Conflict in Georgia: It's About the Oil. Again.

Take a look at the map of the Caspian Region Pipelines and maybe you'll have an "Aha!" moment like I did. I didn't know what to make of the conflict in Georgia until the map hit my in-box.

It came attached to a research note from Innovest Strategic Value Advisors. The note was titled, ominously, A New Arms Race in the Pipeline, and it warns of

.....a re-arming of the region and the opening of a new Cold War.

Yikes! This was no hawkish screed, like the one called Russia Resurgent that graced the cover of The Economist.

It was financial analysis.

Among the various U.S. defense contractors, General Dynamics, which makes tanks and ammunition, and Rockwell Collins, one of the principal suppliers of night vision technology, could see increased demand for their wares in the Caucasus.....

That's not the only place where new opportunity lies. Russia's swift incursion into Georgia convinced Poland to let the U.S. install a missile shield -- called GBI for "ground-based interceptor" -- on its territory. The two governments signed an agreement on August 14 for 10 installations.

Boeing has been in charge of the GBI project's technical development, for which the company obtained an initial USD 1.6 billion. The project also involves subcontractors Orbital Sciences Corporation, Lockheed Martin, and Raytheon.

All in day's work for the military-industrial complex that President Eisenhower warned against in his farewell address to the nation.

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But here's the bottom line: the Georgia conflict, it turns out, is another snapshot of the geopolitical consequences of oil addiction. We'll have to keep going to the world's bad neighborhoods to get the stuff we crave. Innovest analysts explain how competition with the U.S. for control of oil supplies led to the Russian advance into South Ossetia.

It centers around the pipeline that cuts through Georgia, skirting Russian control, called the Baku-Tbilisi-Ceyhan pipeline (BTC). It's the most modern and largest pipeline, built thanks to strong lobbying from Washington (under Clinton's watch) and money from western governments, the World Bank, European Bank for Reconstruction and Development and other aid institutions.

Russia regarded the BTC pipeline as a competitive threat, and the Georgian President's impetuous assault on Ossetia was one provocation too many.

The U.S. has been lobbying hard to get Georgia into NATO, too, a move the Europeans wisely nixed. It would have obligated NATO to defend Georgia from the attack it provoked from Russia.

Keep in mind it was profits from the pipeline that went to feed Georgian assertiveness and the arms race in the region:

Since President Saakashvili came to power in the so-called 'Rose revolution' of 2003, Georgia has made a tenfold increase in military spending. The Stockholm International Peace Research Institute (SIPRI) said that in 2007 Georgia saw the largest average growth rate of military spending in the world.....

In an effort to ingratiate itself with the United States, Georgia has deployed 2000 troops to Iraq, making it the third largest contingent in the country. Georgia has purchased drone bombers from Israel's Elbit Systems. It also has acquired from France and the U.S. other equipment to improve the characteristics of its existing Soviet-era hardware. Russian press reports have commented that while both the sides are using Soviet T-72 tanks and Sukhoi-25 jet fighters, the Georgian variants have been upgraded with night vision capability.....

The Georgian military build-up should also be considered in the context of of the growing military ambitions of its neighbors. All signs show that the Caucasus region is in the midst of a regional arms race.

Maybe that does mean good times are ahead for the defense industries, but erase the pipelines off the map and none of this would be happening. It is a direct result of the global addiction to oil. It's not a pretty picture, and it's only bound to get uglier in these geographic choke points as supplies dwindle and the price rises.

Time yet for a new clean energy paradigm?

Comments

[ajwall]

Isn't it interesting that the maximum advance of Russian forces seemed to be just about where that pipeline crosses Georgia?

A huge pipeline project has been planned for Afghanistan since at least 1996. http://en.wikipedia.org/wiki/Trans-Afghanistan_Pipeline

There is an oil pipeline project of some sort wherever we have military, even Korea. http://english.hani.co.kr/arti/english_edition/e_national/304281.html

Oil is power, and as a strategic matter, it is absolutely essential to the defense of America. Tanks, F-16s, and most warships run on petroleum.

We should not be surprised if in the future, our leaders find an excuse to invade a portion of Africa that is rich in oil to wrest it from the enterprising Chinese.

