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The RussiaGeorgia War
By Michael J. Economides
Posted on Oct. 08, 2008

The war between Russia and Georgia has some nationalist elements and evidence of old grudges, but it is mostly about Russia’s newly found power as an energy imperialist. Georgia has refused to play along like other former Soviet states. If anything, its independent attitude has been a giant irritant to Russia ever since Vladimir Putin used oil and gas to project hegemony over the region and, by extension, into all Europe. At the same time, the tiny country of just 4 million people has been trying to ward off the giant to its north by seeking membership in NATO or the E.U. In the postCold War era, the U.S. and Russiadependent Europe have been reduced to pleading for calm. A look at the map makes the conflict’s issues quite transparent. Oil and gas can come from Russia into Europe by tanker through the Black Sea from its massive terminal in Novorossiysk, or by pipelines through Belarus and Ukraine. There are also plans for a subsea pipeline in the Baltic. These routes give Russia huge leverage – almost an energy monopoly – over both the transit and the destination countries. Over 25 European countries now depend on Russia for as much as 75 percent of their oil and gas. Georgia was eager to act as a spoiler, and European countries were even more eager to comply while trying to avoid incurring the wrath of the hand that feeds them. 
First, it was the BakuTbilisiCeyhan oil pipeline that started construction in 2002 when Russia was much weaker. The 1,776 kilometer line connects the oilrich Caspian with southern Europe in what was to be an energy corridor for European oil and gas supplies. The pipeline is designed to carry 1 million barrels per day from Azerbaijan’s Caspian oil fields to the export terminal Ceyhan via Tbilisi, with Georgia acting as a very important transit country. This did not sit well with Russia, cutting it out from oil exports to Europe. The pipeline, funded by Western oil companies and banks to the tune of $3.2 billion, was commissioned in 2006. What gave Russia fits, and still does, is other possibilities that could affect its control – for example, underwater pipelines that could be built across the Caspian linking Kazakhstan or Turkmenistan. But Russia was really irked over talk of a gas pipeline, similar to the oil pipeline, again linking Azerbaijan and Turkey and points beyond BakuTbilisiErzerum through Georgia. This would give Georgia energy independence and create an alternative route to – the holy grail of Russian geopolitics – Gazprom’s transit monopoly. Back in 2006, Gazprom, flexing its muscles, manipulated the former Soviet states by setting new records in gas export prices practically every month. It was clear that the geopolitical climate in Eastern Europe would be severely damaged. In fact, double and triple digit increases in gas prices were imposed on Russia’s neighbors. First it was Ukraine, then Belarus, then Armenia, all threatened with gas supply interruptions until new contracts with huge price increases were signed. They had no other choice but to surrender to Gazprom’s terms and conditions. Georgia resisted the Russian might, and that predictably ended in war. Things did not deteriorate suddenly. The conflict between Russia and Georgia started with the election in 2004 of Westernoriented president Mikhail Saakashvili, who refused to accommodate Russia’s ambitions to control his country. Then, Georgians discovered and expelled alleged Russian spies. In return, Russia’s president Vladimir Putin stirred a crass witchhunt against Georgians in Russia, while Gazprom threatened to cut off Georgia’s gas supplies unless it agreed to an aggressive price hike to $230 per thousand cubic meters, from $110. Following the threat, Gazprom’s blackmail was blatant, in effect saying, “The Georgians could still maintain lower gas prices. They could compensate for the gas price increase by trading off some assets. For example, Armenia paid Gazprom with its transportation network.” Armenia had seen the writing on the wall and kept the same price for gas supplies, $110 per thousand cubic meters. But they had relinquished control of their gas network in the bargain. But construction of gas pipelines via Georgia would inevitably create an energy supply route that was an alternative to Russian oil and gas, threatening Russia’s energy stranglehold on the vast south European markets. Russia could not tolerate this possibility, and regardless of the daily pretexts, the war is punitive and brutal.
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