ENERGY: Georgia: A Blow to U.S. Energy (BusinessWeek)

The plans of the U.S. and Western oil companies for expanded pipelines in the Caspian region may well be a casualty of Russia's attack.

The Baku-Ceyhan was the Caspian's first independent pipeline

by Steve LeVine

The sudden war in the Caucasus brought Georgia to heel, reasserted Russia's claim as the dominant force in the region, and dealt a blow to U.S. prestige. But in this part of the world, diplomacy and war are about oil and gas as much as they are about hegemony and the tragic loss of human life. Victory in Georgia now gives Russia the edge in the struggle over access to the Caspian's 35 billion barrels of oil and trillions of cubic feet of gas. The probable losers: the U.S. and those Western oil companies that have bet heavily on the Caspian as one of the few regions where they could still operate with relative freedom.

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