scroll forward to a European energy summit last weekend in the Bulgarian capital of Sofia. While Washington’s new Eurasian energy czar, Richard Morningstar, seemed almost blase about the West’s preferred pipeline plan, called Nabucco, he also appeared to re-open the energy contest.

Morningstar’s predecessor, Steven Mann, had dubbed the West’s promotion of the pipeline as “Nabucco hucksterism.” He was describing what he thought was an invalid elevation of the value of a Nabucco line, and its chances for materialization, all the while putting much U.S. prestige at risk in pushing to get it built. Indeed, as recently as three weeks ago, for instance, Deputy Assistant Secretary of State Matt Bryza was still talking up the virtues of Nabucco.

Against that backdrop, Morningstar fell in with Mann’s line of thinking: “Pipelines are just part of the puzzle,” Morningstar said in Sofia. “Nabucco is not the Holy Grail that will solve the problem.”

Morningstar’s aim seemed to be to take down the temperature. After all, as much as Nabucco is a politically driven project targeted against Gazprom dominance of Europe, South Stream is an equally political response to Nabucco. So if the imperative for Nabucco is removed, what is the place for South Stream?

Hence, Morningstar also said: “Our feeling is that the financing of South Stream will be costly, and it is not clear how the material will come.”

Along the same lines, last week U.S. Deputy Undersecretary of State George Krol was even more dramatic. In the Turkmen capital of Ashgabat, Krol opened the door to shipping Turkmen gas via Iran, according to a piece by Dierdre Tynan at Eurasianet. If that happens, it is truly a new age in pipeline politics.”

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