WAR IN GEORGIA

CASPIAN PIPELINES-FROM KOSOVO TO GEORGIA: THE NEW SILK ROAD

INTRODUCTION

The war in Georgia is the last episode of a serial of conflicts in the Balkans and the Caucasus. This situation is the result of the competition over the oil and gas pipelines connecting the Caspian region to the world market.

The US and the European Union want to control the pipes to prevent the emergence of a new “Russian empire”. In our opinion, this policy does not correspond to the western interests and leads to world instability.

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1-COMPETITION OVER OIL AND GAS PIPELINES

Georgia is located on the new Silk Road. In the early middle ages, the Silk Road connected China and Europe. Caravans transported spices from India, gold from Persia and in return pottery and grains from Europe. Today, a new silk road has emerged through the trade of hydrocarbons from the Caspian region.

11-Caspian oil and gas reserves

The Caspian Sea is divided into five neighboring countries: Azerbaijan, Iran, Kazakhstan, Russia, and Turkmenistan. These countries have large oil and gas resources. Given the growing demand and the limited world reserves, the great powers pay more and more attention to the region. Look at the next map.

Source: CIA

Indeed, the oil and gas world resources are progressively exhausted . Regarding oil, the world consumption reaches 84 millions barrels per day. Thanks to economic growth and emerging countries such as China and India, the demand would attain 118 millions per day in 2030. On the other hand, the proven reserves account for 1300 billions Barrels. Considering a medium production of 100 millions barrels per day over the period 2007-2030, the “reserves to production ratio” gives 36 years (The “reserves to production ratio” describes the number of years of remaining production from current proved reserves at current production rates). It means that your children will see the last drop of oil in 2044! (1). This situation does not look much better for the natural gas. The consumption would increase from 104 trillions cubic feet in 2005 to 158 trillions cubic feet in 2030. The proven reserves account for 6200 trillions cubic feets. The “reserves to production ratio” attains 50 years. It means that we have enough natural gas until 2060 (2).

What is the importance of the Caspian region in the world oil and gas market? Once we have excluded Russia and Iran, the Caspian area will produce 5 millions barrels per day in 2030. Its proven oil reserves account for 37 billions barrels or 3% of the world reserves. Regarding gas, its proven reserves represent only 4.3% of the world reserves. Consider the next drawing that gives a global vision of the oil and gas market: Oil reserves in billion barrels, oil production in million barrels per day, gas reserves in trillions cubic feets (3).

Many scholars talk about enormous resources and posit that Azerbaijan could be a new Saudi Arabia! In fact, the big pictures do not confirm that. Obviously, these hypes must serve some hidden political goals.

12- Pipelines

Moreover, the Caspian region is landlocked and the choice of pipeline routes is as important as the control over the resources themselves. A cost effective pipe must follow the shortest way to the market. For example, let us suppose that you live in New York and want to move to Seattle. You will not go south passing through Atlanta, El Paso, LA, San Francisco and finally Seattle. Obviously, you will choose the shortest route through Chicago and crossing the Midwest alongside the Canadian border. Secondly, a pipe must avoid as much as possible the intermediary states and the associated transit fees that raise the final price for the consumer. Thirdly, its trajectory should avoid disruption: for example pipe, then tankers, then another pipe and tanker again. Fourth, since the intermediary states have the powers to turn off the taps, the pipe must only cross countries enjoying stability in avoiding any areas controlled by terrorists.

Now, just look at a map: According to these conditions, the best routes are going north through Russia or running to the Russian port of Novossirick on the black sea (4) . Firstly, it is the shortest way to Europe and the US. Secondly, it bypasses intermediary states and then reduces transit fees. Thirdly, there are yet many existing pipelines constructed during the Soviet period and Russia projects new pipes (the Baltic pipeline and south stream crossing the black sea) in order to extend the capacity of the network. Fourth, the ownership of these projected pipes includes European companies (German for the Baltic, Italian for south stream, Greeks and Bulgarian for the Balkans pipes).

