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“Petropolitics” by the Caspian: What Interests are at
Stake?
The potential to become a new source of energy
supplies has attracted the attention of various
international actors to the Caspian politics arena. But
a zero-sum game of 'realpolitik' is likely to increase
instability and produce no winners in the long run.
By Israel H Seguin
At times when the Middle
East is more insecure and instable, the Caspian region
has become the subject of international disputes due to
its extensive energy resources, despite the fact that
oil and gas deposits are still to be explored. It is
this potential to become the new great source of energy
supplies that has attracted the attention of various
international actors to the Caspian politics arena.
In order to study the complex situation that has emerged
in the Caspian Sea, a four-level approach has been
suggested: the micro-level or the analysis of the
complex and heterogeneous societies located in the
region; the second level that looks at the inter-state
relations among the states that border the Caspian Sea
(what is known as the inner-circle of Azerbaijan,
Kazakhstan and Turkmenistan); the third level which
corresponds to the relations among bordering states and
their near neighbours (the outer-circle), and the fourth
level that interprets the politics of the Caspian region
as an interplay among external actors and the littoral
states to the Caspian Sea [1].
This article concentrates on analysis of the fourth
level, and looks in particular at the actions of three
foreign powers in the region: Russia (the ever-present
power of conquest, domination and dependency for the
region), the United States (playing a more significant
role since the breakdown of the U.S.S.R.), and China
(the new big player). The economic and political
interests of these players have shaped a complex game
based on two main objectives: consolidating political
influence and ensuring economic benefits. It is the
purpose of this article to examine how the foreign
powers are playing this game in Central Asia, by looking
at how each player pursues a different strategy in terms
of the way oil and gas deposits have to be explored and
distributed (called variously “pipeline politics” or “petropolitics”).
Russia: losing control
There have always been several linkages between Russia
and the Caspian Region. Slavic minorities living in each
of these countries; shared borders (the
Russia-Kazakhstan border is one of the longest in the
world); security issues; and the strong dependence of
the Russian economy on oil and gas exports; all are
aspects which bind Russia together with its neighbours.
These elements constitute the basis of Russia’s
permanent interest in Central Asia. On the one hand, the
mosaic pattern of the Central Asian ethnodemography,
with bulky pockets of Russians and Russian-speaking
populations, have made Moscow aware of the dangers of
treating the new states with indifference [2]. On the
other hand, the Islamic tide spreading through Central
Asia with its Turkic Muslim population occupying
land-locked territory in the Volga-Ural region
represents a significant security concern for the
Russian government [3].
In addition to security concerns, economic factors are
important: economically, Central Asia relies heavily on
Russia and, at the same time, Russia’s economy and
budget have become heavily dependent on foreign trade,
particularly on oil exports [4]. Dependency on energy
resources highlights Russia’s interest in playing a big
role in the managing of Caspian potential resources. In
spite of this, Russia had been unable to pursue a
coherent policy or to set consistent priorities until
recently.
Russia has aimed to influence any decision on the
extraction and distribution of the oil and gas deposits
in the region. For some time Moscow supported the
construction of the “northern route” for a pipeline from
Azerbaijan to the Russian port of Novorossiisk via
Dagestan; but it did not succeed as the United States
and the Caspian states did not share the same
preference. Some of the difficulties Moscow has faced in
dealing with the Central Asian states can be explained
by the Russian government’s lack of a defined objective.
One of the major instances with respect to the problems
of agenda-definition appeared when in the early 1990s
the Ministry of Foreign Affairs stated that the Caspian
had to be treated as a lake under the international law,
and therefore its resources belonged to all littoral
states and could only by exploited by consensus
decisions. This represented a geopolitical strategy by
which Russia looked to maintain a dominant presence. At
the same time, however, the Russian Ministry of Fuel and
Energy signed an agreement with Azerbaijan in November
1993 confirming Baku’s right to the disputed fields. The
Ministry openly approved the signing of the development
contract between Baku and the Azerbaijan International
Oil Consortium in September 1994 to the chagrin of the
Ministry of Foreign Affairs [5].
