Gazprom: From Russia, with shove
The militarization of petroleum and natural gas. . .
I found an interesting news item about Gazprom last week that to me further indicates bonding between the political and economic in Russia’s energy front. I lifted this pretty much verbatim from Andrea Mihaelescu at UPI (emphasis added):
Russian gas giant Gazprom now has a right to set up its own armed units after Russian lawmakers gave the gas utility and Transneft, the state oil pipeline monopoly, the power to create armed units to defend their installations.
The Duma, the Parliament’s lower house, passed a bill (341-109 on Wednesday, July 4) that would allow two Russian energy giants to recruit and arm their own security forces, giving them greater powers than private security firms, according to media reports. The decision gave Gazprom and Transneft exemption from strict limits on private businesses wielding arms.
Supporters of the law argued that there is a need to improve the protection of oil and gas pipelines from militant attacks. Alexandr Gurov, a Duma deputy who drafted the Bill, said, “A couple of terrorist acts and an ensuing ecological catastrophe would be enough to immediately declare Russia an unreliable partner and supplier of energy.”
But other lawmakers disagree. “This law is like a Pandora’s Box,” said Gennady Gudkov, a lawmaker with the left-wing Fair Russia party who opposed the law. “Gazprom and Transneft are proposing the creation of their own corporate armies.”
The implications of this move on a security front in international relations look to be dangerous. States that are supplied by Gazprom or do business with them may soon be looking at contracts/treaties that stipulate a foreign military force be set on their soil. This would include Turkmenistan and Kazakhstan, Uzbekistan in Central Asia; Armenia in the Caucasus; and Belarus and Ukraine. While I don’t see Gazprom as going to war in these countries on the behalf of Mr. Putin, I do see a precedent for intelligence gathering and possible human rights violations on the part of a company which increasingly looks like a government political/military agency rather than a government economic enterprise.
What I don’t understand is why we haven’t been hearing howls of outrage from countries that do business with Gazprom. If I was, say, Armenia, I would oppose Gazprom soldiers with my last breath. However, like many states in the region, Armenia is over a barrel when it comes to refusing this ”help”–Gazprom and Co. owns and runs not just fuel commerce but energy grids in the state. Buyer beware. . .
Further reading:
Mercantilism, at Wikipedia
Neo-mercantilism, also from the Wikipedia
July 10th, 2007 at 10:57 am
Of course, to some outsiders, the fact that Gazprom is given the right to form its own military units, might seem like a fairly legitmate solution to potential supply interruption problems.
However, I think there is more to it than meets the eye. For one thing it could be a perfect pretense for imperialistic minds in Kremlin to re-establish “control” over the lost territories since such military units would have a priority of only “defending Russia’s installations abroad”.
Business interruption risks such as terorrist attacks, are perfectly insurable nowadays and I bet the insurance costs much lower than the cost of running your own mini-army, which requires far greater resources and managerial coordination to work.
Regarding your last point:
Armenia does not have much of a choice when it comes to cooperating with Russia. It is surrounded by two hostile states (Turkey and Azerbaijan) and needs Russia on its side when potential conflict erupts since both Azerbaijan and Turkey have far superior armies.
That said, I don’t know if the conflict would be there if Russia chose not to support Armenia and Nagorny Karabakh militarily in the first place.
July 10th, 2007 at 11:39 am
How about Poland, Lithuania, Estonia, Georgia, Romania, Hungary… the list of countries where this might have devastating consequences is enormous.
July 10th, 2007 at 5:36 pm
Dear Tajik Boy and Joshua,
You two are right where I am on this one. I didn’t list all the states affected by Gazprom policies: and I Do thing they would have to amend contracts/treaties in order to include Gazprom cops/soldiers. But I also think it is a move to re-gain stature in the former Soviet.
The list of potential states in jeopardy in this is very high, and I’m assuming, perhaps wrongly, that the EU states are going to have greater barrier to entry than non-Gazprom states. Hey-GazP is in Latin America too.
Oh, it’s just bad all around.
Thanks for writing in, both of you, with such trenchant comments!
Bonnie
July 12th, 2007 at 2:47 pm
Russia’s oil boom is an interesting issue. The U.S. is one of many countries that will be interested in the production of oil in the Russian province. Here is a list i found of the companies involved, as well as some other info…
http://www.whiskeyandgunpowder.com/ppc/RussianOilReport2.html
Cheers!