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Iran And The Politics Of Pipelines

Why care about what happens in Iran? There's the prospect of a nuclear arms race in the region--and of Israel initiating a war with Iran to prevent it from acquiring nuclear weapons. There's also Iran's major role in Iraq and somewhat less important but still significant role in Afghanistan. Iran could be a force for stability or instability in the most volatile region in the world stretching from Israel and Lebanon on the west to Afghanistan and Pakistan in the east. So what happens there matters.

But there is also another issue that is rarely voiced in American politics, but that is central to Iran's relationship to Europe, and could figure in any attempt to impose sanctions on Iran. That is its natural gas reserves. Central Europe and Eastern Europe currently depend on Russia for their natural gas supplies. And Russia has used its monopoly to intimidate its neighbors and get its way with the EU, as well as to sustain internal moves toward autocracy. So it's very much in the interest Europe--and the United States--for Europe to develop other sources of natural gas.

But where would they come from? If you look at today's Financial Times, you'll see on page four a story entitled "Transit States Ease Tension on Nabucco Pipeline." It's about how European Union countries and Turkey have come to agreement on building a pipeline that would bring natural gas from the "Caspian region" through Turkey up to Greece and into Central and Eastern Europe. But the story notes that "the problem is the lack of gas to fill" the pipeline. The only country that "can definitely supply Nabucco from the start is Azerbaijan."

If you look at the map of the pipeline, which is reproduced in the print edition, you'll see something very peculiar. At the projected beginning of pipeline the road forks. It goes north into Azerbaijan, but it also goes south into Iran. Here is another similar picture of the projected pipeline from the a natural gas publication:

The Financial Times doesn't mention Iran, but the European companies who have invested in the pipeline have always counted on Iran's participation. OMV, the Austrian state energy giant, which is a principal backer of the pipeline, is even helping to develop the South Pars gas field in Iran. They have not counted on Azerbaijan who has already committed to sending part of its gas to Russia. 

Azerbaijan has 1.2 trillion cubic meters of natural gas reserves. Iran has 29.6 trillion cubic meters. That's about twenty-five times as much. Iran can meet Europe's supply problems; Azerbaijan can't. Without Iran's participation, the pipeline, which bypasses Russia, makes no sense. With Iran's participation, it's a major geopolitical and economic coup.

As one might expect, the Bush administration enthusiastically backed the pipeline (for its geopolitical ramifications), but opposed Iran's participation. That's like holding the World Cup in the United States, but banning teams from Western Europe and Latin America. 

This June, the Obama administration took a slightly more equivocal position. Richard Morningstar, the special envoy for Eurasian energy issues, said that inviting Iran to the project without a resolution to the standoff over its nuclear program could "have a negative effect."

"We don't want to change our policy unless Iran changes its policy," he said. 

That at least opened the door slightly. But if the Obama administration wants to get Europe to buy into a draconian sanctions strategy against Iran, it is going to have to convince EU countries that Nabucco makes sense without Iran. And it doesn't. This isn't to argue that the Obama administration shouldn't try to pressure Iran to end its crackdown on dissent and to move toward some negotiations on developing nuclear weapons. It is to argue that it is going to be very difficult and will probably entail conflicts between the U.S. and E.U. that are presently submerged.