Instead of working in association with Russia, the US and Europe projected their own pipes which bypass Russia and follow some exotic routes .The US has strongly supported an oil pipe ( the Baku-Tbilisi-Ceyhan: BTC) which starts in Azerbaijan, crosses Georgia and transports the oil to the Turkish port of Ceyhan. This pipe is operating since 2006 (5).  Similarly, the European commission supports for years a projected pipe (Nabucco) which should transport gas from Azerbaijan to Austria and would cross Georgia, Turkey, Bulgaria, Romania and so on! Once again, this projected pipe bypasses Russia. Finally, in the Balkans, the US and Europe support another pipe (AMBO) that would transport the oil from the Bulgarian black sea port of Burgas to the Albanian Adriatic port of Vlore. By the end, the ownership of these pipes (Nabucco, BTC, and AMBO) excludes any Russian companies! Look at the next map:

Source: Chevron

Moreover, we must underline that the US oil executives were quite reluctant about the project BTC: In 1998 Robert Ebel, an American specialist posited that ''Pipelines are supposed to be built for commercial reasons, not political reasons. The plan to build through Turkey emerged as a way to help Turkey, and because our Government does not want a pipeline through Iran. But that does not put the project on a paying basis.'' Similarly, Richard H. Matzke, president of Chevron Overseas Petroleum, said the Baku-Ceyhan option favored by the United States''probably isn't the most rational solution at the moment’’. Indeed, the profitability of these pipes seems dubious and they cross many dangerous areas: the karaback hold by secessionist Armenian in Azerbaijan, the Georgia with its problems connected to South Ossetia and Abkhazia and finally the Kurdish land in Turkey.

Finally, the routes chosen by the western countries are only justified by political considerations. Clearly, these choices obey to a global policy.

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2-WESTERN POLICY AND CONSEQUENCES

Scholars tend to explain this situation with a Marxist explanation. They posit that the competition between capitalist firms and notably oil business leads to local conflicts and wars between countries. The facts do not confirm this theory. Of course, the companies are in competition. However, they tend to partner because the building of pipes represents enormous risks and costs. For example, the South Stream gas pipe associates ENI and Gazprom. The Baltic gas pipe associates Gazprom and some German firms. The Burgas-Alexandroupoli oil pipe is owned by a joint venture of Russian, Bulgarian and Greek companies. Moreover, the previous quotes confirm that the political strategy has influenced the business and not the contrary.

21-The US and European policies

We know the US policy because many officials, congressmen and think tanks have clearly indicated its strategic goals. Firstly, the Caspian region could reduce the dependence of the United States on energy from the volatile Persian Gulf and the US must secure access to oil and natural gas reserves. Secondly, the U.S. must prevent the emergence of a new Russian empire. Thirdly, the Russian access to the rich oil and gas resources could fuel such an expansion . Consequently, the US must support the building of pipes bypassing Russia. There are also some discrete motives: The US fears that the Russian energy divides the US and Europe. Moreover, the US wants to favor the secular Muslim countries that have friendly relations with Israel ( Turkey, Azerbaijan, and Albania) and puts pressure on Europe to accept the Turkey membership.

The European policy does not invoke a “great strategy” and just worries about its future energy. At present, Europe can cover 40% of its natural gas requirements. Over the next 20 years, Europe's dependence would rise to 80%. Therefore, the European Union wants to diminish its dependency on Russia. However, Russia has the largest reserves of natural gas in the world (1680 trillions cubic feets). The other Caspian countries (except Iran closed for political reasons) have only small reserves (4.3% of world reserves). It means that the supply of Europe will necessarily come from Russia. Moreover, the fact to have as a neighbor the first world producer is a great asset for the European economy . Regarding a supposed dependency, each nation depends on the others in a global world and, thanks to division of labor; each individual depends on other people. For example, I am dependent on the farmers because I do not cultivate the tomatoes and potatoes that I eat. In fact, the free trade excludes the notion of dependency (6). A dependency has only a meaning regarding an enemy. Does it mean that Russia is an enemy?

This question is the heart of the problem. In fact, the European commission obeys to the US strategy and shares its objectives. For example, the www.bertelsmann-stiftung.org, a think tank close to the European commission recently wrote: “The US and Europe should recognize that Turkey is the bridge to Caucasus and central asia; This region is of huge strategic influence … Turkey must also play a major role as transit country for natural gas to Europe, which would reduce Europe’ overdependence on Russian gas”. It means that Europe should be dependent on Turkey rather than on Russia! As a result, the European commission favors the Turkey membership into the EU.

