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  1. 1. per Concordiam 2W]ZVIT WN -]ZWXMIV ;MK]ZQa IVL ,MNMV[M 1[[]M[ „ ENERGY SECURITY Challenges for NATO „ WATER MANAGEMENT A continuing Central Asian security concern „ NUCLEAR OPTION Answer to EU's energy independence? PLUS Croatia's journey „ TURKISH HUB The Afghan mission Bridging Europe's energy politics EU's Eastern Neighborhood COULD ENERGY POLITICS LEAVE EUROPE IN THE COLD?
  2. 2. Table of Contents features ON THE COVER Europe receives most of its natural gas via pipelines, most of which are controlled by Russia. That dependence could leave Europe in the cold if the flow of energy resources is 18 NATO targets disrupted by political power play. energy security Alliance’s role in European energy security issues risks involvement in matters it could make worse. p. 10 24 Nuclear renaissance Energy politics and rising fossil fuels costs rekindle nuclear power debate. Wielding the energy sword 30 Turkey: On the Cover illustration: per Concordiam staff As Russia wields its vast natural resources as a energy crossroads political weapon, it must realize its energy The country finds itself at the strategy is a two-edged sword. center of Europe’s lucrative pipeline politics. 34 Water management: a Central Asian security concern Long-standing water debate swirls around the Aral Sea.
  3. 3. departments 4 Director's Letter 5 Contributors 6 In This Issue 7 Letters to the Editor 8 Viewpoint 64 Book Review 66 Calendar 52 p. COOPERATION SECURITY POLICY 38 International team 46 EU aims for stable, 54 Jumping hurdles training Afghan forces prosperous Eastern Croatia’s accession into the Additional troops will still face Neighborhood EU is not an easy process. training challenges. Plan will boost regional political and economic ties and energy 58 Good grades for sale 42 Out of Africa security. Corruption is undermining the Europe tries unity to curb the education system in Central Asia. wave of illegal immigration. 48 Spain, Mexico renew anti-terrorism accord 60 Roma’s dilemma 44 Fingerprint search Sharing resources adds punch to After centuries of neglect, Shared data files are a boon to the fight against organized crime. Europe tries to fix plight of cross-border police cooperation. marginalized citizens. 49 Afghanistan’s 45 Europeana’s digital spillover promise EU and Central Asia confront the With a new database, centuries of new Taliban threat. culture are just a mouse click away. 52 Soft targets Recent attacks suggest only international cooperation will stop new terrorist trend. p. 60 p.60 p.38
  4. 4. DIRECTOR'S LETTER Welcome to per Concordiam It is with great pride that I present the inaugural issue of per Concordiam, the George C. Marshall Center's quarterly journal that addresses defense, policy and security issues in Europe, Eurasia and beyond. We are excited about the opportunity the journal provides to promote candid and constructive dialogue on security topics that confront us. Per Con- cordiam is unique because it provides an avenue for Marshall Center alumni to present their distinctive perspectives, or those of their organization or minis- try, about important security topics that will help us see these problems from a different point of view and to engage one another in a productive exchange of potential solutions. In early 2009, we conducted a survey to gauge perceptions of our readers about the future security environment in Europe and Eurasia. The survey +Y 1VOU 7 9VZL was followed in April 2009 by a conference of distinguished alumni currently Director, George C. Marshall Center serving in positions of leadership. The intent of this project was to better un- derstand security challenges as they are perceived by European, Eurasian and John P. Rose is the director of North American decision-makers. The results of the project demonstrated the George C. Marshall European that the most pressing security concern over the next decade is energy securi- ty, making it the natural theme for the inaugural issue of per Concordiam. Our Center for Security Studies in project revealed that the term energy security has different meanings to our Garmisch-Partenkirchen, Germa- European, Eurasian and North American alumni, and it is our hope that this ny. A retired U.S. Army brigadier issue will facilitate understanding and discussion on such an important topic. general, he has 34 years of I expect the authors who contributed to this issue will generate a great international, operational, aca- deal of thought and discussion among the magazine’s audience. We hope to demic, business and strategic hear from defense and security practitioners, academics and subject matter planning expertise. He holds experts who have knowledge and understanding of a given topic. However, master’s and doctorate degrees there is rarely a universal solution for the security challenges we face, and as from the University of Southern we publish this and subsequent issues, our editorial board welcomes construc- California, Los Angeles, and tive dialogue, observations and suggestions so academics, defense and security attended the Harvard University experts and decision-makers can be presented with opposing viewpoints. John F. Kennedy School of Gov- I encourage each of you to consider contributing your unique perspective and knowledge to future issues of per Concordiam. I cannot overstate the value ernment in Cambridge, Mass. that your submissions will have in the success of this journal. The material His published works include The generated by our alumni, their peers and superiors — and by the original Evolution of U.S. Army Nuclear thinkers and academics interested in the European and Eurasian regions — Doctrine, 1945-1980 and 10 has the capacity to bring critical topics to our collective attention and provides journal articles on nuclear a forum for discussion that can help circumvent intractable problems. I hope strategy, military doctrine and this journal becomes preferred reading for you, and I look forward to hearing long-range planning. your insightful viewpoints, objective arguments and rational discourse. Sincerely, Dr. John P. Rose, PhD Director 4 per Concordiam
  5. 5. CONTRIBUTORS Andris Piebalgs was the European Journal of European Security Commission Roger Kangas and Defense Issues is a professor at the energy commissioner Near East South until November 2009. He assumed the post Asia Center for Energy Security Strategic Studies Volume 1, Number 1 in 2004. He has had of the National March 2010 a long career in the Defense Univer- political and dip- sity in Washington, George C. Marshall European lomatic service. In D.C. He has written Center for Security Studies Latvia, he served as a numerous articles LEADERSHIP parliamentarian, minister of education and and book chapters finance, undersecretary of state for Euro- on Central Asian politics and security and pean Union affairs at the Ministry of Foreign Dr. John P. Rose is finishing a book titled Playing Solitaire: Affairs and was ambassador to Estonia and Director Competing National Security Strategies in the EU. Britain’s The Economist newspaper Central Asia. He received his bachelor’s chose him Eurocrat of the Year in January Hermann Wachter degree from the School of Foreign Service 2007. He has a physics degree from the Uni- at Georgetown University in Washington, German Deputy Director versity of Latvia. D.C., and a doctorate in political science from Indiana University. He is also an ad- Dr. James C. MacDougall junct professor at Georgetown University. U. S. Deputy Director Ferdinand E. Banks is