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Thursday,
August 16,
2007, #156 (1423)
Georgia is looking everywhere and anywhere for an alternative to Russian energy supplies. KazTransGaz-Tbilisi, a Kazakhstani-owned gas distributor in Tbilisi, is in talks with Iran, company officials announced this week. And while energy supply diversification is imperative for Georgia, Tbilisi should be cautious about who it courts. Georgia is vulnerable; most of its gas comes from the north, and the whole country shivered when explosions knocked out a pipeline two winters ago. But more than that-or, depending on who you ask, as exemplified by that-Moscow has repeatedly demonstrated its willingness to use energy as a political weapon. Last winter, Russia's Gazprom more than doubled natural gas prices for Georgia. Price hikes also threatened Georgia's neighbors in the Caucasus, and countries in Eastern Europe where Moscow was similarly eager to flex its muscles. Gazprom officials said they were simply charging market prices; furious Georgians called them political prices, and scrambled to find other suppliers. As a frigid winter loomed, Tbilisi held out as long as possible in the standoff with Gazprom. Georgian officials talked to Kazakhstan, Azerbaijan, and Iran about buying gas, and with Turkey about getting a slice of their in-kind quota from the Baku-Tbilisi-Erzerum (BTE) gas pipeline. But for both logistical and political reasons, none of those source countries could meet Georgia's full needs, and Saakashvili's administration was eventually forced to bow to Gazprom's demands. The price for one thousand cubic meters of gas from Russia jumped from USD 110 to USD 235, and Tbilisi had no choice but to pay the piper. It's a slightly different playing field today. Azerbaijan's Shah Deniz gas field is ramping up production and feeding the BTE pipeline, from which Georgia skims five percent as a tariff and can buy another half a billion cubic meters each year on the cheap. The country is also buying more than a million cubic meters a day directly from Azerbaijan's Azerigaz company, paying USD 120 per thousand cubic meters. It's a good deal for Georgia, but Baku is reluctant to sell more. Instead, Azerbaijani authorities are looking to sell Shah Deniz gas further west, fetching higher prices and securing themselves as a to-be-looked-out-for energy partner. That leaves few places for Georgia to turn. While the country does its best to stand strong against Gazprom, relying on a bullying neighbor like Russia for energy is untenable. And so Tbilisi, risking disapproval and then some from Washington, opens a dialogue with Iran. That's part desperation. Another winter is on us, and Georgians at every level sweat at the thought of what Russia has in store this time around. But if Moscow plays tough, there will be no sweating, only shivering this winter. Officials need to secure a steady supply to obviate any gas shut-off disaster, but playing nice with Tehran could cost the ruling administration in other arenas. Better to haggle with the Azerbaijanis or the Turks, and leave a deal with Iran for exigent circumstances-the US overlooked a brief emergency supply from Iran in 2006 after the pipeline explosion. Georgian citizens, meanwhile, hope it won't come to that. The government
must do its best to not let them down. |
Don't
play with fire when it comes to natural gas supplies