U.S. Official Criticizes the Gazprom Monopoly

Today the Independent published an interview with Matthew Bryza, deputy Assistant Secretary of State for European and Eurasian Affairs of the US State Department. Bryza took the opportunity to lay down some of the most aggressive criticism in recent memory of Gazprom’s anti-competitive ambitions in Europe, and revealed urgent US concerns regarding Turkmenistan gas. Bryza even compares Gazprom’s activities to the game of Monopoly:

Excerpts:

“Gazprom is by law a monopoly,” said Mr Bryza “and monopolies operate according to a hunger to acquire as much infrastructure as possible. There is a board game that American kids grew up playing – maybe you do in Europe as well – called Monopoly. How do you win? You buy up as much property as you possibly can. That’s how you win the game. Monopolies do not contribute to economic efficiency, in fact they undermine economic efficiency.”

Mr Bryza said it is “crucial that Gazprom now demonstrates its reliability in the long term as a supplier by virtue of investing in its domestic production and its pipeline capacity”. He acknowledged that European governments cannot bar investment from firms on the basis that they are Russian-owned, but predicted the competition authorities will eventually curb Gazprom’s activities.

Mr Bryza said: “At some point, European competition law will kick in and begin to question whether or not these are non-competitive practices.” He also called for improved contact with Turkmenistan, saying: “Governments can reach out to the new Turkmenistan government. We are just trying to cultivate a new relationship with Turkmenistan, we feel we have the chance to open up an absolutely new chapter in our engagement with Turkmenistan.

“My colleagues who have visited there since President Niyazov’s death have been pleasantly surprised by the degree to which the new president seems to want to open to the West.”

…

He also noted the EU’s divisions on how to deal with Russia over energy policy. Mr Bryza argued: “There is not unity yet in Europe in terms of a single energy or single gas supply diversification policy. There is an idea that is being realised but it hasn’t transformed itself into a unified policy and I assume that, like so many things in this world and this [European] union, it takes a little time.”

Bob Amsterdam published an op/ed covering these same issues last September in the International Herald Tribune.