one of the world’s MARSHALL CENTER leading academic The George C. Marshall European energy economists. Andrew Monaghan Center for Security Studies is a German- Widely published, is an advisor in the American partnership founded in 1993. he has lectured at research division of The staff of this security studies institute universities and the NATO Defense furthers the vision of the post-World War institutions in College in Rome. II Marshall Plan into the 21st century. more than a dozen Also, he is the senior The center promotes dialogue and under- countries. He is researcher on energy standing between European, Eurasian, currently a visiting security matters and North American and other nations. The professor at Uppsala University, Sweden. He NATO’s contribu- theme of its resident courses and out- has published 12 books, including his latest, tion in the field and reach events: Most 21st century security The Political Economy of World Energy: An represents the college in NATO’s Energy challenges require international, intera- Introductory Textbook. He has a doctorate Security Task Force. He received a doctor- gency and interdisciplinary response from Uppsala University. ate in Russian foreign policy (Russian and cooperation. perspectives of Russia-European Union security relations) from the Department CONTACT US of War Studies, King’s College London, where he also earned a master’s degree Per Concordiam editors Maj. Steve Taylor in war studies. George C. Marshall Center is currently the Gernackerstrasse 2 politico-military 82467 Garmisch-Partenkirchen strategist at the George C. Germany Marshall Euro- Phillip Cornell pean Center for works at the Interna- Per Concordiam is a professional journal Security Studies in tional Energy Agency published quarterly by the George C. Garmisch-Parten- in Paris, where he is Marshall European Center for Security kirchen, Germany. engaged with energy Studies that addresses defense and policy issues. Before security issues in Europe and Eurasia He is a U.S. Air for military and security practitioners Force Eurasian that, he was a senior and experts. Opinions expressed regional affairs specialist. He earned fellow and director in this journal do not necessarily master’s degrees in Eurasian security stud- of international ini- represent the policies or points of ies and irregular warfare from the Naval tiatives at the NATO view of this institution or of any other Postgraduate School, Monterey, Calif., in School, in Oberammergau, Germany, where agency of the German or United States international relations from The Fletcher he worked on NATO energy security policies. governments. All articles are written by School at Tufts University, Mass., and in He continues to serve as an adjunct faculty per Concordiam staff unless otherwise telecommunications and network manage- member with NATO. He has a master’s noted. Opinions expressed in articles degree in international economics (energy written by contributors represent those ment from Syracuse University, N.Y. of the author only. The secretary of focus) and European studies (security focus) defense determined that publication of from the Johns Hopkins University Paul this journal is necessary for conducting H. Nitze School of Advanced International public business as required of the U.S. Studies in Washington, D.C. Department of Defense by law. per Concordiam 5
  6. 6. IN THIS ISSUE The months leading up to the inaugural publication of any endeavor are a thrilling, exasperating and mildly stressful time, to say the least. Now that we have the first issue of per Concordiam out the door and in your mailbox, we on the staff can sit back and relax a bit. Or not. We’re already hard at work on the next issue, which focuses on domestic security, and the subsequent issue on terrorism. But the success of future issues of per Concordiam depends largely on quality submissions from George C. Marshall European Center for Security Studies alumni, the organizations and governments they work for, and academics and schol- ars interested in security and defense issues in Europe and Eurasia. The focus of this March 2010 issue, energy security, is a timely topic. It is virtually impossible to address energy security in Europe and Eurasia without mentioning Russia and its vast resources of oil and natural gas. Far too often, articles focus on the consequences of Russian energy policy, not the rationale behind the policy. Roger Kangas’ article, “Wielding the Energy Sword,” examines and largely debunks the claim of maliciousness in Russian energy policy and focuses on the country’s use of energy security as a political tool that can cut both ways. As a result of the uncertainty of Russia as a supplier, Turkey finds itself at the energy crossroads. Phillip Cornell, in his article, “Turkey: On the Energy Crossroads,” examines the unique position Turkey — perhaps the most geographically and politically significant transit state — holds in ad- dressing an issue that, yet again, seems to force the question of whether Turkey faces east or west. In addition to affecting nations, the topic of energy security is certain- ly going to stress existing partnerships and treaties as it continues to grow in importance. Andrew Monaghan, in his article, “NATO Targets Energy Security,” takes a look at the implications of energy security to NATO following the Strasbourg-Kehl Summit in 2009. Given the fluctuations of fossil fuel markets, many nations are looking to ensure their future energy security through alternate means, which leads to the love-hate relationship Eu- rope has with nuclear energy. Fred Banks examines this dichotomy in his article, “Nuclear Renaissance.” In Central Asia, water management has been a thorny issue since the breakup of the Soviet Union. Resolving this problem requires the cooperation of the region’s five states. Maj. Steven Taylor’s article, “Water Management: A Central Asian Security Concern,” outlines the challenges these nations face and discusses their efforts to find solutions acceptable to all sides. We hope you find this premiere edition of per Concordiam interesting, timely and relevant and that it inspires debate and discussion. All the ar- ticles in this edition, and all future editions, will be available online at the Marshall Center home page at www.marshallcenter.org. We look forward to hearing what you, the reader, have to say. — per Concordiam editorial staff 6 per Concordiam
  7. 7. LETTERS TO THE EDITOR W e hope the articles in per Concordiam inspire debate and discussion. Our intent is to publish important information addressing issues that impact Europe and Eurasia. More importantly, we hope this journal will provoke a response from readers. Starting with subsequent issues, we will have a Letters to the Editor section where we will publish letters from our readers. Please keep letters to no more than 200 words and make sure they refer to articles appearing in the past two issues of our journal. We reserve the right to edit letters for language, civility, accuracy, brevity and clarity. We welcome feedback, which you can send via e-mail to editor@perconcordiam.org. JUPITER ARTICLE SUBMISSIONS Do not assume a U.S. audience. Most per Concordiam The intent of per Concordiam is to be a moderated journal with the readers are from Europe and Eurasia. We’re less likely best and brightest submitted articles and papers published each quar- to publish articles that cater to a U.S. audience. Our ter. We welcome articles from readers on security and defense issues mission is to generate candid discussion of relevant in Europe