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It was not Russia that began the "war of nerves"

It was not Russia that began the "war of nerves"
May 29, 2007
Konstantin SIMONOV, director of the Political Situation Center of Russia

There is a real war going on in the world gas sphere, which is taking on an ever more ferocious nature. We are once again encountering an absurd situation, when the U.S. Congress is adopting laws that concern questions that lie outside the scope of jurisdiction of the USA. In fact, what relation does the USA bear to the international organization of sovereign oil exporting countries, in which it is not a member? In this connection, we may recall the words of President Vladimir Putin: "Comrade wolf eats, and listens to no one."

But on the whole, such an acute reaction of the USA, and along with it also the countries of the European Union, shows that the Americans are nervous. And that means that Russia has hit the mark. In April of this year in the Qatar capital of Doha, it joined in the scenarios of close coordination of the gas exporter countries.

But it was not Russia that began the "war of nerves." For example, even before, certain countries of the European Union, such as Poland, had initiated the idea of creating an "energy NATO" as a reaction to the great dependence of Europe on Russian deliveries of energy resources. The idea of creating a "gas OPEC" with participation of Russia, although with some stipulations regarding the long terms of its possible implementation, encountered objections from a number of experts.

However, even the great repercussions in the public field, which arose as a result of the Doha forum, speaks of the fact that, from the standpoint of strategy of increasing Russia's role in the gas sphere, the task has been fulfilled. The latest actions of the USA confirm this conclusion. But, aside from that, we must
answer the question of whether Moscow is prepared to change the world system of gas trade. It is principally important to understand the prospects of the course toward separating price formation for gas from price formation for oil, and the attempt to make gas an independent commodity. And the second instance that requires appraisal is: In the future, will the participants of the forum
of gas exporter countries come to a division of the markets in the interests of each of the exporter countries included in the gas club?"

One gets the impression that such actions by the USA are only provoking Russia toward ever more decisive actions in defending its interests in the energy sphere. If we predict the consequences of such measures by the USA for the actions of the Russian energy companies in the world, then I do not think that anything will change. The obstacles are even now more than serious, and in
many countries the principle of "the Russians will buy everything up, so we cannot allow them in," is in effect. Therefore, acquiring assets in Europe constitutes a most difficult task for Russian companies in the sphere of the TEK
(fuel-energy complex), which requires the mobilization of huge and varied resources. The companies are forced to break through, like partisans surrounded by the enemy. An indicative example is Great Britain, which once again, evidently on the threshold of the parliamentary elections, has tightened its position in regard to Russian business. For us, the task will not become more difficult--it is already extremely difficult.

In the current situation, Russia holds definite trump cards. The countries of the European Union are becoming more and more interested in Russian gas reserves. This dependence is increasing. The countries of Central Asia presented an option for diversification of deliveries for the European Union, but the recent decision of Russia, Kazakhstan and Turkmenistan to build the Caspian gas pipeline demonstrated the success of our country's international energy diplomacy. The gas pipeline will pass through the territory of Russia, which will continue to control the transit of Central Asian gas.

Ted Galen CARPENTER
vice president for defense and foreign policy studies at the Cato Institute
U.S. Ambassador to the United Nations Susan Rice huffed that her country was 'disgusted' by Russia and China's decision to veto a UN Security Council resolution condemning the violence in Syria and calling for an immediate end to that bloodshed. Their actions, she added, were 'shameful' and 'unforgivable.' Not only could Ambassador Rice apparently use a refresher course in diplomatic language, Washington's response also betrays a troubling arrogance on two levels.
Keyur Patel
High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Russia released a preliminary estimate for 2011 GDP growth on Tuesday - and at 4.3 per cent, it looks pretty healthy. The figure crept ahead of analyst expectations, buoyed by a strong recovery in consumer demand over the year, while 2010 growth was revised upwards, also to 4.3 per cent. Renaissance Capital was cautiously bullish, calling the forecast 'reason for a (modest) celebration'.
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