Baku News

May 01, 2006 The Jamestown Foundation - Erasia Daily Monitor - By Vladimir Socor -
Azerbaijani President Ilham Aliyev's April 24-28 visit to Washington spotlighted the urgency of opening direct Western access to eastern Caspian oil and gas reserves. U.S. policy seems, however tentatively, to move in that direction; the European Union is only beginning to consider the issue; and both are moving too slowly to win. With the imminent completion of the Baku-Tbilisi-Ceyhan oil pipeline and the parallel line for gas, Azerbaijan's role in the world of energy and geopolitics is set for a qualitative change: From regional projects to projects of global significance, and from a primary role as energy producer to a primary role as energy transit country. This change turns the Western-oriented Azerbaijan into a major factor in Euro-Atlantic energy security. In this regard, Azerbaijan's location has already become a more valuable asset than the country's own reserves; and the value of its location is set to increase from this point on, amid a rapidly intensifying contest over direct access to energy reserves. Prior to reaching this qualitative threshold, Azerbaijan had already crossed another threshold: No longer simply a consumer of security, it became also a provider of security within the region and farther afield, by deploying troops with U.S. and NATO forces in the Balkans, Afghanistan, and Iraq; providing crucial transit passage to American and allied forces operating in Afghanistan and Central Asia; and successfully containing the radical Islamist challenges to modernization of the country and the region. Its potential for energy transit can further enhance Azerbaijan's role as a security provider: Functionally, by adding a decisive dimension of energy security; and geographically, by turning Azerbaijan, alongside Georgia, into a key factor of energy security for a Europe that now faces an overdependence on politically risky Russian supplies. Europe's energy security is a prerequisite to transatlantic political solidarity and NATO cohesion. The eastern Caspian basin is key to that security through supply diversification. Azerbaijan and Georgia provide the only existing westward transit option for oil and gas from Kazakhstan and Turkmenistan. The Azerbaijani government has taken the lead by upholding the right of Caspian countries to make sovereign decisions about laying pipelines in their respective seabed sectors, despite Russian and Iranian opposition. Similarly, Azerbaijan is currently spearheading initiatives on trans-Caspian cooperation in oil and gas transportation westward. This role, however, cannot for long substitute -- and certainly can not effectively substitute -- for the leadership that the United States had earlier exercised in this regard, and from which it seems to have stepped back. Aliyev's Washington visit could have provided the opportunity for a reaffirmation of U.S. leadership in that regard. A joint political statement at the presidential level, announcing U.S. support for trans-Caspian energy projects, could have been the vehicle for such reaffirmation. This opportunity was passed up, however. The U.S. side considered issuing such a statement but decided against it at the last moment. This decision seems to reflect a lack of clarity in U.S. policy on Caspian energy issues generally. It apparently also reflects an underestimation of the risks that Azerbaijan must face from Russia and Iran as a result of Baku's energy transit initiatives that answer to Western interests. Back in 1997, then-Presidents Bill Clinton and Heydar Aliyev signed a joint political statement in Washington, and in 1999 Clinton signed a common declaration with the presidents of Turkey, Georgia, Azerbaijan, Turkmenistan, and Kazakhstan on Caspian energy development and transit. Those and similar political documents signaled U.S. commitment at the international level to friend and potential foe alike as well as domestically to the U.S. government agencies, lending institutions, and private energy companies. Thus, the Baku-Tbilisi-Ceyhan and Baku-Tbilisi-Erzurum projects were set on track at that time. Those two pipelines in the western Caspian basin form parts of the planned East-West Energy Corridor, which the United States led in promoting during 1995-2001. That corridor's larger components, however, are the unfulfilled trans-Caspian projects from the eastern shore. Paradoxically, the U.S. commitment to trans-Caspian pipelines petered out in the wake of 9/11, instead of redoubling. Those projects' importance is ever-greater in today's global energy context of growing scarcity and insecurity than it was in the benign pre-9/11 environment and before the Kremlin had turned monopolization of transit and markets into strategic policy tools. To help reactivate those projects, the United States needs to begin by issuing the indispensable political signal to Caspian countries, energy companies, and investment capital markets. It also should reinstate the abolished position of Caspian energy policy coordinator, which proved its value in streamlining regional, European, and U.S. efforts at the government and private-sector level to complete the Energy Corridor's western components. On a parallel track, Washington needs to show no less political commitment to Azerbaijan's security than it does to neighboring Georgia's. The two countries' security is indivisible, as they function in tandem in providing the unique transit linchpin. Aliyev's visit helped refocus Washington's attention on those necessary steps to reinstate the trans-Caspian projects high on the list of U.S. energy policy priorities.