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Pipeline Politics

An interesting Reuters report today on pipeline politics with some good info on the Baku-Tblisi-Ceyhan pipeline, and highlighting Russia’s ongoing co-optation strategy to keep Central Asia’s vast gas supplies beyond the reach of European consumers. In an ideal free market, shouldn’t energy suppliers compete? Excerpt:

And plans to expand the CPC pipeline have been delayed partly because the Russians have not given approval. Russia, for political and strategic reasons, has acted to keep control over flows of Central Asian oil and gas. “Blue Stream, which is a pipeline under the Black Sea, for example, has held back Central Asian gas deliveries and expansion,” said Xavier Grunauer, energy analyst at Nomura. “Now Russia wants a pipeline to by-pass Poland and go straight into Germany, giving them leverage to converge prices in Poland with the rest of the EU.” The $6.57 billion Nord Stream project, led by Gazprom, has faced objections from Poland over energy security, from Sweden over a possible Russian military presence in the Baltic Sea and from Lithuania over environmental concerns.