Cryptogon is pointing to a British report on Russian objections to NATO providing military assistance to Georgia, noting a comment from a Russian Colonel about the recent action being practice for an attack on Iran - Russia to NATO: Military Help for Georgia Is a ‘Declaration of War’. Given the outcome of that one I'm not sure the Iranians have much to worry about (unless the purpose was to get troops on the ground on Iran's northern border).

Moscow has issued an extraordinary warning to the West that military assistance to Georgia for use against South Ossetia or Abkhazia would be viewed as a “declaration of war” by Russia.

The extreme rhetoric from the Kremlin’s envoy to NATO came as President Dmitry Medvedev stressed he will make a military response to US missile defence installations in eastern Europe, sending new shudders across countries whose people were once blighted by the Iron Curtain. And Moscow also emphasised it was closely monitoring what it claims is a build-up of NATO firepower in the Black Sea. …

Top military figure Colonel General Leonid Ivashov, president of the Academy of Geopolitical Studies in Moscow, alleged that the US and NATO had been arming Georgia as a dress rehearsal for a future military operation in Iran.

“We are close to a serious conflict - U.S. and NATO preparations on a strategic scale are ongoing. In the operation the West conducted on Georgian soil against Russia - South Ossetians were the victims or hostages of it - we can see a rehearsal for an attack on Iran.”

He claimed Washington was fine tuning a new type of warfare and that the threat of an attack on Iran was growing by the day bringing “chaos and instability” in its wake.

Cryptogon also points to a couple of reports on T Boone Pickens' water interests in Texas, colocated with his planned wind farms - The T. Boone Pickens Water Swindle.

Roberts County is a neat square in a remote corner of the Texas Panhandle, a land of rolling hills, tall grass, oak trees, mesquite, and cattle. It has a desolate beauty, a striking sparseness. The county encompasses 924 square miles and is home to fewer than 900 people. One of them is T. Boone Pickens, the oilman and corporate raider, who first bought some property here in 1971 to hunt quail. He’s now the largest landowner in the county: His Mesa Vista ranch sprawls across some 68,000 acres. Pickens has also bought up the rights to a considerable amount of water that lies below this part of the High Plains in a vast aquifer that came into existence millions of years ago.

If water is the new oil, T. Boone Pickens is a modern-day John D. Rockefeller. Pickens owns more water than any other individual in the U.S. and is looking to control even more. He hopes to sell the water he already has, some 65 billion gallons a year, to Dallas, transporting it over 250 miles, 11 counties, and about 650 tracts of private property. The electricity generated by an enormous wind farm he is setting up in the Panhandle would also flow along that corridor. As far as Pickens is concerned, he could be selling wind, water, natural gas, or uranium; it’s all a matter of supply and demand. “There are people who will buy the water when they need it. And the people who have the water want to sell it. That’s the blood, guts, and feathers of the thing,” he says.

In the coming decades, as growing numbers of people live in urban areas and climate change makes some regions much more prone to drought, water—or what many are calling “blue gold”—will become an increasingly scarce resource. By 2030 nearly half of the world’s population will inhabit areas with severe water stress, according to the Organization for Economic Cooperation & Development. Pickens understands that. And while Texas is unusually lax in its laws about pumping groundwater, the rush to control water resources is gathering speed around the planet. In Australia, now in the sixth year of a drought, brokers in urban areas are buying up water rights from farmers. Rural residents around the U.S. are trying to sell their land (and water) to multi- national water bottlers like Nestlé (BW—Apr. 14). Companies that use large quantities of the precious resource to run their businesses are seeking to lock up water supplies. One is Royal Dutch Shell, which is buying groundwater rights in Colorado as it prepares to drill for oil in the shale deposits there.

Into this environment comes Pickens, who made a good living for a long time extracting oil and gas and now, at 80, believes the era of fossil fuel is over. So far he has spent $100 million and eight years on his project and still has not found any city in Texas willing to buy his water. But like many others, Pickens believes there’s a fortune to be made in slaking the thirst of a rapidly growing population. If he pumps as much as he can, he could sell about $165 million worth of water to Dallas each year. “The idea that water can be sold for private gain is still considered unconscionable by many,” says James M. Olson, one of America’s preeminent attorneys specializing in water- and land-use law. “But the scarcity of water and the extraordinary profits that can be made may overwhelm ordinary public sensibilities.”

Billmon is back again at Daily Kos with a look at the Georgia disaster - Anatomy of A(nother) Fiasco.

In February of last year, with the newly born Democratic Congress still waiving its little arms and spitting up mucus, Dick Lugar (the ranking Republican on the Senate Foreign Relations Committee) and Joe Biden (the committee’s nominally Democratic chairman) introduced the "NATO Freedom Consolidation Act". Like its predecessors, the bill authorized the President to immediately begin treating the Ukraine and Georgia as full-fledged NATO allies in all but name – with weapons sales, military advisors, etc. Senate cosponsors included Chris Dodd of Connecticut, Chuck Hagel of Nebraska, Gordon Smith of Oregon, and, naturally, John McCain (R-POW).

Also like its predecessors, the bill was whisked through both houses of Congress with about as much deliberation as a resolution praising the Future Farmers of Benton County for their fine showing at the Iowa State Fair – with no hearings, no debate, no roll call votes. President Bush signed it into law on April 9, 2007. The White House put out an official statement marking the occasion. It was one sentence long.