Political and economic interests have driven Russia’s
policy toward the struggle for influence in the Caspian
Sea. However, while the political considerations
outlined above essentially put Russia on the defensive,
willing to obstruct any foreign influence in the
Caspian, economic priorities present Moscow with new
opportunities [6].
United States: gaining influence
The United States is the world’s largest oil consumer
and importer. This fact alone advances the importance of
the Caspian Sea for Washington. It is yet more
significant when conflicts and instability in the Middle
East stress the need to look at other possible sources
of energy. Because the region has become so important to
the U.S. government, analysts have come to the point
where there is an orchestrated effort by Washington to
exaggerate the significance of the region’s hydrocarbon
wealth. A study by the International Institute for
Strategic Studies stated that despite their near
universal quotation, the U.S. Department of Energy
figures are generally perceived to be an order of
magnitude away from reality [8]. This could be
interpreted as an intentional effort to promote the
development of projects in the region.
The involvement of the United States in the Caspian has
been conditioned by previous alignments. The U.S.
government has supported progress towards autonomy for
the newly independent states so that they can become
less dependent on Moscow’s directives. By the same
token, the U.S. has pushed for the division of the Sea
into national sectors to undermine Russia’s position as
regional arbiter. Additionally, Washington has been
strongly opposed to transporting oil and gas supplies
via Iran even though American oil companies believe that
Iran provides the easiest, fastest and cheapest route of
transportation [9].
Keeping in mind the above, the game of “petropolitics”
played by the United States has developed with a
three-fold approach: to eliminate any Iranian role; to
strengthen economic and political ties between Turkey, a
NATO member, and the three Caspian states (Azerbaijan,
Kazakhstan, and Turkmenistan); and to support the
economic development of these states for economic
independence from Russia [10]. With these clearly
identified interests, the U.S. government has supported
two main projects for transportation of oil and gas from
the Caspian basin to the global market. The first of the
projects is the Baku-Ceyhan oil pipeline, from
Azerbaijan to Turkey via Georgia, bypassing Russia and
Iran; while the second is the Trans-Caspian gas
pipeline, from Turkmenistan to Turkey via Azerbaijan.
These projects, nevertheless, have been criticized for
not making any economic sense. Of the eight oil
companies composing the sponsor group for the Baku-Ceyhan
project, only Azerbaijan’s SOCAR and Turkish Petroleum
Corporation unequivocally backed the project, while the
support of the other members was half-hearted at best
[11].
The role of the United States is gaining importance as
the Caspian states seek to counter the influence of
Moscow. At the same time, the U.S. government is aiming
to support any policy which serves to reduce Russia’s
hegemony in the region. But in the process, by pushing
political interests over economic ones, Washington has
designed a non-efficient agenda. Rather than engage with
the oil companies and take account of the independent
studies which have criticized the project, the State
Department has instead tried to pressure them into
paying for a pipeline they do not want [12].
China: introducing a balance of power
China’s ongoing process of industrialization has made
the country one of the major importers of oil and gas.
In contrast to Russia and the United States, China’s
involvement in the Caspian region has been based on a
strong convergence between foreign policy objectives and
energy policy incentives. The government in Beijing has
assumed that China’s political presence and influence
can be enhanced at the same time as it secures new
supplies of energy. Petroleum may become a tool of
foreign policy and establish China as a major player in
Central Asia [13].
Nonetheless, as any project that would seek to develop
export routes through China is likely to offer strongly
competitive speed and low cost, scholars have questioned
the real objectives of the Caspian states when including
China in the discussion of possible routes of
transportation for oil and gas. This raises the question
of whether the Central Asian states are just using the
discussion with Beijing as a bargaining chip in
negotiations with other states or whether it is an
excuse for developing closer ties with China.
Many commentators have emphasized the importance of
factional politics in China’s foreign policy
decision-making process, which pits realists against
liberals, nationalists against internationalists, and
those supporting the promotion of national interests
overseas against those giving priority to
self-preservation [14]. In spite of this, China has not
faced any obstacles to performing an active role in the
Caspian region.
