Russia’s Big Energy Secret

No threat is more potent than that of China's move into Turkmenistan. Last year China's President Hu Jintao signed a deal with the late Turkmen leader Sapurmurat Niyazov to buy 30bcm of Turkmen gas each year for the next 30 years, and finance a giant new gas pipeline to China's Xinjiang province. That's in addition to a deal signed with Iran in March, which promises 14bcm a year of Turkmen gas to Tehran. At the same time, the Turkmens have also signed a deal with Russia for 50bcm a year until 2009. ''There's no doubt that Turkmenistan has promised to sell more gas than it can feasibly pump," says one top U.S. diplomat in the region not authorized to speak on the record. ''The question is, which customer will they choose?"

A lot rides on that choice: no less, in fact, than the future of Russia as an energy superpower. But Gazprom insists there's no problem. ''We do not consider China to be a threat or a competitor in Central Asia," says Gazprom spokesman Igor Volobuyev. ''We have a 25-year, long-term contract with the Turkmen government; they are obliged to fulfil their responsibilities. Our contract with the Turkmens is longer than any of our contracts with our European customers." Putin earlier this year assured Gazprom customers that ''there is complete certainty that Russia will fulfill all its contracts."

Europeans now fret about possible shortages, even as Americans are gleeful. It's no secret that the United States would like to put a dent in Russia's stranglehold over the region's energy resources—as well as shake Putin's ''complete certainty" a little. The diplomatic code word is "encouraging diversity of supply"; deciphered, that means encouraging any and every other pipeline project that bypasses Russia. ''It's one of those areas where we and Beijing see pretty much eye to eye," says the U.S. official in the region. ''The more export routes there are, the happier we'll be."

To that end, the United States is encouraging a number of pipeline projects that cut Russia out of the loop; only one has been built so far, connecting Baku, Azerbaijan, to the energy-rich Caspian direct to the Mediterranean—but the United States hopes that others will follow. Needless to say, Moscow is working hard to keep its monopoly from being undermined. It most recently signed a new deal with Kazakhstan this past September to build a pipeline on the Caspian coast to Russia.

For the Central Asians themselves, selling energy is more than a matter of dollars and cents; it's about winning real independence from an old colonial master. One Kazakh government minister—who didn't wish to have his name used while criticizing Russia—recalls a recent incident when a Russian ministry didn't bother to send a car to pick up visiting Kazakh officials in Moscow. "Kazakhstan is constantly being treated like a kid brother by our Russian neighbors," he complains. Another slight was the banning of all Lufthansa planes from Russian airspace last month after the German company prepared to switch its Asian cargo hub from Krasnoyarsk in Russia to Astana in Kazakhstan. "The Russian government thought they would frighten us by flexing their muscles, the same way they did with Georgia and Ukraine," says the minister. "But we have others we can turn to."

It looks like China, rather than the United States, is best positioned to be the big winner in Central Asia's search for new friends. Though Washington has gone out of its way to turn a blind eye to the region's undemocratic practices, local despots are still irritated by even low-key criticism from the U.S. American insistence that the Central Asians forgo business with Iran also rankles. Kyrgyzstan, America's closest ally in the region, has been racked by instability and economic underperformance.