Georgia, Russia and the Control Over Oil

photo courtesy of UK TimesOnline

Once you come to the realization that everything is a product of energy, the world sure does look different. The world’s wrangling can then be understood in terms of energy: Who’s got it? Who wants it, and at what costs?

Here’s a very good example: The bloody military conflict between Russia and Georgia (once part of the former-Soviet Union) is in large part about the control of oil and natural gas.

A little background: the Caspian Sea Region, also known as the Caucasus, is home to an estimated 35 billion barrels of oil and trillions of cubic feet of natural gas.

And it’s not just the extraction of energy that’s at issue, but the ability to transport the oil and natural gas en route to energy hungry consumers. The system of pipelines that transport the oil and natural gas, then, becomes very critical.

It’s also why U.S. and Western powers, and of course oil companies like BP and Chevron are actively invested in what happens in Georgia.

The Clinton Administration back in the 1990s put into motion plans to create an oil pipeline from Azerbaijan to Georgia to Turkey, essentially an oil transport system free from Russian control. Look at this map from Business Week to see this oil pipeline, as well as a proposed natural gas pipeline which would transport the stuff from the Caspian region all the way to Austria.

So now that Russia has asserted its control in the region and dominated Georgia, one of the consequences is that access to oil and natural gas is much more insecure. Especially because of the volatile environment in the Middle East, strife in the Caucasus makes supply, investment, security, and diplomacy around oil and natural gas so much more critical.

It’s also why the move to an oil-independent energy system is urgent and necessary.

Read more about the Russia-Georgia war and what it has to do with oil in these articles:
http://topics.blogs.nytimes.com/2008/08/14/stalin-and-the-oil-card/...
http://www.businessweek.com/magazine/content/08_34/b4097000700662.htm