Sunday, September 7, 2008

Putin Checkmates Bush in Georgia

There are 139 days until Jan. 20, 2009.

Putin's Ruthless Gambit

The Bush Administration Falters in a Geopolitical Chess Match

By Michael T. Klare

Many Western analysts have chosen to interpret the

recent fighting in the Caucasus as the onset of a new

Cold War, with a small pro-Western democracy bravely

resisting a brutal reincarnation of Stalin's jack-booted

Soviet Union. Others have viewed it a throwback to the

age-old ethnic politics of southeastern Europe , with

assorted minorities using contemporary border disputes

to settle ancient scores.

Neither of these explanations is accurate. To fully

grasp the recent upheavals in the Caucasus , it is

necessary to view the conflict as but a minor skirmish

in a far more significant geopolitical struggle between

Moscow and Washington over the energy riches of the

Caspian Sea basin -- with former Russian President (now

Prime Minister) Vladimir Putin emerging as the reigning

Grand Master of geostrategic chess and the Bush team

turning out to be middling amateurs, at best.

The ultimate prize in this contest is control over the

flow of oil and natural gas from the energy-rich Caspian

basin to eager markets in Europe and Asia . According to

the most recent tally by oil giant BP, the Caspian's

leading energy producers, all former "socialist

republics" of the Soviet Union -- notably Azerbaijan ,

Kazakhstan, Turkmenistan, and Uzbekistan -- together

possess approximately 48 billion barrels in proven oil

reserves (roughly equivalent to those left in the U.S.

and Canada ) and 268 trillion cubic feet of natural gas

(essentially equivalent to what Saudi Arabia possesses).

During the Soviet era, the oil and gas output of these

nations was, of course, controlled by officials in

Moscow and largely allocated to Russia and other Soviet

republics. After the breakup of the USSR in 1991,

however, Western oil companies began to participate in

the hydrocarbon equivalent of a gold rush to exploit

Caspian energy reservoirs, while plans were being made

to channel the region's oil and gas to markets across the world.

Rush to the Caspian

In the 1990s, the Caspian Sea basin was viewed as the

world's most promising new source of oil and gas, and so

the major Western energy firms -- Chevron, BP, Shell,

and Exxon Mobil, among others -- rushed into the region

to take advantage of what seemed a golden opportunity.

For these firms, persuading the governments of the newly

independent Caspian states to sign deals proved to be no

great hassle. They were eager to attract Western

investment -- and the bribes that often came with it --

and to free themselves from Moscow 's economic domination.

But there turned out to be a major catch: It was neither

obvious nor easy to figure out how to move all the new

oil and gas to markets in the West. After all, the

Caspian is landlocked, so tankers cannot get near it,

while all existing pipelines passed through Russia and

were hooked into Soviet-era supply systems. While many

in Washington were eager to assist U.S. firms in their

drive to gain access to Caspian energy, they did not

want to see the resulting oil and gas flow through

Russia -- until recently, the country's leading

adversary -- before reaching Western markets.

What, then, to do? Looking at the Caspian chessboard in

the mid-1990s, President Bill Clinton conceived the

striking notion of converting the newly independent,

energy-poor Republic of Georgia into an "energy

corridor" for the export of Caspian basin oil and gas to

the West, thereby bypassing Russia altogether. An

initial, "early-oil" pipeline was built to carry

petroleum from newly-developed fields in Azerbaijan 's

sector of the Caspian Sea to Supsa on Georgia 's Black

Sea coast, where it was loaded onto tankers for delivery

to international markets. This would be followed by a

far more audacious scheme: the construction of the

1,000-mile BTC pipeline from Baku in Azerbaijan to

Tbilisi in Georgia and then on to Ceyhan on Turkey 's

Mediterranean coast. Again, the idea was to exclude

Russia -- which had, in the intervening years, been

transformed into a struggling, increasingly impoverished

former superpower -- from the Caspian Sea energy rush.

