September 25, 2008

A Failure of Oil Diplomacy

By Watkins, Eric

US Sen. John McCain, the Republican Party's presidential hopeful, has underscored concerns in the country about the viability of the Caucasus as a secure transit corridor for oil and gas. Last week McCain noted that Russia has become more aggressive toward the now- democratic nations that broke free of the old Soviet empire- aggression that became most evident with Moscow's recent attack on Georgia.

Georgia now stands at a strategic crossroads, McCain said, which are traversed in particular by the key Baku-Tbilisi-Ceyhan oil pipeline. "If that pipeline were destroyed or controlled by Russia," he said, "European energy supplies would be even more vulnerable to Russian influence."

McCain is doubtlessly correct in his estimation of the situation but is hardly the first to note the importance of the Caucasus as an energy bridge or the potential for Russian mischief there.

Deja vu

In February, as OGJ reported at the time, it seemed that Washington had finally awakened to the need for a special kind of diplomacy in the region-a kind of diplomacy that would be devoted to oil.

Remember? US Secretary of State Condoleeza Rice announced plans to appoint a special envoy for energy issues to deal with the use of oil and gas for political means.

"It is a really important part of diplomacy, in fact, I think I would go so far as to say that some of the politics of energy is warping diplomacy in certain parts of the world," Rice told the Senate Foreign Relations Committee on Feb. 12.

"I do intend to appoint, and we are looking for, a special energy coordinator who could especially spend time on the Central Asian and Caspian region," she said.

Rice was making her pitch on Capitol Hill in response to questions from Sen. Richard Lugar (R-Ind.), who asked about progress made on establishing such a post as called for in legislation approved in 2007.

Oil as a weapon

Lugar was especially vexed about Russia's use of oil and gas as a political weapon, saying among other things that, "Moscow continues to use energy to extort its neighbors."

Lugar went on to explain: "Russian foreign policy is now largely based on maximizing the political leverage and financial earnings of its energy supplies and dominating the transport of energy in Eurasia.

"Appointment of a special representative for energy would be a clear statement of high-level US priority for this strategically critical region," he said.

"Failure to demonstrate US commitment will jeopardize progress on trans-Caspian energy cooperation, with potentially devastating impacts on long-term US security and economic interests in the region," Lugar said. Could any man or woman sound more like a prophet than Sen. Lugar? It seems he had a vision of the future in describing the need for the US to undertake serious oil diplomacy in the region.

Very clearly, it is a vision that Washington has yet to embrace.

Eric Watkins, Senior Correspondent

Copyright PennWell Corporation Aug 25, 2008

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