The net-net of the analysis yielded very few reasons for the US to get more involved in what is essentially a regional conflict involving ethnic histories stretching back hundreds of years.
However, we found one fact that led us to recommend that the US maintain a low profile presence in the area: as of mid-2006, Georgia is now home to the only non-Russian pipeline that can get oil or natural gas out of the areas east of the Caspian sea. This is more than mildly irritating to the Russians.
Here is a link to a map for those not familiar with the area:
The pipeline is the Baku-Tbilisi-Ceyhan, and it runs through Azerbaijan, Georgia, and Turkey (in order to not run through Iran). It is a large capacity pipe, capable of transporting up to 1.1 million barrels per day (Dr. Webber, the maps don't use any of the standard units you showed us on Thursday!).
All other routes to get that oil out transit through Russia. We have seen two situations in the past few weeks demonstrating how willing Russia is to use that logistics dominance to control behaviors of other countries.
We found that British Petroleum is the largest investor, owning a 30% stake in both the pipeline and the reserves in the largest fields under the Caspian. U.S. oil interests in total were less than 25%. The rest was held by a variety of countries, with Europe in total having a nearly 2/3 stake in the pipeline and the Caspian region's oil fields.
Our conclusion was that while the US has an interest, we do not possess the largest interest. Therefore, our role should be one of awareness and indirect support. We trained 2,000 Georgian troops on how to protect the BTC pipeline in 2002-2004. That is the type of assistance our analysis found we should continue, but not expand.
I found it interesting to see the direct and real-time interaction between our energy policy and our foreign policy. They constantly interact and impact each other.
We also found it to be yet another reason that alternative energy and other methods to reduce our need for oil coming from unstable regions such as this one needs to be a high priority item for the Obama administration.
Credit and thanks to my team mates on this project:
Jessie Neufeld (Law)
Kevin Gong (LBJ)
Joe Harvey (MBA)
COL John Kilgallon (Fellow)
Jonathan Witham (MBA)
Becky Taylor (LBJ)