and Eurasia. security and defense topics, not to serve as an echo chamber for U.S. foreign policy. Here’s how to submit an article: Steer clear of technical language. Not everyone is First, e-mail your story idea to editor@perconcordiam.org in an outline a specialist in a certain field. Ideas should be accessible form or as a short description. If we like the idea, we can offer feed- to the widest audience. back before you start writing. Provide original research or reporting to support We accept articles as original contributions. If your article or similar your ideas. And be prepared to document statements. version is under consideration by another publication, or was published We fact check everything we publish. elsewhere, tell us when submitting the article to us. Copyrights. Contributors will retain their copyrighted If you have a manuscript to submit but are not sure it’s right for the work. However, submitting an article or paper implies quarterly, e-mail us to ask if we’re interested. the author grants license to per Concordiam to publish the work. As you’re writing your article, Bio/photo. When submitting your article, please please remember: include a short biography and a high-resolution Offer fresh ideas. We are looking for articles with a unique ap digital photo of yourself of at least 300 dots per proach from the region. We probably won’t publish articles on topics inch (DPI) resolution. already heavily covered in other security and foreign policy journals. Connect the dots. We’ll publish an article on a Then, e-mail us your manuscript as a Microsoft Word single country if the subject is relevant to the attachment to: editor@perconcordiam.org. region or the world. per Concordiam 7
  8. 8. VIEWPOINT Why energy security matters G. BOULOUGOURIS/EUROPEAN UNION in Europe and Eurasia Andris Piebalgs, European Commission energy commissioner until November 2009 In his 1953 Nobel lecture, George Marshall called on nations to learn from past events and find ways to avoid war and maintain peace. In Europe at this time, following the Schuman declaration Andris Piebalgs, of 1950 and learning from the lessons of World War II, plans European Commission were already taking off for a new kind of peaceful cooperation energy commissioner until in Europe. This was the start of the European Coal and Steel November 2009 Community, the forerunner of today’s European Union. In those days, coal meant energy. Coal dialogue and negotiation with all stake- was the primary fuel of the European holders based on mutual respect and economies, fueling homes, businesses, trust. Within the EU, 27 member states factories and transport. Millions and almost 500 million citizens have of jobs depended on its extraction, come together into a single internal processing and transportation, not to energy market, based on commonly mention its consumption. For Europe, agreed goals, political objectives and the links between security and energy legislation. Closely related to this is our were clearly established. approach to climate change, which we The same question faces the world see as the other significant international today: Is energy security a factor for threat to security. peace, or does it aggravate conflict? Countries geographically close to the In some parts of the world, access to EU can also join the European internal energy is clearly an issue that exacer- energy market. Countries in the Euro- bates disputes. In some cases it may pean Economic Area1 and the European be a direct cause. For today’s EU, as in Energy Community2 have already done the 1950s, energy security is, and must so. At the same time, the EU is seeking remain, a motor for peace. to develop its energy relations with other The EU is the world’s second largest countries. T raditionally, the focus was energy consumer and the largest en- on long-standing energy suppliers, such JOHANSEN KRAUSE ergy importer. Fifty-four percent of all as the Organization of the Petroleum energy used in the EU is imported, 60 Exporting Countries and Russia. But it is percent for gas and 84 percent for oil. clear more is needed to ensure interna- Demand for imports is rising. In recent tional energy markets are able to function years, world energy demand outside Eu- smoothly and transparently now and in One of the European rope has risen faster than ever before. the future. Union’s greatest One of the EU’s greatest challenges is The EU therefore places a high prior- challenges is ensuring that to ensure that growing energy depend- ity on developing energy relations with energy dependence does ence does not become a risk to wider new partners. These may be energy pro- not become a risk to wider economic or international security. ducers, such as Azerbaijan and T urkmeni- economic or international To tackle these risks, the EU’s re- stan, transit countries, such as Ukraine security. sponse is clear. Our own energy security and T urkey, or large energy consumers, depends on building up cooperation, such as the United States and China. 8 per Concordiam
  9. 9. The EU shares a mutual interest with of the world’s largest, most integrated consuming, producing or transit states and financially attractive energy markets. across the globe to ensure a stable and For the countries of the Southern predictable framework for energy supply Caucasus and the Black Sea region, the flows, including the establishment of new realization of this corridor would offer energy infrastructure. Nowhere is this the possibility of additional energy sup- more true than in the Caspian region plies to new markets as well as a long- and Central Asia. term source of gas transmission revenue. The success of the EU’s approach is And for the EU, the Southern Cor- demonstrated by the conclusion of an ridor offers geographically new sources intergovernmental agreement between of energy and the potential to enhance the EU and T urkey, Bulgaria, Romania, commercial and economic relations with Hungary and Austria to facilitate the the countries of the Southern Caucasus building of the Nabucco pipeline. This and Central Asia in particular. is the first concrete project in the EU’s National actions alone cannot assure vision of a new energy corridor, the energy security. Neither can the EU, “Southern Corridor,” bringing greater despite its size and advanced stage of en- energy security to countries from the ergy integration. But the EU has shown Caspian, through the Middle East and that energy collaboration, dialogue and T urkey, to the EU. Other projects in the understanding are a means to bring Southern Corridor may benefit from this greater energy security not only to its vision and from the recent agreement. own citizens but to the wider world. All countries involved in the Southern As European Commission President Corridor, whether producer, transit coun- José Manuel Barroso declared at the “ The EU is the world’s second largest energy consumer and the largest energy importer. Fifty-four percent of all energy used in the EU is imported, 60 percent for gas and 84 percent try or consumer, will benefit from greater diversification and security in their signing of the Nabucco Intergovernmen- tal Agreement, “Gas pipes may be made ” for oil. energy markets and economies. For the of steel, but Nabucco can cement the countries of the Caspian Basin and Cen- links between our people.” † tral Asia, as well as those of the Mashreq region and the rest of the Middle East, 1. Iceland, Liechtenstein and Norway are here. 2. Albania, Bosnia, Croatia, the former Yugoslav republic of the realization of this corridor would en- Macedonia; Montenegro and Serbia and the U.N. Interim able secure and long-term access to one Administration Mission in Kosovo. per Concordiam 9
