Transatlantic Politics

Liberal politicians are the worst kind everywhere in the world. With parliamentary elections coming up on November 30, Romanian Liberal Party - currently in government - is flirting with the idea to get a lucrative deal with Gazprom and a quick gain, even if it means to sacrifice the country’s energy independance on the long run.

Liberal minister of economy and finances, Varujan Vosganian said on Thursday that Romania is open to South Stream, a Gasprom pipeline project designed to discourage European attempts to build a pipeline known as Nabucco, that would bring Caspian gas directly to the EU market via Turkey, thus bypassing Russia.

Romania has been the last country involved in Nabucco so far resisting Russian pressure to sign up for South Stream. Yet a Gazprom delegation is expected in Bucharest next week, amidst various media reports that the Russian monopoly is about to offer Romania to join its project.

While the Romanian president Traian Basescu still declares his backing for Nabucco and calls upon European leaders to speed up the process, the liberal government it is at odds with signals "openness" towards Gazprom, with the Ministry of foreign affairs mediating a meeting last week in Moscow between Romanian gas officials and the Russian monopoly.

Now, the economy minister’s wording suggest that gas politics might shape up the electoral debate in the run up to the elections.

The social-democratic opposition already called upon the Government to hold "direct talks" with Moscow in order to get a better gas price and dismissed the president’s "deep freeze" policy towards the Kremlin which was "disastrous" and only drew prices up.

Yet it is at least naive to think that direct talks with the Russian giant will put Romania in a better position. The debate is false, because unlike Hungary and Bulgaria, both Nabucco countries which signed up for South Stream as well because they are  over 85% dependent on Russian gas, Romania imports only a third of its total gas consumption from Gazprom, the rest being produced internally.

As Vladimir Socor from the Jamestown Foundation puts it, Romania is "only the latest addition to Gazprom’s list of candidate countries for the proposed South Stream."

The offer to Romania appears designed to increase Russia’s leverage vis-à-vis countries that have already signed up for South Stream and are now negotiating the commercial and financial terms separately with Gazprom. The Russians propose to include more countries in South Stream than the pipeline could possibly reach. By the same token, Russia offers to include more countries than it could possibly supply from Russian gas reserves in the years ahead.

Gazprom is tempting the maximum possible number of countries, playing them off against each other with the prospect of individual package deals around South Stream. Package deals would include supply contracts, transit revenue, and storage sites that could confer on this or that recipient country the coveted status of a gas-trading “hub.” Mostly aware of Gazprom’s limited gas export potential in the years ahead, the countries are vying to wrap up supply contracts ahead of their neighbors and to make the most out of any possible transit and storage opportunities.

For The Economist, all this works only because the European Union "is asleep on the job".

Bizarrely, Europe’s leaders publicly maintain that the two pipelines are not competitors. They have given the task of promoting Nabucco to a retired Dutch politician who has not visited the most important countries in the project recently (or in some cases even at all).

The main reason for the lack of private-sector interest is lack of gas. The big reserves are in Turkmenistan, but Russia wants them too. Securing them for Nabucco would mean a huge, concerted diplomatic push from the EU and from America. It would also require the building of a Transcaspian gas pipeline.

Yet as long as EU countries still give in to the temptation of bilateral deals with Russia, Nabucco, though twice cheaper than South Stream, has increasingly less chances to be completed.

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If elected president of the US, senator Barack Obama would not trade eastern European security for Russian help on Iran, his senior foreign policy advisor, Gregory B. Craig, told EUObserver in an interview.

"[But] that doesn’t mean that you trade away our security commitments to the new members of NATO, that’s not even thinkable. I always remember the notion that the expansion of NATO was not a threat to Russia, that this was a decision not by NATO to move east, but a decision by the new democracies from the former Soviet space to integrate with the West."

"The notion that you choose to co-operate with Russia vis-a-vis Iran at the expense of central and eastern Europe, I just don’t accept that. That’s not viable and it won’t happen that way," Mr Craig said.

Russia’s aggressive stance toward neighbours who want to be part of NATO and the EU is a historical throwback, he added. "I think the notion that Russia has a veto over what they decide inside of Ukraine or Georgia is very 19th to 20th century. In a 21st century world, with global impacts, global trends, Russia suffered enormously economically as a result of its intervention in Georgia."

Hmm..let’s see..

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Following the Russian military invasion, Georgia might soon be left out from the vital energy corridor now trasiting its territory, if Azerbaidjan comes to terms with Armenia over the frozen conflict in the Azeri region of Nagorno-Karabakh.

According to  Iranian Ambassador to Baku, Naser Hamidi-Zare, Iran is willing to mediate between Armenia and Azerbaijan over Nagorno-Karabakh.

“Iran proposed to mediate between Azerbaijan and Armenia in the resolution of the conflict” Hamidi-Zare said, adding that Tehran has held discussion on this issue with both parties of the conflict.

Why the sudden interest in Tehran for this very old conflict? Apart from an obvious image gain if it were to succeed in the mediator role, Iran wants to counter the US influence in the region. Early plans of the now functional Baku-Tbilisi-Ceyhan oil pipeline took into consideration another route, through Azerbaijan and Armenia, right on the border with Iran (see map). But with the US sanctions over Iran and the frozen conflict right in the middle of the shortest route from Baku to Turkey,, Georgia was then seen as a safer alternative.

But following the brutal "unfreeze" of the 2 Georgian frozen conflicts in South Ossetia and Abkhazia, now recognized as independent republics by the Kremlin, Azerbaijan is already hesitant in committing fully its exports through Georgia, rerouting some of these through Russia. And if its conflict with Armenia was to be solved, guess where the shortest route for its large oil and gas supplies would be? Exactly. Through Armenia.

Another key player in this whole energy game is Turkey, so far at odds with Armenia over a historical event it won’t recognize - the genocide against Armenians during World War 1 and over the Nagorno-Karabakh conflict, Ankara being a strong supporter of Azerbaijan.

Diplomatic ties were broken off between Armenia and Turkey in 1993, as a sign of support for Azerbaijan. But in the aftermath of the Georgian conflict, Turkish President Abdullah Gul made a historic visit to Erevan, the pretext being a football game between the two countries. And during the UN plenary in New York on September 26, Turkish Foreign Minister Ali Babacan sat down with his Armenian and Azeri counterparts in an attempt to move forward the discussions, so far championed by US envoy to the region Matthew Bryza.

Armenian media hope that Turkey’s increasing distance from the US and closer ties to Russia could work in its favour over the frozen conflict, and could end-up rerouting future Caspian-EU energy links through its territory instead of Georgia. Turkey is favoring both Russian and Iranian gas to be transported by the planned Nabucco pipeline, which is to reduce Europe’s dependancy on Russian gas. The US has so far insisted that Azeri gas and possibly gas from Turkmenistan would suffice for the pipeline.

Yet the Georgian conflict sees regional powers such as Turkey and Iran regrouping and arguably reinforcing their positions on the energy front. Russia can only encourage this.

P.S. According to EUObserver, an alleged Armenian-Russian connection during the Georgian conflict was highlighted in the European Parliament by the chairman of the Foreign Affairs committe Jacek Saryusz-Wolski, who asked EU’s foreign policy chief Javier Solana in a public hearing on 10 September if Russian bases in Armenia were used to launch missiles at Georgia during the conflict. Mr Solana said he could not confirm the information.

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