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Caspian Diplomacy Should Intensify

For over 15 years the U.S. has worked to promote cooperation over energy issues among the newly independent states in the Caspian Sea region. A proclaimed goal of U.S. energy policy in the region since the early 1990s has been to make certain that countries in the region do not have to depend upon any single export route that could easily be squeezed off.

Europe, which once objected to the U.S. interest in the Caspian Sea region in the unfounded belief that it could strike advantageous deals with Moscow, whom it did not wish the Americans to upset, has become more appreciative of this strategy since its citizens froze in winter following Russia’s closing of the gas taps to Ukraine in recent years.

Russia had the opportunity to show its good faith towards Europe in the mid-1990s, when Moscow’s participation in the Energy Charter Treaty was a possibility. Unfortunately, the committee of the Duma to which it was sent for ratification had a majority reflecting the interests of certain of the country’s entrenched industrial bureaucracies, and it died there. President Yeltsin tried to implement it by decree, but that did not work.

However, the U.S. strategy does not have to mean circumventing or isolating Russia or keeping it out, unless Russia chooses that this is what it must mean. For example, it is not widely known that the American embassy in Kazakhstan worked with Russia in the 1990s in order to restructure the Caspian Pipeline Consortium, so that the now-functioning oil pipeline could be built from western Kazakhstan across southern Russia to the Black Sea.

The experience of Azerbaijan, which exports energy to Russia as well as to other countries, also illustrates this principle, as well as demonstrating that the principle of multiple export pipelines, offering flexibility to producers and consumers alike, is likewise well founded. The best-known and greatest success, although not the only one, is the Baku-Tbilisi-Ceyhan (BTC) oil export pipeline that was agreed ten years ago and began pumping earlier this decade.

Another example is the lesser-known Kazakhstan-Caspian Transportation System (KCTS), agreed with Azerbaijan last year, which will eventually contribute oil from Kazakhstan on the eastern shore of the Caspian Sea to the BTC and perhaps other pipelines in the region. An add-on to the KCTS may also later take gas from the offshore Kashagan deposit to European markets via Azerbaijan and Turkey. Gas from Turkmenistan could also join this pipeline, making it a variant of the Trans-Caspian Gas Pipeline that is now planned as part of the Nabucco project.

Of course, the U.S. is hardly the only country with interests in the region and means to realize them. For example, earlier this month Turkey's Prime Minister Recep Tayyip Erdogan and the Russian Prime Minister Vladimir Putin signed an agreement for the so-called “South Stream” pipeline that would take natural gas from the Caspian Sea region into Europe. Italy's Prime Minister Silvio Berlusconi was also present, since major Italian energy companies would be involved in the project.

This was coupled with a Russian commitment to another oil pipeline from the Turkish Black Sea coast to its Mediterranean coast (the “Samsun-Ceyhan” pipeline) that, according to press reports, is dear to industrial interests closely connected with the Turkish government circles. In this, it follows the pattern of the “Blue Stream” gas pipeline built under the Black Sea from Russia to Turkey earlier this decade, which was much criticized for increasing Turkey’s energy dependence on Russia and later led to a corruption scandal implicating the country’s energy minister of the time.

The Russian-Turkish agreement over South Stream comes only weeks after the Turkish government committed to the European-sponsored Nabucco pipeline, which would follow a different route but do basically the same thing as South Stream: take gas from the Caspian Sea region, and even from the very same countries, to Europe.

The two projects have been jousting through high-level meetings and press releases for years, but the struggle between them now begins in earnest. There is not enough gas for them together: it is very unlikely that both these projects could happen.

The original, stupendous U.S. claims in the 1990s about the energy riches of the Caspian Sea have not yet been realized. However, it became clear almost a decade ago with Kazakhstan’s offshore Kashagan strike (the biggest worldwide since Prudhoe Bay in Alaska in the 1960s) that the countervailing skepticism of early days was just plain mistaken.

It was clear by the turn of the century that the Caspian Sea region would be at least a “swing producer” helping to maintain stable world energy prices in case of disruptions in production elsewhere. Now it has been clear for a while that the region will indeed become a significant producer in its own right, of both oil and gas.

The pipeline agreed last year and now under construction from Turkmenistan to China across Uzbekistan and Kazakhstan is demonstration enough of this fact. Europe recognizes it today as well. The security of European energy supplies, with the help of the Caspian Sea region, will help to insure that any economic recovery there is not endangered by unpredictability or the over-reliance on a single source.

Increases in Caspian Sea region energy production will both increase the quantities available on a regular basis to world markets and also contribute to global price stability. There is every reason to deepen conflict-resolution initiatives such as the difference between Azerbaijan and Turkmenistan over the delimitation of undersea natural resource sectors.

It took the U.S. and Europe a decade, following the disintegration of the Soviet Union, to begin a dialogue over energy cooperation in general. The transformation of NATO since then permits the facilitation of that dialogue and its extension to include other parties.

Thus although the word “energy” does not appear in the Alliance Strategic Concept approved in April 1999, nevertheless Secretary General Jaap de Hoop Scheffer thought it proper to say at a meeting of the New Defence Agenda in Brussels in 2005, that NATO should “deepen relationships” with states in the Caucasus and Central Asia. Last October, he judged it entirely appropriate to accept the invitation to give the keynote speech on “Energy Security in the Twenty-First Century” at the Economist Energy Security dinner in London.

The U.S. and Europe are now ready to work individually and together in such a direction, recognizing that their interests coincide. These are difficult matters. The process may profit from observing U.S. President Eisenhower’s injunction to expand the dialogue wherever the issues are so complicated as to risk being intractable.

Thanks to its inclusiveness beyond the U.S. and Europe and its many varied platforms, NATO has the potential for contributing constructively to energy security not only for its members but also for all countries cooperating with it, without exception. It can also encourage and facilitate dialogues that are already under way in other organizations and forums. Naturally it will not be the only such forum, but also its historically specialized mission provides a potential value-added not easily found elsewhere.

English original of "Kaspickú diplomaciu je nutné zintenzívniť," first published in Euro-Atlantic Quarterly (Banská Bystrica), vol. 4, no. 4 (October–December 2009): 51.

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