  10. 10. Europe’s massive energy consumption requires building new pipelines to connect energy sources to consumers. Energy politics have the potential to stop that energy flow. PHOTO ILLUSTRATION PER CONCORDIAM 10 per Concordiam
  11. 11. ?1-4,16/ PM -6-:/A ;?7:, :=;;1); 87?-: 87411+; 4-)- -= 16 0- +74, Journals, newspapers and Web sites are replete with articles that address the Russian energy situation. Much of the focus is on how the Dmitry Medvedev- Vladimir Putin administration cajoles, threatens and rewards neighboring states through oil and gas Dr. Roger cross-border transfer routes. Kangas 6IQWVIT Those who profess a zero-sum perspective in ,MNMV[M international relations gleefully parallel the cur- =VQ^MZ[Qa rent “energy wars” to the Cold War, as such a topic ?I[PQVOWV is perfect for “great game” analysis. Such realists ,+ usually cite the cutting off of energy supplies to Ukraine in 2006 and 2007 and the increasingly problematic Russian-Georgian energy network. Others, who prefer more liberal perspectives, see this situation as a basis for interlocking security frameworks, noting that “Russia needs Europe as much as Europe needs Russia.” Some see the Rus- sian gas routes through the Baltic as a way to link it more fully to northern Europe as proof of this approach. Naturally, as is the case for most multina- tional situations, the concept of energy security in Europe and Eurasia is one that possesses multiple levels of interest and motivation. Fortunately, there are many reports and feature articles that present this perspective, too. per Concordiam 11
  12. 12. S HORT OF RESTATING THE OBVIOUS AND NOTING THE EXISTING LITERATURE ON THE TOPIC, this decade to nearly 10 million barrels a day. In terms of gas reserves, Russia possesses nearly 1,700 trillion cubic feet, with exports at 6.75 trillion cubic feet. Thus, this non-OPEC state possesses roughly 4.6 to 6.2 percent of the world’s oil reserves, and an impressive 25.7 to 27.2 percent of the world’s gas reserves, de- pending on the data used. story focuses on Russia’s rationale for Clients are largely in Europe, although the its energy policy and how such policies have Asian market for both oil and gas is growing. both direct and indirect consequences for With specific projects to China and the Far regional players. East, such as the 3,000-mile-long (4,800 km) It is clear the Russian government consid- East Siberia-Pacific Ocean oil pipeline under ers its energy reserves to be a strategic asset and construction, the expectation is that energy a potentially effective tool of engagement with exports will increasingly shift to the growing neighboring states. However, what is the ideal end-state envisioned by Russia and what are the possible limitations of this policy? Moreo- ver, has this policy caused more than just WHILE THE CURRENT immediate reactions from neighboring states MANAGEMENT OF THE ENERGY that would suggest they are actually changing SECTOR IS EQUALLY OPAQUE, their own broader strategic energy policies? To then-President Putin targeted illustrate this latter point takes an examination of the Russia-Central Asia relationship. After individuals such as Mikhail all, Central Asian countries currently require Khodorkovsky, considering him Russian participation in their own energy to represent the worst of the projects because of their inextricable link to the kleptocratic oligarchs. broader Russian-dominated export network. As one widens the scope of discussion, it is possible to note how other states react and pos- sibly adjust their own regional energy policies in markets of Asia. Assuming that Russia’s own light of these shifts. If one strips away the polem- energy needs are constant, or grow at a modest ics, is it possible to assess the impact of Russia’s rate, the amount of export potential and actual . decision to use energy — and energy transit — revenues are astounding. From an economic as a tool in its diplomatic and security toolbox? perspective, the possibility of having energy revenues rebuild Russia is front and center for RETURN OF A the Putin-Medvedev team. Not surprisingly, this is why energy security and energy exports GREAT POWER have become matters of national security — in It is almost required that any doctrine and practice. commentary on post-Soviet Rus- What is the Russian government’s motiva- sia’s foreign affairs makes some tion to securitize energy? Russia began the 21st reference to the fact that it ceased century with an inferiority complex honed being a “superpower” when the to perfection, on one hand, because of the Cold War ended. Debates now collapse of the Soviet Union — what Putin center on whether it is a “re- calls the greatest tragedy of the 20th century. gional power,” a “major power,” a And on the other, because of the tabloid-like “large power” or a “great power.” global debacles of the 1990s — including the ASSOCIATED PRESS Whatever the level of power, if economic nightmare of hyperinflation and one understands how Russia the embarrassing antics of Boris Yeltsin. This could regain some of its former was clearly unacceptable to Putin as he began influence, it is logical to focus his presidency in 2000. The continuation of Russia’s gas exports are on a resource that it possesses in the Chechen conflict with renewed vigor and a powerful diplomatic tool. How Russia uses great quantity: energy, specifically oil and gas. the flexing of Russia’s muscle as a permanent that tool can have inter- Estimates vary, but most assume Russia has member of the U.N. Security Council — on is- national consequences. a base level of at least 60 to 80 billion barrels of sues such as potential sanctions against Iran re- oil reserves. With increasing interest in foreign garding its suspected nuclear program — were investment, as well as the more aggressive strate- two immediate manifestations of this newfound gies employed by the state-dominated firms, strength and improved self-image. There was Russian exports have increased over the past also the desire to focus on the energy sec- 12 per Concordiam
  13. 13. AGENCE FRANCE-PRESSE Head of Russian energy giant Gazprom, tor, and playing on Russia’s strengths in this area Alexei Miller, right, rise of Russia’s energy sector allowed it to regain a reaped significant dividends. speaks with Ukrain- more credible geopolitical position. As Russia has ian Prime Minister Looking back, it appears the focus on energy- already had a number of years to develop a policy Yulia Tymoshenko, as-political-power addressed three key issues for on energy security, it must temper discussions center, and Ukraine’s Russia: the perception of domestic corruption Naftogaz company of what to do with what has already taken place, and cronyism, economic fragility and geopolitical chief Oleg Dubina in as this has shaped how others perceive Russian weakness. As for the first, many ordinary Russians January 2009. The policy. To this end, it is clear that the policy mo- welcomed the attack on the “oligarchs” as right- countries signed 10- tives regarding energy fall into both positive and ing a wrong of the past decades. The government year gas supply and negative categories. Russia has used energy to: took over or split up into more modest entities the transit contracts, end- Finance military modernization energy firms that developed under the control of ing a dispute that left Develop the country’s economic corrupt officials and allies of