Clinton presided over every stage of the BTC line's

initial development, from its early conception to the

formal arrangements imposed by Washington on the three

nations involved in its corporate structuring. (Final

work on the pipeline was not completed until 2006, two

years into George W. Bush's second term.) For Clinton

and his advisors, this was geopolitics, pure and simple

-- a calculated effort to enhance Western energy

security while diminishing Moscow 's control over the

global flow of oil and gas. The administration's efforts

to promote the construction of new pipelines through

Azerbaijan and Georgia were intended "to break Russia 's

monopoly of control over the transportation of oil from

the region," Sheila Heslin of the National Security

Council bluntly told a Senate investigating committee in 1997.

Clinton understood that this strategy entailed

significant risks, particularly because Washington 's

favored "energy corridor" passed through or near several

major conflict zones -- including the Russian-backed

breakaway enclaves of Abkhazia and South Ossetia . With

this in mind, Clinton made a secondary decision -- to

convert the new Georgian army into a military proxy of

the United States , equipped and trained by the

Department of Defense. From 1998 to 2000 alone, Georgia

was awarded $302 million in U.S. military and economic

aid -- more than any other Caspian country -- and top

U.S. military officials started making regular trips to

its capital, Tbilisi , to demonstrate support for then-

president Eduard Shevardnadze.

In those years, Clinton was the top chess player in the

Caspian region, while his Russian presidential

counterpart, Boris Yeltsin, was far too preoccupied with

domestic troubles and a bitter, costly, ongoing

guerrilla war in Chechnya to match his moves. It was

clear, however, that senior Russian officials were

deeply concerned by the growing U.S. presence in their

southern backyard -- what they called their "near

abroad" -- and had already had begun planning for an

eventual comeback. "It hasn't been left unnoticed in

Russia that certain outside interests are trying to

weaken our position in the Caspian basin," Andrei Y.

Urnov of the Russian Ministry of Foreign Affairs

declared in May 2000. "No one should be perplexed that

Russia is determined to resist the attempts to encroach

on her interests."

Russia Resurgent

At this critical moment, a far more capable player took

over on Russia 's side of the geopolitical chessboard. On

December 31, 1999, Vladimir V. Putin was appointed

president by Yeltsin and then, on March 26, 2000,

elected to a full four-year term in office. Politics in

the Caucasus and the Caspian region have never been the same.

Even before assuming the presidency, Putin indicated

that he believed state control over energy resources

should be the basis for Russia 's return to great-power

status. In his doctoral dissertation, a summary of which

was published in 1999, he had written that "[t]he state

has the right to regulate the process of the acquisition

and the use of natural resources, and particularly

mineral resources [including oil and natural gas],

independent of on whose property they are located." On

this basis, Putin presided over the re-nationalization

of many of the energy companies that had been privatized

by Yeltsin and the virtual confiscation of Yukos -- once

Russia's richest private energy firm -- by Russian state

authorities. He also brought Gazprom, the world's

largest natural gas supplier, back under state control

and placed a protégé, Dmitri Medvedev -- now president

of Russia -- at its helm.

Once he had restored state control over the lion's share

of Russia 's oil and gas resources, Putin turned his

attention to the next obvious place -- the Caspian Sea

basin. Here, his intent was not so much to gain

ownership of its energy resources -- although Russian

firms have in recent years acquired an equity share in

some Caspian oil and gas fields -- but rather to

dominate the export conduits used to transport its

energy to Europe and Asia .

Russia already enjoyed a considerable advantage since

much of Kazakhstan 's oil already flowed to the West via

the Caspian Pipeline Consortium (CPC), which passes

through Russia before terminating on the Black Sea ;

moreover, much of Central Asia 's natural gas continued

to flow to Russia through pipelines built during the

Soviet era. But Putin's gambit in the Caspian region

evidently was meant to capture a far more ambitious

prize. He wanted to ensure that most oil and gas from

newly developed fields in the Caspian basin would travel

west via Russia .

The first part of this drive entailed frenzied diplomacy

by Putin and Medvedev (still in his role as board

chairman of Gazprom) to persuade the presidents of

Kazakhstan, Turkmenistan, and Uzbekistan to ship their

future output of gas through Russia . Success was

achieved when, in December 2007, Putin signed an

agreement with the leaders of these countries to supply

20 billion cubic meters of gas per year through a new

conduit along the Caspian's eastern shore to southern

Russia -- for ultimate delivery to Europe via Gazprom's

existing pipeline network.

