Transatlantic Politics

Coupled with a non-united Europe and the fading influence of the US State Department in Eastern Europe, Vladimir Putin strikes again today on the energy front by securing a deal on the South Stream gas pipeline with Bulgaria, one of his closest allies and also dubbed "Russia's trojan horse in the EU".

During his final visit as Russia's President to a foreign country, Putin managed to get Bulgaria on board for his pet project: The Nabucco pipeline.  This was accomplished even though the South Eastern European country is also a partner in an US-EU backed project designed to be an alternative to Russian pipelines across Eastern Europe and to Russia itself as a gas supplier.

Despite EU optimism, Russia's move is clear: the Baku-Tbilisi-Ceyhan precedent must not be repeated.  The Baku-Tbilisi-Ceyhan gas project was a U.S.-led pipeline that bypassed Russia and brought oil from Azerbaidjan directly to the Mediterranean via Turkey.  This project single-handedly helped Azerbaidjan and neighboring Georgia gain a degree of autonomy from Russia's sphere of influence.

Having witnessed the power of the pipeline, Russia has set its sights on the oil & gas-rich Caspian countries.  As a result, these same former members of the Soviet Union are also becoming more dependent on Russia's state-controlled Gazprom monopoly in an overt attempt by Russian-controlled Gazprom to bring the "lost countries" of the Warsaw Pact back into the sphere of Russian influence.

Reuters summarizes Gazprom's expansion in Central and Eastern Europe. However, Reuters fails to note Russia's recent coup d'etat in Austria, where Putin secured a deal concerning the termination of the previously-mentioned Nabucco pipeline.  The termination point of this pipeline in Austria is at the Baumgarten terminal and is based on the principle that  "if we can't own the pipeline, we should own the faucet". 

Such moves are to be expected from Russia's Gazprom.  Here is a list of Russia's latest energy dealings: 

• BULGARIA
• Gazprom supplies all of the Balkan country's natural gas and transits gas via its territory to Greece and Turkey.
• Russian President Vladimir Putin on Jan. 18 secured Bulgarian participation in the 10 billion euro ($14.66 billion) South Stream gas pipeline.The project, proposed by Italy's Eni  as well as Gazprom, is Moscow's challenge to a rival Nabucco plan to pipe Central Asian gas to the European Union and reduce the bloc's reliance on Russian energy. Gazprom is also interested in buying a stake in Bulgaria's state gas monopoly Bulgargaz if the government goes ahead with plans to list a minority stake on the bourse. Gazprom is also reportedly interested in acquiring the Sofia heating utility plant.
• Bulgaria has picked Atomstroyexport, controlled by Gazprom, to build its new 4 billion euro power plant of Belene.
•  CZECH REPUBLIC
• Czech natural gas firm Vemex has signed a deal with Gazprom unit Gazexport on gas deliveries to the Czech Republic which bypass the former Czech monopoly.
• ESTONIA, LATVIA, LITHUANIA
• Gazprom wants to build gas storage in the former Soviet Union's Baltic states, but it is seeking alternative pipeline routes to avoid dependence on traditional transit states.
• In particular, it wants to build a pipeline under the Baltic Sea from Russia to Germany, which would bypass Estonia, Latvia and Lithuania, as well as Poland and Belarus.
• The planned pipeline is to be built by a consortium, Nord Stream, majority-owned by Gazprom and also Germany's BASF and E.ON
• GREECE
• Putin said last month that Greece wanted to double imports of Russian gas after 2016. He said Greece supported Gazprom's plans to build the controversial South Stream pipeline (a rival to the aforementioned other Russian pipeline: Nabucco).
• HUNGARY
• Under a deal announced on July 13, 2006, Gazprom gained stakes in Hungarian gas and power companies in return for giving Germany's E.ON a share in the Siberian Yuzhno-Russkoye field.
• Gazprom and Hungary's MOL have formed a company to study the proposed extension of the Blue Stream gas pipeline, which takes Russian gas to northern Turkey.
• SERBIA
• In December, Russia proposed to Belgrade a controversial energy pact that would potentially see Serbia included in Gazprom's South Stream gas pipeline.
• In return Gazprom would get a 51 percent stake in Serb oil monopoly NIS for 400 million euros. But the proposal has drawn fire from one faction of Serbia's ruling coalition, which argues the offer undervalues NIS.
• Analysts believe nationalist Prime Minister Vojislav Kostunica wants to accept the offer, to reward Russia for backing Serbia's efforts to block the independence of its breakaway Kosovo province by threatening to use its U.N. veto.
• SLOVAKIA
• Gazprom owns 49 percent of the gas network SPP together with Germany's Ruhrgas (a subsidiary of E.On) and Gaz de France.
• TURKEY
•  Gazprom supplies three quarters of Turkey's gas via southern Europe and by a pipeline under the Black Sea, which it jointly owns with Eni.
• It wants to buy Turkish gas distribution firms is also seeking direct deals with Turkish utilities with an eye towards supplying gas to Israel.

 Putin's Russia understands that energy is the lifeblood of an economy.  Chavez's Venezuela understands that energy is the lifeblood of an economy.  Why do the largest economies in the world, the EU & the US, not do more to secure their own lifebloods? 

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