the past administra- part of Europe without infrastructure tion. While the current management of the energy gas in midwinter. Build partnerships sector is equally opaque, then-President Putin In the positive category, this has been beneficial targeted individuals such as Mikhail Khodorkovsky, primarily to the Commonwealth of Independent considering him to represent the worst of the “klep- States and to the periodic call for a “gas industry tocratic” oligarchs. Equally important, government OPEC-like organization” that would include coun- policies saw a return of state control on key sectors, tries such as Iran, Algeria and others. Some may and by his second term, Putin recast the energy sec- view exporting energy to enhance a bilateral rela- tor as a strategically important asset and returned tionship or shape a regional structure in this light. it to the “commanding heights” of the economy. On the negative side, Russia has also been will- Much as the energy sector was viewed in the Soviet ing to use energy to: period (and, unsurprisingly, by other countries Gain political concessions in the world), business and government blended Hurt or punish adversaries together in the oil and gas industries. This allowed Of course, one can quickly cite examples of the increasing revenues to shore up the economy periodic embargoes and supply limits to Ukraine, and make the country less fragile. Georgia, the Baltic states and even threats to oth- Paralleling these internal developments, the ers as cases where this has happened. Much as per Concordiam 13
  14. 14. one sees in other parts of the world, particularly INNOCENT BYSTANDERS among the Organization of the Petroleum Export- ing Countries nations, the possibility of withhold- A simple truth is that national policies do ing energy supplies can be enough to affect an- not have the luxury of being conducted in a other country’s policies. Even the economic logic vacuum, regardless of motive, and do have ef- expressed by Russia had merit, especially as it was fects on neighboring states, even if the relative supplying gas to neighbors at subsidized rates. importance and magnitude of this effect is However, the desire to break shipments before the debatable. One needs to look no further than end of contract periods can come under criticism. the five states of Central Asia — Kazakhstan, Kyrgyzstan, T ajikistan, Turkmeni- stan and Uzbekistan — to see how Russia’s newfound exertion of power in the energy sector can have secondary and tertiary effects. As often noted, Central Asian states themselves possess sig- nificant energy reserves and are in the process of developing a network for the export of oil and gas. Kazakhstan is awash in oil. Turkmenistan has gas reserves at internationally competitive levels. Uzbekistan possesses enough of both to remain self-sufficient. For these three states, the total reserve estimates vary. Kazakhstan holds as much as 40 billion barrels of oil and 100 trillion cubic feet of gas. Turkmenistan, while only having a possible 600 million barrels of oil, has nearly 100 trillion cubic feet of gas. Uzbekistan has around 590 million barrels of oil and 65 trillion cubic feet of gas. Tajikistan ASSOCIATED PRESS and Kyrgyzstan, while importers of oil and gas, have the potential to Russian President Dmitry export hydropower and, ultimately, Medvedev, left, meets with — were the states ever to come to Gazprom chief Alexei Miller an agreement — could participate at the Kremlin in Moscow It is important to note that each of these is a in a broad energy network in Central Asia. in September 2009. rational stratagem legitimized by the past prac- One could argue that Russian energy poli- tices of other states. Without question, Russia cies have little or no impact on these states. has used all of these approaches with respect to This might be the case if the Central Asian neighboring states. There are limits. In spite of energy states had an established production harsh words and threats of “further action,” it and transit network that offered varied routes, still is the case that such negative use of energy which at present, they do not. The nascent con- supplies has not led to violence. Perhaps it is only dition of Central Asia’s energy industry has re- in Hollywood that states go to war for oil. Indeed, sulted in a more short- to medium-term focus this is the case thus far and, arguably, the cur- on the part of the respective administrations. rent leadership in Moscow would be reluctant to For most of the 1990s, the goal of these do so. After all, Russia’s energy policy plays into states was to get a quick infusion of outside a broader national policy (regaining pride in the money, technical know-how and support for country) and international policy (a return to export routes that would turn these natural Russia’s rightful place within the community of endowments into profit-making commodities. nations) and abets the national security strategy Writers like Steve Levine have noted the impor- of a state that is improving its standing in the tance of energy to these states and the specific world. From Moscow’s perspective, using energy objectives sought in the “great energy game.” as a tool of foreign and security policy is both The limitations of the Central Asian states, logical and necessary. especially in terms of geography, ultimately re- 14 per Concordiam
  15. 15. quire Russia to play an influential role in the re- national and multilateral approaches to solving gion. In and of itself, this is not a problem. The the Afghan crisis. Beyond that, there is a strong fact that an external actor can offer investment belief there can only be regional stability and opportunities and partnerships for export security when participating states in the region routes is potentially beneficial. Indeed, because can exercise their right to develop fully as many of the Soviet-era routes are north-south independent states and as a region, including and pass through Russia means there is logic energy security. The absence of Russia’s central to Russia’s engagement in Central Asia. To this role in this approach is telling. Likewise, Uz- end, Russia has not been disappointing. bekistan is stressing the need to develop varied At present, a sizable percentage of Central transportation and communication routes — Asian oil and gas is either in a partnership particularly to the south. with Russian firms or transits via Russian More broadly, it has perhaps begun to affect pipelines. Scholars such as Theresa Sabonis- how these states view the multinational organi- Helf and Daniel Yergin have outlined in detail zations that include Russia, namely the Collec- the ever-increasing control Russia has over the tive Security Treaty Organization, the Common- electric grid in the countries as well, noting wealth of Independent States and the Shanghai that one needs to look at the broader energy Cooperation Organization. While these groups market holistically. Therefore, there is a touch are still important to Central Asian countries, of realism when looking at the effects an ag- it is worth noting that none could create a gressive Russian energy policy might have on coherent energy policy for its member states, the Central Asian states. What have been the and discussions of somehow creating a viable direct consequences? Since the renegotiation network within, say, the CIS, are unlikely. While of prices between Russia and Ukraine, and the this might even be beneficial to some states in periodic stoppages of gas to Georgia (and the the region — T ajikistan and Kyrgyzstan, for