Russia’s Refined Approach To Pipeline Politics

Courtesy of The Wall Street Journal, a report on America’s reduced criticism of the Nord Stream and South Stream pipeline projects.  As the article notes:

“…The U.S. has toned down its once-strident criticism of two controversial Russian-backed pipelines, a shift in rhetoric that coincides with strong progress on the high-profile projects in recent months.

For years, the Bush administration argued against building the two gas pipelines — Nord Stream, which will run from Russia to Germany under the Baltic Sea, and South Stream, which will cross the Black Sea into Eastern Europe. The pipelines steer clear of Ukraine, with which Russia has had a string of transit disputes that disrupted the flow of gas into Europe in recent years.

Some Eastern European states such as Poland also resisted Nord Stream, fearing it would deprive them of lucrative transit fees, while Germany said it would improve Europe’s energy security. The U.S. took the position that both pipelines, strongly promoted by the Kremlin, would increase Europe’s already heavy dependence on Russian natural-gas imports and stifle competition.

But the Obama administration has damped the anti-Russian rhetoric. Where U.S. diplomats once railed against the power of OAO Gazprom, the Kremlin-controlled gas company, and accused Russia of using its natural resources as a political weapon, they now emphasize engagement and dialogue.

“We don’t want to have a highly politicized, ‘us vs. them’ discussion with the Russians,” Richard Morningstar, the U.S. special envoy for Eurasian energy, said in an interview. “We want to engage with Russia constructively. They are and will continue to be an important player in world energy markets.”

Other factors have pushed the pipelines forward. The latest Russia-Ukraine gas dispute that left thousands of European gas customers without heat last winter appears to have swung opinion in Europe in favor of alternative export routes that avoid Ukraine.

[gas pipes]

Also, Russia has refined its pipeline diplomacy in recent years, learning from mistakes made in the early stages of Nord Stream when it was slow to consult Baltic littoral states and carry out studies of the pipeline’s potential environmental impact.

The U.S. change in tone on the energy question comes amid efforts by the Obama administration to “reset” its relationship with Moscow, which soured after events such as last year’s Russia-Georgia war.

President Barack Obama’s suspension of plans to install an antiballistic missile system in Eastern Europe, a move that some viewed as a major concession to Russia, has helped to ease tension between Moscow and Washington.

Russian officials welcomed the change in tone on the energy front. “My impression is the new administration is much more constructive,” Alexander Medvedev, Gazprom’s deputy chief executive, said in an interview.

U.S. officials deny there has been a change of policy on the pipelines. The Obama administration still strongly supports the idea of a “southern corridor” that would go around Russia and reduce its domination of European energy markets.

Washington and Brussels both back Nabucco and the Interconnector Turkey-Greece-Italy, two pipelines that would transport natural gas from the Caspian to the heart of Europe without going through Russia.

“Engagement [with Russia] doesn’t mean that we will compromise our principles,” Mr. Morningstar said. “We feel strongly that there should be a diversity of supply and we strongly support the southern corridor.”

Nord Stream, the more advanced of the two pipelines, has made big strides recently. This month, Sweden put aside its fears about its effect on the marine environment and gave its consent to the pipeline passing through its exclusive economic zone in the Baltic. Finland gave the green light after Russia dropped its threat to increase export tariffs on timber.

Also this month, Russia and Slovenia signed a pact allowing South Stream to cross Slovenian territory — the latest in a series of deals Moscow has secured with transit states.

Russia is also broadening the shareholder base of the pipeline consortiums. GDF Suez SA of France is in talks to take a stake in Nord Stream, joining Gazprom, Germany’s BASF SE/Wintershall Holding AG and E.On Ruhrgas AG and NV Nederlandse Gasunie of Holland. ENI SpA of Italy, Gazprom’s partner in South Stream, said French energy company Electricité de France was to sign up to the project, during a visit by Russian Prime Minister Vladimir Putin to France.

While U.S. officials say Nord Stream is now unstoppable, they say South Stream may never see the light of day. There have been no feasibility studies, the final route is still undetermined, and it is still unclear where gas for the pipeline will come from. Many question whether the project is commercially viable. But the U.S. no longer criticizes either Nord Stream or South Stream publicly.

Just a year ago, Michael Wood, then the U.S. ambassador to Sweden, urged Stockholm to “take a hard look” at Nord Stream, writing in a newspaper opinion piece that it represented a “special arrangement between Germany and Russia” at a time when Europe should forge a united energy policy.

He urged Europe to work with countries in Central Asia to “develop an energy infrastructure outside the Kremlin’s control.” Germany issued an official protest to Washington over the article.”



This entry was posted on Friday, November 27th, 2009 at 8:47 am and is filed under Uncategorized.  You can follow any responses to this entry through the RSS 2.0 feed.  You can leave a response, or trackback from your own site. 

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