It was foolish to imagine that Russia, facing this offensive, could remain passive. Of course, Russia tries to reestablish its own influence on the Caspian region. Of course, Russia wants to get transit fees. Indeed, Russia has kept close cultural and economic relations with these countries, which include large Russian minorities. Moreover, Russia has many defense facilities including the Baikonur space launch complex in Kazakhstan.

22- Consequences: local wars

These two contrasted policies (US and Russia) boost the nationalistic feelings of the small landlocked countries of the Caspian . In these countries, the nationalism has replaced the communism and it leads to ethnic or religious tensions. These internal tensions extend to tensions between the different states. In return, these conflicts can involve the great powers. As a result, the competition over pipes has already fueled many regional wars.

I do not say that oil and pipes are the only causes of these wars . Many factors play a role. However, the oil has certainly boosted some local wars. For example, during the Balkans wars, many observers contended that western powers were seeking to secure a passage for oil from the Caspian Sea. The Kosovo is strategic as the AMBO pipeline could become the main route to the west (As a result, camp Bondsteel, the biggest US foreign military base is located in Kosovo). Look at the next map:

Some scholars posit that Albania imposed the independence of Kosovo in exchange of its agreement for the pipe. In fact, this independence and the blow to Serbia, traditional ally of Russia, has led to a greater instability and at first in the Caucasus.

In the Caucasus, Russia has fought the Chechens who threatened the Russian north route. Turkey and Iran both supported the Chechen rebels in order to destabilize the Russian route. Moreover, the Chechen found a safe haven in the Pankisi valley of Georgia. By the end, when the Chechen Republic became a part of the Russian Federation, many western ONG supported the claim of the terrorists (7). Clearly, these campaigns have contributed to present the BTC as a better and safer alternative than the Russian route.

In reply, Russia has backed up the Armenian Karabakh militias fighting against Azerbaijani forces. Moreover, Russia has constantly put the pressure on Georgia in fomenting troubles through the separatists of Abkhazia and Ossetia. The present war in Georgia is just a step along a serial of conflicts in the Balkans and the Caucasus.

23- Georgia

After weeks of separatist provocations, Tbilisi launched an offensive on the South Ossetia on August 7. Russia responded with a massive counter-attack to prevent what Moscow called genocide. Following a French mediation, Russia and Georgia signed a ceasefire. Then, south Ossetia and Abkhazia declared their independence.

Let us compare this process with the Balkan wars : the Kosovo was the theater of separatist riots. As a result, Serbia attacked the Kosovo. The West condemned this attack and the NATO bombed Serbia. Finally, the Kosovo declared its independence in 2008. Clearly, the two processes look exactly similar. Nevertheless, the West presently condemns the independence of South Ossetia and criticizes the “disproportional” response of Russia. Does it mean that the bombing of civilian Serbs was a “proportional” response? Clearly, the western point of view is untenable!

We do not know why Georgia launched its offensive . Russian Prime Minister accused the U.S. of pushing at the war in order to benefit the candidacy of John McCain. In fact, the US diplomacy advised Georgia to avoid any confrontation with Russia. Maybe the Russians have lured the Georgians into a trap. However, Israel has played a major role by arming and training the Georgians forces. Did Israel want to test the Russian reactions in the perspective of a larger attack against Iran?

Whatever the origins of the war, Russia has demonstrated its capacity to disrupt the BTC or Nabucco at any moment. As a result, the oil business would avoid Georgia as a transit route. The Nabucco project could be dead because the risk of building a pipeline becomes too high. Right now, the Caspian producers are rerouting their oil and gas through Russia. For example, Azerbaijan expects to reroute its crude, using the Baku-Novorossiysk pipeline rather than the BTC pipe.

Finally, the western policy has split the region into two camps: The first with Azerbaijan, Georgia, Turkey, Albania and Israel supported by the US and the second including Iran, Armenia, Serbia and Turkmenistan supported by Russia . This situation looks like “the great game” opposing Russia to the United Kingdom by the end of the 19 th century. Unfortunately, all these rivalries paved the way to the World War 1. Do we want really to repeat such a tragedy? Clearly, we need a new policy toward Russia.

