At the end of September, Gurbanguly Berdimuhammedov undertook his first visit to the United States as Turkmenistan’s new president. His five-day sojourn has revived speculation about the direction of his administration’s foreign policy. Berdimuhammedov has indicated that he might reconsider several of Niyazov’s isolationist policies. While many would welcome an improvement in the country’s human rights situation and appreciate the country’s strategic location in the heart of Eurasia, foreign governments and companies are primarily interested in Turkmenistan’s energy resources. Ashgabat is the second-largest producer of natural gas in the former Soviet Union after Russia.

BACKGROUND: Until now, Turkmenistan has exported its gas exclusively through Russian-controlled energy pipelines. While reaffirming a commitment to uphold long-term contractual obligations, which require Turkmenistan to continue shipping more than 50 billion cubic meters annually to Russia, the Berdimuhammedov administration has been exploring additional export routes, including eastward into China and southward toward Pakistan. Although much uncertainty persists regarding the extent of Turkmenistan’s gas reserves, which industry experts estimate at almost 3 trillion cubic meters (tcm) and Turkmen government representatives claim as high as 20 tcm, representatives of foreign governments and energy companies have flocked to the country since the beginning of the year.

The legacy of the USSR’s integrated pipeline system has compelled Turkmenistan to rely on Soviet-era energy pipelines to reach world markets. Turkmenistan’s dependence on transit routes through Russia has allowed Gazprom to buy Turkmen gas for lower than market prices – 65 per 1,000 cubic meters before August 2006; $100 per 1,000 cubic meters since then – and then resell it at much higher prices (over $250 per 1,000 cubic meters) to European customers.

In the political-military realm, however, Turkmenistan has pursued a more independent approach. Niyazov followed a doctrine of “positive neutrality” regarding Central Asia’s Russian-dominated international institutions (the Commonwealth of Independent States, the Eurasian Economic Community, and the Collective Security Treaty Organization). He also declined to participate in the Shanghai Cooperation Organization (SCO).

Berdimuhammedov has already demonstrated a more open attitude toward dealing with the SCO. Along with Afghan President Hamid Karzai, he was a “guest of honor” at the August 2007 SCO summit in Bishkek. The other SCO members are eager to cooperate with Turkmenistan in the energy sector even if its government refrains from formally joining their organization. In the joint communiqué issued at the end of the Bishkek summit, the heads of the SCO member governments maintained that they would develop their energy coordination “according to the principle of openness for all interested states and organizations that share the goals and tasks of the SCO.”

Cooperation with Turkmenistan would go far toward realizing plans to make the SCO a powerful “gas OPEC.” If Turkmenistan were to formally join the SCO, or merely coordinate its energy policies with its full members (China, Russia, and the other Central Asian countries) and formal observers (which include gas-rich Iran), the organization’s weight in world energy affairs would increase significantly.

President Vladimir Putin and other senior Russian leaders have sought to cultivate improved bilateral ties with the new Turkmenistani leadership. The Berdimuhammedov administration has reciprocated by abandoning Niyazov’s discriminatory policies against the country’s ethnic Russian minority, which the previous government saw as a potential fifth column susceptible to Moscow’s control. Cultural exchanges between Russia and Turkmenistan have expanded considerably in recent months and Russian is being taught more widely in Turkmenistan’s schools.

Chinese government officials have also lobbied Ashgabat to expand bilateral energy cooperation. During Berdimuhammedov’s visit to China in July 2007, the Chinese National Petroleum Company signed an agreement with Turkmengaz, Turkmenistan's national gas company, to purchase 30 billion cubic meters of Turkmen gas for export to China starting in 2009. The 4,300-mile Turkmenistan-China pipeline under construction will be one of the longest and most expensive in the world.

The European Union also considers Turkmenistan an important player in its future energy strategy, including as a major supply source for the envisaged Nabucco gas pipeline. Last month, British Energy Minister Malcolm Wicks traveled to Turkmenistan. Wicks stressed Europeans’ willingness to pay higher prices than Russia for the country’s natural gas and underscored the contributions that British Petroleum and other EU-based firms could make toward developing the country’s offshore oil resources. Berdimuhammedov is scheduled to visit Brussels later this year.

