Not A Safe Route.

Byline: Adam B. Kushner

Oil and gas traveling through Georgia was supposed to free Europe from Russia. Not anymore.

Russia's invasion of Georgia threatened a major transit corridor for oil and gas from the Caspian Sea, raising questions about Western energy security. Major pipelines through Georgia supply Europe with more than 1 million barrels of oil per day and 26 percent of the continent's natural gas. At the height of the fighting, more than 50 Russian missiles targeted the most important oil pipeline, called BTC because it runs from the Azerbaijani port of Baku, near Tblisi, the Georgian capital, to the Mediterranean port of Ceyhan, Turkey. Other missiles placed within 100 meters of one of BTC's pressurized vents could have caused a major explosion.

Completed only three years ago, BTC is the culmination of a Western campaign to free Europe from energy dependence on Russia; now the war has Europe wondering whether Georgia is the route to independence. "Russia's military has changed risk perception around Georgia as a transit route," says Tanya Costello, a specialist on the former Soviet Union at the Eurasia Group, a political-risk consultancy.

For now, this is a practical risk only east of the Atlantic. The pipelines through Georgia mostly feed Europe, and energy analysts don't see any direct threat to the American market. But oil prices, which had been declining, spiked again late last week on the news. And while no one believes energy was the main motive for Russia's incursion, it surely played some part in Moscow's thinking on the region. "When Baku-Tblisi-Ceyhan was constructed," says Costello, "you had a much weaker Russia that was more amenable to an energy dialogue. While Russia didn't like the existence of a pipeline that bypassed its territory, Moscow had accepted its existence. Now we're in a situation where Moscow sees the situation in zero-sum terms. A resurgent Russia will be less happy to see routes across Georgia expanded."

In the long term, that could redraw the energy-supply map, according to Julia Nanay, a senior director at PFC Energy. BTC was only the latest of several Western-backed pipelines, all conceived with an eye to skirting Russia. European partners had been planning to extend the South Caucasus gas pipeline--it runs alongside BTC but ends, landlocked, in Turkey--to Austria, via Bulgaria, Romania and Hungary. "Nabucco [the extension] will have even more of an uphill climb now" that investors doubt the reliability of that gas route, says Nanay. Doubts stirred by the Russian invasion also threaten a ...