Georgian terrorists, gas in Turkmenistan, and Putin's next power grab

In reading a headline like "Georgian Threat to Moscow Uncovered" in the state-owned Russian newspaper Izvestia, I'm startled, but not for the reasons that the FSB office that "leaked" the intelligence probably wanted. The Izvestia article reports that they received leaked communication from within the Russian government indicating that they foiled a plot by the Georgian government, disguised as Islamic terrorists, to blow up buildings in Moscow, St. Petersburg, and Sochi, and gun people down in at least Moscow.

As Stratfor notes, this is highly dubious for a number of reasons. For one, Georgia has never attacked outside of its own country, with the exception of South Ossetia and Abkhazia. Secondly, Muslims make up a small percentage of Georgia's population, and they are mostly pro-Russian.

But then there's the big one that Stratfor doesn't note: Russia has recently been given a huge incentive to cause trouble in or attack Georgia, in the form of the recent confirmation of the Caspian Sea's natural gas riches. Energy delivery, especially to Europe, and especially in the form of natural gas, is the biggest trump card that Russia has over the West. But with the confirmation of gas in Turkmenistan, the EU has also hyped expectations of connecting Europe to the Caspian region via the Caucasus. The Caucasus stand in the way of Russia's ambitions, quite literally: besides through Russia, there are only two ways to get a pipeline to Europe (i.e., Turkey or Israel): through Iran, or through the independent countries in the south Caucasus. Iran is out of the question thanks to Russia's measured support of Iran's controversial activities. And in the Caucasus, you only need two out of three to create an impenetrable bloc between the Russian north Caucasus and Iran. Russia has already cowered Armenia into not allowing Western pipelines, and with Georgia out of commission thanks to this "leaked" intelligence (or something like it), it would render Azerbaijan irrelevant.

But perhaps the most startling part of all of this is that Russia may not be bluffing: it wouldn't be the first time that they used false flag apartment bombings under the guise of Islamic terrorism as an excuse to invade a Caucasian republic. The last time they did it was in 1999: Russia's equivalent of 9/11, the apartment bombings in Buynaksk, Moscow, and Volgodonsk, and the failed attack in Ryazan that blew the FSB's cover. The Russian secret services orchestrated the attacks as an excuse to invade Chechnya, and invade they did: tens of thousands of Chechen civilians died in the Second Chechen War, and war crimes abounded. In 1999, the false flag attacks led to the invasion of Chechnya in order for the FSB and Putin to effect a virtual coup d'état in the midst of a huge national crisis. Putin was introduced to Russia, Russia loved him, and he became Russia's unelected president a few months later. If in 2008, false flag attacks (or the threat thereof) lead to the invasion of Georgia, it will be to cement control of the Caspian, in order to cement Putin's power in preparation for new power grabs.

Confusing Eurasian toponyms

Do you ever look at a map from a couple hundred years ago and think, "I thought that country was on the other side of Europe...?"

• Iberian Peninsula vs. Caucasian Iberia (modern day Georgia)
• Albania vs. Caucasian Albania (in present day Azerbaijan and southern Dagestan)
• Bulgaria vs. Volga Bulgaria (around present day Kazan) vs. Old Great Bulgaria (northeast of the Black Sea)
• Armenia vs. Kingdom of Armenia (from the South Caucasus to the Black Sea to Damascus) vs. Armenian Kingdom of Cilicia (what is now southern Turkey)

And Russia bags two more

As a prize for successfully baiting the Georgians into war, Russia has scared Western investors out of Georgia, cementing control over oil and natural gas shipment through the Caucasus. This is quite a prize: since Iran is not a viable option, and Russia has proved to be a fickle supplier of energy, the only remaining route to the riches of the Caspian Sea is through the Caucasus. Russia effectively bought Armenia's favor earlier, and with the Georgian invasion, now has a bloc powerful enough to cower the only remaining Caucasian state still standing (albeit impotently, given it doesn't share a border with the Caspian): Azerbaijan.*

On the other side of the Caspian, an anonymous source inside energy giant Kazakhstan said that they were reconsidering the BTC pipeline, instead opting for transit through Russia. Kazakhstan's ambassador to the US wrote in to the WSJ later to deny the rumor, which would probably be the response no matter what they were really up to.

* The site is subscription-only, but it allows you to see articles if you click a link from Google. Just click the top link.

The West flees from Georgia, Russians achieve their goal

There are two major energy pipelines owned by non-Russian foreign consortia running through Georgian territory: the Baku-Tbilisi-Ceyhan pipeline, and the Baku-Supsa pipeline. While the former pipeline had been shut down coincidentally a few weeks before the recent fighting began (supposedly because of sabotage by Kurdish separatists, but I have my doubts), the Baku-Supsa pipeline was still operational. And though the pipeline was not damaged in the fighting, BP (the operator) has shut down the line as a "security precaution."

From the NYT, analysts and oil bosses believe the incident has destroyed any chance of more energy pipelines in Georgia:

“It is hard to see through the fog of this war another pipeline through Georgia,” said Cliff Kupchan, a political risk analyst at Eurasia Group and a State Department official during the Clinton administration. “Moving forward, multinationals and Central Asian and Caspian governments may think twice about building new lines through this corridor. It may even call into question the reliability of moving existing volumes through that corridor.” [...]

But Mr. Verrastro, a former senior executive with Pennzoil, said it would be very hard now to build a new Western [natural gas] pipeline.

