Gazprom billboard near Russian parliament, and map of Libya
Asia Times has a story about how Russia is outmanuevering US energy policy in Africa and around the globe.
Russia’s energy drive leaves US reeling
By M K Bhadrakumar
… But what has truly incensed the Bush administration are Gazprom’s dramatic inroads into Africa.
Russian giant Gazprom, the largest extractor of natural gas in the world, has announced plans to build a pipeline across the Mediterranean to pump Libyan gas to Europe. This is the final lap of a Kremlin strategy that involves Gazprom handling the entire output of Libya’s gas, oil and liquefied natural gas (LNG) designated for export to Europe and the US.
Look at Gazprom’s terse announcement in Moscow on July 9, “The Libyan side positively evaluated Gazprom’s proposal to buy all future volumes of gas, oil and liquefied natural gas assigned for export at competitive prices.” … Putin visits Tripoli in April, less than a month before he left office, and the two erstwhile colonels decided to jointly handle all of Libya’s energy resources.
And Gazprom seeks to buy exploration licenses in Nigeria and proposes to build a pipeline from there to Algeria, and with Algeria, Gazprom is developing a proposal on “joint” marketing of gas in Europe. US officials have gone ballistic. “The monopolistic Gazprom is behaving like a monopolist does. It tries to gain control of the market as much as possible and to stifle competition. And that’s clearly what is going on,” thundered Matthew Bryza, US deputy assistant secretary of state for Eurasian affairs. “The Kremlin wants Gazprom to be a dominant force in global energy, and the dominant force in global gas. Tying up gas resources in Central Asia and Africa is part of that,” he added. The plan is for Gazprom to dominate “in every corner of the planet”, he alleged.
This is pretty funny coming from a country that seeks Full Spectrum Dominance (wikipedia definition) of the planet, in large part to dominate the oil markets. It is also pretty funny to hear the representatives of Big Oil, the Bush administration, complaining about energy monopoly.
Washington was relieved to see the back of Putin’s presidency, but it now transpires that Gazprom may have only stepped up the pace of overtures under Medvedev’s astute guidance. Besides, with its new assets in Africa, Gazprom will soon be knocking for access to the US market through supplies of LNG. The European and international companies which have been traditionally present in the African market will be compelled to play a role alongside Gazprom.
… Gazprom chief executive Alexei Miller suddenly arrived in Tehran on Monday and discussed with Iranian President Mahmud Ahmadinejad the setting up of an organization of gas-producing countries.
… During the visit, an agreement was signed on the development of Iran’s oil and gas fields by Russian companies; on Russian participation in the transfer of Iran’s Caspian Sea crude oil to the Oman Sea; cooperation in the development of Iran’s fabulous North Azadegan oil field; and, possible participation of Gazprom in the planned Iran-Pakistan-India gas pipeline project. Evidently, Moscow took a deliberate decision to press ahead with Iran in energy cooperation in the full glare of world publicity in complete disregard of US displeasure. Tehran loved it.
… By now it must be obvious to the Bush administration that the youthful-looking, post-communist lawyer-president who took over from Putin has lost no time drilling a hole through the entire US strategy to weaken Gazprom’s grip over the supply of gas to Europe.
… The geopolitics of energy security are a highly sensitive subject for the Bush administration, whose profound links with Big Oil are legion. It is a tremendous loss of face for the Bush-Cheney-Rice combine that Moscow is outwitting the US on the energy front.
Showing its inability to learn, the Bush administration continues its plans to address unrest in the Niger Delta with AFRICOM, expanding and militarizing the conflict. From Michael Klare:
… Although department of defence officials are loath to publicly acknowledge any direct relationship between Africom’s formation and a growing US reliance on that continent’s oil, they are less inhibited in private briefings. At a 19 February meeting at the National Defence University, Africom deputy commander Vice-Admiral Robert Moeller indicated that “oil disruption” in Nigeria and West Africa would constitute one of the primary challenges facing the new organisation.
Britain seems to be planning to join in this military approach: Britain to train army in Nigeria to combat delta rebels. Every military ruler of Nigeria trained at Sandhurst, except Abacha. Military training and cooperation does not have a positive history relative to democracy. The UN envoy who was supposed to negotiate with MEND and the rebels in the Delta, Ibrahim Gambari, was revealed to be a close crony of Abacha.
It was Gambari who told the United Nations that Ken Saro-Wiwa should be hung because he was “a mere common criminal”. It is therefore a certain sign of the bad faith of Nigeria’s negotiation that they pressed for Gambari to be appointed mediator with the rebels.
Gambari has resigned because of the resulting controversy, and plans for talks in the Delta have been suspended.
Supporting bad faith negotiation and military bullying will not win hearts and minds, or even control on the ground. The US needs to rethink its approach, especially if energy security remains a US goal.
The rebellion in the Niger Delta is not a spontaneous evil, a mindless outbreak of anarchic violence that must be met with still more violence. It is paused by the grinding poverty and economic ruination of one of the most economically productive regions on earth, with the profits channelled to billionaires in Nigeria and to big oil.
As the Asia Times article points out, the energy action is global, and the players are big. The US does not necessarily have the advantage. So the US needs to take some of the actual facts into account, and to smarten up its approach.