New York (Platts)--12Feb2009

The US has a direct economic and strategic interest in the energy
security of Europe -- particularly regarding Europe's dependence on Russian
natural gas -- and can play a vital role in ensuring that security, though
whether US leaders have the political will to fulfill that role is unclear,
according to a report from the Council on Foreign Relations.

With their vast deposits of gas and oil, as well as a key location
between the major consuming countries of western Europe and eastern Asia,
Eurasian countries such as Russia, Azerbaijan, Kazakhstan and Turkmenistan
"will be a vital source of Europe's energy in the foreseeable future," said
report author Jeffrey Mankoff, an adjunct fellow for Russia studies at CFR.

"Ensuring reliable access to Eurasia's energy at a reasonable price is
therefore among the most crucial strategic imperatives for Europe and, by
extension, for Europe's allies in the United States," Mankoff said.

Granted, the importance of that goal may not be readily apparent to US
observers. "For the time being, the United States itself buys relatively
little Russian oil...and no gas," Mankoff said.

"Yet the dependence of major US partners in both Europe and the former
Soviet Union leaves them in a position where resisting Russian political
demands could have serious economic and political consequences," he added.

Evidence of such consequences became readily apparent this winter, when
the recurring dispute between Russia and Ukraine over Russian gas led to
several European countries being left without sufficient gas supplies in the
midst of a severe cold snap.

But the current weakness in the global economy and the resulting drop in
energy prices has created a window of opportunity for addressing Europe's
vulnerability to Russia, since the latter's ability to leverage its control of
energy has temporarily weakened, Mankoff said.

Mankoff, who also is associate director of international security studies
at Yale University, said Russia's ability to control energy supplies forms a
central component of that country's foreign policy. As such, "how the EU and
its American allies shape their priorities in this field will, to a large
extent, shape the West's strategy for dealing with Moscow."

Indeed, "given the growing political instability in the Middle East, the
United States would do well to think about ways of leveraging Russia's vast
holdings of oil and gas to expand the supply of available energy," he said.

"Doing so will require establishing a framework for Russia to be a
constructive participant in European oil and gas markets, and insulating
against the danger that Russian supply will fall short, for either political
or technical reasons," he added.

The author also urged development of a more integrated European gas
market, "which would be the single most effective way of decreasing the
geopolitical risk of dependence on Russia."