The annual meeting of gas-exporting countries (GECF) in Doha, Qatar, on April 9 could poison relations between Russia and the United States. Kommersant has learned that the US House of Representatives has asked Secretary of State Condoleezza Rice to inform the Russian government that its participation in the creation of a cartel will be looked upon by Congress as an unfriendly step and that the so-called gas OPEC itself is a "global organization of extortion and racketeering."
US Congress Targets Russia in Speaking Out Against Gas OPEC
A week before the GECF meeting in Doha, Ileana Ros-Lehtinen, the Ranking Member on the House Committee on Foreign Affairs, wrote a letter to Secretary of State Condoleezza Rice regarding the creation of a gas OPEC. In the letter, Representative Ros-Lehtinen requested that Secretary Rice "energetically oppose the creation of a global organization of extortion and racketeering, which will present a fundamental and long-term threat to world energy supplies."
At the first meeting of the GECF organization of gas-exporting countries, in May 2001, the participants categorically rejected the proposition that in the future they would attempt to create a pricing cartel in the gas market. However, the five most recent meetings of the GECF have shown that, some political friction notwithstanding, the organization's structure is increasingly reminiscent of that of OPEC. At the meeting on April 9, the idea of a gas OPEC is expected to be discussed openly: a list of countries that are prepared to consider joining the organization has already been compiled and includes, besides Iran and Russia, Algeria, Venezuela, Qatar, Trinidad and Tobago, Nigeria, Oman, UAE, Brunei, Malaysia, and Indonesia.
As recently as the summer of 2006, experts scoffed at the idea that the creation of a gas cartel was in the works. Hadi Hallouche, the author of a report for the Oxford Institute for Energy Studies, asserted in June 2006 that "at the moment there is no convincing proof that such a thing will happen." The situation changed, however, after Iranian spiritual leader Ayatollah Ali Khamenei proposed the idea to Russia on January 29, 2007. Soon after that, Venezuelan President Hugo Chavez hopped on the bandwagon, and on February 1, 2007, during his yearly press conference, Mr. Putin called the possibility of creating a gas cartel an interesting idea. During his subsequent visit to Qatar, the Russian president said that gas exporters "should coordinate their actions," even if they do not unite in a formal organization.
Congresswoman Ileana Ros-Lehtinen, a Republican, proposes in her letter to Condoleezza Rice that the US secretary of state take harsh measures to stop the process of unification by gas-exporting countries. "The United States needs to clearly convey to the Russian government that the creation of a gas cartel will be looked upon as a deliberate threat to us and our allies," she maintained.
If a gas OPEC does come into being, Congresswoman Ros-Lehtinen suggests in her letter that the problem of diversifying energy sources and freeing the EU from its dependence on supplies of gas from Russia and its friends in the CIS might be solved by "increasing the attention and support given to the plans of several countries in Central Asia to create new gas pipelines and infrastructure." "We should make every effort to facilitate the movement of the new government of Turkmenistan…towards the creation of new [gas] export routes, including a pipeline under the Caspian," she urged the secretary of state.
The US State Department yesterday declined to comment on the letter from Congresswoman Ros-Lehtinen, saying that "the US secretary of state has not yet reacted to it." A Kommersant source in the US government, however, confirmed yesterday that Condoleezza Rice's department "is concerned by the possibility of the creation of a gas OPEC, despite doubts that the unification will take place in the near future." In any case, if the discussion in Doha on April 9 does bear fruit for Russia, no one should expect the US to react disinterestedly: all of the measures proposed by Congresswoman Ros-Lehtinen to convince Russia to give up on the idea of a gas OPEC are being discussed in one form or another both in the EU and in the US.
US Congress Targets Russia in Speaking Out Against Gas OPEC
A week before the GECF meeting in Doha, Ileana Ros-Lehtinen, the Ranking Member on the House Committee on Foreign Affairs, wrote a letter to Secretary of State Condoleezza Rice regarding the creation of a gas OPEC. In the letter, Representative Ros-Lehtinen requested that Secretary Rice "energetically oppose the creation of a global organization of extortion and racketeering, which will present a fundamental and long-term threat to world energy supplies."
At the first meeting of the GECF organization of gas-exporting countries, in May 2001, the participants categorically rejected the proposition that in the future they would attempt to create a pricing cartel in the gas market. However, the five most recent meetings of the GECF have shown that, some political friction notwithstanding, the organization's structure is increasingly reminiscent of that of OPEC. At the meeting on April 9, the idea of a gas OPEC is expected to be discussed openly: a list of countries that are prepared to consider joining the organization has already been compiled and includes, besides Iran and Russia, Algeria, Venezuela, Qatar, Trinidad and Tobago, Nigeria, Oman, UAE, Brunei, Malaysia, and Indonesia.
As recently as the summer of 2006, experts scoffed at the idea that the creation of a gas cartel was in the works. Hadi Hallouche, the author of a report for the Oxford Institute for Energy Studies, asserted in June 2006 that "at the moment there is no convincing proof that such a thing will happen." The situation changed, however, after Iranian spiritual leader Ayatollah Ali Khamenei proposed the idea to Russia on January 29, 2007. Soon after that, Venezuelan President Hugo Chavez hopped on the bandwagon, and on February 1, 2007, during his yearly press conference, Mr. Putin called the possibility of creating a gas cartel an interesting idea. During his subsequent visit to Qatar, the Russian president said that gas exporters "should coordinate their actions," even if they do not unite in a formal organization. Congresswoman Ileana Ros-Lehtinen, a Republican, proposes in her letter to Condoleezza Rice that the US secretary of state take harsh measures to stop the process of unification by gas-exporting countries. "The United States needs to clearly convey to the Russian government that the creation of a gas cartel will be looked upon as a deliberate threat to us and our allies," she maintained.
If a gas OPEC does come into being, Congresswoman Ros-Lehtinen suggests in her letter that the problem of diversifying energy sources and freeing the EU from its dependence on supplies of gas from Russia and its friends in the CIS might be solved by "increasing the attention and support given to the plans of several countries in Central Asia to create new gas pipelines and infrastructure." "We should make every effort to facilitate the movement of the new government of Turkmenistan…towards the creation of new [gas] export routes, including a pipeline under the Caspian," she urged the secretary of state.
The US State Department yesterday declined to comment on the letter from Congresswoman Ros-Lehtinen, saying that "the US secretary of state has not yet reacted to it." A Kommersant source in the US government, however, confirmed yesterday that Condoleezza Rice's department "is concerned by the possibility of the creation of a gas OPEC, despite doubts that the unification will take place in the near future." In any case, if the discussion in Doha on April 9 does bear fruit for Russia, no one should expect the US to react disinterestedly: all of the measures proposed by Congresswoman Ros-Lehtinen to convince Russia to give up on the idea of a gas OPEC are being discussed in one form or another both in the EU and in the US.
