Georgia's South Ossetia Conflict - Energy Issues
I read that the Russians supposedly targeted the BTC pipeline but there didn't seem to be any clear info on whether it was damaged or not. It seems that this was a target of Russia - was it to damage (send a message) or control the pipeline?
Monopoly control over caspian gas exports to europe
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Originally Posted by
Culpeper
What would have been the value of bombing the pipeline?
Bombing the pipelines, or almost hitting them, on top of this skirmish is going to kill the investment climate in Georgia. This is important because it will likely kill plans for the Nabucco gas line to Europe, and its competitor Gazprom’s South Stream will be built. Nabucco threatens to break the Russian monopoly of transporting Caspian gas to Europe. Again this is natural gas not oil, no use of spot markets, long term fixed contracts, with great power given to who controls the transportation.
While Nabucco’s plans have some hang ups, South Stream makes little sense economically. It will be the most expensive pipeline ever made, and cost likely 2X more than Nabucco. However, market principles do not matter for South Stream with Russia using Gazprom and its pipelines as a geopolitical tool. Market principles do apply to Nabucco. Investors will be hard pressed to put up the billions needed for Nabucco, when its feeder the South Caucasus Pipeline (gas line that runs in the BTC corridor) is exposed to so much risk.
For more on Nabucco v. South Stream & Balboa v. Drago, I recomend:
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OIL, OLIGARCHS, AND OPPORTUNITY: ENERGY FROM CENTRAL ASIA TO EUROPE, HEARING before the COMMITTEE ON FOREIGN RELATIONS UNITED STATES SENATE. Thursday, June 12, 2008.
Ms. Zeyno Baran (PDF)
Director, Center for Eurasian Policy
Hudson Institute, Washington, DC
So why have the Russians "stopped"
I use the term stopped lightly as reports coming out through today about the actual cessation of hostilities are mixed, but if in fact Medvedev has called off the dogs, why stop now if one of the desired goals at the onset of all this was the attainment of a Georgian regime change? The Russians seam to have pushed this past the point of making a viable case to the west about the legitimacy of their actions, so why not put the proverbial nail in the coffin and finish the job?
I believe one of two possible options is currently in play:
The current Russian assessment of the geopolitical environment has determined that a show of restraint at this point will garner sufficient political capital and credibility. This possibly is viable if predictions for friendly and enemy casualties upon the invasion of Tbilisi are deemed too costly to sustain.
Or:
The Russians have determined that the potential defense of Tbilisi would prove to be too costly and therefore have instead decided to simply wait the Georgians out. Call it an extension of their assigned peacekeeping duties in S.O. if you will, but rather than face head on a motivated nationalistic force in an urban combat scenario, simply starve out the Georgians in Tbilisi until they are more ready to consider the prospect of a new regime.