And so, with an absolute minimum of democratic process, the United States of America committed its full prestige and power (if not, just yet, a legally binding guarantee) to the defense of the two former Soviet republics, even though the Russians have repeatedly stated that they regard NATO membership by either country as a direct threat to their own vital security interests. As others have already noted, this is as if China had unilaterally announced a military alliance with Mexico and Cuba. Actually it’s worse: Imagine the US reaction if China announced a military alliance with Mexico, after which the president of Mexico started dropping public hints about taking New Mexico back – by whatever means necessary. (And if that comparison seems unnecessarily paranoid, consider the history of Russia in the 20th century. Even paranoids have real enemies.)

A careful search of Nexus and Google reveals that the number of stories appearing in the pages of major US newspapers and magazines, or on the wires of major American news services, taking note of this fateful decision, equals exactly one: a brief item out of UPI’s Moscow bureau, warning of the Russian reaction. The Georgian and Ukranian press, on the other hand, gave the new law saturation coverage – encouraged by their respective governments, both of which issued official statements describing their future NATO admissions as, in effect, done deals.

The Russians also reacted. Just a few days after the NATO Freedom Consolidation Act was introduced in the Senate, President Putin gave a speech in Munich that was widely reported as his harshest attack to date on America for its allegedly aggressive and hegemonic designs. The New York Times and US government officials (which is a somewhat redundant expression) both professed shock over Putin’s language – without once mentioning the congressional provocation that triggered it.

But there was just one problem: NATO admission for the Ukraine and Georgia was most emphatically not a done deal. Despite all the pressure from the Cheney Administration (which, we now know, was being played hard by pro-Georgian lobbyists, including John McCain’s current campaign manager) the French and Germans stuck to their position in the run up to last April’s NATO summit in Bucharest.

This led to another flurry of activity by the congressional expansion lobby. In January of this year, another resolution was introduced, again demanding that NATO open its doors to the Ukraine and Georgia. This time the list of cosponsors included Biden, McCain and Joe Lieberman – as well as both Hillary Clinton and Barack Obama. It was passed by unanimous consent. And when the NATO summit nonetheless elected to pass on the Ukrainian and Georgian applications (promising, vaguely, to revisit the issue at a later date) the Demopublicans quickly came back with yet another resolution blasting the Russians for a long list of alleged violations of Georgian sovereignty and praising the NATO summit for "stat[ing] that the Republic of Georgia will become a member of NATO" – when, in fact, the summit had made no such promise. Up is down. Black is white.

Blank Checks and Bounced Ones

Looking at this dreary legislative record (which reads like something out of the old Supreme Soviet) is it any surprise Georgia’s president felt he had a virtual carte blanche from America to challenge the Russians – up to an including the use of military force in a disastrous bid to reconquer South Ossetia? Why would he think otherwise – that is, until the moment when he discovered that America had written him a check it had no real intention of honoring?

There's not much more to say - except that it’s a pretty strange world where the sworn goal of US diplomacy is to put the country in a situation where it may have to go to war with another nuclear power (or back down ignominiously) to defend the sanctity of borders drawn by Josef Stalin and Nikita Krushchev. Leaving aside the raving hypocrisy (Kosovo, Iraq) it’s an alarming sign that the national security and foreign policy elites of this country – in both parties; and not just among the lunatic neocon fringe – are totally out of control. British analyst Anatol Levin (one of the more perceptive of the realists) describes it a case of "profound infantilism":

In the United States, the infantile illusion of omnipotence, whereby it doesn’t matter how many commitments the United States has made elsewhere—in the last resort, the United States can always do what it likes.

Personally, I see it more as a case of the bureaucratic imperative run amok: The national security state is doing exactly what it was designed to do, but without any of the external checks and counterbalances that existed during the Cold War – the war it was originally created to fight. The domestic political system, meanwhile, has atrophied to the point where it’s simply an afterthought – a legislative rubber stamp needed to keep the dollars flowing. With no effective opposition, the machine can run on autopilot, until it finally topples off a cliff (as in Iraq) or slams into an object (like the Russian Army) that refuses to get out of the way.

And that, ultimately, is the most depressing thing about this story: Even after the fiasco in Iraq, the bloody failure in Lebanon, the downward spiral in Afghanistan and, now, the futile posturing in Georgia, there’s absolutely no evidence the US foreign policy elite is inclined to moderate its ambition to re-organize the world along American lines. Nor is there any sign the political class (including, unfortunately, Barack Obama) is rethinking its lockstep support for that agenda. The voters, meanwhile, don’t seem to care much one way or another – as long as gas doesn’t get too expensive and the military casualties aren’t too high (or can be kept off the TV). If anything, it looks like bashing the Russians is still good politics, if only for the nostalgia value.

If you caught Andrew Bacevich on Bill Moyer’s show the other night, you may have noticed that his biggest complaint was not that US foreign policy is misguided and destructive (although he clearly thinks it's both) but that it is being conducted in a democratic vacuum -- despite all the florid rhetoric about promoting democracy. We may still go through the motions of a republican form of government, Bacevich says, but the fabric has gotten pretty thin: or, in the case of our national revival of the Great Game in the Caucasus, damned near invisible.

How long before it tears completely?

The Washington Post's "PostGlobal" edition has an opinion piece touching on the same issues Billmon does, and raising the "gas OPEC" subject again, which I haven't seen for a while - Russia Positions Itself As Global Economic Player.

This split was also evident at the last NATO summit in Bucharest a few months ago. The U.S. proposed that Georgia and Ukraine become members, but Europeans partners pointedly avoided an unnecessary ruckus with Russia and came back with a polite, lukewarm "definite maybe" postponement of the matter.

Simply put, the Europeans -- united with one foreign policy and a combined GDP greater than that of the U.S. -- are not in a mood to put up another Berlin Wall or Iron Curtain made of imported suspicions against Russia. The last was European, but this one is an American argument and Europe is best served by stepping aside. This generation of Europeans consider Russians distant, unfamiliar cousins and Russia as a land of opportunity. As such, they search for commonalities and a spirit of live and let live -- entente cordiale. No one wants to make enemies or engage in an unnecessary clash born of an imaginary picture as depicted by American politicians: some sort of dark or "evil," anti-freedom and anti-democratic force.