McCain, Palin, and other politicians who want to encourage our oil dependence would control our policy and continue to run us headlong towards a global oil war. They would certainly disagree that they support big oil, but we know that McCain went pro oil after a big meeting with oil execs, and we know that Palin's voters are paid by oil companies to live in Alaska and that her own husband works on the North Slope oil field and that she has also claimed that a pipeline project in Alaska was the will of God.

[philandrel]

It is pleasant to read a blog like David Sassoon's in the context of the unremitting condemnation by other media sources. BBC News informs us "Russia Faces Fresh Condemnation(!)" And who is issuing the "Fresh Condemnation," why it is,

"Seven of the world's leading industrialized nations . . . . Canada, France, Germany, Italy, Japan, the U.S. and U.K. said Moscow's recognition of South Ossetia and Abkhazia violated Georgia's integrity and sovereignty."
http://news.bbc.co.uk/2/hi/europe/7585182.stm

Ah, but it does not end here. Informed, "China and several Central Asian nations rebuffed Russia's hopes of international support for its actions in Georgia," we find, "the alliance . . . opted to take a neutral position and urged all sides to resolve the conflict through 'peaceful dialogue.'"
http://news.yahoo.com/s/ap/20080828/ap_on_re_eu/georgia;_ylt=AmsuH2EQhmrAtm6v3YnCkH6s0NUE

Now insofar as Russian incursion into Georgia gives the Russians control of the Baku-Tbilisi-Ceyhan pipeline which is integral to NATO policy in Central Asia since the collapse of the Soviet Union, there is little doubt why "Russia Faces Fresh Condemnation" from NATO countries. In the vulgar contemporary American phrase, Western Europe will now know "Who Is Their Daddy."

As for "China and several Central Asian nations," they certainly are aware of NATO engaging in exactly the same action in Kosovo taken by Russia in South Ossetia. Their language well can be construed a statement to NATO as well as Russia.

[mjt218]

Your post ignores one important point . . . The West has opened up access for Georgia to military goods in order to counter Russia's strength in the region and secure access to oil resources in the area. Oil has been the issue for a long time, not just now.

The Prize is a great book by Daniel Yergin that illustrates how the 20th century was shaped by oil. Almost every major international event can be tied to the stuff.

Clean Energy will help us move away from this. It will just be interesting to see what the next focus item is. Clean water perhaps?

[SimonNZ]

"But here's the bottom line: the Georgia conflict, it turns out, is another snapshot of the geopolitical consequences of oil addiction."

That makes sense. I've never seen Cheney rush off to a conflict zone before (except Iraq but that was well after the event), but he was on the plane to Georgia the next day.

[MagisterLudi]

Russia will not let Georgia become re-armed as easily as you think. Putin is too smart for this.

[MagisterLudi]

"Take a look at the map of the Caspian Region Pipelines and maybe you'll have an "Aha!" moment like I did All signs show that the Caucasus region is in the midst of a regional arms race."
Looked for the first time at the Caucasus map? And then right away blogging about it hmmmmm.....

Based on current tactical deployment of Russian forces it is not very likely that Russia will allow NATO/ American heavy weaponry to flood Georgia. Despite American ploy of bringing "humanitarian" aid on U.S.Navy ships.My prediction: Russia will take it to the brink not to allow heavy weaponry to be brought by sea. Maybe by air or from Turkey.

[mjt218]

I don't think his post was about the re-arming of Georgia necessarily. Ukraine, Azerbaijan, and many other countries not in bed with Russia in the area will be interested in receiving military support and military goods from the West. The Poland deal is an illustration of this.

Georgia may eventually start spending money on military resources again. Right now, they'll try their best to hide by the West and look as much like a victim as possible to protect their sovreignty on the international stage.

[David Sassoon - Huffpost Blogger]

It was the first time I saw a map of the region with a focus on the oil pipelines, and the geo-politics behind their construction and control. And yes, I immediately blogged about it, because I hadn't seen the news coverage focus on it.

The point of the post was not to consider the re-arming of the region, but the reason underlying it: oil. It's what giving the region the influx of money to pay for arms, and the motivation to play the Great Game.

The threat of another Cold War is another reason to break the oil addiction asap. It means getting as many 100mpg plug in hybrids on Americas roads is intimately connected to bringing peace to the region etc.....