Rice Warns Against Russian Gas Monopoly

Rice Warns Against Russian Gas Monopoly
Bid for Stake in Greek-Turkish Pipeline Raises Concern Over Supply in Europe

By Glenn Kessler
Washington Post Staff Writer
Wednesday, April 26, 2006; A21
original


ANKARA, Turkey, April 25 -- Secretary of State Condoleezza Rice on Tuesday warned Greece and Turkey against allowing Russia to obtain a monopoly over Europe's supply of natural gas, implicitly bolstering a planned pipeline from Azerbaijian that would weaken Russia's tight grip on 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 Dora Bakoyannis.

Rice waded into the 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 concerning its nuclear program.

Her trip to Athens was the first independent visit to Greece by a secretary of state in two decades. As she met with Bakoyannis, about 3,000 protesters marched with signs calling Rice a war criminal and urging her to "go home," and some youths clashed with riot police. She later flew to Turkey for another round of meetings.

Rice raised the gas supply issue ahead of a visit to the White House by Ilham Aliyev, the president of Azerbaijan, on Friday. The Bush administration has put aside its concerns about Aliyev's lack of democratic credentials in an effort to prevent Azerbaijian 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. In addition to the planned natural gas line, an oil pipeline has been constructed from Baku, the Azerbaijani capital, to Turkey.

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

Russia's gambit 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 U.S. diplomats to sell the Azerbaijian 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 imported by Finland, Slovakia and other Eastern European countries, 44 percent of Germany's imports and one-quarter of the gas bought by 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 Azerbaijian would 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 a way to reduce tensions between two long-time antagonists, U.S. officials now want the project to hook up to the Azerbaijian route, which is due to begin supplying gas in 2007.

Gazprom's 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."

In Turkey, Rice met with officials and had dinner with Foreign Minister Abdullah Gul. She reiterated her pledge to share more information with Turkey about the activities of Kurdish guerrillas in Iraq. Turkish troops in recent weeks have massed on the border with Iraq, leading to speculation in the Turkish press that the troops would cross the border. But Gul said the maneuvers were part of an annual effort to seal the border when the winter snows melt.