This is more obvious when we look at how China has dealt
with security issues. In 1996, China, being worried
about stability in its common borders with the Central
Asian States (particularly in the Xianjiang zone) due to
the uprising of Muslim fundamentalism in the region,
proposed the creation of the Shanghai Five Group (since
2001 the Shanghai Cooperation Organization) to
Kazakhstan, Kyrgyzstan, Tajikistan, and Russia. The
agenda of the annual sessions conducted in each member
state in turn have been gradually extended from the
issues of interaction in the border regions to the
prospects of mutually beneficial cooperation in
political, economic and cultural spheres.
From a purely political perspective of the Central Asian
and Caspian states, China may be used as a counterweight
to Russia, as there is the added advantage that closer
relations with China are unlikely to irritate Russia as
much as their contacts with the U.S. In this sense,
China’s entrance into Caspian geopolitics is likely to
have a marked impact on the balance of power in the
region.
Three’s a crowd?
The Caspian Sea is located in a region with diverse
populations, weak states, and is exposed to the
influence of Islamic extremism and terrorist groups.
Moreover, the military and strategic balance of power in
the region is very fragile. External actors have
involved themselves in a region where economic interests
have to be attuned with security strategies. Competition
for influence in the region defines the new game for oil
resources, that of “petropolitics”.
For instance, in November 1996 Boris Berezovsky, then
deputy secretary of the Russian Security Council, came
to Baku, apparently to encourage President Aliyev of
Azerbaijan to agree to joint sovereignty in the Caspian
(the legal status defended by the Russian government).
On his heels, however, came James Collings, then the
U.S. Department’s point man for the New Independent
States, to pronounce for the first time Washington’s
clear support of sectoral division and national
sovereignty in the Caspian sectors of the sea, which was
the legal status preferred by Azerbaijan [15].
Even though potential economic gains attracted attention
to the region, political objectives continue to be
relevant. The United States has supported projects
without “economic sense”, but with strategic
significance. Russia and China have sometimes reached
consensus on stability and security concerns and
policies for the region. This was the case when in the
late 1990s Russia agreed to China’s active participation
in the security dialogue on Central Asia through the
Shanghai Forum. Rather than shut out its neighbour,
Moscow was wise to engage China as a force for regional
stability and a partner in economic cooperation.
Finally, China has been aware that it can call on
Russia’s support to counterbalance the U.S. and Japan;
and, looking west, it sees Russia as a vital stabilizing
force in Central Asia [16].
Petropolitics of the Caspian region is a complex new
game in which economic gains are affected by political
objectives (the U.S.), or allow for a more pragmatic
perspective (Russia), and in which economic interests
can grant political power (China). All these games are
being played at the same time. How the game will end up
depends on political developments inside Washington,
Moscow and Beijing. If political contexts advance to a
‘realpolitik’ scenario, we will probably face the
eruption of more conflicts than are needed.
The Central Asian states can assume for some time that
they can benefit from a zero-sum game to strengthen
their bargaining power vis-à-vis the three external
powers. In the long term, however, such a scenario can
add more instability and produce no winners. That will
be a lesson that all actors in the inner and outer
circle of the Caspian politics will have to learn.
References
[1] H. Hrair Dekmejian and Hovann H. Simonian, Troubled
Waters: The Geopolitics of the Caspian Region (London:
Routledge, 2003), pp.8
[2] Ibid.
[3] Dimitri Trenin. 2003. Russia’s Policy in Central
Asia. Journal of International Affairs 56 (2): 119-31
[4] Ibid.
[5] Ibid.
[6] Ibid.
[7] Paul Kubicek. 2004. Russian Energy Policy in the
Caspian Basin. World Affairs 166 (4): 207-217
[8] Gawdat Bahgat. 2002. Splitting Water: The
Geopolitics of Water Resources in the Caspian Sea. SAIS
Review 22 (2): 273-292
[9] Ibid.
[10] Ibid.
[11] Alec Rasizade. 2001. The Bush Administration and
the Caspian Oil Pipeline. Contemporary Review 279
(1626): 21-5
[12] Ibid.
[13] Ibid.
[14] See Alec Rasizade. 2001.
[15] See Abraham Becker, Russia and Caspian Oil: Moscow
Loses Control (Washington: RAND, 1998)
[16] Philip Andrews-Speed, and Sergei Vinogradov. 2000.
China’s involvement in Central Asian Petroleum. Asian
Survey 40 (2): 377-397 |
