The U.S.-Georgia Strategic Charter

By Gustavo Coronel | January 12, 2009

Georgian Foreign Minister Grigol Vashadze and Secretary of State Condoleezza Rice sign Charter in Washington

The U.S.-Georgia Charter on Strategic Partnership signed on January 9th, in Washington strengthens bilateral energy cooperation and will provide President Obama and his administration with a policy tool to continue the Bush administration’s policy towards Russia, as it pertains to the Caucasus and specifically to the Republic of Georgia.

The Fourth Energy Summit, consisting of top leaders from Azerbaijan, Georgia, Turkey, Poland, Ukraine and Lithuania held in Baku, Azerbaijan last November 14, 2008, laid the groundwork for this strategic agreement with Georgia, in the waning days of the Bush administration. Other countries participating in this Energy Summit, besides the United States, included Turkmenistan, Kazakhstan, Estonia, Romania, Latvia and Moldova, all of which sent observers. The main topic discussed at the Summit was the creation of an effective Asia to Europe energy corridor, essentially independent from Russian gas.

The final declaration of the Summit emphasized this objective and an agreement was signed between SOCAR, the state-owned oil and gas company of Azerbaijan and KazMunaiGas, the state-owned oil and gas company of Kazakhstan to develop the Trans-Caspian energy transport corridor.

Russian Prime Minister Vladimir Putin has personally conducted a campaign of promises and threats to European and Central Asian countries in order to “convince” them to utilize Russian pipelines already built or to be built, in preference to pipelines owned by Western companies. He traveled to Hungary in 2006 in order to persuade that country, economically and militarily, to utilize Gazprom pipelines and gas in preference to the proposed Nabucco Gas Pipeline Project.

This was one of the main reasons Vice President Dick Cheney paid a visit to Azerbaijan, Georgia and Ukraine, as well as a stopover at the Ambrosetti Forum in Italy, in September 2008. The August 2008 Russia-Georgia conflict had sounded the alarm in Washington, mostly because of the rapid and decisive manner in which the Russians acted as well as the manner in which they behaved after the crisis subsided, treating portions of Georgia as occupied territory. Cheney visited Georgia not only to reassure the Georgians of U.S. support but also in an effort to promote a commitment to the nearly 2,000 mile Nabucco pipeline connecting the Caspian region, a project which would run across Georgia bypassing Armenia and south into Turkey that Putin has been determined to stop.

The name of the game for Putin is control, both of the domestic energy sector and of the regional system of oil and gas distribution in Central Asia and the Caucasus, since these are the resources on which European countries are becoming increasingly dependent. Gazprom, the Russian hydrocarbons monopoly, already controls or is busy trying to control much of the energy supplies and distribution systems of 12 European countries and former Soviet states. RIA Novosti reported in September that “Russian energy giant Gazprom holds a 50% stake in Austria’s Baumgarten, the terminal for the Nabucco pipeline.”

The Nabucco pipeline, designed to present an alternative to Russian hegemony in the pipeline distribution systems to Europe, which also has the support of the European Union, would transport gas from Turkmenistan to Europe via Turkey. The leaders of the project are European companies from Austria, Bulgaria, Romania, Hungary and Turkey.

The Nabucco gas line is key to these efforts to become less dependent on Russia to transport Central Asian gas to the West. As quoted recently by The Guardian, Reinhardt Mitscheck, the executive manager of the Nabucco Consortium said: “We have good reasons to believe that the project will fly.” Six companies are partners in the venture, including: Germany’s RWE group; Turkey’s BOTA; Bulgaria’s Bulgargaz; Romania’s TransGaz; Hungary’s Mo; and, Austria’s OMV Gas. The gas line would give Europe an alternative to gas controlled by Russia’s Gazprom.

