…AND LOCAL VS. FEDERAL INTERESTS.

Possible militarization is far from Novorossiisk’s only problem. The Krasnodar krai Duma (regional legislature) has imposed an "ecological" tax on export and transit shipping operations in Novorossiisk. Efforts by foreign companies and Russia’s Oil and Power Ministry to have the tax rescinded have failed thus far. (Petroleum Information Agency, April 23). Novorossiisk’s port facilities and oil terminal require substantial expansion and modernization, which Russia cannot afford to finance. The port appears ill-equipped to withstand even moderate-force winds, which constantly interfere with commercial shipping, forcing oil tanker operations to be suspended for days at a time. These problems, and the expenditures needed to overcome them, may drive up the price of Azerbaijani and Kazakh oil if diverted via Russia, adding to the doubts surrounding the planned diversion.

Three Countries Strengthen Ties.