Concurrently, Americans are taking the Georgian issue to an unnecessary level. It either a lazy fallback to old methods instead of an effort to look reality in the eye, or alternatively it is fodder for elections in U.S.A. where retail mileage can be drawn from replicating the cold war. It can serve Senator McCain and his militarist background as an heir to President Bush and it serves the current occupants of the White House to divert genuine attention from hard economic realities, massive budget deficits, private debt and the mortgage fiasco at home. And it is not a surprise to know that Mr. Randy Scheunemann (of the lobbying firm Orion Strategies in Washington) is both the chief foreign policy advisor to Senator McCain and, according to filings of the U.S. Department of Commerce, a registered lobbyist for the government of Georgia. But the recent push for freedom fries in the Caucasus turned out to be a modern day version of the failed Bay of Pigs rescue with Georgians waiting for Americans to parachute in and rescue the lot. Alas Secretary Rice went to Tbilisi to push the Georgians to accept the cease fire that was an EU initiative (mediated by France as its the present rotating president).

President Bush has chosen abrasive bully tactics in the 21st century to lecture Russia about what is good for her. Summits and discussions at a table are cast aside in some sort of muscle flexing which fabricates a new dividing line and polarizes Russia against Bush's version of the "free world". Russia has seen the deck stacked against it: The planned missile defense system in Poland and in the Czech Republic is a manifest affirmation of America's reassessment of its policy towards Russia and a relapse to pre-1990 years. Talk about stripping Russia's seat from the G-8 also plays to the tune of Senator McCain's pet project of kicking Russia out of the group of industrial economies.

What is clear is that neither Russia or China are going to fall into this trap laid by President Bush. They consider the false choice of "responsible nations" and "free" nations to be contradictory for a country that has long preferred friendships with dictators outside Europe. Russia has long contemplated a payback for the breakup of Yugoslavia, subsequent support for an independent Kosovo, the missile shield system in Poland and the Czech Republic and pesky setups in Georgia and Ukraine. America's opposition to letting the International Monetary Fund help Russia during her financial problems in the early 1990s and the go-it-alone Afghanistan episode of NATO's fight against global terrorism, which excluded Russia, all confirmed Russia's suspicions.

America has been busy with old-fashioned territory grabs and the eastward crawl of NATO towards Ukraine and Georgia, aiming for relatively modest oil reserves in the Caspian region. However, Russia has been nursing a modern global strategy that leaps over borders. Russia has cut landmark deals with former and potential American clients: weapon sales to Saudi Arabia, Indonesia, and Venezuela are the first of their kind. Sales of gas via a new trans-Siberia gas pipeline to northern China and talks of a "gas OPEC" with Iran, Algeria and others is another that towers over the pseudo-democratic ideas of Georgia. Border demarcation of the North Pole (with purported reserves of more than 90 billion barrels of oil-- twelve times the amount in the Caspian region), nuclear power deals with India and Iran and direct under-sea gas pipelines to Germany, Turkey and south-eastern Europe (bypassing the Ukrainian chokehold on Russian gas lines to Europe) are other moves on the multi-dimensional chess board -- all as Russia is simply keeping cool and amusing itself with the much hyped, but failed mission of Tony Blair as the chief negotiator of the Middle East Quartet, of which Russia is a member. From the Russian perspective, all options are on the table!

One interesting theory about the Georgian debacle is that it was engineered as part of the McCain election campaign - Georgia War a Neocon Election Ploy ?.

Is it possible that this time the October surprise was tried in August, and that the garbage issue of brave little Georgia struggling for its survival from the grasp of the Russian bear was stoked to influence the U.S. presidential election?

Before you dismiss that possibility, consider the role of one Randy Scheunemann, for four years a paid lobbyist for the Georgian government who ended his official lobbying connection only in March, months after he became Republican presidential candidate John McCain's senior foreign policy adviser.

Previously, Scheunemann was best known as one of the neoconservatives who engineered the war in Iraq when he was a director of the Project for a New American Century. It was Scheunemann who, after working on the McCain 2000 presidential campaign, headed the Committee for the Liberation of Iraq, which championed the U.S. invasion of Iraq.

The SMH reports that Iraq has restarted oil exploration. My prediction is that they will find quite a lot of oil - Iraq resumes oil exploration after 20-year break.

Iraq said today it was resuming exploration of its immense oil reserves after a break of nearly 20 years due to crippling UN sanctions, saying it hopes to double its proven deposits of crude. "Today the Iraqi oil ministry celebrates a return to work by Iraqi oil exploration teams after 20 years of interruption," ministry spokesman Assim Jihad told AFP. Oil Minister Hussein al-Shahristani attended a ceremony to mark the event at the Al-Garraf field near Nasiriyah, 350 km south of Baghdad. Jihad said the ministry would deploy three exploration teams trained abroad in the latest techniques.

OPEC member Iraq hopes the exploration squads will uncover deposits that will enable it to double its proven oil reserves, currently at 115 billion barrels of crude. "The ministry has begun to build new refineries in the country, in the provinces of Dhiqar, Kirkuk, Karbala and Misan while renovating other refineries in Baghdad, Basra and Diwaniyah," said Shahristani. In the province of Dhiqar alone the oil ministry hopes to draw on reserves estimated at four billion barrels of crude.

The SMH also reports that the Chinese are interested in buying this oil - Iraq and China revisit major oil deal.

