August 23, 2011

In Northeast Asia, Energy May Alter the Geopolitical Balance

A potential energy deal between Russia and North Korea may
alter the geopolitical balance in Northeast Asia. Over the weekend, North
Korean leader Kim Jong-il visited the Russian Far East in what may be a sign
that Pyongyang is willing to develop a lucrative energy deal with Moscow.
Though no official deal has been announced, The
New York Times
reported Monday what the broad contours of an energy deal
could look like:

For years, officials in Moscow and
Seoul have urged North Korea to let the two countries build a pipeline through
the North to carry Russian natural gas to meet the rising demand in South Korea
and perhaps to also supply Japan. North
Korea can expect to earn as much as $500 million a year in transit fees from
the pipeline, according to South Korean analysts

After years of hesitation, North
Korea has recently shown interest in the proposals. Executives from the Russian
gas firm Gazprom visited Pyongyang, North Korea’s capital, in July. This month,
the Russian foreign minister, Sergey V. Lavrov, said that North Korea was
“positive” about the pipeline project, and North Korea’s media acknowledged
last week that Mr. Medvedev had called for greater cooperation involving energy
and railways among Russia and the two Koreas.

An energy deal could change the geopolitical balance in a
variety of ways. In particular, Russia would reap significant benefits from
wielding its oil and natural gas reserves to develop its Far East. For years
Moscow has struggled to maintain strong ties to its eastern hinterlands, in
part because of the geographic distance (nearly 4,000 miles – or seven time
zones – separate Moscow from its most eastern population). As a result,
Russians in the Far East have looked to China for everything from
agricultural goods to jobs
. Indeed, Chinese influence in Russia’s east has
steadily increased, worrying some in Moscow. A lucrative energy deal that would
Moscow to invest in its Far East may help tip the balance of influence away
from the Chinese

An energy deal between Russia and North Korea that brings
natural gas to South Korea and Japan also has the potential to help normalize
relations on the Korean Peninsula. Though sharp grievances persist between the
two Koreas – with North Korea’s nuclear program the most significant impediment
– a pipeline and other energy deals could generate stability by fostering
interdependencies between the neighbors. Opinions on that point seem to be
mixed, though. “South
Korean analysts disagreed about whether the proposed pipeline would present an
economic and security risk or whether it would help the North rebuild its
economy and encourage it to be more flexible concerning its nuclear ambitions
The New York Times reported. Yet
there is some room for optimism. “With
South Korea’s support, Russia and North Korea have also discussed the idea of
extending the Trans-Siberian Railway through the North into the South and
building high-voltage power lines to sell surplus Russian electricity from
plants like Bureiskaya to both Koreas
,” which could move the North Korean
regime in a more stable direction.

Of course, a Russian-North Korean energy deal could have
consequences for the current geopolitical balance. China – long considered to
be North Korea’s last credible ally in Northeast Asia – could lose its leverage
over the regime if it were to develop stronger ties with Russia, especially if
Russia were willing to fill China’s role in providing goods, financial opportunity
and humanitarian relief to the decrepit Korean state. Losing that leverage
could undermine the international effort to bring North Korea to the
negotiating table to discuss dismantling its nuclear weapons program. (China
has played the intermediary in bringing the regime to the table for
negotiations.) It all depends on whether Russia is willing to put pressure on
the North Koreans to come to the negotiating table, too – which would be
consistent with their nonproliferation goals. Yet, with China on Russia’s
backdoor, the cost-benefit calculus could change should Russia considers
shorting up its influence in its Far East a greater strategic priority than
shuttering North Korea’s nuclear weapons program.

It is unclear in what direction an energy deal could take
the geopolitical balance in Northeast Asia. Moreover, such a deal may not be
plausible – at least in the near future. Nevertheless, it is an interesting
trend that U.S. policymakers will need to follow. And it is another stark
example of the way in which energy resources could affect geopolitical
relationships around the world.

Photo: A
map highlighting Russia’s Far East. Courtesy of