The U.S. has decided to reinforce this regional effort for Europe to become less dependent upon Russian natural gas. Secretary of State Condoleezza Rice signed the Charter of Strategic Partnership with Georgia, an agreement that has been defined as “historic.” Following consultation with the Bush administration, the Obama transition team approved the Charter, which is designed to strengthen our bilateral relationship across economic, energy, diplomatic, scientific, cultural and security fields. The Charter contains specific sections on Defense and Security Cooperation, Economic, Trade and Energy Cooperation and the Strengthening of Democracy. Specifically, the section dealing with Energy Cooperation reads:

Section III: Economic, Trade and Energy Cooperation:

“The United States and Georgia intend to expand cooperation to enhance job creation and economic growth, support economic/market reform and liberalization, continue to improve the business climate, and improve market access for goods and services. We recognize that trade is essential to promoting global economic growth, development, freedom, and prosperity. We welcome the emergence of a Southern Corridor of energy infrastructure. The United States endeavors to facilitate the integration of Georgia into the global economy and appropriate international economic organizations….

Recognizing the importance of a well-functioning, market-oriented energy sector, the United States and Georgia intend to explore opportunities for increasing Georgia’s energy production, enhance energy efficiency, and increase the physical security of energy transit through Georgia to European markets. We intend to build upon over a decade of cooperation among our two countries and Azerbaijan and Turkey, which resulted in the Baku-Tbilisi-Ceyhan and Baku-Supsa oil pipelines and the Baku-Tbilisi-Erzurum natural gas pipelines, to develop a new Southern Corridor to help Georgia and the rest of Europe diversify their supplies of natural gas by securing imports from Azerbaijan and Central Asia.”

Judging by the language contained in the energy section of the Charter, there is little doubt that the U.S will continue to support pro-actively the Nabucco pipeline project. The development of a new natural gas corridor to help Europe and Georgia to become more independent from Russian-controlled gas is, obviously, one of the main objectives of the Charter.

Just before signing the Charter, Secretary Rice said:

“Georgia is a very important partner of the United States; a valued partner. Our relationships rest, of course, on shared values…this Charter underscores the principles and outlines a way to advance our relationship and our cooperation in defense, trade, energy security, strengthening democratic institutions, people-to-people contacts, and cultural exchanges. The U.S. supports and will always support Georgia’s sovereignty and its territorial integrity, as well as its Euro-Atlantic aspirations and its integration into the institutions of the Euro-Atlantic…I know that this Charter will help our two nations realize our shared goals of creating a more secure, democratic and prosperous world.”

In response, the Minister of Foreign Affairs of Georgia, Grigol Vashdze stated:

“This is a historic day for my country…The Charter strengthens close strategic partnership between Georgia and the United States, and stressing that countries undersigning this legal instrument, the legal document, share a vital interest in strong, prosperous, independent, sovereign, territorially integral Georgia. This is something Georgian nation has been aspiring to and this is a stepping stone which will bring Georgia to Euro-Atlantic structures, to membership within NATO and to return to family of Western and civilized nations.”

Upon hearing of the imminent signing of the Charter, Russian President Dmitri Medvedev demeaned Georgia’s President Mikheil Saakashvili, saying: “We had the impression that our neighbor was not quite right in the head, but we did not imagine it was to this degree.” Saakashvili described Medvedev’s comments as an “acknowledgment of the Russian aggression.”

The impact of the Charter on future Caspian regional developments:

The short-term impact of the new U.S. – Georgia Charter will essentially be psychological. Georgia feels it has received explicit support from a super power, not only in the energy field but also in the military field and in their pursuit of membership in NATO, although this last objective still seems to be in the distant future. Through the Charter, the United States has reasserted its intentions of helping Georgia, as well as other former members of the Soviet Union, to maintain their independence and to promote democracy in the region. As Heritage Foundation analyst Ariel Cohen said in a recent interview with The Georgia Times: “This [the Charter] is not a mutual defense pact, and should not be read as such. It draws a red line for Russia and we hope that people in Moscow will understand that this red line is important; the U.S. cares about the territorial integrity and sovereignty of Georgia.” Under certain provisions of the Charter, the U.S. guarantees “the physical security of energy transit through Georgia to European Markets,” indeed drawing the line.

Gustavo Coronel, who served on the board of directors of Petróleos de Venezuela (PdVSA), has had a long and distinguished career in the international petroleum industry, including in the USA, Europe, Venezuela and Indonesia. He is an author, public policy expert and contributor to

SFPPR News & Analysis.