August 2008 conflict), Turkmenistan found example, see CIS-wide investment in their own itself subject to similar price shifts, especially hydropower facilities as attractive — the un- as it was negotiating the price of its gas flow- derstanding that the structure would be under ing through Russian pipelines. This has caused Russian control has likely caused reconsidera- some criticism on the part of Turkmen officials, tion. In recent years, cooperative routes south but the fundamental contracts between Russia to Afghanistan came under increasing consid- and Turkmenistan still remain. There does eration as viable alternatives. Lastly, the hostility appear to be greater interest in participating in Russia’s relations with other states was a topic in the Nabucco pipeline or other non-Russian in Central Asian energy discussions. In Septem- energy routes. But only when such pipelines are constructed would one see Turkmenistan truly lessen its ties with Russia. Likewise, Rus- sia’s policies have influenced Kazakhstan. It was not a coincidence that Kazakh investments KAZAKHSTAN IS AWASH IN OIL. in future pipeline routes through Georgia and TURKMENISTAN HAS GAS Turkey went on hold shortly after the August RESERVES AT INTERNATIONALLY 2008 Russo-Georgian conflict. COMPETITIVE LEVELS. UZBEKISTAN The fact that threats to export routes are real and not hypothetical has made the Central POSSESSES ENOUGH OF BOTH TO Asian states reconsider their options. Before REMAIN SELF-SUFFICIENT. concluding that Central Asian states are more than willing to submit to Russian whims, one must consider that the assertive actions of their northern neighbor are accelerating searches for alternative routes. The obvious choices ber 2009, for example, Uzbekistan again cut off include China, the desire to resurrect the TAPI gas shipments to T ajikistan for late payments, (Turkmenistan-Afghanistan-Pakistan-India) with the tone of the discussion sounding very route and even potential routes through Iran much like the Russian-Ukrainian situation. or over the Caspian Sea to Azerbaijan and into In sum, one must remember that Russia has Europe. In each of these, the notion in the not directly targeted the Central Asian states 1990s that multiple pipelines would ensure in the manner it has done to others. However, economic development now includes a sense in a subjective manner, the potentially negative of geopolitical security. In recent months, for example that Russia is setting with the current example, the Kyrgyz government proposed the policies could preclude any real development of Bishkek Initiative, which has at its core multi- positive cooperation in the region. per Concordiam 15
  16. 16. AGENCE FRANCE-PRESSE Workers check a valve on a natural gas pipeline at Vecses, Hungary. and energy. It is simplistic to suggest policies have THE RIPPLES WIDEN More than half of been “either-or” among the more security-related As we see the secondary effects of Russia’s ener- Hungary’s natural gas topics and those focusing on human and political supply arrives from gy policy in Central Asia, it is not surprising that rights. Rather, throughout the nearly two decades Russia via Ukraine — other states are now reevaluating their own poli- of American activity in Central Asia, all of these el- making it vulnerable to cies vis-à-vis Russia. For some states, many in the Russian energy politics. ements have been part of U.S. policy and pursued EU, this is a business decision each must address by various departments and agencies within the logically. The commonly held belief is that Russia U.S. government. will remain critical to Europe in the foreseeable Regarding energy, it is all about exploitation future. As noted by Andrew Monaghan and of resources (and the opportunity for U.S. and Phillip Cornell, Russia’s decision to use energy other energy companies to fairly participate) and as a tool of foreign and security policy has had the transport of the product to market. U.S. policy a direct impact on countries’ bilateral relations in the 1990s did stress energy security, but with with Russia. But does this also apply to how these respect to the Central Asian states being able to states prioritize their Central Asia policies? At diversify their own export routes. This was not a present — keeping in mind the significance of policy directed against Russia, but rather one that Afghanistan in any outside countries’ policy to- would offer states such as Kazakhstan and Turk- ward the five Central Asian states — the answer menistan the opportunity to maximize profits and is a qualified yes. create a diverse, expanding and varied portfolio The United States, for example, has had a of client states. Ideally, the energy revenues put fairly fluid set of policies toward Central Asian back into the respective economies would enhance states. While this is not the place to discuss the social and political stability. Diversification was to evolution of U.S. policy, it is appropriate to note benefit Central Asian states, not necessarily the that the policy has included — and stressed, at United States. various times — human rights, democratization, However, the forceful exertion of Russian economic development and privatization, secu- influence in the export and transit of energy from rity concerns and combating terrorism, access 2006 onward has affected how the United States and transit routes to operations in Afghanistan colors its discussion of Central Asian energy. 16 per Concordiam
  17. 17. The primary motive remains the same, even as the United States has begun a third presidential Что делать? administration that has addressed Central Asian (WHAT CAN BE DONE?) energy. A nuanced interpretation has emerged in the discourse: Central Asian states should develop Without question, the assertiveness with which alternative routes not only because of good business Russia has acted on its current energy status has sense but because routes through Russia are now created an entire industry in both serious discus- subject to the whims of geopolitical desires and to sions and conspiracy theories. Whether one sees this retaliatory action, which makes it imperative that as Russia taking advantage of its natural wealth, or Central Asian leaders speed up these alternative hatching a sinister plot to create a new power basis for routes. While some policy analysts and pundits cast an “empire,” Russia’s energy policy is important in and this as an anti-Russian agenda, the U.S. government of itself. Moreover, the effect it has on neighboring has avoided that language. states and their own energy policies is evident. Such Other countries have also emphasized the en- reactions need study to understand them in a rational ergy component in their recent negotiations with manner. Central Asian states. Obviously, the Nabucco pipe- Should Russia use energy as a tool of policy? Of line, if it includes Turkmenistan, would elevate the course. Some argue that energy needs are a basis energy factor in European relations with Central for regional security, and the broader transnational Asia. (See Cornell’s article, Turkey: On the energy considerations ought to apply. Quite frankly, Russia crossroads, page 30.) It is clear EU states are look- has a geological gift and has every right to develop, ing to Central Asia and the broader Caspian region exploit and export this product in the manner most with renewed interest. While the Nabucco route appropriate for the country, or firms, that actually gets the most attention and print, other options and develop the energy industry. For the