Wednesday, June 29, 2011

SCO's Eurasian energy clubhouse still under construction....

SCO's Eurasian energy clubhouse still under construction....
By Robert M Cutler

MONTREAL - The 10th anniversary meeting of the Shanghai Cooperation Organization (SCO) came and went in Astana, Kazakhstan this month with, once more, much talk during the run-up about the organization engendering some sort of "energy club" and without any specific steps towards indicating what such an indefinite term might even mean.

The publicity around this idea dates back five years to remarks made by Russia's then-president Vladimir Putin. Just one year later, in 2007, there was considerable public chatter of the possibility of a Russian-led "OPEC for gas" that would emerge from a trilateral entente with Kazakhstan and Turkmenistan. (Turkmenistan is not an SCO member and has never evoked a serious interest in becoming one. Full members are China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan.)

The physical basis for the exaggerated suggestions that Central Asia might develop a cartel for gas along the lines of the Organization of the Petroleum Exporting Countries was the agreement signed among the three countries' presidents to refurbish and upgrade the Caspian Coastal Pipeline (CCP, also called by its Russian name the "Prikaspiiskii" and sometimes, by mistranslation, the "pre-Caspian"). The CCP runs along the Caspian Sea coast in Turkmenistan and southwest Kazakhstan into Russia, and is connected to gas fields in eastern Turkmenistan through a separate pipeline.

This top-level agreement was never implemented and talk of a Russian-led gas OPEC in Central Asia slowly faded away. (See
Four-way street in Kazakhstan, Asia Times Online, September 18, 2009; Turkmenistan signals Nabucco intentions, Asia Times Online, September 24, 2010.) Yet, five years after the launching of the SCO "energy club" idea, the latter periodically persists, despite or perhaps due to the very vagueness of the term, which more malleable and indeed subjective than "organization" or "institution".

In fact, the contradiction among the interests of the SCO's member-states makes any "energy club" highly unlikely. Uzbekistan sells gas to Russia and China on the basis of bilateral accords, and recently welcomed increased investment from Russian sources over the next five years, obviating the appeal to supranational or even intergovernmental structures.

Kyrgyzstan could benefit from multilateral mediation of its disagreements with Uzbekistan over watershed use and hydroelectric power, but other international institutions and "track two" (that is, informal) diplomacy have been at work on that question for some time: and likewise Tajikistan. (See
Tajikistan find a game changer, Asia Times Online, January 14, 2011.)

Finally, the SCO's two largest and influential members have interests so divergent that "energy security" does not even mean the same thing to them. China seeks "energy security" in the sense of security of supply of energy raw materials to feed its increasing demand. However, Russian leaders think of such a putative club as an arrangement among producers to control supply (and hence also prices) as well as to plan future energy development so as to maintain such a state of affairs.

The SCO as an organization has failed to overcome certain growing pains that are typical for an institution of its sort at this stage of development. Despite having a permanent secretariat funded by (and, despite the name of the organization, also located in) Beijing, it is not clearly anything more than a forum for representatives of its member-states to encounter one another and explore international cooperation more on a bilateral than on a multilateral basis, whether on the political executive level or the technical specialist level. It is not supranational, as the European Union is for example, and none of its members seeks to give it any supranational competences.

Today, two decades after the collapse of Cold War superpower bipolarity that structured, relatively rigidly, the international system, and following the ease of communications at all levels of global politics driven by the proliferation of the Internet, such sorts of meetings are no longer the rare and spectacular events that they once were.

In the leaders' communique concluding the most recent SCO meeting, one finds no mention of any "energy club" or institutional basis for cooperation, but only an "energy mechanism" that should be "open to all countries and organizations that agree with the SCO's tenets and tasks".

Membership is not a requirement for participation in the newly announced "energy mechanism", but the SCO failed yet again this month to define fully the criteria that potential new members must meet to have their candidacies considered. Such a failure cannot instill confidence in the institution as a nexus for multilateral cooperation. To claim for SCO the credit for every bilateral or even multilateral energy agreement achieved among its member-states (or participants in the undefined "energy mechanism") would further dilute its credibility...

Dr Robert M Cutler (, educated at the Massachusetts Institute of Technology and The University of Michigan.

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