Posted By Steve LeVine Thursday, June 10, 2010 - 6:38 PM Share
Generals are consigned to fight the last war, as we know
from the 118
million hits that Google turns up on the phrase. But must politicians? Such
has been the spectacle this week in Istanbul, where the West and Russia did
their best imitation of the uber-dramatic pipeline wars of the
1990s that established the United States as a key player on the Caspian Sea. Meanwhile,
2,000 miles to the east, an unchallenged China advanced another rook by signing
a preliminary deal to pipe Uzbek natural gas into Xinjiang, and supported a
fourth round of United Nations sanctions against Iran on the condition that
it could continue its gasoline trade with Tehran.
The fight is over Europe's natural gas supply, and the
perceived economic and political muscle that goes with it. Russia's natural gas
giant, Gazprom, supplies some 25 percent of Europe's gas -- the figure rises to
100 percent in Finland and the Baltic states -- and Washington and many former
Warsaw Bloc nations see this as a potent Russian economic and political weapon.
Three times in the last four years, Russia has cut off the natural gas flow in
rows with neighboring Ukraine, and Washington and the Europeans both want to
lessen Russia's market dominance by finding a competing supply.
Enter Nabucco, a
proposed $9 billion, 2,100-mile pipeline that would ship some 30 billion cubic
meters of natural gas from the Caspian and elsewhere to Europe. This
Western-backed plan has set Russia on edge, resulting in South Stream, Moscow's retort to
Nabucco. Russia envisions building South Stream along much the same route as
Nabucco, and shipping double the volume.
There has been much in the way of pyrotechnics because of
this rivalry. In a way, it is a reprise of the 1990s, when the United States and
Russia vied to ship Azerbaijan's oil bounty. The U.S. won that first round of
pipeline politics when the Baku-Ceyhan pipeline began transporting oil in 2006
(interestingly, the main oil company in Baku, and Washington's main partner in
the pipeline is BP).
My friend Edward
Lucas, who writes for the Economist, has a good primer on the latest round
of pipeline politics:
But while both Russia and the West have attempted to replay
their 1990s contest, geology and technology have gotten ahead of them. In the
United States, a Texan named George
Mitchell figured out how to extract natural gas from shale, igniting a
gas-patch boom that is estimated to have provided the country with a 100-year
supply of natural gas. Meanwhile, Qatar has come on the market with the first
economically viable fleet of ocean-going liquefied natural gas tankers.
Together, the shale gas and LNG have created a new ocean
of natural gas. There is such a glut in Europe that, according to a Bloomberg
report today, Qatar has decided to cut off two-thirds of its exports until
the market settles.
All of this means that, unlike Baku-Ceyhan, neither
Nabucco nor South Stream actually have much gas to ship. When the concept behind the Nabucco
project originated in the 1990s, it was intended as an essential link from
the former Soviet states of Central Asia to the outside world that would break
Russia's then-monopoly on pipeline transport in the region. But on Monday,
Turkey and Azerbaijan got together to announce an
agreement that the Azerbaijanis will ship just 6 billion cubic meters of
natural gas a year in the pipeline by 2019, or one-fifth of the envisioned
volume; there is no other supply in sight. But even if Nabucco's backers could
somehow find the gas, it would still represent just 5 percent of the 540 billion cubic
meters that Europe currently uses.
Alexandros
Petersen, a senior fellow in the Eurasia Center at the Atlantic Council,
thinks the clock has not entirely run out on European pipeline politics. He says
the shale gas advances, for instance, "have yet to revolutionize the heavily
restricted European/Eurasian natural gas markets." "2010 is a year of decision"
for the pipelines to go forward or not, Petersen says.
But Sam Charap,
the associate director for Russia and Eurasia at the Center for American
Progress, thinks the Nabucco-South Stream rivalry is a "distraction" for the
Obama administration. "The unconventional gas revolution has undermined" the
Nabucco project, he told me. Shale gas is known as unconventional gas;
conventional supplies are the stuff you pump out of the ground and deliver by
pipe.
In any case, there is still intrigue on the Caspian. In December,
China opened an 1,100-mile
natural gas line starting in Turkmenistan, and connecting into the Chinese
natural gas grid in Xinjiang. Iran has done the
same in a smaller way, but China is fast replacing the United States as the
main geopolitical-balancer in Central Asia. China's energy policy also
undermines U.S. efforts to isolate Iran, another Caspian Sea state. Here is Michael Klare on that topic.
