Pipeline to Trouble

Ilan Berman, The Wall Street Journal:

Ever since December 2004, when populist opposition candidate Viktor Yushchenko unseated then-Prime Minister (and Kremlin favorite) Viktor Yanukovych to claim Kiev's top political office, Ukraine has emerged as a model for democratic transformation in the "post-Soviet space."

But just eight months into its tenure, Mr. Yushchenko's young government is heading into dangerous diplomatic waters. In late July, Ukraine's state-owned Naftogaz Ukrainy inked a landmark memorandum of understanding with the Iranian government. Under the accord, initialed by Naftogaz Chairman Alexei Ivchenko and Iranian Deputy Oil Minister Hadi Nejad-Hosseinian, Ukraine has pledged to construct a transit gas pipeline from Iran to Western Europe, with preliminary talks on the project slated to begin next month.

The deal comes on the heels of largely unnoticed consultations in Tehran between Ukraine's National Security and Defense Council Secretary, Petro Poroshenko, and top Iranian officials, including Iran's new hard-line President Mahmoud Ahmadinejad, and positions Kiev as a major energy partner for Tehran.

The reasons for this cooperation are logical. Today, Ukraine remains deeply dependent on the Kremlin's good graces, with 90% of its oil supplies, 80% of its natural gas and 100% of its nuclear fuel coming from Russia. In the past, the pro-Kremlin regime of Leonid Kuchma found this state of affairs acceptable. To its credit, the Yushchenko government does not.

In recent weeks, top officials in Kiev have declared repeatedly that energy independence from Russia constitutes a top national priority. As part of this effort, Kiev has latched onto a novel idea: energy cooperation with Iran. Ukrainian Prime Minister Yulia Tymoshenko herself has unequivocally backed the Iran-Ukraine pipeline project as a key facet of Kiev's efforts to reduce its current corrosive dependence on Russia. "Only in this way will we get truly diversified energy deliveries," Ms. Tymoshenko told reporters in the wake of the Naftogaz accord.

But in hitching its energy star to the Islamic Republic, Ukraine runs the risk of endangering the new diplomatic and economic bonds it has begun to build with Washington in the wake of the Orange Revolution. Iran is steadily emerging as America's cardinal strategic challenge in the post-Saddam Middle East. Tehran's ayatollahs have made no secret of their desire for an offensive nuclear capability, and are making serious progress toward that goal -- despite the best diplomatic efforts of the U.S. and the EU-3: Germany, France and Britain.

The Iranian regime remains the world's leading state sponsor of terrorism, enabling the activities of radical groups such as Hezbollah, Hamas and the Palestinian Islamic Jihad, as well as segments of the insurgency in Iraq.

And officials in Washington are becoming aware of the fact that Tehran has unexpectedly emerged as a major beneficiary of the war on terror. Over the past year-and-a-half, thanks to the skyrocketing world energy costs generated by political instability in the Middle East, it has gleaned tens of billions of dollars in excess revenue -- money that can be used by the Iranian regime to fuel both its nuclear ambitions and its foreign troublemaking.

The proposed pipeline through Ukraine would make all of these matters much worse. Such a project is bound to expand European energy dependence on the Islamic Republic, thereby diminishing Europe's resistance to the idea of a nuclear Iran and both its incentive and its ability to prevent such a development. It also provides a new, and potentially significant, source of funding for Tehran's strategic programs, exponentially accelerating Iran's atomic drive and its development of longer-range ballistic missiles. READ MORE

Most of all, the Naftogaz project positions Ukraine squarely on the wrong side of the looming showdown between Washington and Tehran. In their quest for a measure of independence from Russia's energy machinations, officials in Kiev should think carefully about whether that is a place they would like to be.

Mr. Berman is vice president for policy at the American Foreign Policy Council in Washington and the author of "Tehran Rising: Iran's Challenge to the United States," due out later this month from Rowman & Littlefield Publishers.