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Caspian Oil Access Curtailed: Georgia -- A Blow to US Energy - International - SPIEGEL ONLINE - News

The plans of the US and Western oil companies for expanded pipelines in the Caspian region may well be a casualty of Russia's attack.

 If Russia clamps down on pipelines, oil from these platforms in Azerbaijan may not make it to the West. Long-term U.S. efforts to access Caspian oil free of Russian influence may come to naught. The sudden war in the Caucasus brought Georgia to heel, reasserted Russia's claim as the dominant force in the region, and dealt a blow to U.S. prestige. But in this part of the world, diplomacy and war are about oil and gas as much as they are about hegemony and the tragic loss of human life. Victory in Georgia now gives Russia the edge in the struggle over access to the Caspian's 35 billion barrels of oil and trillions of cubic feet of gas. The probable losers: the U.S. and those Western oil companies that have bet heavily on the Caspian as one of the few regions where they could still operate with relative freedom.

At the core of the struggle is a vast network of actual and planned pipelines for shipping Caspian Sea oil to the world market from countries that were once part of the Soviet empire. American policymakers working with a BP-led consortium had already helped build oil and natural gas pipelines across Georgia to the Turkish coast. Next on the drawing board: another pipeline through Georgia to carry natural gas from the eastern shore of the Caspian Sea to Austria -- offering an alternate supply to Western Europe, which now depends on Russia for a third of its energy.

But after the mauling Georgia got, "any chance of a new non-Russian pipeline out of Central Asia and into Europe is pretty much dead," says Chris Ruppel, an energy analyst at Execution, a brokerage in Greenwich, Conn. The risk of building a pipeline through countries vulnerable to the wrath of Russia is just too high.

by Fran on Thu Aug 14th, 2008 at 03:11:12 PM EST
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All the pipelines we'll ever need from the Caspian are already in place. The BTC (oil) is large enough to take all the oil that will ever be produced in the Azeri side of the Caspian, and, later, the oil from Kashagan on the Kazakh side, once a way is found (i) to produce it and (ii) to bring it across the Caspian Sea. The South Caucasus Gas Pipeline already exists (it shares the route of the BTC) and brings azeri gas to Turkey. Nabucco is about bring gas from Turkey to Austria; the question of what gas is used to fill it in Turkey is the big one: azeri gas is not enough, Turkmen gas is highly unlikely, Iranian gas is (so far) unreliable, and is presumably not what the Americans want, so all you have left to fill it (ie to finance it and justify its construction) is Russian gas.

The ignorance in these articles about Caspian oil is stunning, as usual.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Fri Aug 15th, 2008 at 06:30:28 AM EST
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