China's investments are also giving the country a lasting
presence in Central Asia that, so far, the United States has failed to match. It
almost doesn't matter that the U.S. has put down military bases in the region.
The Manas
Air Base in Kyrgyzstan is ephemeral; pipelines by comparison are forever.
China, its eye affixed on the original prize, has won the second round of pipeline
politics.
Competition is healthy best that the Fat Cats get it!
By Dwight Baker
June 10, 2010
Dbaker007@stx.rr.com
Talks about a one-world government run by a few of the elites are about to run its course, running the elites right out of town.
The facts held in this article are profound and should bring to many attentions of our failed energy inspired geo-political war making machines. Many in that upper room where the maps are pulled down and old time big bosses sit and stare about who they want to take out next is nearly gone. WHY, the hard hand of injustice is leaking out its poison for most who have an eye to see and an ear to hear.
My end take on Steve article brings back some vivid memories of my days in oil and gas in Oklahoma the years 1976---1996. I remember well in the College Library in Chickasaw Okla. I found a set of Russian Encyclopedia. I began to study the Tengiz oil in the north of the Caspian Sea. I was amazed then and even today of the many structures of oil and gas bearing pay zones of rocks that they had cored mapped and logged, seems the number was over 25. Chevron was the operator that I had focused on designing high-pressure gate valves that would endure in the hostile Tengiz environments. I designed the valves and Chevron engineers like my ideas but then an abrupt come about and the drilling project hit the skids, nothing new about that in the oil and gas patch.
Later on about 1989 I got involved with the coal gas drilling. I again designed a gate valve for high-pressure frac control that would work and work without repair. The company grew and I began to hire folks that worked in the field camps around in those drilling areas, one of the men was a retired VP level from Halliburton. He liked to drink coffee and we would chat, he began to tell me some of his times with Halliburton when it seemed lights out.
In Iran Halliburton had sent complete equipment sets working for them, then when the political power changed all was lost. Halliburton left without one piece of the equipment. But on another note he had worked around the shores on the west bank of Iran next to the Persian Gulf not too far from Qatar. He told of the times when the wells drilled began to flow from natural gas formations that the well logs of the zone working on were 6 to 7 feet long, meaning thousands of feet of pay.
Back to the topic: Competition is a good thing and I believe that people young and old alike are waking up to the fact that if on a grid one does not like, get off. That will always send the signal up to the top “Oops better change our ways of doing business”.
Note to all: A sharp reader points out that Nabucco itself did not start in the 1990s. It was Nabucco's forerunner -- the PSG pipeline, a GE and Bechtel project that would start in Turkmenistan, cross the Caspian to Baku, and go on from there. Nabucco is the latest iteration of the East-West corridor concept devised in the Clinton Administration.
In addition, I am corrected that LNG itself is not a non-conventional fuel. It is simply delivered using a non-conventional method.
Thanks for corrections, suggestions, leads and so forth. Always welcome.
Rice may not have had a choice. On Dec. 11, Moscow's government-owned Prime Tass news agency reported that Russia had signed a long-term cooperation accord with Turkmenistan covering natural gas exploration, production, processing, transport, and marketing. The deal was announced just 10 days after Gazprom announced that it had reached a similar agreement with Kazakhstan over that country's oil resources.müzik dinle
Hi Mydas, by Rice's choice I am presuming that you mean the policy of the prior State Department. Not just Washington, but both Russia and the United States are choosing to continue to fight the last war -- pipeline politics. Meanwhile, time and events at least in the European theater have moved on.
You are right about the Moscow-Kazakhstan and -Turkmenistan agreements. But then events eclipsed both of those pacts -- demand and gas prices plummeted, forcing Russia to renege on both pricing and purchases. And, as discussed above, China's pipeline opened, shoving Turkmen gas out the back door, and eliminating Gazprom's monopoly on the demand side.
As commented "The fight is over Europe's natural gas supply, and the perceived economic and political muscle that goes with it. Russia's natural gas giant, Gazprom, supplies some 25 percent of Europe's gas -- the figure rises to 100 percent in Finland and the Baltic states -- and Washington and many former Warsaw Bloc nations see this as a current sports news potent Russian economic and political weapon. Three times in the last four years, Russia has cut off the natural gas flow in rows with neighboring Ukraine, and Washington and the Europeans both want to lessen Russia's market dominance by finding a competing supply." .
Steve LeVine is the author of The Oil and the Glory and a longtime foreign correspondent.
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