Iraq's oil ministry said Sunday it plans to resurrect a major oil deal with China that fell apart amid crippling United Nations sanctions and the aftermath of the 2003 US-led invasion. Oil minister Hussein Al-Shahristani met with Chinese ambassador Chang Yi to revive the 1997 contract that granted China exploration rights to the Al-Ahdab oil field in the province of Wassit, just south of Baghdad. "Iraq and China are concerned with completing the agreement to develop Ahdab oil field," a statement from the Iraqi oil ministry said on Sunday.

The construction of a power station in the province's Al-Najibia was also discussed, Assim Jihad, a spokesman for the ministry told AFP, adding that an Iraqi delegation would travel to China in the next few days to work on the terms. After China won exploration rights to the al-Ahdab field in 1997, in a deal then valued at $US700 million ($A773.4 million) over 23 years, activities were suspended due to UN sanctions and postwar security problems.

Planned oil production was 90,000 barrels per day. State-run China National Petroleum Corp had been expected to win the new exploration rights. The meeting in Baghdad came after Iraq announced on Friday that it was resuming exploration of its immense oil reserves after a break of nearly 20 years. Iraq wants to ramp up output by 500,000 barrels per day (bpd) from the current average production of 2.5 million bpd, about equal to the amount being pumped before the US-led invasion of March 2003.

Another SMH report says that Nigerian oil reserves are also increasing - Nigeria's oil reserves hit 33.6 bln barrels.

Crude oil reserves in Nigeria, the world's eighth largest exporter, have increased by 12 percent over the past year to 33.6 billion barrels, a top oil official said Friday. "As at today, we have an oil reserve base of 33.6 billion barrels," Abubakar Yar'Adua chief of the state-run oil company, Nigerian National Petroleum Corporation (NNPC) told reporters.

The reserves in the OPEC member state stood at 30 billion barrels a year ago. Nigeria, until recently Africa's leading oil producer and exporter before it was overtaken by Angola, is aiming to build a reserve base of 40 billion barrels by 2010.

The SMH also has a report from Paul McGeogh on the disastrous Georgian offensive in South Ossetia - Trigger happy and oil mad.

Dig deep enough and you come to oil and gas. The war this week between Russia and the headstrong former Soviet republic of Georgia prompted hand-wringing about another awkward demonstration of the limits of American power. But what sounded like a stiff breeze in the capitals of Europe was a collective sigh of relief as leaders recalled their own good sense in resisting an American push back in April for the North Atlantic Treaty Organisation to clasp Georgia to its ample bosom.

Were Georgia a member of NATO, as are more than half a dozen other former Soviet republics and satellites, the US and Canada and their 24 European allies now would be, technically at least, at war with Russia. In the NATO charter, a strike at one is a strike at all.

Put to one side European squeamishness about war. In Afghanistan the German, Italian, French and Spanish contingents refuse to actually fight. But much of the gas that heats their homes, the oil that fuels their factories and the petrol that drives their cars are delivered through a spaghetti-like tangle of pipelines controlled by Moscow.

All, that is, except the one that Washington sponsored. Running through Georgia, it was seen by the US as a way to undermine Russian power in what was one of Moscow's key spheres of influence in the old Soviet days.

I haven't bothered reading whatever nonsense the neoconservative press has babbling away about this event, but I thought this Moscow Times article is worth reading - when you look at propaganda from the other side of the fence the structure is much easier to observe, watching a parade of tame thinktankologists all vigourously spouting the party line - War Casts Cloud Over Pipeline Route. They seem to be quite keen on blocking the long awaiting Nabucco pipeline development (though personally I reckon that one will end up carrying Iraqi gas to Europe one day).

Any plans to use Georgia as a bridge for more energy supplies to Europe are likely set to gather dust now that the tiny country's fierce armed conflict with Russia has exposed the insecurity of the route, analysts said.

Georgia has been a key conduit of oil and gas from Central Asia to the West that bypasses Russia, and Europe has been hoping to build another pipeline to bring more gas from the area. That pipeline project, called Nabucco, has long been on the drawing board, but potential investors had trouble contracting enough gas for it from Azerbaijan or Turkmenistan.

Shipping the gas from Turkmenistan would require building a separate pipeline across the Caspian Sea bed, which has yet to be divided by the sea's five littoral states, Russia, Azerbaijan, Kazakhstan, Turkmenistan and Iran.

Now, Georgia's vulnerability may have dealt a lethal blow to Nabucco and plans for a trans-Caspian pipeline. "A trans-Caspian gas pipeline can be considered a forever buried chimera," said Pavel Baev, an energy expert at the International Peace Research Institute in Oslo. "It became clear for all the participants of these energy games that nothing will go through the Caspian Sea."

Europe was "shocked" by the instability and realized that "hardly anyone would invest money in new projects" associated with Georgia, said Konstantin Simonov, director of the Fund for National Energy Security.

When asked about the impact of the war on Nabucco prospects, European Commission energy spokesman, Martin Selmayr, said none of the pipelines going through Georgia was affected. The commission was in regular contact with energy companies in the region, he said.

Russian air strikes did not hit any of the three international oil and gas pipelines crossing the country or any oil ports, but they forced BP, which is an operator of Azerbaijan's two biggest energy projects, to stop oil and gas shipments through Georgia as a precautionary measure Tuesday.

The BP-operated Baku-Tbilisi-Ceyhan pipeline, which carries oil from Azerbaijan to the Turkish Mediterranean, was already out of commission because of an explosion in Turkey last week that Kurdish separatists claimed responsibility for.

The SMH reports that Russia has now halted its military campaign in Georgia.

Russia's President Dmitry Medvedev on Tuesday ordered a halt to the military offensive against Georgia after the army staged new strikes against its neighbour.