Russian govern- investment opportunities are emerging, with the ment and its citizens, it makes sense to maximize profit intent of bypassing Russia and of offering choices to and gains. Moreover, it would be wise to do so in a way the suppliers and consumers. that would be environmentally friendly and suitable China, for example, has aggressively sought to to the Russian domestic situation. Having said that, if establish a presence in the region and offer con- the decision is to use energy as part of a foreign and tracts for energy routes eastward. The agreements security policy, wise leadership would also understand to develop fields in Turkmenistan, Kazakhstan and that each action has potential consequences. Present- Uzbekistan are part of this policy, which actually ing things in zero-sum terms and carrying out policies predates the current Russian assertiveness. However, that almost encourage a “hazing” mentality will have this policy does appear to be more forward-looking long-term effects. as the search continues for more complex and As noted before, Russia cannot operate in a higher-priced routes. Even Afghanistan is pushing vacuum, and must understand that any direct usage for pipeline routes south — to help develop the of energy as a weapon will have important second- country and reignite the notion it will be a transit ary and tertiary effects. The desire to punish Ukraine corridor for commercial goods and energy from and Georgia is clear, as noted by the repeated vitriolic Central Asia to points beyond. Afghan officials are statements of Russian officials. Right or wrong, there increasingly including this in their public speeches, is a desire to play “the energy card” as a retaliatory especially to foreign audiences. They engage India, measure against these states. The consequences in Pakistan and even Iran. While the alternative routes other areas become clear. The Central Asian states — have been in discussion for years, in the past three inextricably linked to Russia — are accelerating their years representatives from these countries have search for alternative routes. Even if they politically stepped up their efforts to entertain alternative support Russia’s position vis-à-vis Ukraine, Georgia or routes. Even with the fluctuating and uncertain en- other states, they must now consider the direct impact ergy prices, there has been a renewed desire to seek such policies have on their own economies. Similarly, out new routes — arguably because of the “Russian other states that feel the impact of Russia’s mercu- question.” rial policies are re-exploring Central Asian routes as In the end, the bilateral relations between Russia alternatives. For some, like China, the contracts sought and any of these states depend on a host of issues years ago now appear in a much more significant light, — the majority of which do not deal with Central and there is a greater effort to complete them. Asia. Bilateral ties remain critical, and EU-Russian, In the end, even as we’re years into the 21st cen- Chinese-Russian, and U.S.-Russian dyads must be tury, strategies employed in past centuries still apply. the primary consideration in addressing concurrent It would behoove all states — energy exporters, transit energy policies. However, as energy is a global com- states and consumers — to understand that this is modity with a global transport network, the actions truly a global commodity. Wielding the energy sword and secondary reactions in the region reflect the may allow a state to possibly slay their opponents, but inevitability of how one country’s actions can have a improper handling of this razor-sharp implement can worldwide ripple effect. wound the possessor just as deeply. † per Concordiam 17
  18. 18. NATO Targets Energy Security Strasbourg-Kehl summit prompts alliance response ASSOCIATED PRESS Dr. Andrew Monaghan NATO Defense College 18 per Concordiam
  19. 19. “The disruption of the flow of natural gas in January 2009 seriously affected a number of allies and partner countries.” NATO T NATO members reaffirmed he international context of 2008 tension between energy being a security prob- the alliance’s commitment and 2009 has highlighted the lem and one of a mostly economic, technical to transatlantic solidarity importance of securing the energy and commercial nature.2 Indeed, in many ways and future challenges at supply. The war between Russia it has complicated the situation for NATO. A the Strasbourg-Kehl Sum- and Georgia in August 2008 af- military security role for the alliance becomes mit in April 2009. Attend- fected European energy supplies more relevant in certain ways and yet, simul- ees included, above: left to right, British Prime Minister by causing the temporary shut- taneously, NATO faces the increasing risks of Gordon Brown, U.S. Presi- down of the Baku-Supsa pipeline. The NATO involvement in other issues and disputes in dent Barack Obama, NATO secretary-general noted that since the conflict which it has little to contribute and in which its Secretary General Jaap threatened the sophisticated supply network contribution may aggravate the situation. de Hoop Scheffer, German of the Caucasus, it was also partly about the This paper briefly establishes the back- Chancellor Angela Merkel security of the energy supply.1 ground of the NATO discussion about energy and French President The long-running dispute over gas pric- security. It then examines the areas in which Nicholas Sarkozy. ing and transit tariffs between Russia’s giant the alliance can make a positive contribution to Gazprom energy company and the Ukrain- the wider energy security. It looks at European An engineer, left, checks ian state-owned company, NJSC Naftogaz of energy security more specifically, before draw- the pressure in the pipeline Ukraine — which led to an unprecedented ing together some ramifications for NATO. pumping natural gas from an underground storage cutoff of gas supplies to European Union tank at Hajdúszoboszló, markets in January 2009 — underscored con- NATO and Energy Security Hungary. Hungary has had cerns in the Euro-Atlantic community about The declaration released after the alliance’s to dip into its gas reserves energy security. Strasbourg-Kehl Summit in April 2009 un- when Russian gas stops But while this context emphasized the derscores the framework of NATO’s energy flowing from Ukraine. importance of a complex and often politically security position. Reflecting the process — influenced problem, it has not clarified the started at the 2006 summit in Riga, Latvia per Concordiam 19
