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. Last Updated: 07/27/2016

Oil, Democracy to Top Cheney Tour

APU.S. Vice President Cheney and his wife, Lynne, arriving in Vilnius. Energy security is at the top of Cheney's agenda.
NEW YORK -- U.S. Vice President Dick Cheney's trip to Kazakhstan this week takes him to a land at the crossroads of the Bush administration's most pressing foreign-policy challenges: Russia, China, Iran and the global clamor for oil.

Awash in crude oil and natural gas reserves, Kazakhstan is one of a few nations that experts say has the capacity to expand energy output. It is wedged between the growing economic influences of China and Russia and may emerge as an alternative source of oil as the U.S. seeks to isolate Iran over that country's nuclear development program.

Cheney's talks Friday with Kazakh President Nursultan Nazarbayev, between stops in Lithuania and Croatia, come at a critical time. Americans are in the midst of what U.S. Energy Secretary Samuel Bodman has called a crisis because of rising gasoline prices driven by insufficient supply, and in Kazakhstan sits one of the world's 10 largest oil fields.

"The Caspian basin is one the final frontiers of today's energy development," said Ariel Cohen, senior research fellow at the Heritage Foundation, a Washington-based research group. "It is important to get this oil to the global markets, preferably bypassing Russian chokeholds."

Cheney also plans a speech Thursday in the Lithuanian capital, Vilnius, in which he will outline Bush administration goals for democratic freedoms, free-market economies and energy security, a senior administration official told reporters yesterday. His audience will be the leaders of countries worried about Russia's renewed attempt to exert influence regionally, including the presidents of Georgia, Poland, Romania and Bulgaria.

For the countries that once were part of the Soviet bloc, Cheney will carry the message that the United States wants to help ease their integration into the global economy and alliances such as the European Union and the North Atlantic Treaty Organization.

With Kazakhstan, a mainly Muslim, secular society and Central Asia's biggest economy, a bigger issue for the United States is energy.

The second-largest oil producer among the former Soviet republics after Russia, Kazakhstan produces about 1 million barrels a day, or about the same amount that could be pumped from the Arctic National Wildlife Refuge in Alaska, Cohen said. By 2015, Kazakhstan's daily output may triple to 3 million barrels -- amounting to about 3.6 percent of world output last year and one-third of Saudi Arabia's contribution, Cohen said.

"Kazakhstan is one of the few countries with ample capacity to expand oil production," said Harvard University professor Ricardo Hausmann, former chief economist of the Inter-American Development Bank. "This makes them very important to maintain global energy balances."

The difficulty is getting Kazakh oil to the industrial world without going through Russia. A key issue in Cheney's talks in the Kazakh capital of Astana is encouraging the Nazarbayev government to develop a pipeline across the Caspian Sea that connects to another extending from the Azeri capital of Baku, through the Georgian capital of Tbilisi and out of the Turkish port of Ceyhan on the Mediterranean Sea.

"Cheney needs to foster the relationship, as Kazakhstan is one of the world's major emerging oil provinces," with about 3 percent to 4 percent of the world's oil and gas reserves, said Michael Heath, a political analyst at Aton Capital Group in Moscow.

Skirting Russian-controlled pipelines would "break Russia's stranglehold" on the export of Kazakhstan's oil, said Frederick Starr, director of Johns Hopkins University's Central Asia-Caucasus Institute in Washington.

"Kazakhstan is firmly committed to building it, but needs U.S. and European backing against Russia's and Iran's inevitable attempts to prevent it."

The confrontation with Iran, the world's fourth-largest producer, may help spur investment in Kazakhstan as it drives up the price of oil, which hit $73.75 a barrel Tuesday on the New York Mercantile Exchange. The price is up 45 percent from a year ago and Iran's Deputy Oil Minister Hadi Nejad-Hosseinian predicted yesterday that continued demand may push it to $100 per barrel this year.

Doing business in Kazakhstan is not easy. On the World Economic Forum's Global Competitiveness Report in 2005, Kazakhstan ranked 61st among 117 countries, unchanged from a year earlier. It is fourth among the 15 former Soviet republics. The annual ranking measures countries' trade practices and their treatment of labor and capital.

U.S. energy interests are extensive in the country, where the first well was drilled in 1899, according to the U.S.-Kazakhstan Business Association, a Washington-based group that includes major U.S. oil companies.

Kazakhstan's Tengiz oil field, which holds 6 billion to 9 billion barrels, is under development by a joint venture that includes Chevron and Irving, Texas-based ExxonMobil. Houston-based Halliburton, Cheney's former employer and the world's largest oil-services provider, assists the big oil companies in Kazakhstan.

China, where a growing economy is pushing up demand for oil, also has been acquiring energy assets there.

Kazakh officials say they are eagerly awaiting Cheney's visit, which follows a trip Secretary of State Condoleezza Rice made there last October.

"American attention is a welcome break from the increasingly strong influence that Russia and China continue to play in this region," Prasad Bhamre, an adviser to Kazakhstan's economy and budget ministry, wrote in an e-mail reply to questions.

Cheney's visit comes at a time when political and social stability in Central Asia is an important U.S. goal.

The United States, which was evicted from bases in Uzbekistan last year, wants Kazakhstan's cooperation, such as passage through its airspace, as it conducts missions in Iraq and Afghanistan.

The Kazakh stop also will offer another example of the balancing act required of U.S. President George W. Bush's foreign policy in pushing for democratic reform in countries that the United States depends on for oil and cooperation in the war on terrorism.

In February, a leading opponent of Nazarbayev was killed in what protesters in recent weeks have denounced as a politically motivated crime.

"There is also a sense that a quid pro quo can be worked out with the United States, whereby no 'velvet' or 'orange' revolutions are encouraged, in return for being a stable friend in the region," Bhamre wrote, referring to uprisings that led to government changes in Czechoslovakia and Ukraine and were supported by the United States.