"I have taken the decision to end the operation to force Georgian authorities into peace," Medvedev told defence chiefs at a meeting on the South Ossetia conflict.

Russian forces moved into Georgian territory on Friday after the Georgian army launched an offensive to bring South Ossetia , which broke away in the early 1990s, back under government control. Russia says 2,000 civilians have been killed.

"The purpose of the operation has been achieved.... The security of our peacekeeping forces and the civilian population has been restored," Medvedev added while insisting any new Georgian attacks would be "liquidated."

While Medvedev is claiming the fighting has stopped because they have given the Georgians a hiding, it is perhaps possible they have been confounded by a sudden lack of navigation, as Google seems to have cleansed Google Maps of all features on the map of Georgia (along with Azerbaijan and Armenia, just to be safe).



The SMH also notes that this piece of geopolitical instability hasn't resulted in the customary oil price surge - Oil prices dive despite Russia attacking BTC pipeline.

Crude prices slid further on Tuesday, even as Russia attacked a key strategic oil pipeline in its battle with Georgia and the International Energy Agency forecast a steep drop in energy demand. The IEA, publishing its monthly report, painted a global picture of sharply falling demand for oil because of high prices and economic slowdown, and a cut in the use of cars and increased crude production.

Oil prices also fell as the dollar hit a six-month peak against the euro, traders said. A stronger US currency tends to dampen demand for dollar-denominated commodities as they become more expensive for buyers holding weaker currencies.

London's Brent North Sea crude for September delivery lost 1.56 US dollars to 111.11 US dollars per barrel in electronic trading on Tuesday. New York's main contract, light sweet crude for September delivery sank 1.35 US dollars to 113.10.

The Russian airforce attacked a key oil pipeline running through Georgia on Tuesday but there was no word yet on whether it had been damaged, the secretary of Georgia's National Security Council told AFP. "Russians bombed the BTC pipeline south of the city of Rustavi," said Alexander Lomaia. "We don't know yet whether it was damaged. It's a second attempt to bomb this pipeline since August 10."

A spokesman for British energy giant BP, which operates the pipeline, said the company was unaware that it had been attacked. The BTC pipeline had already been shut last week after a blast occurred in a pump at a section in eastern Turkey. It normally carries up to a million barrels per day of mostly Azeri crude oil to the Turkish port of Ceyhan.

Kiashu at GWAG has a look at Georgia, Russia, the West: Checkmate.

This article is about the conflict between Georgia and Russia, and how Russia appears to have checkmated the West. Depressingly, it's mostly about oil. I'm going to explain some things about strategy and the like, it's a bit lengthy but not really complicated in its basic principles. Just begin with the thought that you're a leader in a country like the US or Australia, where the people want burgers and SUVs and consume lots of oil. How are you going to make sure they keep getting it?

In the world of oil production and consumption, one of the issues is that the places consuming the most do not produce the most, so we have to transport the oil. This can't be done magically, it must be physically carried about in either tanker ships or pipelines. There are only a few routes. These routes become what are known as "strategic chokepoints" - routes that you simply have to go through, and if someone hostile shuts them off, you're in the shit. ...

What's Russia up to?

Nothing more nor less than asserting and creating its Great Power status. It's not for nothing that last year they resumed patrols of nuclear bombers, flying close to Britain and to Guam.

There are many ethnic and historical issues behind the Georgia-Russia conflict. The Ossetians feel a kinship with Russia more than with Georgia, Georgia was set for NATO membership next year, putting a NATO country directly on Russia's border, and Russia has long held sway over the entire Caucasus. And since the West went to war with a Russian ally in Serbia to secure the independence and self-determination of the Kosovar Albanians, they can hardly complain if Russia goes to war with Georgia to secure the same for the Ossetians. But really that is not important: for the world and for Russia it all comes down to energy, to controlling the flow of it. Russia has chosen an effective means of controlling the flow of oil from the Central Asian republics.

Russia has accomplished a strategic coup de main. The aim of most warfare is to present your enemy with a dilemma. For example, achieve air superiority against his land forces, and his forces can either sit still in bunkers and be encircled by your troops, or move and be bombed - either way they're screwed, it's a dilemma. Russia has presented the West with a dilemma - do nothing to help Georgia and lose BTC, or go to war against Russia and in the course of the conflict lose BTC.

Checkmate.

Jeff Vail's take on the subject is at Georgia, the New Map, and Oil Pipelines, looking at the tension between market states and nation states.

In a recent diary entry, Jerome a Parils makes a good point that neither side here has any claim to a "moral high ground"--this isn't an issue of principle about supporting territorial integrity or supporting a national group, but rather an issue of realpolitik. It's also been building for quite some time. Stratfor has been screaming about the impending war in Georgia for years (they must be quite pleased to sound less like they've been crying wolf right now). I wrote about Georgia in the context of enveloping Central Asia's resources by the Shanghai Cooperation Organization back in 2006. The US has long maintained a sizable signals intelligence ground station in Georgia, and has been advising Georgia on fighting Islamist rebels in the Pankisi Gorge region. This is something to watch for--one angle the US may use to argue the moral high ground approach is that they need to ensure the "territorial integrity" of Georgia in order to deny a training ground to Islamist "terrorists" in the Pankisi Gorge (sound familiar?).

It's also important to ground what's happening in Georgia in the larger context of the decline of the Nation-State system. I wrote and presented a paper about this at the 2006 Yale Journal of International Law conference which some people may find worth reading, and highly recommend Philip Bobbitt's "Shield of Achilles" for an in-depth look at the topic. The basic issue is not that the "state" is going away, but that the constitutional basis of a "state" in providing for the welfare of a contiguous "nation" is increasingly invalid, leading to the rise of the "market-state" (where the constitutional basis for the state comes from its ability to provide market opportunity to those within its borders) and a growing conflict with disenfranchised and marginalized nations (and other non-state groups) that exist wholly or partially within the borders of the new market-state.

