Major players including the United States, the EU, Russia, and China are vying for control and influence over scarce energy resources that will only become more valuable and in demand going forward. These powers will play a critical role in the global energy sector that will largely shape the political and economic context of this century.
Holding the largest reserves of natural gas in the world, it appears Russia will continue to be the dominant energy supplier to much of Europe in the foreseeable future. Quite simply, the massive Soviet-era Druzhba pipeline that supplies most of the continent is not going anywhere, with several proposals indeed on the table for its expansion to new territory. What’s more, energy ties have recently been strengthened with the completion of the Nord-Stream pipeline’s first line to Germany in November 2011, and a second to be completed throughout the course of this year. The new pipeline, however, has one advantage for Russia that Druzhba lacks: namely, as an offshore line it avoids transit through politically troublesome nations in the region. When Russia shut off gas to Ukraine during price disputes in 2006 and 2009, for instance, supplies to Europe were drastically affected. In this way, the physical realities of Druzhba protected Russia’s neighbors from prolonged cutoffs.
Hence, it should not come as any surprise that Poland’s defense minister likened the pipeline to the Molotov-Ribbentrop pact, which sealed the fate of Eastern Europe in World War II. Several Eastern and Central European states quickly redoubled their efforts to diversify their energy sources as a result. Poland, most notably, is now able to import about half of its gas from non-Russian sources. This trend is expected to increase as shale gas and liquefied natural gas become increasingly viable options.
As such, although Russia will remain a major player, it appears that its ability to use its gas supplies for blackmail is slowly diminishing. This lesson is being learned the hard way in Central Asia, which has awoken to its ability to court other major power centers. Turkmenistan is perhaps the most illustrative case in point. After experiencing an oil embargo from Russia in 1997-1998 and bitter haggling over a previously agreed-upon gas contract in 2009, Turkmenistan came to view China as a more reliable partner; China’s pipeline with Turkmenistan is now in place and the energy-hungry nation is contracted to buy billions of cubic meters of natural gas. In fact, Anders Aslund, a senior fellow at the Peterson Institute for International Economics in Washington, has predicted that both Kazakhstan and Turkmenistan will outperform Russia in the Chinese gas market going forward. Historical and linguistic ties are clearly no longer an insurmountable barrier in Central Asia.
Moreover, Europe and Eurasia’s energy policies will have a direct effect on other regional states seeking economic and political integration. While Central Asian countries along the Caspian Sea will continue to play a dominant role in the distribution sector, other regions (such as Southeast Europe) will enable Caspian energy resources to be linked north towards Europe’s economic heartland – thus becoming a key participant in future energy dialogues. Through the EU-led Southern Gas Corridor, the states of Southeastern Europe will in turn be vying to control the bulk of energy-transport systems; mainly pipeline projects that will serve to benefit the local economy.
A common approach on the part of Southeast European states could also alter the way in which the great powers and actors treat their interests. Previously viewed as buffer zones between the ideological blocs of the East and the West, many countries in the region are now taking on new attributes of geostrategic definition, appearing as key transit corridors for Russian and Central Asian energy flows. If the region continues its path towards European integration and the EU, shared energy security policies and strategies will also be crucial. Accordingly, as members of the EU’s Energy Community Treaty, they will become part of the wider EU energy space and key to building a pan-European gas market.
With an aim to reduce Russian influence and diversify its gas supplies, the EU is also supporting a number of enterprises linking the wider region (Russia currently provides a quarter of total EU gas supplies). As part of the Energy Security and Solidarity Action Plan proposed by the European Commission, these initiatives include Caspian and Middle Eastern regions which would supply gas to Europe through its Southern Corridor projects. For that reason, Central Asian and Balkan states will be critical in ensuring Europe’s interconnectivity of gas supplies.
A recent agreement between Turkey and Azerbaijan is planned to further advance such gas exports to European markets. With an estimated date of completion in 2017-2018, the pipeline project will be part of the Southern Corridor, which includes the EU-supported Nabucco gas pipeline, the Trans Adriatic Pipeline (TAP), White Stream, and the ITGI pipeline between Turkey, Greece, and Italy. The project aims to directly link the European gas market with the largest gas fields in the world—the Caspian and Middle Eastern basin whose reserves are estimated at over 90 trillion cubic meters. The EU’s strategic goal for the Southern Corridor is to provide 10 to 20 percent of gas demand within the EU by 2020, equivalent to approximately 45-90 billion cubic meters of gas per year. The key challenge will be to ensure that gas producing countries become ready to export directly to Europe, which for many may imply accepting high political risk linked to their geopolitical situation.
Together with Russia, Kazakhstan, Turkmenistan, Iran, and Azerbaijan, the Caspian Sea will be at the forefront of future energy security discussions. In addition to neighboring countries Armenia, Georgia, Turkey, Ukraine, and Uzbekistan, the region represents an important economic, political, and strategic hub not only for Europe but also for the United States. Subsequently, Washington’s policies toward the region will be wise to focus at strengthening regional ties and ensuring a diversification of Caspian energy to regional and international markets.
As such, the region will be a key battleground in the quest for far-reaching influence. In addition, many of the aforementioned geographic regions that Sir Halford John Mackinder labeled as the “pivot area” will undoubtedly become strategic interests to many powerful actors in the world. In that quest for the balance of power, the English geographer’s memorable quote resonates even in today’s geostrategic circles: “Who rules East Europe commands the Heartland; who rules the Heartland commands the World Island; who rules the World Island commands the World.”
Mikel Kotonika is a International Affairs Analyst and current U.S. Foreign Policy Intern at the American Action Forum.
Glen Johnson is a Ph.D. candidate in Russian History at Georgetown University.