Not All Gas and Gaiters in the Caucasus

Article published on March 15, 2004
community published
Article published on March 15, 2004

This article has not been vetted by an editor at Paris HQ

Until now, Russia has been the EU’s required energy partner. In the shadow of Putin, will the Georgian gas pipeline change the tone?

As Geogia’s gateway into Europe, the port of Poti is experiencing unprecedented development. Since the near-secession of the Adjarie province, all of central Asia’s wealth has converged here in a town where oil reservoirs spring up like mushrooms. Through oil tankers or the oil pipeline linking Bakou to Soupsa, oil floods the town before heading for Europe. Since January 29th other pipes have also appeared in the port: those of the gas pipeline which will link Bakou to Erzurum in Turkey. In Georgia this site is at least as important as the BTC (Bakou-Tbilissi-Ceyhan) oil pipeline already in construction. And for good reason - if the BTC is supposed to mark a diplomatic rapprochement with the United States, the gas pipeline known as the SCP will assure the country’s energy independence and an economic rapprochement between the Caucasus, Georgia and Europe.

The railroad is a European creation

Now that European enlargement is tangible, the Republics of Transcaucasia, EU membership candidates, represent a strategic interest for Brussels, notably in relation to Russia.

The activity in Poti is therefore not without importance. The railroad which transports the oil is a creation of the European programme Traceca which aims to create a trans-European transport corridor. The Bakou-Soupsa oil pipeline is the fruit of a partnership between Americans and Europeans, which influences the Caucasian energy networks through the INOGATE programme. The BTC, promoted by the Americans, which emerges in the middle of the Mediterranean region at Ceyhan, benefits from the political support of the Europeans. And vice versa for the gas pipeline, the SCP, which accompanies it and whose European calling is not in question: INOGATE’s web site promotes a new corridor between the Caspian sea and Turkey, including an interconnection with the Greek (and therefore European) network, as a major objective. Last year, Turkey and Greece agreed to combine their networks in 2005. The SCP itself will be completed in 2006.

Why so much activity by the EU over the energy question? A green paper, adopted in 2000 by the Commission, tried to evaluate the energy needs of an enlarged Europe and to provide some answers. Entitled ‘Towards a European strategy for the security of energy supply’, it confirms the priority nature of the projects in the Caucasus: ‘we should keep a watchful eye on the development of oil and gas resources in the Caspian sea basin and in particular on transport routes to open up oil and gas production’.

40% of electricity will come from gas by 2030

There is an alarming idea floating about: ‘Adopting a policy of geopolitical diversification has not been able to free the Union from effective dependence on the Middle East (for oil) and Russia (for natural gas). Indeed, a number of Member States, and in particular the applicant countries, are entirely dependent on a single gas pipeline that links them to a single supplier country ’. In other words, Russia. The economies of the candidate countries, for historical reasons, essentially function thanks to gas from their Russian neighbour. Cleaner than oil and coal, there are those who are keen for gas to be developed as an alternative energy source for power stations and European transport. According to the report, the EU’s global energy dependency will increase again and will reach 70% in 20 to 30 year’s time. Enlargement will only reinforce this trend. The levels of imported natural gas could rise from 60 to 90%. In other words, by 2020-2030, the EU would get 40% of its electricity from gas. The paradox is that efforts to diversify in energy terms only create another political dependence. With by far the world’s biggest reserves, Russia will unsurprisingly be the only country able to provide for the increase in demand for gas from Europe. That said, diversifying the gas supply, advocated by the Green Paper, does not mean doing without Moscow entirely. In 2002, Romano Prodi agreed to an energy partnership with Vladimir Putin. What freedom might the EU have in such a context?

Partnership with the Transcaucasia Republics

Notably pushed by the new members, the EU is demonstrating the will to free itself from this partnership which is too lenient with regard to attacks on fundamental freedoms, democracy, Chechyna and so on. Chris Patten, the Commissioner for External Relations, speaking before the European Parliament on February 26th, maintained his desire for a partnership with Russia based on shared values and greater political involvement by the EU.

Seen from this angle, the stakes as regards energy are extremely high in terms of the EU’s ability to lead an ambitious foreign policy different from Putin’s Russia. Coincidentally perhaps, just after this debate a report by the MEP Per Gahrton on the necessity of establishing a limited partnership with Transcaucasia appeared. Likely to defend the EU’s energy interests in the region and already taken up by Chris Patten, it would promote political modernisation, economic development and dialogue between the three States, Armenia being increasingly marginalised.

Enlargement to the south towards Greece, Spain and Portugal in the 1980s created an era of Euro-Mediterranean co-operation. Enlargement to the East should logically turn the EU’s attention towards the Caucasus, all the more so since the region is opening up to the West and Europe, as the recent arrival in power of Mikhail Saakashvili in Georgia proved. The port of Poti shows that Georgia’s future lies on the other side of the Black Sea. The EU represents an area of stability and economic prosperity in a region facing the explosive duopoly of Putin’s Russia and America.