The War In Iraq and American Energy Security
The full impact of the U.S.-led war to liberate the people of Iraq will not be known for several years, until an Iraqi civilian government demonstrates its capacity to govern. Until that time the risk of instability throughout the Persian Gulf will remain quite high, and if democracy-building efforts in Iraq are successful, many Persian Gulf regimes will be further undermined.
American energy security depends upon many other nations. Recent work stoppages in Venezuela and Nigeria affected the supply of oil to U.S. markets, and could be a harbinger for problems that may lie ahead for producers in the Caspian region. Crises in the oil industry in one part of the world may create unexpected security risks for the U.S. elsewhere in the world, as states try and insure their steady access to reserves.
Threats to Energy Security in "New Producing" States
Turkmenistan, Kazakhstan and Azerbaijan all must eventually transfer power to a post-Soviet generation. Heydar Aliyev, 79, of Azerbaijan is a real political survivor, but even he cannot cheat death indefinitely. At the very time that "big" oil begins to flow through the much-debated Baku-Tbilisi-Ceyhan pipeline, Azerbaijan could find itself going through a difficult political transition.
Saparmurad Niyazov of Turkmenistan and Nursultan Nazarbayev of Kazakhstan are in their early sixties. Niyazov has so alienated the Turkmen elite that, in November 2002, they attempted a coup against him. The Turkmen leader has offered Russia generous terms to market Turkmen gas in return for domestic security guarantees.
Although praising Kazakhstan's special relationship with the United States, Nazarbayev often sides with Russia's president Vladimir Putin against the United States, as he did on the question of war in Iraq. The deteriorating political situation in Kazakhstan is beginning to resemble Nigeria, although the level of corruption in the landlocked Caspian state is still not as pervasive as it was in Nigeria under military rule. But pressure on Kazakh opposition groups has grown, as charges of presidential corruption became the subject of a New York court hearing.
Too often American policy-makers tolerate the foibles of dictators of oil-rich states, only to make access to oil less rather than more dependable. When the government of Nigeria returned to civilian rule four years ago it was too late for quick fixes. Preparation for the presidential elections triggered the recent violence, but the real cause was decades of neglect by Nigeria's rulers. While the military dictators were in power, the thrust of American policy was to support American businesses involved in the country and provide only minimal assistance to the regime in power. Since the return of civilian rule, the United States has made a substantial increase in assistance money available to the Nigerian government and non-governmental agencies working in the country. However, this assistance money is unlikely to lead to rapid solutions in Nigeria, and the ethnic violence, already responsible for over ten thousand deaths, could escalate.
The demographic mosaic of Kazakhstan is not nearly as complex as that of Nigeria, but ethnic and sub-ethnic divisions are critical there too. Should political succession fail to meet the expectations of the prominent families of the Small Horde (from oil-rich Western Kazakhstan) or solely reward those from the Great Horde (President Nazarbayev's group), or those of the Middle Horde (in northern and eastern Kazakhstan, whose elite generally favor close ties with Russia) the risk of territorial secession would become real.
Venezuela's strike was caused by the mismanagement of its oil industry, the country's principle source of income. The state oil company is that country's largest employer. Added to the mix was a controversial and unpopular president, with a legacy of bad choices made in using foreign investment income. Similar crises could develop in Azerbaijan and Kazakhstan if new National Oil Funds are not distributed to their populations. The next presidents in these states will likely be less popular than the current ones and are more are likely to turn to Moscow instead of to Washington to bolster their regimes. The Kazakh oil and gas industry is becoming increasingly more intertwined with Russian interests at the very time that Kazakh relations with leading American energy companies are becoming more strained.
Political succession could put new pressures on western investors in Kazakhstan, and this succession is likely to occur in the period (2005-2010) when Kazakhstan's new large oil fields come fully on line. The relationship between Baku and Moscow is more complex, given Moscow's tacit support of Armenia in the Nagorno- Karabakh conflict. But Azerbaijani realists appreciate the many levers Moscow can use to secure or undermine their leaders.
Can Russia be a stabilizer in neighboring states?
From the onset, the Russian-American energy partnership, has been mostly hype. Talk of cooperation with Russia put Saudi Arabia on notice that, to preserve their privileged place in the American market, they had to be more forthcoming with their oil. At a time when American policies were marginalizing Russia internationally, the energy partnership seemed a reward for Putin's support in the War on Terrorism and his quietly acceding to the opening of U.S. military bases in Central Asia.