“This Russian military attack on independent Georgia has a serious impact on the security and availability of oil and natural gas to our free allies in Central and Western Europe. Let us recognize that a disruption of the BTC oil pipeline could send our oil prices even higher. And, ultimately, this violative attack by Russia will increase long term oil prices due to its impact on an oil pipeline from Kazakhstan that would not traverse through either Russia or Iran. Russia is a major natural gas producer as well and this attack can have a chilling impact on affordable natural gas from Kazakhstan and Turkmenistan. Let’s commit as Americans to the vital mission of American energy security.” -George Allen

Georgia clash imperils Europe’s fuel flow
David M. Dickson
The Washington Times
August 12, 2008

Russia’s military incursion into Georgia, a former Soviet republic, signals that it intends to play a much bigger role in the distribution of Central Asia’s huge oil and gas reserves to European markets, analysts said Monday.

By increasing instability in the area, Russia has significantly raised the cost of oil and gas pipelines that are on the drawing board. Investors now will be less likely to spend the billions of dollars needed to complete the projects, the analysts said.

Georgia has two major pipelines — one for oil, another for natural gas — that transport petroleum from the energy-rich nations of Azerbaijan and Kazakhstan to European markets.

“The Russian bear is trying to choke the vital east-west energy arteries in the Caucasus, specifically the BTC oil pipeline and the gas pipeline,” said Ariel Cohen of the Heritage Foundation.

The Baku-Tbilisi-Ceyhan (BTC) oil pipeline, opened in 2006, transports 1 million barrels of oil each day from Baku, Azerbaijan, on the west coast of the Caspian Sea through Georgia’s capital of Tbilisi to Ceyhan, Turkey, on the east coast of the Mediterranean Sea. From there, ships haul the oil to its final destination. This high-quality oil competes with Russian supplies in Western markets.

CLICK HERE to view the entire article.

This entry was posted on Tuesday, August 12th, 2008 at 5:56 pm and is filed under Energy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.