US Must Free Itself From Dependency On Russian Oil And Gas

The reality that’s been revealed by Russia’s Georgia adventure is captured in the following statement by Prof. Steven Blank at Penn. State: ““Russia’s energy objective is to monopolize all Caspian energy flows to Europe, so that it can then blackmail Europe and force political changes to European policy,” Prof. Blank said.

That is the new national security challenge presented by Russia that I discussed recently.  It’s historical and strategic dimensions are set forth in a excellent piece of journalism published last Friday in the Globe and Mail.

The object of the blackmail is stated as follows: “It [Russia] can then play that energy card to block further NATO expansion to its borders, to prevent criticism of its anti-democratic government, and to win support for the foreign ambitions of its state-owned companies,” he added.   Of course, if Russian blackmail can accomplish those goals, it could also be used to further any other objectives Russia has.  After all, control of a region’s oil and gas is about as powerful a lever of control as any country could have.

The Baku-Tbilisi-Ceyhan (BTC) pipeline running through Georgia, the immediate object of Russia’s interest last week, is like a modern Maginot Line.  It was carefully conceived and painstakingly promoted and finally implemented by the Western powers as a way to contain Russia’s strategy of using its huge energy assets to control the rest of Europe.  And now, in less than a week, the BTC Pipeline has been exposed as a feckless waste of effort by our new enemy, Russia.

The West’s strategic concept was to bypass Russia and Iran in transporting to Europe the huge oil and gas deposits of several Caspian-region former Soviet Republics.  What Russia has now made clear is that whether it controls the BTC Pipeline directly or not, such control is within its capacity in a matter of days. Thus, Russia now has effective control of the pipeline that was designed to thwart its ambitions.

I am suggesting that the only - and I want to emphasize only - possible effective strategy that the West can now develop to counter Russia’s energy stranglehold is to free itself of its need for Russia’s oil and gas.  The way to do so is for the U.S. to adopt a strategy of moving its transportation systems away from oil dependency.

The specific strategy I suggested includes using natural gas for trucking and electricity for cars.   I believe that if the U.S. leads the way and provides its huge market for the entrepreneurs who will develop the electric and CNG alternatives to oil, other countries around the world will follow and the price of oil will over time be substantially reduced, which implies that it will no longer be scarce.

There have been a number of criticisms of my idea.   Some of them reflect the fact that I did not flesh it out entirely.  Having a specific policy prescription down to the last detail is not my objective, but I will comment briefly on some of the objections:

1. Energy independence will take too long to implement. I believe that just by the U.S. setting forth the goal and adopting robust policies to implement it will motivate Russia to modify its own strategy.  Russia will see that in the face of longer term expectations of lower oil prices their present game will only work for a short time - maybe a decade - and can not be successful in the longer term.  This will force Russia to adopt a new strategy, which I believe can only be one of peaceful cooperation as a global trading partner with all OECD countries.  What other strategy, short of blatant military confrontation which would also be self defeating, could Russia adopt?

2. My strategy for oil independence did not include nuclear.   I’m not opposed to nuclear or even “clean coal” - but I suspect that neither one is practical.  Nuclear I think is becoming too expensive compared with wind, solar, and geothermal.  But if I am wrong on that, I would happily include nuclear or whatever else would work best.  How we get off oil is immaterial to me, although in the very long term only renewable sources will be available.

3. We should not rely on natural gas.   I think the U.S. has enough NG resources that we can use if for trucks on an interim basis.  Ultimately, trucks will also need to use a plug-in hybrid system, but the technology for that is too far off to implement immediately.   That is why I suggest natural gas as an interim solution.  If others have better ideas, I’m happy to stand corrected.  It is the goal that is important, not the means of reaching it.  Maybe we need a far more robust and electrified rail system for carrying containers interstate.  Whatever works best.

An objection I did not read, but which I frankly think is the most difficult hurdle, is how Europe can wean itself from dependence on Russian natural gas.  That would seem to require the use of electricity for home heating.   If sufficient renewable  electricity can be developed in Europe and their homes can transition quickly enough to electric heat, the goal could be achieved.

The key is to understand that Russia has never been a reliable partner for western democracies and it is certainly a more potent and potentially dangerous enemy today than it was in the past.  Therefore, a condition of complete dependency on Russia for energy is an untenable national security risk for all OECD countries.

Posted in Categories: Commodities, Contributor, Eurozone, External Research, USA.

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Comment by Trevor7007

2008-08-18 23:13:42

I agree with you Jim.

The longer we delay renewables, the less bargaining power we have with Russia!!

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