Rice Warns of Russian Energy Monopoly

04/25/2006

Statement Shows Support for Greek-Turkish Natural Gas Pipeline

By Glenn Kessler
Washington Post Staff Writer
Tuesday, April 25, 2006

ANKARA, Turkey, April 25—Secretary of State Condoleezza Rice warned Greece and Turkey Tuesday against allowing Russia to obtain a monopoly over Europe’s supply of natural gas, implicitly bolstering a planned pipeline from Azerbaijan that would weaken Russia’s tight grip over European energy supply.

“It’s quite clear that one of the concerns is that there could be a monopoly of supply from one source only, from Russia,” Rice told reporters in Athens after meeting with Greek Foreign Minister Theodora Bakoyannis.

Rice waded into the fierce battle over the increasing dominance of Russia’s state-owned energy giant Gazprom--which recently sought a stake in a Greek-Turkish pipeline—even as she sought to build support in Greece and Turkey for sanctions against Iran. She also sought to reassure Turkey that U.S. and Iraqi forces will take stronger action against Kurdish separatists who have launched terrorist attacks against Turkish targets from a base in northern Iraq.

Rice’s trip to Athens was the first independent visit to Greece by a secretary of state in two decades. About 3,000 protesters, carrying signs calling Rice a war criminal and urging her to “go home,” marched as she met with Bakoyannis, with some youths clashing with riot police.

Rice raised the gas-supply issue a few days before President Bush is due to host Ilham Aliyev, the president of Azerbaijan, at the White House on Friday. The Bush administration has put aside its concerns about Aliyev’s lack of democratic credentials to prevent Azerbaijan from coming under Russia’s sway and eliminating what U.S. officials believe is the last chance to give European countries an alternative route for energy.

The high-stakes battle over European energy has been largely hidden from public view but it has emerged as a significant policy issue for top U.S. and European officials since Russia earlier this year briefly shut off Ukraine’s supply of natural gas in a pricing dispute.

Russia’s gambit—which only seemed to embolden the Russian government after Ukraine acquiesced to higher prices—alarmed European governments and set off a scramble, backed by Washington, to seek new sources of gas. Russian officials, in turn, have privately complained about the aggressive tactics of American diplomats to sell the Azerbaijan route.

“There is going to be a very strong emphasis for all of us on energy security,” Rice said. “It’s quite obvious that when you have the kind of demand growing around the world with big economic powers growing—developing powers in places like China and India, that it is going to be critical to have energy security.”

Russia is the world’s largest gas supplier and dominates many European markets. It supplies 100 percent of the gas to countries such as Finland, Slovakia and other Eastern European countries, 44 percent to Germany and one-quarter of the gas to Italy and France, according to the U.S. Energy Information Administration.

U.S. officials have made the case to European officials that using the link to Azerbaijan will also improve relations with Turkey, which is eager for membership in the European Union. The pipeline would also traverse Georgia, helping a country that has angered the Russian government by resisting Kremlin influence and turning toward the West.

Gazprom has sought an interest in the Greek-Turkish pipeline, either as a shareholder or a supplier. While the United States has promoted the Greek-Turkish project as an way to reduce tensions between two long-term antagonists, U.S. officials now want the project to hook up to the Azerbaijan route, which is due to begin supplying gas in 2007.

Gazprom Deputy Chairman Alexander Medvedev warned Tuesday that Gazprom may direct future gas supplies to China and emerging Asian economies should European leaders turn to competing suppliers. “There is no real alternative to Russian gas,” he told Bloomberg News. “If there is a political decision made to cut dependence on Russian gas, we won’t sit and wait while the mood changes.”

After her meetings in Greece, Rice flew to Turkey’s capital for another round of meetings, including dinner with Foreign Minister Abdullah Gul. She reiterated her pledge to share more information with Turkey about the activities of the Kurdish guerrillas. Turkish troops in recent weeks have massed on the border with Iraq, leading to speculation in the Turkish press that Turkey would cross the border. But Gul said the maneuvers were part of an annual effort to seal the border when the winter snows melt.