August 12, 2008 By James Kimer

The Pipeline War

btc_map_15480.gif Is it about separatism? Protecting Russian passport holders? A brute expression of power? No, Russia’s invasion of Georgia is mostly about seizing control of the only energy conduit threatening their monopoly of supply from Central Asia to Europe – according to this piece from the Globe and Mail, which concludes that “rewarding its transgression by acceding to the Kremlin’s plans for an energy monopoly in Europe would encourage even worse behaviour in the future.” To what extent is this terrible war one of private economic gain for the gazoviki?

Georgia is a crucial transit point for oil and gas. Three major pipelines connecting energy sources in the Caucasus and Central Asia to European markets pass through its territory. One of these, the South Caucasus pipeline, is an important part of the plan for the Nabucco pipeline to Austria, which would deliver natural gas directly to the European Union, bypassing Russia entirely, if built. The Russian government, which controls Gazprom, the world’s largest gas company, has tried frantically to cajole its European customers into ignoring Nabucco and investing instead in its own new pipelines.