In a nutshell, a few years ago Russia devised North Stream – fully operational – and South Stream – still a project – to bypass unreliable Ukraine as a gas transit nation. Now Russia devises a new sweet deal with Turkey to bypass the “non-constructive” (Putin’s words) approach of the European Commission (EC) concerning the European “Third Energy Package”, which prohibits
one company from controlling the full cycle of extraction, transportation and sale of energy resources.
Background is essential to understand the current game. Already five years ago I was following in detail Pipelineistan’s ultimate opera – the war between rival pipelines South Stream and Nabucco. Nabucco eventually became road kill. South Stream may eventually be resurrected, but only if the EC comes to its senses (don’t bet on it.)
The 3,600 kilometer South Stream should be in place by 2016, branching out to Austria and the Balkans/Italy. Gazprom owns it with a 50% stake – along with Italy’s ENI (20%), French EDF (15%) and German Wintershall, a subsidiary of BASF (15%). As it stands, these European energy majors are not exactly beaming – to say the least. For months, Gazprom and the EC were haggling about a solution, but in the end Brussels predictably succumbed to its own mediocrity – and relentless US pressure over weak-link and European Union member Bulgaria.
Russia still gets to build a pipeline under the Black Sea, but one now redirected to Turkey and, crucially, pumping the same amount of gas South Stream would. Not to mention Russia gets to build a new LNG (liquefied natural gas) central hub in the Mediterranean. Thus Gazprom has not spent US$5 billion in vain (finance, engineering costs). The redirection makes total business sense. Turkey is Gazprom’s second-biggest customer after Germany; much bigger than Bulgaria, Hungary and Austria combined.
Russia also advances a unified gas distribution network capable of delivering natural gas from anywhere in Russia to any hub alongside Russia’s borders.
And as if it was needed, Russia gets yet another graphic proof that its real growth market in the future is Asia, especially China – not a fearful, stagnated, austerity-devastated, politically paralyzed EU. The evolving Russia-China strategic partnership implies Russia as complementary to China, excelling in major infrastructure projects from building of dams to laying out pipelines. This is trans-Eurasia business with a sharp geopolitical reach and not subjected to ideology-drenched politics.
Russian “defeat”? Really?
Turkey also made a killing. It’s not only the deal with Gazprom; Moscow will build no less than Turkey’s entire nuclear industry, and there will be increased soft power interaction (more trade and tourism). Most of all, Turkey is now increasingly on the verge of becoming a full member of the Shanghai Cooperation Organization (SCO); Moscow is actively lobbying for it.
This means Turkey acceding to a privileged position as a major hub simultaneously in the Eurasian Economic Belt and of course the Chinese New Silk Road(s). The EU blocks Turkey? Turkey looks East. That’s Eurasian integration on the move.
Washington has tried very hard to create a New Berlin Wall from the Baltics to the Black Sea to “isolate” Russia. And yet Team “Don’t Do Stupid Stuff” in Washington never saw it coming – yet another Putin judo/chess/go counterpunch applied exactly across the Black Sea.
Asia Times Online has been reporting for years how Turkey’s key strategic imperative is to configure itself as the indispensable energy crossroads from East to West – transiting everything from Iraqi oil to Caspian Sea gas. Oil from Azerbaijan already transits Turkey via the Bill Clinton/Zbig Brzezinski-propelled BTC (Baku-Tblisi-Ceyhan) pipeline. Turkey would also be the crossroads if a Trans-Caspian pipeline is ever built (slim chances as it stands), pumping natural gas from Turkmenistan to Azerbaijan, then transported to Turkey and finally Europe.
So what Putin’s judo/chess/go counterpunch accomplished with a single move is to have stupid EU sanctions once again hurt the EU. The German economy is already hurting badly because of lost Russia business.
The EC brilliant “strategy” revolves around the EU’s Third Energy Package, which requires that pipelines and the natural gas flowing inside them must be owned by separate companies. The target of this package has always been Gazprom – which owns pipelines in many Central and Eastern European nations. The target within the target has always been South Stream.
