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US analyst: It is time to make the Russian oil and gas sector more transparent and open to foreign investment while curbing the use of energy as a geopolitical tool, which endangers Russiaâ€™s neighbors

09 July 2011 11:35 (UTC +04:00)

Ariel Cohen, Senior Research Fellow for Russian and Eurasian Studies and International Energy Policy, at the Heritage Foundation, believes, control of energy corridors in the region was an objective of the Russian military operation against Georgia.

â€œEven today, Russia is still willing to use force to achieve its geo-economic goals as wellâ€, Mr. Cohen stated at the Congress testimony. â€œThis year, Gazprom opens the Nord Stream pipeline from Russia to Germany, with spurs to other European countries, increasing their dependence on Russian energy. This has been clearly confirmed by incidents over the last two decades involving delays in energy supplies to Azerbaijan, as well as the Baltic States, Belarus, Bulgaria, Croatia, Georgia, Serbia, Slovakia, and Ukraine and other countriesâ€, he says, adding, from the American perspective, Russiaâ€™s energy nationalism and continued collusion with anti-American regimes in Iran, Syria and Venezuela are troubling long-term geopolitical trends and should be sources of frustration in Washington.

According to the analyst, Russiaâ€™s strategic goals include preventing countries around its borders from becoming pro-American as well as increasing control over the transportation of Russia hydrocarbons through the territory of its neighbors.

â€œFurthermore, the Kremlin aims to control the export of oil and gas from neighboring countries by directing their flow via the Russian pipeline system. By locating pipelines and gas storage facilities in Austria, Hungary, Bulgaria, Greece and Turkey, Russia connects them to Moscow with ties that bind. Sometimes, these ties also include lucrative personal economic deals, as demonstrated by the employment of Gerhardt Schroeder as Chairman of the North Stream gas pipeline consortium, and similar arrangements for other prominent European politiciansâ€.

Mr. Cohen also mentioned that, despite the fall in energy demand across Europe, Russia raced to secure its natural gas market share and bypass Ukraine, the principal transit country. It is building Nord Stream and South Stream pipeline systems.

â€œEurope may diminish its dependence on Russian gas by boosting an alternative pipeline, Nabucco, but in order to do so, it requires US political support for Turkey, Azerbaijan, Turkmenistan, and Kazakhstan to cooperate on this mega-project. However, unlike the Clinton and the George W. Bush Administrations, the Obama Administration has downgraded Eurasian energy on its priority list. Very little political support materialized, which jeopardizes the future of Nabucco. However, it is primarily the European Union membersâ€™ responsibility to diversify its sources of natural gas. Unfortunately, so far, no necessary leadership from Europe has materialized in this caseâ€.

Speaking about the US-Russian relations, Mr. Cohen mentioned that, in the last two and a half years of â€œresetâ€, despite the rhetoric about needed improvements in the rule of law, Russian whistleblowers died in jail or were severely beaten, Russian courts continued to sentence political opponents to lengthy prison terms for crimes they had not committed, peaceful demonstrators were beaten and incarcerated; and the state refused registration to democratic political parties. And things are likely to get worse.

â€œBased on the â€œresetâ€ record, top White House and State Department officials now privately recognize that they bet on the wrong horse, as it is unlikely that Medvedev will wield any real power beyond the spring of 2012 even if he nominally remains in office.

However, the Administration cannot publicly admit its mistake, as this would undermine the very notion of this over-personalized â€œresetâ€ policyâ€, he stressed.

The analyst also believes that, the Obama Administrationâ€™s â€œresetâ€ policy has primarily been a series of concessions to a regime in Moscow that is seeking Soviet-like superpower prestige and status through forced nuclear equality with Washington. â€œThis approach has far-reaching negative implications for US security and foreign policy as well as for the security of US alliesâ€.

â€œWhoever occupies the Oval office is facing a complex system of USâ€“Russian relations. These include nuclear nonproliferation and arms control, the supply of US and NATO troops in Afghanistan via Russian territory, human rights and Islamist extremism in Russia, the energy and sovereignty concerns of U.S. friends and allies, and the Iranian quest for weapons of mass destruction, to name just a few. The Obama Administration cannot address these issues by pretending that Medvedev and his narrow circle of supporters wield the real power. In fact, it is the Putin groupâ€”which includes the key energy, military and security services officials, businessmen, and the leadership of the United Russia ruling partyâ€”that exercises the ultimate powerâ€, he says, adding, now Putin, no great friend of America, is likely to move back from the Prime Ministerâ€™s office to the Kremlin in the spring of 2012, raising tough questions about Obamaâ€™s Russian policy.

â€œPutin has publicly disagreed with Medvedev, his handpicked successor, on a number of key policy issues, many of them vital to U.S. interests. While Medvedev has generally articulated positions which are considered liberal in Russia, Putin has consistently criticized the US and stuck to the statist lineâ€.

The analyst believes that, the US Administration needs to stop its policy of .pleasing Moscow and instead add pressure on Russia to start a â€œresetâ€ of its own policies. â€œIn particular, Congress should ensure that missile defenses are developed for the benefit of American troops and allies and prevent the Administration from granting far-reaching concessions to Russia in negotiating short-range nuclear weapons dealsâ€.

â€œCongress has an important role to play in changing the relations with Russia in the energy field for the better, for the benefit of the Russian and American peoples and our European allies. It is time to make the Russian oil and gas sector more transparent and open to foreign investment while curbing the use of energy as a geopolitical tool, which endangers Russiaâ€™s neighborsâ€, he said.

Another analyst, Jim Nichol, Specialist on Russian and Eurasian Affairs, noted in his US Congressional Research Serviceâ€™s last update report on â€œRussian Political, Economic, and Security Issues and US Interestsâ€ issue, which was prepared for Members and Committees of the Congress, that Russia has attempted to buy up gas supplies in Azerbaijan and Turkmenistan, is an attempt to undermine Nabucco.

â€œSome US officials, members of Congress have claimed that European dependence on Russian energy and Russiaâ€™s growing influence in large segments of Europeâ€™s energy infrastructure poses a long-term threat to transatlantic relationsâ€, he reminds, adding, that those concerned about the possible consequences of overdependence on Russia for energy have called for the building of pipelines circumventing Russian territory that would transport non- Russian gas supplies to Europe.