This "market-state"/"nation" conflict is the new lever of choice in the new "great game." Where it serves Russia's interest, they will support a non-state "national" group against the integrity of a "market-state" (Georgia). Where it is against their interest, they will support the "market state" (here, Russia) against separatist "national" groups (e.g. Chechnya, Dagestan, and a dozen other internal problems--Siberia, for example, has some serious separatist problems). Similarly, the US will support the "market-state" where it must (as in Georgia, Iraq, Pakistan, etc.) and will support non-state "national" groups where it serves its interest (Kosovo, the Ahwaz rebels in the Iranian province of Khuzestan where most of Iran's oil is, the Baluch rebels in the East of Iran, but not the same rebels in the SW of Pakistan, etc.). Where this "market-state"/"national" conflict overlaps with key resource production or exportation infrastructure, look for increasing problems, in part because the conflict between nations and state will intensify, and in part because growing resource scarcity will make resource infrastructure an increasingly popular and effective target within the context of these struggles...

Energy Bulletin has Tom Whipple's latest peak oil update, including this section on the BTC pipeline.

Pipelines, even buried ones, are easy to sabotage as anyone who has followed the situations in Nigeria and Iraq knows. For many months now Kurdish separatists have threatened harm to the 1100 mile Baku-Tbilisi-Ceyhan pipeline that can transport as much as 1 million barrels/day from the Caspian Sea to tankers in the Mediterranean. Last week a fire began in Eastern Turkey closing the BTC pipeline which at the time was pumping about 800,000 b/d.

At first the Turks denied that the line was sabotaged, but after several press releases from the Kurdistan Workers Party (PKK) claiming responsibility for the fire, they now appear to be waiting the results of an investigation.

The fire caused BP to declare force majeure on shipments of Caspian crude from Ceyhan. News of the fire briefly caused a rise in oil prices late last week, but this was soon overshadowed by the rising US dollar.

The BTC pipeline is still on fire with estimates for repairs running anywhere from two to five weeks. The situation was further complicated last week by the fighting in South Ossetia which resulted in Russian air attacks on the BTC pipeline and an oil shipping port inside Georgia.

BP had been redirecting part of its Caspian oil production to the Georgian Black Sea ports of Batumi and Kulevi, but by Saturday these exports were halted due the fighting.

Exports from Ceyhan are of increasing importance to the US and European oil supply. If the pipeline has been sabotaged by the PKK as they claim, it sets an important precedent and once again shows how vulnerable are the world’s oil and gas pipelines. The pipeline from Kirkuk in Northern Iraq has recently reopened after many years of continuous attacks partly because of increased security and partly because it is advantageous to would-be attackers to keep the pipeline open. These situations, however, are constantly in flux and renewed disagreements over the status of Kirkuk could easily lead to more pipeline closures.

Also at Energy Bulletin, high doomer Dmitri Orlov ponders The trouble with Georgia.

To the conquering Russians, Georgia represented the rich, creamy heart of the incredibly tough nut of the Caucasus region. In contrast to the many small and taciturn mountain tribes, many of them either Moslem or animist, here was an Orthodox Christian nation with great traditions of art, music, architecture, poetry, an unparalleled joie de vivre, and a delicious national cuisine. Georgians easily secured for themselves a pleasant role within the empire. Leaving administrative chores to the Russians and commerce and the trades to the Armenians, they were free to indulge in more pleasant pursuits, such as feasting, falconry, and entertaining foreign visitors. This trend had carried over into Soviet times, making Georgian Soviet Socialist Republic a favored tourist destination, a prosperous place complete with amusing wines, delicious food, an exuberantly friendly population that spoke your language, and majestic mountains for a backdrop. In the interest of maintaining public order, the Russians tried to be even-handed in their treatment of the non-Georgian tribes. Knowing full well just how much trouble they can be, they administered their territories as autonomous units within Georgia. One of the more glaring exceptions to this was the arbitrary administrative inclusion of Abkhazia within Georgia, which was done by Joseph Stalin (Dzhugashvili), who was a Georgian, and which in many ways laid the ground for the current conflict.

Their being so well coddled within the fold of the great empire cultivated in the Georgians a sense of exceptionalism and entitlement vis à vis their smaller and poorer neighbors, which, once the Soviet Union collapsed and the Russians departed, gave rise to a particularly rabid, venomous, and ultimately self-destructive brand of nationalism. The first post-independence Georgian leader, Zviad Gamsakhurdia, was killed rather quickly. Part of his nationalist rhetoric involved labeling other tribes, such as the Abkhaz and the Ossetians, as newcomers and gypsies, who are only welcome as "guests" on Georgian soil.

Next up was Eduard Shevardnadze, who was Foreign Minister of the USSR under Gorbachev, and who was more or less handed Georgia as his personal fiefdom by the West, as his reward for idly standing by and smiling pleasantly while the Berlin wall was being torn down. He was given UN recognition and foreign aid, and told to go ahead and try to preserve "Georgia's territorial integrity." At this he failed miserably, causing a senseless bloodbath and a flood of refugees. Shevardnadze slowly sank into a morass of corruption and national decay, until finally even the West decided that he smelled bad and unceremoniously replaced him with a shiny new face: the American-educated Mikhail Saakashvili.

And this brings us to the current conflict, which he started. It is unclear why he decided to start it, but then his American education might offer a clue: the US doesn't seem to need good reasons to start wars either.