This was Russia's intention from the start: to destabilize Georgia and make foreigners think twice before investing money in Georgia, an alternative route for directing oil and natural gas across the Caspian Sea without going through Russian territory. Russia didn't need to damage actual infrastructure (though it looks like they might have at least tried in both Poti and the crucial BTC pipeline) – all they needed to do was increase the risk premium that investors saw in Georgia, and their goal is achieved – to channel all the oil and natural gas they can through their own territory.

This is all part of the New Great Game, a fight between Russia and the West over control of Central Asia's increasingly important energy reserves. Russia has been quite active in the Caucasus, fomenting tension that will scare off Western investors, such as its recent antics in Nagorno-Karabakh – arming and encouraging both the Armenians and Azerbaijanis, hoping that they'll eventually go to war over the disputed territory. Such a war, like the current one in Georgia, would surely set back Western energy companies' plans to use the countries as energy conduits to avoid Russia.

Republican warmongers cause spike in oil prices, blame oil companies

Samuel R. Staley from the Reason Foundation has an editorial at the Hawaii Reporter about the irony of Republicans bemoaning high oil and gas prices and blaming the oil companies. An excerpt, recounting the reasons for the recent explosion of energy prices:

The third and most important factor, is what pundits are calling "geopolitical uncertainty."

We are at war in Iraq and still have troops in Afghanistan. Iran wants to rattle our bones by going nuclear and the world is wondering if we will militarily strike them to prevent it. Throw in an anti-Bush politician in charge of Venezuela (our fifth largest supplier of crude oil in February) and the political instability in Nigeria (our fourth largest supplier of crude oil in February) and at least one-fifth of the price of a barrel of oil on the world market is attributed to geopolitical uncertainty according to oil industry analysts.

I'd like to add something: with the exception of instability in Nigeria (of which I know little about), all of the major causes of the uptick in the price of oil have been egged on by the Russia government:

• Russia both supplied Iraq with most of its arms for the last three decades, while at the same time feeding the US intelligence (almost certainly erroneous, and likely intentionally erroneous) about Saddam's affinity for anti-American terrorism. Later, likely hoping to prolong the war and increase the period of instability before the oil started flowing again in Iraq, the Russians fed Saddam intelligence on America's military and war plan.
• Russia has been Iran's nuclear connection, despite the lack of obvious benefit to Russia. America's spat with Iran is the most recent development to raise the "geopolitical price premium" of oil.
• Russian arms were behind Venezuela's latest embarrassment over arming anti-Colombian rebels and the subsequent threat of US invasion and spike in the price of oil.
• Russia supports both the Armenians and the Azeris in the conflict over Nagorno-Karabakh, which has led to uncertainty regarding the West's access in the future to the Caspian Sea as an energy transshipment point.
• During the late Clinton years, Russia trained Ayman al-Zawahiri, who months later officially merged his terrorist organization with bin Laden's al-Qaeda and committed the 1999 US embassy bombings in East Africa, which Lawrence Wright thinks was an attempt to "to lure the United States into Afghanistan." The US responded with cruise missile strikes, and the attacks halted plans for an American-funded gas pipeline in Afghanistan, and ushered in the decade-long period lasting up until today of steadily rising oil prices.

In all of these cases, it wasn't the original sin that made the most impact, but rather then American response to it (or the markets' response to the events in light of recent American posturing). In acts of provocation, the provocateur commits an act that is seen as so egregious that it demands a response, yet the purpose of the attack is not to kill or even to terrorize, but rather to draw the victim into another conflict. When Russian support of anti-American dictators is seen as a tactic for drawing the US into conflict with oil-producing countries, the correct American response is not warmongering, as Putin's American critics would have, but rather a retreat from American imperialism abroad. Just something to think about.

Nagorno-Karabakh and the New Great Game

"Private intelligence agency" Stratfor published an article* last month suggesting that Russia was seeking to foment tensions between Azerbaijan and Armenia over the de facto Armenian, de jure Azeri territory of Nagorno-Kabarakh. Another Stratfor article published earlier in the year details the Kremlin's close ties with Armenia (total subjugation of the country's rail and mobile phone networks, and increasing control of the country's energy and mining sectors). Russia has been aiding both sides militarily – the Armenians with Russian troops, and the Azeris with weapons leakage from Russia's recent withdrawal from Caucasian neighbor Georgia.

The more recent article gives three reasons that the Russians would want to stir up trouble over Nagorno-Kaharakh: to be able to say "I told you so" after Kosovo; to make the West think twice about Azerbaijan's stability; and lastly so that Russia could step in and solve it and look good doing so. But, the author only devotes one sentence to the issue of energy, saying that "[t]he West worries that renewed conflict could destabilize their investments in Azeri energy infrastructure." In light of recent bidding between the EU and Russia over the future of Armenia's energy resources, any Russian interference in the region ought to be looked at primarily from the standpoint of energy politics. War between Armenia and Azerbaijan would both raise the risk premium on natural gas and repel Western investors, delivering Armenia back into the hands of the Kremlin. High energy prices finance Putin's regime and placate a citizenry that is otherwise doing pretty poorly, and a monopoly on delivery of natural gas gives Russia leverage over both its former republics and the rest of Europe. If Russia is creating a geopolitical climate that destabilizes energy flows, there can be no doubt that it's acting intentionally.

* The site is subscription-only, but it allows you to see articles if you click a link from Google. So, do a search for the title of the article and click on the link from Google's search results page. Sorry, Stratfor!