IMPLICATIONS: Since December 21, the Bush administration has launched a sustained effort to “turn the page” and explore opportunities to elevate the Turkmenistan-American relationship to a higher plane. U.S. executive branch agencies have sent more than a dozen delegations to Turkmenistan following Niyazov’s death to sustain a broad dialogue in many important areas—economics and agriculture; democracy and human rights; education; public health; and cooperation regarding Afghanistan and other regional security issues.

According to Evan A. Feigenbaum, Deputy Assistant Secretary of State for South and Central Asian Affairs, Washington attributes considerable importance to developments in Turkmenistan because they could affect nine issues of critical concern for American foreign policy: Russia’s resurgence in the other former Soviet republics, China’s expanding global footprint; Iran’s influence in Eurasia; energy security; democracy promotion; the fate of Afghanistan; the evolution of Islam; transnational terrorism; and global economic development.

Despite this comprehensive list of American interests in Turkmenistan, the main objective of U.S. policies this year has been to direct some of Turkmenistan’s gas exports through a pipeline under the Caspian Sea to Azerbaijan and then to Europe. The route of this 1,000-mile Trans-Caspian Gas Pipeline (TCGP), under active discussion for approximately a decade, would relieve the need to use the existing network of Russian-controlled pipelines.

Human rights groups point to continued restrictions on citizens’ civil liberties, despite the government’s pledges to expand media and other freedoms. Business groups complain about pervasive corruption, a lack of transparency even for basic economic indicators, and overly vague plans to transition to a national market economy through top-down measures.

Nevertheless, there is a growing consensus that the Berdimuhammedov government has made “encouraging” progress in some areas and should be judged by “realistic” standards. Feigenbaum, who has visited the country twice this year, bluntly told the New York Times, “Look, Rome wasn’t built in a day and we don’t expect that Turkmenistan is going to turn into a Jeffersonian Democracy by next Thursday.”

Washington officials also deny that they see themselves engaged in a great-game style competition with Moscow and Beijing for influence in Turkmenistan. Nevertheless, a number of senior U.S. officials – Feigenbaum, USCENTCOM Commander Admiral William Fallon, as well as high-level State Department officials Steven Mann, Matt Bryza, and Daniel Sullivan – have visited Ashgabat since Russia, Kazakhstan, and Turkmenistan agreed in May 2007 to construct their own Caspian Shore Gas Pipeline. Berdimuhammedov’s signing of this preliminary memorandum of understanding aroused concern that he was losing interest in the U.S.-backed TCGP.

Sullivan – who is Assistant Secretary of State for Economic, Energy, and Business Affairs – stressed that “increased diversification of energy routes, buyers, suppliers are in Turkmenistan’s long term energy security interest. Nations should never be left with only one option – one market, one trading partner, one vital infrastructure link.”

American officials also argue that fully developing Turkmenistan’s energy resources requires involving private American companies because they have access to more advanced extraction technologies than Russian firms. Most Western companies found dealing with the Niyazov administration too difficult to warrant a major investment presence.

Washington policy makers furthered their dialogue with Turkmenistan’s leaders during Berdimuhammedov’s attendance at the annual opening session of the UN General Assembly in New York. The occasion, Berdimuhammedov’s first visit to a Western country since becoming president, also provided an opportunity for his first meeting with U.S. Secretary of State Condoleezza Rice. In addition, some members of the Turkmenistan delegation – including Baymurat Myradov, the executive director of the new national hydrocarbon agency – subsequently traveled to Washington and Houston for detailed discussions on energy policies and other issues.

CONCLUSIONS: The discussions between U.S. and Turkmenistan officials apparently went well. Berdimuhammedov reaffirmed interest in developing multiple pipelines for his country’s energy exports. He even confirmed stories in the Russian media that differences over pricing – Ashgabat reportedly wants Moscow to begin paying $150 per 1,000 cubic meters for Turkmenistan’s natural gas starting next year—have prevented implementation of the May 2007 agreement.

Yet, the Bush administration would be wise to accelerate its efforts to appoint a new ambassador to Turkmenistan, thereby providing more sustained support for its diplomatic engagement efforts. Berdimuhammedov’s fortuitous presence in New York and the episodic visits by Washington-based agencies to Ashgabat can complement, but not substitute, for a more substantial in-country American diplomatic presence.

AUTHOR’S BIO: Richard Weitz is a Senior Fellow and Director of Program Management at Hudson Institute.