THE BLOG

Eurasian Geopolitics and Energy Security Deserves More Attention

The 2007 and 2009 energy crises between Russia and Ukraine, which had major implications across Europe, have shown that energy supply security is also closely associated with the national security of a country.

Following the end of the Cold-War, the transformation of Eurasian countries, accompanied by frozen conflicts and uncertainties, make it difficult for Western nations to predict what lies ahead. The EU and the US shall join in efforts with the regional actors such as Turkey to integrate Caucasus and Central Asia into Euro-Atlantic structures, to strengthen political and economic independence, stability and gradual healthy democratic evolution in Eurasia. In order to do that, energy is the most important sector to work on. The US and the EU are currently leaving this potential too untapped, with insufficient resources and time allocated for engagement policies. The US and the EU should better coordinate their efforts to reach out to Eurasia through natural regional powers such as Turkey. As a founding member of the OSCE, the UN and the OIC, a long standing NATO ally, a potential future member of the EU as well as a country with deep historical, cultural and economic ties to states and peoples of this vast region, Turkey is already a pivotal country in Eurasia.

With vast energy resources and located between existing (Russia, US and EU) and emerging great
powers (China and India), Eurasia is geopolitically very strategic. Home to some 350 million people, Eurasia has a GNP of $1.65 trillion, and $1 trillion flow through the region annually through foreign trade, which is growing 10% annually. More importantly, Eurasia is blessed with most valuable energy resources that could be the world's answer to overdependence on either Russian or Middle Eastern sources. Excluding Russia, the region has 10% of global oil and 32% of global gas reserves. Today, conservative and independently proven reserve profile shows that this region's reserves are already bigger than that of the North Sea.

The US and the EU are the largest energy importers in the world and their dependence on imported fossil fuels, particularly oil (for US) and gas (for EU), is expected to grow steadily. It is expected that the proportion of imported energy in the US's and EU's consumption mix will rise from its present level of half to more than two-thirds by 2030. Of those imports, natural gas is certain to grow significantly and primarily in the European energy mix, as it is becoming the Union's fuel of choice for power generation. According to the International Energy Administration, BP World Energy Report of 2008, in 27 member EU gas consumption in 2008 was roughly 500 bcm.

Caspian energy development and export potential is now entering its second phase. With the Baku-Tbilisi-Ceyhan (BTC), Baku-Tbilisi-Erzurum (BTE), and the Caspian Pipeline Consortium (CPC) realized, regional and international focus have shifted towards examining the second phase of Caspian energy production and export: expansion of Southern Corridor through Nabucco, Italy-Greece-Turkey Gas Interconnector, Azerbaijan's Shah Deniz II gas and Kazakhstan's Kashagan oil (and associated gas field) development, additional export routes for Turkmen natural gas, and Kazakhstan's oil and gas. A number of major geopolitical issues, which certainly require closer engagement and push from the US and EU, will affect the destiny of these energy development efforts. Among others these are: Russia's assertiveness in the Caspian region, instability in Iran, transit disputes with key en route countries, facilitation of the Nagorno-Karabagh conflict resolution, the Turkish-Armenian rapprochement process and strategic transformation in Turkish-Russian cooperation (especially in energy field).

After a year of much anticipated appointment and accelerated efforts of Eurasian Special Energy
Envoy Ambassador Richard Morningstar and the Obama Administration, not much has been achieved or effective policy was crafted in any of the above-mentioned important geopolitical and energy related issues. Although continuing to back the same basic principles as the Clinton and Bush Administrations, it is now clear that the Obama Administration has less ambitious, "unclear" goals regarding Caspian energy policy. Whole new argument of "depoliticizing" the pipeline diplomacy in Eurasia seems misses the crux of the matter in the region: geopolitics. To not recognize the need for more comprehensive engagement (or lack thereof) with Eurasian broader geopolitical issues (as some mentioned above) affecting the future energy development would be a major mistake by the US. This inherently suggests that the US does not care about these issues, leaving the leadership to push for diversification of sources and routes efforts to other nations. From the vantage point of the regional countries and players, the US currently appears less relevant. More importantly, the Kremlin is likely to interpret this new approach as a sign of weakness, as some experts already pointed out (see EurasiaNet and Jamestown Eurasia Daily Monitor reports).

In order to have a tangible progress and breakthrough in the regional energy development with anticipated results, continuous, comprehensive engagement with key countries is required. In addition, close cooperation stimulated through -currently lacking- high level visits to assure support to these key countries on risks that they are about to assume by choosing the "alternative" routes of diversification during the second stage development is a must.

From a strategic point of view, the consolidation of this ideal policy often referred as modern version of the old Silk Route of Eurasia. If implemented right, it can certainly produce enormous benefits for producers, consumers and transit countries alike.

Given the complex nature of the energy geopolitics of the 21st century, it is very hard to predict the losers and the winners. If the US and the EU do not act with the same kind of aggressiveness, if not with the same rules of the game as understood by regional hegemons, there will only be "loser-loser" equation instead of an anticipated "win-win" for everyone.