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Cheney Plays Russian Oil Roulette

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For reasons that baffle political analysts -- and me -- Vice President Dick Cheney recently gave Russian President Vladimir Putin a poke in the eye with a sharp stick. Visiting Lithuania, Cheney infuriated Moscow by observing that Russia "has unfairly and improperly restricted the rights of her people." Then, in a classic case of the pot calling the kettle black, Cheney also criticized Russia's oil policy. "No legitimate interest is served when oil and gas become tools of intimidation or blackmail, either by supply manipulation or attempts to monopolize transportation," the vice president intoned. Give us a break!

When it comes to manipulating the supply of oil, what does Cheney think the United States has been doing ever since striking its Faustian bargain with Saudi Arabia back in 1986? That's when President Bush's father, then-Vice President George H.W. Bush, in an ill-advised attempt to shore up the domestic oil industry, traveled to Riyadh to give King Fahd and the OPEC oil cartel the green light to raise crude oil prices by instituting production quotas, and in one fell swoop becoming the enabler and guardian angel of OPEC (see post "Taxing Oil's Monopoly Profits", 3/24/06). That trip was taken after then Representative Dick Cheney floated a bill in Congress to impose a tariff on all imported oil. It was voted down because of the onerous cost it would have exacted on the American consumer and through lack of support from the free traders in the then Reagan administration. In the two decades since, Western oil consumers have paid perhaps a trillion needless dollars to enrich the sheikhs and the oil industry, with Washington's active connivance. And all along, Dick Cheney has been one of the chief cheerleaders.

Cheney was certainly right about Russia's record of using oil as a weapon. You'll remember that earlier this year, Moscow tried to cut off Ukraine's natural gas supply in a dispute over prices. When Ukraine simply used Russian gas earmarked for Europe that was flowing through its territory, European customers were outraged, and Russia quickly settled its dispute with Ukraine. But the message that Moscow could and would cut off its customers was lost on no one.

And Moscow's not the only bully on the energy playing field. Energy-rich countries around the globe are blatantly wielding, or hoping to wield, "the power of the pipeline" to get their way on issues far removed from oil and gas, wrote Jad Mouawad in a recent New York Times piece. From Iran's eagerness to build a transnational natural gas line to India and Venezuela's undisguised enthusiasm for a similar link with Argentina and Brazil, pipelines present a way to gain political leverage over one's neighbors. Under the guise of helping others to meet their burgeoning energy needs, the energy producers also acquire the power to intimidate customers and influence their ties to the rest of the world. No wonder the United States is not leading a chorus of approval for either the Iranian or Venezuelan projects. It hardly wants to see India under the thumb of Iran or Hugo Chavez calling the shots for all of South America.

But then the Vice President knows how to use oil as a weapon, too. From Lithuania, he went on to Kazakhstan to make nice with President Nursultan Nazarbayev. Nazarbayev's human-rights record is considerably worse than Putin's, but Cheney merely hip-faked the subject of political reforms in Kazakhstan, disingenuously pretending that they were already under way. Getting down to business, he told reporters, "Obviously Kazakhstan is important given their considerable resources. . . . It's one of the few places where we're going to see an increase in oil production from a non-OPEC state over the next few years." Kazakhstan is also crucial because it could be a key link for a pipeline for central Asian oil that would bypass both Russia and Iran. And that's clearly why Cheney was cozying up to Nazarbayev, since such a pipeline would weaken Russia's control over supplies destined to the West.

Oil is a cynical game, and any number can play. For those of us who can only watch from the sidelines, the lesson is to be on guard when the players start spouting pious principles. As Ralph Waldo Emerson once wrote of a dinner guest, "The louder he talked of his honor, the faster we counted our spoons."