Great Game Under Way in the Caucasus

US looks to wean Georgia from Russian energy

by Joshua Kucera

The US government is pondering ways of breaking Georgia’s dependency on Russian gas and electricity. The US Department of Energy is working with a Tennessee-based think tank, the Howard H. Baker, Jr. Centre for Public Policy, to "discuss policy alternatives and define and eliminate barriers to investment in Georgia’s energy sector," said Lana Ekimoff, director of Russian and Eurasian affairs in the department’s Office of Policy and International Affairs.

"We expect this initiative to assist Georgia in designing a long-term energy sector development strategy that will enable them to achieve an acceptable level of energy security," Ekimoff said at a 25 July hearing of the Subcommittee on the Middle East and Central Asia of the US House of Representatives’ International Relations Committee.

Georgia’s dependence on Russian energy supplies was highlighted in January, when two pipelines transporting gas from Russia to Georgia exploded, creating an energy crisis in Tbilisi and other cities. At the time, Georgian officials accused Russia of deliberately creating an energy shortage. Moscow denied the charge. "The political situation between Russia and Georgia does not allow for a reliable supply of gas and electricity and for more than a decade Georgians have not been able to supply heat and power to its citizens during the coldest parts of the winter," Ekimoff wrote in written testimony to the committee.

Ekimoff credited past US energy assistance to Georgia, which included helping plan the country’s energy budget and privatizing UEDC, the state electricity company, with helping to cushion the impact of the January energy crisis. "These measures in addition to further reforms were critical in alleviating the impact of the January crisis by facilitating the integration of emergency Azerbaijani gas and increasing the output of Georgian hydropower," she said. Her testimony did not mention that a fresh supply of Iranian gas was also a vital element in easing the January crisis.

The Georgia plan is part of a larger strategy outlined by US officials to encourage the development of the energy sectors of the countries of Central Asia and the Caucasus, while also increasing US influence in the region. Steven Mann, principal deputy secretary of state for South and Central Asian affairs, said Washington was now focused on the "second phase" of new energy routes out of Central Asia, now that the Baku-Tbilisi-Ceyhan pipeline and the Caspian Pipeline Consortium line are completed. The second phase, he said, was focused on increasing access of oil from Kazakhstan, a key US ally in the region, to the Baku-Tbilisi-Ceyhan pipeline.

The Kashagan field in Kazakhstan has proven reserves of nearly 30 bn barrels of oil, with the potential for close to 100 bn barrels, Mann said. Samuel Bodman, the US energy secretary, and Vice President Dick Cheney have both visited Astana in recent months for talks with Kazakhstani President Nursultan Nazarbayev on oil-and-gas issues. Mann also touched on a US plan to link up electricity producers in Central Asia with consumers in Afghanistan and South Asia. Another key US policy goal is sidelining Iran’s influence in the region. "We remain firmly opposed to any pipeline involving Iran," Mann said.

On the contentious question of how to delineate the oil and gas reserves of the Caspian Sea, Mann said that US policy was to support whatever solution the five nations bordering the sea come up with, and to offer technical and legal assistance to facilitate delineation. Mann said he blamed Tehran and Ashgabat for their inflexibility on the Caspian issue. "So far, regrettably, the northern part [of the sea] has had a delineation agreement but we’re not seeing that with Iran and Turkmenistan," he said.

Source: Eurasianet