  20. 20. — of drafting a coherent and suitable role for the EU — so its NATO membership provides an the alliance, the declaration notes the principles important political and institutional mechanism agreed to at Bucharest, Romania, and a report on for engagement. progress achieved. Second, the search for diversification leads Thus the alliance affirms its continuing support toward regions of greater political instability and for “efforts aimed at promoting energy infrastruc- greater vulnerability to conflict or terrorist and ture security” and intention to “ensure that NATO’s pirate attacks. Thus there is a clearer need for endeavors add value and are fully coordinated and coordinated military protection for such supplies embedded within those of the international com- and routes. This is evident in Nigeria, a key oil munity, which features a number of organizations specialized in energy security.” The declaration points to the critical importance of diversification While piracy is a problem of routes, suppliers and energy sources, and inter- for all shipping, its relevance to connectivity of energy networks. As an important note, it also refers to the “disruption of the flow energy security was highlighted of natural gas in January 2009 seriously affected a when pirates seized the MV Sirius number of allies and partner countries.” Star, a supertanker that carries Diversification of Europe’s Energy about 25 percent of Saudi Arabia’s Supplies: NATO’s Added Value daily oil production. By linking the alliance’s role to the wider Euro- pean discussion of diversification of routes, sup- System manager pliers and energy sources, NATO adds value to Bela Balint monitors natural gas flow at the international effort in two ways. producer for NATO member states. Nigeria is the FGSZ Natural Gas First, calls for diversification highlight the an important focus for NATO, given the violent Supply Corp. system wider membership and partnership of the alliance, activity and threats posed by the Movement for control center in including major producers and transit states — the Emancipation of the Niger Delta, which seeks Siofok, Hungary. particularly the United States, Canada and Norway, greater control over Niger Delta oil production. Such activity clearly affects supplies, the effec- tive exploitation of resources and the price of oil. A second example is that of piracy off the Horn of Africa, a problem that became increasingly prominent in 2008. To increase security, NATO responded with Operation Allied Provider, from Oct. 24 to Dec. 12, 2008, and coordinated the handover of that mission to the EU naval forces’ Operation Atalanta.5 While piracy is a problem for all shipping, its relevance to energy security was highlighted when pirates seized the MV Sirius Star, a supertanker that carries about 25 percent of Saudi Arabia’s daily oil production. A number of attacks have taken place against other tankers, including the Abdul Kalam Azad and the Kriti Episcopi.6 By emphasizing its naval capabilities, NATO ASSOCIATED PRESS can bring a capacity that other major energy organizations, including the EU and International Energy Agency, do not possess. Thus, the alliance can add value to the wider international energy which are major energy producers and members security effort. NATO’s maritime situational of the alliance but not of the European Union. awareness facilitates monitoring activity on the It also provides an important window to the high seas and the sharing of data among NATO Arctic region, which will become an increasingly navies. The alliance also coordinates naval assets important element of the energy supply chain. to protect oil and gas shipments, such as liquefied Turkey, another NATO member, is a key energy natural gas-carrying tankers on the high seas. transit state and major energy hub for European To be sure, there are limitations to what a supplies — indeed it is crucial for plans for Eu- consensus-bound organization can do to project ropean energy diversification.4 But at the same power. But important questions remain, not the time, Turkey has a complex relationship with least of which is who would pay for the alliance 20 per Concordiam
  21. 21. A gauge in Hajdúszoboszló, Hungary, shows the pressure inside a pipeline from Ukraine bearing Russian natural gas. Some leaders contend that NATO intervention into energy security may cause a bigger split in the Russia-EU energy dispute. to protect the assets of independent companies? Nevertheless, the intention to diversify energy sources, routes and types — particularly given the increasing role of liquefied natural gas in energy supplies — will only increase the use of sea lanes and the need to protect them with naval assets. ASSOCIATED PRESS European Energy Security: A Risk for NATO But at the same time it tries to cast this complementary military security role, the alliance risks becoming entangled in An agreement reached by Russian Prime Minister other problems in which different organ- Vladimir Putin and Ukrainian Prime Minister Yulia izations play the main roles and in which NATO has little, if any, constructive role. Timoshenko in early September 2009 appears to have Indeed, by becoming involved, the alli- temporarily relieved some of the more pressing issues, ance may exacerbate the very problem it seeks to address. This applies particular- particularly regarding the amount of gas Ukraine will ly to the nature of Russia’s energy part- import from Russia. nership with the EU and especially the tensions inherent in the Russia-Ukraine the Ukrainian economy and, more spe- March 2009, arguing that changes to the energy relationship framed by the ongo- cifically, the financial status of Naftogaz management of Ukrainian gas transport ing gas price problem between Gazprom Ukrainy itself generated concerns about make it impossible for Gazprom “to uni- and NJSC Naftogaz of Ukraine. The its ability to pay. This surfaced in late laterally finance its Ukrainian partners.”9 ramifications of the problem already May 2009, when Russian Prime Minister This highlights the wider tensions over have had a major impact on gas supplies Vladimir Putin noted Moscow’s con- responsibility. to European (including NATO member) cerns about the Ukrainian side’s ability European Commission President José states. Despite the long-running nature to make the payments.8 An agreement Manuel Barroso considers the prob- of the problem and more immediate reached by Putin and Ukrainian Prime lem to be “mainly between Russia and clear warning signs in December 2008, Minister Yulia Timoshenko in early Sep- Ukraine.” However, Russian President the cutoff — let alone its rapid escala- tember 2009 appears to have temporar- Dmitry Medvedev argues this is “not tion — appeared to surprise many in the ily relieved some of the more pressing just a problem for Russia and Ukraine, Euro-Atlantic community. issues, particularly regarding the amount as some people occasionally try to paint The resolution in January 2009 of of gas Ukraine will import from it,” and insists the EU plays a role in the immediate problem, which centered Russia. But the financial status of supporting Ukraine financially (while on the inability to agree on a price for Naftogaz Ukrainy itself and its ability to at the same time Moscow appears to Russian gas supply to Ukraine, and a tar- pay remains a concern, and the par- seek bilateral agreements with Ukraine). iff for the transit of Russian gas to Eu- ties could revisit the agreement if the Significantly, Moscow proposes the EU rope before the end of previous agree- Ukrainian economy improves. consider different options for financing ments on Dec. 31, 2009,7 did not resolve Moreover, the wider picture of rela- supplies. And, “if the European financial an important underlying issue: Naftogaz tionships among the EU, Ukraine and institutions decide that this kind of work is Ukrainy ability to pay for gas supplies to Russia — and Russia’s place in the possible, then the Russian Federation will Ukraine. The agreement stipulated the European “energy architecture” — re- consider how much it can contribute.”10 energy company must complete pay- mains complex. Russian Deputy Prime (Emphasis added.) This is an important ments for monthly gas imports by the Minister Igor Sechin noted the uncer- point: Moscow increasingly paints the seventh day of the following month. This tainty created when the EU and Ukraine EU as the actor who should take more was not broken. But the perilous state of signed a gas pipeline declaration in responsibility — having decried the EU’s per Concordiam 21