The Nabucco Carrot and U.S.-Iran Engagement

By Joshua Kucera

For years, analysts have argued that the Nabucco natural gas pipeline -- a U.S.-backed effort to transport gas from the Caspian Sea to Europe via Turkey, thus bypassing Russia -- needed to accept gas from Iran if it was to be economically viable. But Iranian involvement in the project, which is intended to reduce European energy dependence on Russian gas exports, has been anathema for U.S. policymakers: Washington's efforts to thwart Iran's ambitions have so far overridden its desire to thwart Russia's.

That may be changing. The White House has appointed a new envoy for Eurasian Energy, Richard Morningstar, who worked on energy diplomacy in the Clinton administration and has a reputation as a savvy diplomat. Morningstar played a crucial role in shepherding through the last big U.S. move in the Central Asian energy game, the Baku-Tbilisi-Ceyhan oil pipeline.


> Caspian Pipelines Map

At an energy conference in Bulgaria at the end of April, Morningstar refused to rule out Iranian involvement in Nabucco, and suggested that opening up the Iranian energy sector could be a "carrot" for improving relations on other issues.

"Obviously, right now, gas from Iran creates some difficulties for the United States as well as for other countries involved," he said, before adding, "We want to engage with Iran but . . . we are hoping that there will be positive responses from Iran and that we will be able to resolve some of our outstanding issues."

George Krol The day before that, another U.S. diplomat suggested that Turkmenistan -- whose natural gas reserves are among the top five in the world, but which are now exported almost exclusively through Russian pipelines -- could also engage more with Iran. The U.S. has been advocating a pipeline across the Caspian Sea, so that gas could then be shipped from Kazakhstan and Turkmenistan further westward through Azerbaijan, Georgia, Turkey and into Europe. But U.S. Deputy Assistant Secretary of State George Krol, speaking at another energy conference in Turkmenistan's capital, Ashgabat, suggested that Turkmenistan might instead ship the gas westward via Iran.

> Nabucco Map

At the same time, Morningstar seemed to try to tamp down tensions between Russia and the West over Nabucco. At the Bulgaria conference he suggested that the pipeline had been overhyped. "Pipelines are just part of the puzzle. Nabucco is not the Holy Grail that will solve the problem," he said.
Iran has been pushing to take part in Nabucco for years, and access to European gas markets will indeed be a strong incentive for Tehran to improve relations with the U.S. Russia, meanwhile, has been put on the backs of its heels. Prime Minister Vladimir Putin, who was scheduled to attend the Bulgaria meeting, canceled at the last minute. Russian press accounts speculated that Putin understood Russia was going to be dealt a setback and didn't want to be present when it happened.

Taken together, the moves seem to echo an earlier Obama administration diplomatic gambit: the "secret" letter President Obama sent to Russian President Dmitry Medvedev, offering to abandon missile defense plans for Eastern Europe in exchange for greater Russian cooperation on getting Iran to stop its missile programs.

Both served notice that the new U.S. administration is willing to attempt bigger moves by solving multiple problems at the same time, while keeping the Russians and Iranians guessing over what the administration's true motive is. The missile defense letter has yet to bear fruit, but seemed to defuse tension over the issue, and could pave the way toward a future solution.

Floating the Nabucco offer could have the same effect, presenting a concrete example of the kinds of tangible policy changes that could accompany the Obama administration's new tone towards Tehran. As such, it complicates Iran's -- and Russia's -- calculations on the energy front, and beyond.

World Politics Review