It may be difficult for some people to grasp why it is that the Abkhaz or the Ossetians do not much fancy suddenly becoming Georgian, so let me offer you a precise analogy. Suppose Los Angeles, California, were to collapse as the USSR once did, and East L.A. quickly moved to declare its independence. Suppose, further, that the 88% of its population that is Hispanic/Latino voted that the other 12% were free to stay on as "guests," provided they only spoke Spanish. The teaching of English were to be forbidden. After some bloody skirmishes, East L.A. split up into ethnic enclaves. Then some foreign government (say, Russian, or Chinese) stepped in and started shipping in weapons and providing training to the Latino faction, in support of their efforts to restore East L.A.'s "territorial integrity." As a non-Hispanic resident of East L.A., would you then (1) run and hide, (2) stay and fight, or (3) pick up a copy of "Spanish for Dummies" and start cramming?

The Abkhaz and the South Ossetians have made their preference very clear by applying for and being issued with a Russian passport. That's right, the majority of the present native population of these two "separatist enclaves" are bona fide citizens of the Russian Federation with all the privileges appertaining thereto. Lacking any other options, they are happy to accept protection from Russia, use Russian as their lingua franca, and fight for their right to be rid of Georgians once and for all. One of the privileges of being a Russian citizen at this stage, when Russia has recovered from its political and economic woes following the Soviet collapse, is that if some foreign entity comes and shells a settlement full of Russian citizens, you can be sure that Russia will open one amazingly huge can of whoop-ass on whoever it feels is responsible. Add to that the atrocities allegedly perpetrated by the Georgian forces, such as finishing off wounded Russian peacekeepers, and you can see why the normally shy and reticent Russian army might get behind the idea of making sure Georgia no longer poses a military threat to anyone. The Georgians have really done it to themselves this time, and we should all feel very sorry for them. They are not evil people, just incredibly misguided by their horrible national politicians. The West, and the US in particular, bear responsibility for enabling this bloodbath by providing them with arms, training, and encouraging them to fight for their "territorial integrity."

This, it will no doubt turn out, was the wrong thing to do. The term "Georgia's territorial integrity" has been bantered about and proffered lamely as an excuse for an untenable status quo for almost two decades now, with poor results. In the meantime, the territorial integrity of another semi-defunct state, Serbia has been sacrificed on the altar of geopolitics. Kosovo, which is Serbia's historical homeland, has been cleansed of Serbians, and alienated from Serbia proper. For those who are vague on the details of that conflict, here is a summary. Kosovo became majority-Albanian due to Albanians' higher birth rate. The Albanians then formed Kosovo Liberation Army, which fought Serbians for independence and lost. Albanians then fled en masse to Albania. The US and NATO then intervened, bombed Kosovo and Serbia, repatriated the refugees, and turned Kosovo into a UN protectorate. The next step from the West's point of view is to recognize Kosovo's independence, taking it away from Serbia forever.

If Kosovo is to Serbia as Abkhazia and South Ossetia are to Georgia, what, you might ask, is the key difference that mandates a different outcome for the latter? Well, there are quite a few (neither is Georgia's historical homeland, both fought for independence and won, both are populated by indigenous tribes rather than newcomers from across the border), but the most salient seems to be this one: Serbia, Abkhazia, and South Ossetia are all BAD (aligned with Moscow) while Georgia is GOOD (aligned with the West and US, and wants to join NATO). Morality, which, I am sure, underpins Western and US foreign policy, dictates that the bad be punished, and the good rewarded. I submit to you that such self-serving logic is a political dead end, and that if senseless bloodshed is to be stopped and peace is to be restored to the Caucasus, Western and US leaders will have to activate several additional brain cells, and stop mindlessly repeating the meaningless phrase "Georgia's territorial integrity."

Financial Sense also has a look at the conflict - Russia Invades Georgia.

A s these words are written, Russian mechanized troops are moving against the Republic of Georgia. The Georgian leadership has been taken by surprise. They did not think the Russians would go this far. So the question has to be asked: Why is Russia invading Georgia now? What would a war between Georgia and Russia accomplish?

Some observers have stated that Russia wouldn’t dare invade Georgia. Such an invasion would bog them down in an endless fight against Georgian guerrillas. From the Kremlin standpoint this wouldn’t necessarily be a bad outcome. First, the suppression of ragtag forces is always possible if the invader is persistent and determined. In Chechnya the Kremlin’s determination has been unwavering and brutal for almost nine years. Nobody thinks Russia has lost the war in Chechnya.

During World War II one of Hitler’s generals fretted about Russian partisans. Hitler corrected the general. Fighting partisans was a sign of victory, he explained. It meant that the enemy’s main forces were defeated. It meant that Germany’s losses would be comparatively minor. Only those who cannot keep the field in regular warfare hide in caves and snipe at convoys from the underbrush. In totalitarian terms, the Russian action is entirely rational.

One thing is certain: the Russian invasion of Georgia, if it continues, will mark a turning point. Why are the Russians acting in such a bold manner? Some may speculate that it’s about the price of oil, as the world’s second-longest oil pipeline passes through Georgia. And this point should be considered. But more than anything, the invasion impacts U.S.-Russian relations in a decisive manner. It changes the political atmosphere in Europe and the Far East, in Washington and London and Tokyo. The Kremlin strategists already know that the global economy is headed for trouble. This means growing political weakness within the democratic countries.

Already America has been weakened on many fronts. In strategic terms, this may be the perfect moment for Russia to break with the United States. There may never be a better moment to paint America as an imperialist aggressor. In Washington D.C., however, there is no desire for a break with Russia. American policy-makers have long assumed that Russia is a friendly country. They have assumed that disagreements can be worked out, and peace will prevail. There has been no real preparation for a renewed Cold War. Western politicians pose the following questions: Why should the Russians shoot themselves in the foot? Why should they damage their own economic chances? But these questions misunderstand the real situation.