Now it’s up to Bulgaria and Hungary, which have always fought the EC “strategy”, to explain the fiasco to their own populations, and to keep pressing Brussels; after all they are bound to lose a fortune, not to mention get no gas, with South Stream out of the picture. Bulgaria alone reportedly has lost more than 6,000 new jobs and over $3 billion of investment due to the loss of South Stream.
So here’s the bottom line; Russia sells even more gas – to Turkey; Turkey gets much-needed gas with a cool discount; and the EU, pressured by the Empire of Chaos, is reduced to dance, dance, dance like a bunch of headless chickens in dark Brussels corridors wondering what hit them. And while the Atlanticists are back to default mode – cooking up yet more sanctions – Russia is set to keep buying more and more gold.
Watch those spears
This is not the endgame – far from it. In the near future, many variables will intersect.
Ankara’s game may change – but that’s far from a given. President Recep Erdogan – the Sultan of Constantinople – has certainly identified a rival, Caliph Ibrahim of ISIS/ISIL/Daesh fame, trying to steal his mojo. Thus the sultan may flirt with mollifying his neo-Ottoman dreams and contemplate steering Turkey back to its previously ditched “zero problems with our neighbors” foreign policy doctrine.
Not so fast. Erdogan’s game so far was the same as that of the House of Saud and Qatar’s House of Thani; get rid of Syrian President Bashar al-Assad to allow an oil pipeline from Saudi Arabia and a gas pipeline from the South Pars/North Dome mega-field in Qatar. This pipeline would be Qatar-Iraq-Syria-Turkey, rivaling the already proposed, $10 billion Iran-Iraq-Syria pipeline. Final customers: the EU, of course, desperate in its “escape from Gazprom” offensive.
So what now? Will Erdogan abandon his “Assad must go” obsession? It’s too early to tell. The Turkish Foreign Ministry is spinning to the media that Washington and Ankara are about to agree on a no-fly zone along the Turkish-Syria border – even as the White House, earlier this week, insisted the idea had been scrapped.
The House of Saud is like a camel lost in the Arctic. The House of Saud’s lethal game in Syria always boiled down to regime change so that the Saudi-sponsored oil pipeline from Syria to Turkey might be built. Now the Saudis see Russia about to supply all of Turkey’s energy needs – and still be positioned to sell more gas to the EU in the near future. And Assad still won’t go.
But it is US neo-cons who are sharpening their poisonous spears with gusto. As soon as early 2015 there may be a Ukrainian Freedom Act in the US House of Representatives. Translation: Ukraine being dubbed a “major US non-NATO ally”, which means, in practice, a virtual NATO annexation. Next step: more turbo-charged neo-con provocation of Russia.
A possible scenario is vassal/puppies such as Romania or Bulgaria, pressed by Washington, deciding to allow full access of NATO vessels into the Black Sea. Who cares that this would violate current Black Sea agreements that affect both Russia and Turkey?
And then there’s a dangerous Rumsfeldian “known unknown”: how the fragile Balkans will feel subordinated to the whims of Ankara. As much as Brussels keeps Greece, Bulgaria and Serbia in a strait jacket, in energy terms they will start depending on Turkey’s goodwill.
For the moment, let’s appreciate the magnitude of the geopolitical shockwaves after Putin’s latest judo/chess/go combo. And get ready for another chapter of Russia’s “pivoting across Eurasia”. Putin hits Delhi next weekend. Expect another geopolitical bombshell.
Pepe Escobar is the roving correspondent for Asia Times/Hong Kong, an analyst for RT, and a TomDispatch regular. His new book, Empire of Chaos, has just been released. He is also the author of Globalistan: How the Globalized World is Dissolving into Liquid War (Nimble Books, 2007), Red Zone Blues: a snapshot of Baghdad during the surge (Nimble Books, 2007), and Obama does Globalistan (Nimble Books, 2009). Follow him on Facebook.
Copyright 2014 Pepe Escobar