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September 9th - - Straits Times - Siberian oil and North Asian balance of power

But if Mr Putin's coyness about - some would say hostility towards - Japan's hopes for Siberian oil supplies continues well beyond the summit, it may be time for outside powers to take notice.

An energy alliance between China and Russia might be emerging in a manner threatening North Asia's balance of power. Or so say two Kremlinologists - one American, one Russian - in a recent paper for London's International Institute for Strategic Studies (IISS).

The paper, titled China, Japan And The Scramble For Siberia, is by Associate Professor Lyle Goldstein of the US Naval War College and Assistant Professor Vitaly Kozyrev of Moscow University's Institute of Asian and African Studies. It appears in the latest edition of Survival, the IISS quarterly review.
IISS in the press icon
09 September 2006: Straits Times
 
Putin must tread a fine line between vying energy needs of China and Japan
 
By Anthony Paul, Senior Writer

RUSSIA'S President Vladimir Putin decreed that energy security should be central to the Group of Eight (G-8) summit talks in St Petersburg last July.

We will not know for some months the full results of the G-8 deliberations. Is it possible, however, that at long last Mr Putin's intentions regarding the so-called Nakhodka pipeline - one of the new century's most ambitious mega-engineering projects - will become clearer?

If so, some of the energy security tensions currently troubling the region might finally dissipate.

But if Mr Putin's coyness about - some would say hostility towards - Japan's hopes for Siberian oil supplies continues well beyond the summit, it may be time for outside powers to take notice.

An energy alliance between China and Russia might be emerging in a manner threatening North Asia's balance of power. Or so say two Kremlinologists - one American, one Russian - in a recent paper for London's International Institute for Strategic Studies (IISS).

The paper, titled China, Japan And The Scramble For Siberia, is by Associate Professor Lyle Goldstein of the US Naval War College and Assistant Professor Vitaly Kozyrev of Moscow University's Institute of Asian and African Studies. It appears in the latest edition of Survival, the IISS quarterly review.

'Elites in both Moscow and Tokyo are wary of Beijing's new power and influence and sense that enhanced bilateral cooperation (between Russia and Japan) is now necessary,' say Prof Goldstein and Prof Kozyrev. The two academics called on Washington and Brussels to launch with Moscow 'a joint exercise in much-needed 'offshore balancing'' by helping to ease Japan's access to Siberian energy resources.

Complicating Russo-Japanese relations, however, is the perennial problem of the Northern Territories, Japan's term for the disputed Kuril islands. Russia has held them since the Pacific War ended; Japan wants them back.

One bizarre result of this: The two nations are still technically at war. On Sunday, Japanese officials told reporters that despite efforts at the G-8 summit to agree on a peace treaty, a 'wide rift' still existed between the two countries.

A little more than a century ago, the United States brokered a peaceful end to the Russo-Japanese War. Could this be a precedent for the US, backed by the European Union (EU), to help settle one of North Asia's most persistent headaches?

As the paper's authors see it, one key to a future durable peace in North Asia is the so-called Nakhodka pipeline project. If the pipeline were to reach Nakhodka, a Russian port convenient to Japan, the project should certainly help Japan obtain fair access to Siberia's massive energy resources.

If the most ambitious plans are fully realised, the world's largest and most expensive pipe - four feet (about 1.25m) in circumference and covering about 4,180km from Taishet in eastern Siberia to Nakhodka - could deliver as much as 80 million tonnes of fuel yearly.

But if the pipe were to stop short of Nakhodka, Russia would be seen to be favouring China, which has declared its interest in buying every drop of oil available.

In 2004, note Prof Goldstein and Prof Kozyrev, China edged out Japan to become the world's second largest crude importer. They quote estimates showing that, by 2030, 'China will have to import 10 million barrels per day of crude - roughly equivalent to US daily imports in 2000'.

A Sino-Russian energy nexus would be compellingly logical from China's security viewpoint: 'Put simply, if Moscow could guarantee supplies in a crisis, Beijing might not have to fear strangulation by hostile sea powers that might seek to interdict Chinese supplies from the Middle East.'

That President Putin is taking a keen interest in the project became apparent at a meeting with regional governors and Cabinet ministers in Tomsk in April. A brief incident there demonstrated vividly his role as North Asia's most powerful oil mogul.

Mr Semyon Vainshtok, president of Transneft, the pipeline monopoly, assured the meeting that the structure, though it came within 800m of the World Heritage-listed Lake Baikal, did not risk polluting the world's deepest, oldest and largest freshwater lake.

But after listening to an ecologist question this statement, Mr Putin startled the gathering with the sudden instruction that the pipeline be shifted at least 40km north of the lake's shoreline. (Since then, Transneft has announced that the new route will now be 400km north.)

Mr Putin's ukase, or decree, added at least two months of redesign time and many millions to the estimated US$18 billion (S$28 billion) cost. But no matter. 'Let's consider it a done deal,' Mr Putin said.

Keen Putin-watchers were not terribly surprised by his firmness. The pipeline and Lake Baikal are in an earthquake-prone area. An ecological disaster in the watershed of one of Siberia's main tourist attractions would make it even more difficult for Mr Putin to attract population to the region.

And beyond Siberia - for example, in Primorye territory, on Russia's Pacific Coast - he faces one of Russia's most daunting demographic and economic challenges.

Since 1993, the death rate in Primorye has exceeded the birth rate. One in every four of the 2.02 million people now living there has an income below the official poverty level of US$160 per month, a problem that the population's rising age exacerbates. A third of the territory has no resident population at all. (In Russian territories east of the Urals, there are only about 18 million Russian citizens.)

One more statistic underlines Mr Putin's problems in a most dramatic way: Just across the Chinese border are China's three cramped northern provinces, home to about 130 million Chinese.

And therein might lie the best reason for increasing Japan's involvement in Siberian oil.

According to the two academics, 'there is potent fear on the ground in Siberia and the Russian Far East that the region could become a satellite of China, if not the victim of flagrant territorial aggression'. In other words, populate the region with Russians or risk letting part of Russia perish.

What can outsiders do to facilitate, as Prof Goldstein and Prof Kozyrev put it, 'a more stable balance of power for East Asia in the 21st century'?

They offer some lateral thinking: Have American and European diplomats 'make an all-out push for a fundamental breakthrough between Moscow and Tokyo that will bring Siberia's bountiful resources to the shores of the Pacific'.

They suggest a first step of setting up a 'trilateral Russia-Japan-US summit (with the EU in a supporting role)'.

The summit, devoted to 'tangible progress on the Northern Territories question', could influence the 'vital and still undecided question of the Siberian pipeline's final route'.