Russia's Georgia Invasion May Be About Oil

Aug. 16, 2008 — -- The conflict between Russia and Georgia is about borders and political power. But dig deeper, and you may find natural gas, oil and a stronger Russia vying for control of those resources are key factors.

"They [the Russians] sent a message that Georgia has been their backyard, was their backyard and will be their backyard," said Cliff Kupchan of the Eurasia Group, who has studied Russia and its economy and was a State Department officer during the Clinton administration. "And included in that is control of the energy transportation routes in that area."

There are three key pipelines that run through Georgia. The biggest, designed to bypass Russia, is the Baku-Tbilisi-Ceyhan pipeline, or BTC, which transports about a million barrels of oil a day from the Caspian Sea through Georgia to ports in Turkey. From there, the oil is sent to Europe and other destinations around the world.

There is a lot of concern in America about Russia's willingness to use oil and gas for political ends, Kupchan said.

There is precedent for such worry. In 2006, Russia cut natural gas supplies to Ukraine when that country refused to accept a price hike. As a result of the move, Europeans from France to Finland were left out in the cold.

The United States and Europe helped build the BTC pipeline as a way to decrease Europe's dependency on Russian oil and gas. Building it through Georgia, a new, Western-friendly democracy, was supposed to be a safe bet.

But experts say the current conflict demonstrates that the supposed "safe route" through Georgia is not so safe.

Two pipelines in Georgia operated by British Petroleum were temporarily taken offline because of the recent violence. The BTC pipeline is already down because of unrelated damage -- but experts say chances are the BTC pipeline also would have been suspended because of the violence if it had been operating.

Energy resources didn't trigger the war, Kupchan said, but for the Russians, it is a major factor that shapes its geopolitics.

"They've never liked pipelines going around them," he said. "They've never been able to do anything about it. Now, unfortunately, they are."

In the 1980s and 1990s, Russia's economy was flailing. Now the price of oil is high and the state is flush with cash from oil exports.

That puts the US at a disadvantage, said Celeste Wallender, a professor of Russian Studies at Georgetown University.

"Some of the leverage that the United States and Europe … exercised over Russian foreign policy in the 1990s is gone simply because Russia doesn't need our money," she said.

That's left the United States in a tight spot. Its strongest ally, Europe, is bound to Russian energy supplies. And the West needs Russia's cooperation on Iran, nuclear proliferation and global terrorism.

Cold War strategies of containment and isolation likely won't work anymore.

"I think that if Russia isn't somehow engaged, a Russia that really does feel marginalized and isolated in many ways is even more threatening to our interests," said Stephen Flanagan, senior vice president of the Center for Strategic and International Studies in Washington, who served in both the Clinton and George H.W. Bush administrations. "Because I think they still have a lot of capacity to make mischief to do damage to our interests around the world."

In this new global economy, Flanagan said, that may mean punishing Russia with one hand and embracing it with the other.