A blog by an American expatriate living in the heart of New Europe

"It's a lateral transfer" -- George W. Bush, 43rd President of the United States
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Monday, September 04, 2006

Sweetening the deal

(Grey lines: Existing pipelines; Blue line: Under construction; Red line: proposed by US)

Polish daily Rzeczpospolita (Polish link) reports that the US will offer to build oil and gas pipelines from central Asia to Poland in return for building an anti-missile shield on Polish soil

The idea of building an anti-missile rocket base somewhere in the Tatra mountains has been mooted for some time now, with Poland and the Czech Republic tussling over who would get it. The Polish government believes it could protect the country from all sorts of nasty missiles coming Poland's way from the east, and would probably mean a significant injection of US funds into the economy.

As the beatroot reports however, the idea isn't very popular with the Polish public. The government also has some reservations, as the US would want "extraterritorial rights" (registration required) - read: complete control - over the base and the land it sits on.

Serendipitously, information was leaked by Polish diplomats to "RzP" that the US government, led by Vice President Dick Cheney, has floated a deal to have US oil companies such as Chevron and Texaco build pipelines from Kazakhstan and Turkmenistan through Georgia and Turkey (see picture above), to Poland, in return for accepting the domestically unpopular missile base on Polish territory. According to the paper, the project will be a major issue of discussion when Prime Minister Jarosław Kaczyński makes his first trip to the US next week, and meets with US Energy Secretary Samuel Bodman. The US could also announce its decision to build the base in Poland during the PM's visit.

Due to energy-security fears resulting from Russian dominance of Poland's oil and gas supplies, the Polish government has wanted such pipelines for a while now – work is being done to extend a pipeline carrying Caspian Sea oil from Brody, in Ukraine, to Płock, in Poland. But Ukraine has just taken a sharp political turn towards Russia, and after last month's Mazeiku refinery incident, there is no guarantee that such a pipeline will be free from Russian meddling.

Interestingly, a very rich Polish businessman, Ryszard Krauze, signed several deals last month giving his oil company, Petrolinvest, drilling rights in Kazakhstani oil fields. Petrolinvest is part of the Prokom Group, which is run by Krauze and majority held by the Polish government. The pipelines complete the infrastructure gap from a Polish company doing the extraction in Kazakhstan to Polish refineries and finally to Polish customers.

And thus – so the thinking goes – Polish energy security is guaranteed.

The US' proposal to build that missile base in Poland just got a whole lot sweeter.


Anonymous ignacy said...

Good post, Gustaw and glad to see that you are posting regularly again! And please keep posting. 'Tween you and BR,the *real* news comes through. Thanks.

What's next, a 51st state party?

9/05/2006 05:09:00 PM  

Blogger Gustav said...

Thanks Ignacy.

Yeah, I dunno. I tend to believe a close relationship with the US is in Poland's interest, as long as it doesn't come at the expense of the EU -- and to be honest, I think it's in the US' interest to have a strong partner like Poland in the EU. Now if only Poland would stop acting like a teething toddler in the bloc and take the leading position among the ten new member states that naturally fits it.

When it comes to this deal in particular, while it's a win-lose for Poland (win=energy security; lose=unpopular missile base) it's a win-win for the US - they get their missile base and very valuable oil and gas transit lines. Who will this hurt? Russia, in the end, and there's still a chance that the deal might not go through if Putin puts his foot down hard enough (read: tells Bush that he'll go easier on Iran if he dares make this deal with the Poles). Kazakhstan, Georgia, and Poland all gain lots of energy independence from Russia if this goes through - which makes me think it might not be such a bad idea.

9/05/2006 06:52:00 PM  

Blogger beatroot said...

But they have offered the same deal to the Czechs. And people who live in Greenland probably.

9/05/2006 08:19:00 PM  

Anonymous Anonymous said...

Hi Gustav,
I say the US will get Poland or Czech, whoever says yes to have the base, independant of the gas lines...what can the Americans say about gas lines through Russia nd central Europe?

BTW, are you watching the Tigers? Its a miracle!


9/05/2006 10:10:00 PM  

Blogger Gustav said...

Hi TC, and welcome.

But what if both say yes? In any case, if either says no, the other is still guaranteed a close, independent source of crude - if the deal goes through, that is.

"Watching" may be going too far - it's pretty difficult to get games here. I've been following them though, and I love that their doing well. Of course, of late they have had a bit of trouble.

9/05/2006 11:43:00 PM  

Blogger Gustav said...

Sorry beatroot, I thought I had answered your comment, but blogger ate it I guess.


They'd probably offer the deal to anyone they could. It's a good idea - as I said, a win-win for the US.

Think Texaco is interested in building a pipeline to Greenland?

9/06/2006 01:58:00 AM  

Anonymous ignacy said...

You can see all the Tigers games (and just about all other games) you want on the internet via mlb.com. It's only about 70 bux per season.

9/06/2006 02:26:00 AM  

Blogger Gustav said...

Too rich for my blood. Must admit, coming from Detroit, I'm much more of a hockey and football fan. Baseball just doesn't do it for me.

9/06/2006 02:37:00 AM  

Blogger beatroot said...

This comment has been removed by a blog administrator.

9/06/2006 02:50:00 PM  

Blogger beatroot said...

They are not going to send the oil via a pipeline to Greenland...they are going to send it in little parcels via TPSA!

9/06/2006 02:52:00 PM  

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