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Nabucco: How the pipeline became a pipedream

Nabucco was a lynchpin of Americas grand strategy to isolate Russia, but in the end the hunter became the hunted.

The covert energy war for domination of Caspian energy has ended in a humiliating defeat for the West, with the American midwifed Nabucco pipeline being stillborn. Nabucco failed because it was a political pipeline. The $31 billion gas bridge had a sole aim detaching Central Asia from Russia. This gigantic pump was designed to divert 30 billion cubic metres of gas (nearly 10 per cent of Europes annual consumption) away from Russian pipelines. Egged on by the United States, the Europeans began to have fantasies about dirt cheap energy from a region floating on a sea of oil and gas. Like small minded shopkeepers they forgot that barring one misstep with Ukraine, the Russians had been reliable suppliers of Siberian gas for over 30 years. However, the Russians had the foresight and the diplomatic muscle to see the project fail. In June 2009 when the Europeans were about to ink an agreement on Nabucco, a leading Moscow-based commentator ridiculed their chaotic chanting. Alexander Knyazev, director of the regional branch of the Institute of the CIS, said the support for the project reminded him of the haunting chorus of Hebrew slaves from Verdi's opera beautiful, yet altogether gloomy and hopeless. It was an eerily prescient remark.

Nabucco: Evil intent Washington's geopolitical bible is "The Grand Chessboard: American Primacy and its Geostrategic Imperatives," in which former US National Security Adviser Zbigniew Brzezinski stresses the necessity and the means for the US to establish complete domination over Eurasia. Brzezinski says by creating instability in every country in Russias neighbourhood, especially in the Central Asian Stans and Ukraine, and disrupting the flow of oil and gas, the US can isolate Russia, so that Moscow ceases to be a great power. Brzezinski openly espouses provoking instability by exploiting the ethnic and religious diversity of the region. US policy, he states in The Grand Chessboard, is to "Balkanise Eurasia" and ensure that no possible stable economic or political region between Russia, the European Union and China emerges in the future that might challenge US global hegemony.

The term "Arc of Instability" came into use in the1970s to refer to a 'Muslim Crescent' extending from Afghanistan to the Stans in the southern part of the former Soviet Union. Nabucco was one of the ways the United States tried to turn this baleful fantasy into reality.

Russia steps on the gas Nabucco was actually the Wests Plan B. The original pipeline envisaged bringing gas from Turkmenistan and even Iran. However, the problem was Turkmenistan never seemed to make up its mind. While it doesnt take high-octane thinking to figure that Russian may have applied pressure, what finally made Turkmenistan cry off was the sharp increase in instability in neighbouring Uzbekistan after the country opened up to Westerners. Wisely, the Turkmens decided all the petro dollars in the world werent worth it if it meant Western meddling in their internal affairs. Iran now became Europes new poster boy. However, with the United States going after Iran over its alleged nuclear weapons programme, Iranian gas became more hot air than reality. One by one, the dominoes were falling. Europe and the United States now decided to skip Turkmenistan and instead start in Azerbaijan. The new section was named Nabucco. The problem now was that the pipeline had lost its justification to detach Central Asia from Russia. So a new raison detre was found. Nabucco was, said its backers, the key to weakening Russian influence on Europe by reducing dependency on Siberian gas. In reality, it was like spending a fortune on advertising a bad product that consumers didnt like.

Streams of gas Because Nabuccos sole purpose was to eat Russias lunch, the Russians went after it with a vengeance. Also, Moscow wasnt taking any chances with something as existential to its economy as energy. Firstly, like a giant sponge Russia soaked up all available natural gas in Central Asia and the Caspian to deny supplies to Nabucco. Then in 2007, Vladimir Putin unveiled or rather unleashed South Stream. South Stream is a $39 billion competing pipeline crisscrossing Russia, Bulgaria, Serbia, Hungary, Slovenia and Italy that would carry gas to Europe. Importantly, the pipeline would bypass troublesome Ukraine, which seemed to be doing exactly what the United States wants block Russian gas. Then with the speed of a mechanised column and against very obstacle put in its way by Eastern European nations the Russians, with German backing, built Nord Stream. This 1222 km natural gas pipeline transports gas from Vyborg in northern Russia to Greifswald in Germany. Again, it bypassed the Baltic countries, thereby removing any possibility of disruption.

Nord Stream was crucial to Russias energy strategy because it demonstrated to Western Europe its main gas consumer that Moscow was serious about ensuring uninterrupted flow of energy to Europe. It deflated allegations that Russia wanted to strangle Europe. Putins Stream strategy paid off. As Nabucco kept getting shorter, other smaller players saw an opportunity and jumped in. Finally, the Trans-Adriatic Pipeline got picked over Nabucco.

Day after Nabucco The very nature of a gas war makes it an extremely high stakes affair. Because gas pipelines are so expensive to build and cannot be rerouted, the norm is that buyers and sellers enter into long-term often 20-30 year agreements. This brings together producers and consumers as well as transit countries in a sort of pipeline alliance. Because all transit nations get an income from the pipeline, there is every reason for them to have stables relations. For the Americans, that is bad news. Russias linkages with German, for instance, deepened after Moscow built the Siberian natural gas pipeline into the heart of Europe in the 1980s. That pipeline was built despite immense American pressure to scuttle the project.

Biggest losers No.1 United States; No.2 Turkey. The Turks were cheerleaders for Nabucco as they were expecting a $680 million annual windfall. The country was also hoping to draw the Central Asian Stans away from Russia into a Turkic embrace. Having outsized ambitions, Turkey is acting as Americas sidekick in the region. However, the Stans are not falling for Ankaras enticements.

Endgame While the crystal would surely be clinking in the Kremlin, what remains to be seen is if South Stream would proceed as planned. The bulk of Russian gas is destined to go East, not West. It is Asias ravenous economies, especially Chinas, that will sustain tomorrows energy industry, while Europe is still on its knees. No new European deals are in sight but Russia has entered into a 30-year contract with China, for which Beijing has given an unprecedented $60 billion advance. Korea and Japan are next in line. In this backdrop it remains to be seen if Europe gets the leftovers or whether it regains its place in Russias export strategy. As for the United States, the Nabucco wipeout, coming shortly after the global spying expose, is a taste of things to come in a decreasingly unipolar world.

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