On Conflict in Georgia
by Mark David Iden
San Francisco Chronicle
The war in Georgia and the inadequacy of the West’s response points again to the power of the Russian energy monopoly.
Europe fears protesting too much, as this might induce Russia to reduce the flow of natural gas to the continent this coming winter (Russia presently supplies 50 percent of Europe’s natural gas).
Whether or not Russia marches on to Tibilisi, its assault on Georgia has further strengthened Russia’s hold on Europe: Financiers are unlikely to back new proposed pipeline systems bringing Caspian oil and gas to the United States and Europe via Georgia.
This suggests that growing Caspian oil and gas production would have to use the vast Russian pipeline network to get to market.
The most sensible and cost-effective way out of this is to transport the resources by pipeline south to Iran. A competitive Iranian alternative would thwart Russian designs, and help bring down natural gas prices.
Uncle Sam and Il Duce
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