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3- CONCLUSION:A NEW PARTNERSHIP WITH RUSSIA

Is Russia an enemy? That is the question . Of course, it was an enemy during the soviet period just like Germany was during the Hitler regime. After the soviet collapse, we have not seized the opportunity to establish a new alliance with Russia. On this site, we have recommended to include Russia in a new NATO and to prepare its membership into the European Union. By 1990, the Russian would have accepted such proposals. Later, President Putin reiterated his desire to work closely with the US in the global war on terrorism. However, the US administration has perceived more and more Russia as an adversary.

The US has not interest to prevent Russia to get its own « sphere of influence » in central Asia and the Caucasus . The US has its own “backyard,” in Central America and the Caribbean. France too has such a sphere in Africa as Spain in Latin America. Germany extends its influence on the Eastern Europe and so on. The US could accept a Russian sphere and would get real benefits of it. Firstly, the US would face a more secure partner than the Caucasus states that are as volatile as the Middle East. Secondly, only a united front between the US, the European Union and Russia could deter Iran. Thirdly, the war on terrorism and Islamism should replace the old concepts of the outdated cold war.

Of course, Europe should have close relations with Russia . On this site, we have constantly campaigned for a European enlargement to Russia for three reasons: Firstly, the Union includes three Baltic States that were a part of the Russian territory for many years (20 to 30% of the population is Russian). What is more a Russian territory, Kaliningrad, is deadlocked in these Baltic States and such a situation (Remember Danzig) could bring a lot of problem in the future. Secondly, Russia could provide the oil and gas resources that are lacking in the European Union . Thirdly, the Russian population shares the same civilization as us. Russia has more preserved its European identity than France or Germany.

These reasons seem obvious. Without Russia, the European Union has no future. However, the European medias dislike Russia and you may presently read more hatred papers against Russia than during the Stalin period! Many scholars contend that Russia is not a democracy protecting the human rights. Do you really think that a country as France, which is suspected to have committed a grand genocide in Rwanda, can really provide Russia with lessons of democracy? Do you really think that Saudi Arabia is a democracy? Do you believe that your Kosovo is going to be a democracy? In fact, many criminal organizations (drugs, sex slavery, kidnapping, stolen cars and so on) are headquartered in Kosovo!

Of course, Russia is an authoritarian democracy. In our opinion, such a regime is better adapted to the coming world than our permissive society. Clearly, thanks to its degenerate population, Europe is committing suicide. Russia does not want to follow the same suicidal path. The Euro-Russian partnership could save the European civilization and strengthen the free world.

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Footnotes

1- Moreover, there are many uncertainties about the Saudi proven reserves. The official figures account for 262 billions barrels. Some experts argue that Saudi Arabia's oil fields now are in decline and that the reserves could only account for 130 billions. On the contrary, Saudi officials contend that the present reserves could increase by about 200 billions. This lack of transparency prevents any serious forecasts. Clearly, we could know a global oil crisis before 2040.

2- Despite the global warming activists, the world coal consumption is projected to increase from 123 quadrillion British thermal units (BTU) in 2005 to 202 quadrillion BTU in 2030. The coal reserve to production ratio peaks to 165 years. Our children will have not to worry about coal. Of course, coal can be transformed in synthetic oil as the German and the South Africans did in the past.

3- For more specifics, go to http://www.eia.doe.gov/oiaf/archive/ieo07/index.html

4- However, Turkey complains about the increase of tankers in the Bosporus straits. The alternative is to send oil or gas from Novossirik to Burgas in Bulgaria and then through a pipe to join the Greek port of Alexandroupoli. Of course, the shortest route should be across Iran. Obviously, this option is closed because of the Iranian policy. Another possible route would run through Afghanistan. Finally, we must mention that China is projecting a pipes running over 4000 kilometers from Kazakhstan. It would cross the western China where some Islamic organizations are instigating a separatist movement.

5- Turkey and Israel intend to extend the pipe to the Israeli port of Eilat on the Red Sea. From there, supertankers would carry the gas and oil to the Far East through the Indian Ocean . As a result, Israel could control the flow and would become the trader of the Caspian oil on the Asian markets.

6- What is more, Russia also is dependent on Europe for selling its gas. Russia had cut its supply to Ukraine, which refused to pay a new price. When a customer refuses to pay, is it not usual to cut off the supply?