Meanwhile, Putin moved to undermine international

confidence in Georgia as a reliable future corridor for

energy delivery. This became a strategic priority for

Moscow because the European Union announced plans to

build a $10 billion natural-gas pipeline from the

Caspian, dubbed "Nabucco" after the opera by Verdi. It

would run from Turkey to Austria , while linking up to an

expanded South Caucasus gas pipeline that now extends

from Azerbaijan through Georgia to Erzurum in Turkey .

The Nabucco pipeline was intended as a dramatic move to

reduce Europe 's reliance on Russian natural gas -- and

so has enjoyed strong support from the Bush administration.

It is against this backdrop that the recent events in

Georgia unfolded.

Checkmate in Georgia

Obviously, the more oil and gas passing through Georgia

on its way to the West, the greater that country's

geostrategic significance in the U.S.-Russian struggle

over the distribution of Caspian energy. Certainly, the

Bush administration recognized this and responded by

providing hundreds of millions of dollars in military

aid to the Georgian military and helping to train

specialized forces for protection of the new pipelines.

But the administration's partner in Tbilisi, President

Mikheil Saakashvili, was not content to play the

relatively modest role of pipeline protector. Instead,

he sought to pursue a megalomaniacal fantasy of

recapturing the breakaway regions of Abhkazia and South

Ossetia with American help. As it happened, the Bush

team -- blindsided by their own neoconservative

fantasies -- saw in Saakashvili a useful pawn in their

pursuit of a long smoldering anti-Russian agenda.

Together, they walked into a trap cleverly set by Putin.

It is hard not to conclude that Russian prime minister

goaded the rash Saakashvili into invading South Ossetia

by encouraging Abkhazian and South Ossetian irregulars

to attack Georgian outposts and villages on the

peripheries of the two enclaves. Secretary of State

Condoleezza Rice reportedly told Saakashvili not to

respond to such provocations when she met with him in

July. Apparently her advice fell on deaf ears. Far more

enticing, it seems, was her promise of strong U.S.

backing for Georgia 's rapid entry into NATO. Other

American leaders, including Senator John McCain, assured

Saakashvili of unwavering U.S. support. Whatever was

said in these private conversations, the Georgian

president seems to have interpreted them as a green

light for his adventuristic impulses. On August 7th, by

all accounts, his forces invaded South Ossetia and

attacked its capital city of Tskhinvali , giving Putin

what he long craved -- a seemingly legitimate excuse to

invade Georgia and demonstrate the complete

vulnerability of Clinton's (and now Bush's) vaunted

energy corridor.

Today, the Georgian army is in shambles, the BTC and

South Caucasus gas pipelines are within range of Russian

firepower, and Abkhazia and South Ossetia have declared

their independence, quickly receiving Russian

recognition. In response to these developments, the Bush

administration has, along with some friendly leaders in

Europe, mounted a media and diplomatic counterattack,

accusing Moscow of barbaric behavior and assorted

violations of international law. Threats have also been

made to exclude Russia from various international forums

and institutions, such as the G-8 club of governments

and the World Trade Organization. It is possible, then,

that Moscow will suffer some isolation and inconvenience

as a result of its incursion into Georgia .

None of this, so far as can be determined, will alter

the picture in the Caucasus : Putin has moved his most

powerful pieces onto this corner of the chessboard,

America's pawn has been decisively defeated, and there's

not much of a practical nature that Washington (or

London or Paris or Berlin ) can do to alter the outcome.

There will, of course, be more rounds to come, and it is

impossible to predict how they will play out. Putin

prevailed this time around because he focused on

geopolitical objectives, while his opponents were

blindly driven by fantasy and ideology; so long as this

pattern persists, he or his successors are likely to

come out on top. Only if American leaders assume a more

realistic approach to Russia 's resurgent power or,

alternatively, choose to collaborate with Moscow in the

exploitation of Caspian energy, will the risk of further

strategic setbacks in the region disappear.

Michael T. Klare is professor of peace and world

security studies at Hampshire College and the author,

most recently, of Rising Powers, Shrinking Planet: The

New Geopolitics of Energy (Metropolitan Books).

Copyright 2008 Michael T. Klare

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