LONDON () -- The widely reported, quite incendiary comments that came recently from U.S. Vice President Dick Cheney regarding Russia's energy policy are causing a real stir, not least with the Russians. This is because Cheney's words had the ring of truth about them.
Cheney slammed Russia for using its resources of oil & gas as "tools of intimidation and blackmail"; words that are possibly somewhat ill chosen. Perhaps this was deliberate, an attempt to distract public ire and concern from disasters in Iraq and the stand off with Iran to a dispute with Russia for which the Bush administration is less obviously culpable.
Nevertheless, it is undeniable that Russia has no compunction about using its oil & gas resources as a bargaining chip. Ukraine saw this first hand at the tail end of last year, and at the same time, Western Europeans got an unpleasant reminder of their reliance on Russia for a large slice of their natural gas supply.
Several other former Soviet satellites that receive gas from Russia are also familiar with such hardball bargaining, as are Western oil & gas companies looking to develop areas of Russia's resource base.
In a new twist to this theme, Russia's monopoly gas exporter, Gazprom, recently made a veiled threat to use its position to discourage any moves aimed at frustrating its ambitions to expand into the Western European retail gas sector.
Russia likes to couch its energy policy as angled towards market liberalisation with consideration for legitimate guardianship of the national interest. Few would argue with that, but it is the confrontational manner in which Russia makes its moves that jars the U.S. and Europe.
Cheney's use of Russia as a ploy to draw attention away from other issues is an old trick, however one that inadvertently also serves to remind the public that energy security is still a worry.
The situation with Iran is seemingly heading towards the military option being the only viable one. The U.S. is backing itself into a corner by letting its rhetoric put its credibility at stake if military action is not taken against an unresponsive Iran.
If this eventually happens, then it will be seen in many quarters as a move born of diplomatic ineptitude. This is unfair; the U.S. has few options in dealing with a jumped up state like Iran, and has the backing of Europe in taking a hard line.
But some will jump to the conclusion that the rapid exhaustion of diplomatic avenues to pave the way for a military strike is what the Bush administration has wanted and planned for all along.
Now in South America, the ideologically germane Presidents of Venezuela and Bolivia, are putting the squeeze on foreign oil & gas companies and advertising their own not insignificant position in the global energy supply chain.
At the end of the day then, one can understand Russia's use of its position as a major oil & gas exporter to get what it wants, even if one does not approve. After all, Arab nations and countries like Venezuela and Bolivia do it, now more than ever.
Russia's rise as an energy power has given it a new and pressing relevance, but the irony is that it doesn't really need one. Russia will always be relevant, and unlike the tinpot states of South America and the Middle East, has no need to garner attention by making waves in the oil & gas markets.
The powers that be in Russia should remember this and act accordingly, but whether Cheney's words will help them to do so is another matter.
