Asia's new 'great game' is all about pipelines

I wanted to share with you this op-ed by former PetroCanada lead economist John Foster, published in today’s Toronto Star. I was very pleased to contribute the introduction to his recent report “A Pipeline Through A Troubled Land: Afghanistan, Canada, and the New Great Energy Game,” published by the Canadian Centre for Policy Alternatives. – Opinion –

Asia’s new ‘great game’ is all about pipelines

Secure routes needed to move Central Asia’s vast energy resources to international markets

August 20, 2008

The quest for control of energy resources has been dubbed the “new great game” – a rivalry for pipeline routes to access energy resources in Central Asia and the Caspian Sea.

It’s a geopolitical game that is openly analyzed in U.S. think-tanks, widely reported in the Asian press but rarely commented upon in Canada. It began after the Soviet Union broke up and the five “Stans” of Central Asia became independent.

Recent reports have linked the conflict in Georgia with pipelines that bring oil and gas to Europe but the pipeline rivalry extends far beyond Georgia to the vast oil and gas resources of the Caspian region and Central Asia.
When the countries of Central Asia were part of the Soviet Union, their oil and gas flowed only to the north through Soviet-controlled pipelines. After the Soviet breakup in 1991, however, competing world powers began to explore ways to tap these enormous reserves and move them in other directions.
Pipelines are important today in the same way that railway building was important in the 19th century. They connect trading partners and influence the regional balance of power.

Both Georgia and Afghanistan are seen as energy bridges – transit routes for the export of land-locked hydrocarbons.

Washington has long promoted a gas pipeline south from Turkmenistan through Afghanistan to Pakistan and India. It would pass through Kandahar.

Realistic or not, construction is planned to start in 2010, and Canadian Forces are committed until December 2011. Richard Boucher, U.S. Assistant Secretary of State, said last year: “One of our goals is to stabilize Afghanistan,” and to link South and Central Asia “so that energy can flow to the south.”

Unwittingly or willingly, Canadian forces are supporting American goals.
The BTC (Baku-Tbilisi-Ceyhan) oil pipeline and South Caucasus gas pipeline that pass through Georgia to Turkey originate in Azerbaijan. Recently built, they are the jewels in the crown of U.S. strategy to secure energy resources that bypass Russia and reduce European dependence on pipelines from Russia.

Two Central Asian countries are rich in hydrocarbons. According to the International Energy Agency, Turkmenistan has the world’s fourth largest reserves of natural gas, while Kazakhstan’s oil reserves are said to be three times those of the North Sea. Turkmenistan exports virtually all its gas to Russia. Last year, the presidents of Russia, Turkmenistan and Kazakhstan agreed on a new gas line north to expand the export system.
Construction starts this summer.

China is tapping into Central Asia’s treasure, too. There is a new pipeline that brings oil from Kazakhstan to China. And a gas pipeline is being built from Turkmenistan through Kazakhstan to China.

The rivalry continues with plans for new gas lines to Central Europe. The Russians plan a line under the Black Sea to Bulgaria called South Stream, and the EU backs a project called Nabucco that would supply gas via Turkey.
As well, Washington is pushing for new pipelines under the Caspian Sea that would link Kazakhstan and Turkmenistan to Azerbaijan and the pipelines to Europe.

But Russia is blocking these plans. Boucher asserts that European energy security is important to the United States as well as to Europeans and that it “is based on having multiple sources.”

The United States expresses great concern about European dependence on oil and gas imports from Russia. But Europe has imported energy from Russia for 40 years. It imports from the Middle East and Africa, too.

Is Russia less reliable? Much is made of Russia’s temporary cuts in gas supplies to Ukraine and Belarus, but these countries were enjoying highly subsidized gas (a hangover from the Soviet era) and refusing to pay full European border prices. In similar circumstances, what would Canadian energy suppliers do?

Energy has become an issue of strategic discussions at NATO. At recent NATO summits the United States sought to commit NATO to energy security activities, calling for NATO to guard pipelines and sea lanes.

Last year, Prime Minister Stephen Harper said energy security required “unprecedented international co-operation, … protecting and maintaining the world’s energy supply system.”

NATO proposals could have enormous consequences for Canada. U.S. strategic thinking is to get other NATO countries involved in guarding the world’s oil and gas supplies. Canada is in danger of being drawn into long-term military commitments relating to energy.

Recently, Defence Minister Peter MacKay told a Halifax talk show that Canadian troops were not in Afghanistan “specifically” to guard a pipeline, but “if the Taliban are attacking certain projects, then yes we will play a role.”

Neither Afghanistan nor Georgia is a member of NATO, but both are transit countries in the new great game.

Energy geopolitics are worthy of public discussion. The rivalry for energy resources is a power game – and militarizing energy is a long-term recipe for disaster.
John Foster is an international energy economist and an expert on the world oil scene. He is the author of “A Pipeline Through A Troubled Land: Afghanistan, Canada, and the New Great Energy Game,” Canadian Centre for Policy Alternatives.

Tags: Afghanistan, John Foster, Pipeline