The Russians see America’s weakness. First and foremost, the Americans are unwilling to bomb Iran. They have upset the Saudis by building a Shiite democracy in Iraq. The Americans have angered the Turks by supporting the Iraqi Kurds. The Americans have weakened NATO by admitting too many FSB/KGB-influenced countries into the NATO fold. The Russian leadership probably feels it is time to tip everything over. It is time to expose America’s weakness. What will President Bush do? By the time you read these words, the White House will probably have issued a statement denouncing the Russian invasion. But will American troops be sent to Georgia?

As for the moral justifications now being mounted by the Kremlin, a few words are necessary. Moscow’s claim of Georgian ethnic cleansing in Ossetia is as cynical as it is hypocritical. One only has to take a look at Chechnya. Russian atrocities in that part of the world are famous. The real issue is the fact that Georgia’s leadership threw off Moscow’s shackles and aligned itself with the United States. Even though there is no formal alliance between the United States and Georgia, the two countries have become close. There are U.S. military advisors in Georgia. The border of NATO is directly to the south. The Russian attack on Georgia may a way of testing NATO. It may, in fact, lead to the unraveling of NATO.

Would the United States send troops to Georgia?

Anticipating events, the Russians have long accused the Americans of attempting to push Russia out of the Caucasus. Russian propagandists have said that Westerners are greedy for oil (i.e., the Baku oil fields). It has even been alleged that America has fueled the war in Chechnya and seeks to destroy Russia itself. This is ridiculous, of course, but Russian nationalism is stirred by such allegations.

Noting the proximity of Azerbaijan to Iran, one ought to speculate on the fact that a war has been brewing between Iran and the U.S. for three years. By invading Georgia the Russians are assuring the Iranians of Moscow’s readiness to confront the U.S. By invading Georgia the Russians are exacerbating the global energy crisis by strengthening all anti-American forces in the Middle East.

The price of oil isn’t merely about oil. It is about food, the U.S. dollar and power-politics. Westerners, however, are always “mystified” when the Russians seem to act contrary to their own economic interest (as if economic interests were the only interests). It is true that Russia has benefitted from high energy prices. More significantly, Russia will benefit even more when the U.S. dollar collapses.

And to close, one from The Daily Mail - The Pipeline War: Russian bear goes for West's jugular.

The war in Georgia escalated dangerously last night after Russian jets reportedly bombed a vital pipeline that supplies oil to the West.

After a day of heightening international tensions, Georgian leaders claimed that the Baku-Tbilisi-Ceyhan pipeline, which transports oil from the Caspian Sea to Turkey, had been attacked. But it is thought the bombs missed their target.

Their claims came after Russian jets struck deep into the territory of its tiny neighbour, killing civilians and ‘completely devastating’ the strategic Black Sea port of Poti, a staging post for oil and other energy supplies.

Reports last night also said that Russia had bombed the international airport in Tbilisi.

Georgian economic development minister Ekaterina Sharashidzne said: ‘This clearly shows that Russia has targeted not just Georgian economic outlets but international economic outlets as well.’

The pipeline is 30 per cent owned by BP and supplies 1 per cent of the world’s oil needs, pumping up to a million barrels of crude per day to Turkey.

The Times reports that the Baku-Tbilisi-Ceyhan pipeline may be damaged by the conflict that has erupted in Georgia - Analysis: energy pipeline that supplies West threatened by war in Georgia conflict. Pepe Escobar at The Asia Times once dubbed the pipeline Pipelineistan - "a supreme law unto itself".

The Guardian reports that Georgia has declared a state of war, and Russian forces are now occupying much of the province of South Ossetia.

A blog called "The Global Buzz" noted the strange coincidence of the PKK allegedly bombing the pipeline in Turkey a few days ago. There are also rumours that the US is sending 2 more carrier groups to the Persian Gulf, though Cryptogon cynically notes these sorts of stories have been spread more than a few times in the past, without incident.

The conflict that has erupted in the Caucasus has set alarm bells ringing because of Georgia's pivotal role in the global energy market. Georgia has no significant oil or gas reserves of its own but it is a key transit point for oil from the Caspian and central Asia destined for Europe and the US.

Crucially, it is the only practical route from this increasingly important producer region that avoids both Russia and Iran.

The 1,770km (1,100 miles) Baku-Tbilisi-Ceyhan pipeline, which entered service only last year, pumps up to 1 million barrels of oil per day from Baku in Azerbaijan to Yumurtalik, Turkey, where it is loaded on to supertankers for delivery to Europe and the US. Around 249km of the route passes through Georgia, with parts running only 55km from South Ossetia.

The security of the BTC pipeline, depicted in the James Bond film The World is Not Enough, has been a primary concern since before its construction. ...

Output from the pipeline, which is 30 per cent owned by BP and carries more than 1 per cent of the world's supply, is likely to be on hold for several weeks while the fire is extinguished and the damage repaired. ...

Only a few days before the Turkish explosion, Georgian separatists threatened to sabotage the pipeline if hostilities continued. The latest eruption of violence could easily spur fresh attacks. The BTC pipeline, which is buried throughout most of its length to make sabotage more difficult, was a politically highly charged project. It was firmly opposed by Russia, which views the Caucasus as its own sphere of influence and wants central Asian oil to be exported via its own territory.

Russia also backs the South Ossetian and Abkhazian separatists in Georgia and relations between Moscow and Tbilisi have curdled into outright hostility in recent months. The BTC pipeline, which cost $3 billion to build, is a key plank of US foreign policy because it reduces Western reliance on oil from both the Middle East and Russia.