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A Thuggish Quality

georgiawar081408.jpgSteven Pearlstein has a good column in the Washington Post today explaining what is becoming well known as Russia’s energy play with this war in the Caucasus. I’d agree with some of the other analysts who argue this isn’t the only thing Russia is going for here, but it is of course important nonetheless. Pearlstein does of course neglect to mention that Gazprom is pulling the same moves in North Africa with joint ventures with the Algerian exporter and an offer to buy all of Libya’s gas. I wonder how long we’ll stay blind to the pattern?

Suddenly the Russians were offering to pay Turkmenistan and Azerbaijan multiples of what they had previously offered to secure long-term supply deals. They penned an agreement with Italy and its oil company, Eni, to build a pipeline that would run under the Black Sea from Russia to Europe and end up at the same Austrian terminal as Nabucco. And Russian officials offered highly favorable transit agreements, ownership shares and guaranteed gas supplies to secure transit agreements from Bulgaria, Serbia and Hungary. To industry observers like Ed Chow, a senior fellow at the Center for Strategic and International Studies, Nabucco has always looked more like a diplomats’ pipe dream than a viable economic project. Its promoters had not only failed to secure supply and transit agreements but also had yet to identify an oil company eager to champion the project and finance the pipeline. Now, with its successful military incursion, Russia has raised serious doubts in the minds of Western lenders and investors that a new pipeline through Georgia would be safe from attack or beyond control of the Kremlin. What we’ve been reminded once again is that Vladimir Putin is perfectly willing to sacrifice the rule of law and the good opinion of others to protect the Russian empire and the energy monopoly that sustains it. The techniques he used to bring Georgia to heel, while more lethal and destructive, have the same thuggish quality as the techniques Putin uses to silence domestic opposition and to expropriate the energy assets of Yukos, Shell and BP.