University of Groningen
M.A International Relations and International Organization
Agha Bayramov
University of Groningen
15.01.2015
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European Energy Security and the Importance of the Caspian Sea
Introduction
The collapse of the Soviet Union led to both an end of an ideological clash and the
emergence of new geopolitical interests among great powers. To obtain sustainable energy
resources is one of the new political challenges of powerful states. However, the strategic
dimension of energy is not a new issue in international politics. “It has been widely discussed at
least since the 1973-4 Arab oil embargo”(Keukeleire & MacNaughtan 2008, p.222). After the
Arab oil crises, new energy cooperation and partnerships emerged and this process accelerated
after the Cold War. In other words, powerful countries like the United States, Russia and China
realized that sustainable energy resources can accelerate and strengthen their economic and
military interests. In light of this, many countries started to use their political, economic and even
military power in order to obtain and provide cheap and alternative energy sources. Meanwhile,
the importance of energy resources led to the emergence of new conflicts and competitions
amongst great powers. Europe is a major region of international energy politics due to its energy
dependency and interest, yet also because it is the headquarters of the IAEA and IEA. The four
main areas of these organizations - Energy Security, Economic Development, Environmental
Awareness and especially Engagement Worldwide - makes the region a prominent global energy
centers. The IEA is working with both member and non-member states, providing them with
authoritative recommendations and statistics. Meanwhile, it has a strong relations with other
international energy organizations such as OPEC, IRENA and IEF. Thus, these strong
partnerships and engagements make Europe one of the major energy regions.
In addition to the new political challenges, the end of the Cold War sparked an emergence
of new energy rich countries in the international sphere. Russia and newly independent Caspian
Sea countries, Azerbaijan, Turkmenistan, Kazakhstan, have become new and significant energy
actors in international politics, due to having abundant energy reserves. However, the Russian
government has effectively used the disunity of member states for its own advantage and
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established huge energy dependency relations with numerous European countries. At the same
time, Moscow has monopolized the pipeline projects of the Caspian Sea to restrict alternative
access of the EU. Thus, as stated by Zeyno Baran “the EU relies on Russia for more than 30
percent of its oil imports and 50 percent of its natural gas imports” (Baran 2007, p. 132).
Nevertheless, the energy politics of the EU began to change after the gas crisis between Russia
and Ukraine in 2007. The EU has realized that high dependency, lack of energy diversification
and disunity between member states are the main obstacles that prevent member states from
implementing strong energy policies. In light of this, the main research question for this paper is:
is Russia the main obstacle which prevents the EU from establishing alternative energy relations
with other regions, especially the Caspian countries, or are there other internal and external
reasons? This will be explored by developing various sub-questions. To investigate the EU’s
internal side: How successful was the European Union in its energy policy agenda during the
period between 1991-2007 in the Caspian Region? How did competing strategic, economic and
commercial interests impact on the EU policy? To investigate the external reasons: does Russia
need the EU more than the EU needs Russia? How can the Caspian resources influence the
energy diversification of the EU? How will strong EU cooperation with the Caspian states
impact the strategic sphere of its partner United States? In this paper, I use two main
methodologies, analytical and descriptive, to answer the questions. For analytical part, I seek to
outline where the Caspian resources can be located within the present paradigm of the EU energy
security. I make particular reference to R. Young’s Energy Security analyzing concepts of the
energy security and EU foreign policy. For the descriptive part, I utilize international journal
articles to provide comparative and statistical information.
The Energy Policy of the European Union and Challenges
To begin with, what is energy security? and How can one define it? Is there a definition? In his
article on Energy Security Daniel Yergin mentions that “although in the developed world the
usual definition of energy security is simply the availability of sufficient supplies at affordable
prices, different counties interpret what the concept means for them differently” (Yergin 2006, p.
71). For the Russian government, energy security consists of controlling the main energy routes
and monopolizing pipeline projects. However, Nikolay Kaveshinkov explains it from a different
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perspective in his article ‘The Issue of Energy Security’. According to him, “energy security
should be defined as the elimination of a threat that in the longer run the energy factor would
become a potential barrier to the economic development of a country” (Kaveshinkov 2010, p.
589). Meanwhile, he mentions that energy security should be explained in terms of both supply
and demand. Finally IEA defines energy security as “the uninterrupted availability of energy
sources at an affordable price”(Bahgat 2006, p. 965). In short, energy security is not only reliable
and sustainable supplies but is also available at a reasonable price. For the European Union,
energy security has not been the main strategy of foreign policy since the mid-2000s. The
majority of great powers realized the significance of sustainable energy during the Arab oil crisis
in 1973-4. On the contrary, “as was the case then, the looming threat to energy security has not
automatically led to member states developing a genuine ‘common’ energy policy” (Keukeleire
& MacNaughtan 2008, p.222). In other words, the lack of attention and concern of EU member
states to energy issues prevented them from establishing and implementing coherent and
strategic energy policies. Stephan Keukeleire and Tom Delreux mentions critically three main
obstacles to the EU in their book ‘The Foreign Policy of The European Union’
According to them, “the first challenge is the EU’s growing import
dependence” (Keukeleire & MacNaughtan 2008, p. 223). Although the percentage of energy
importer countries varied significantly, every year their dependence rates are increasing
considerably. “According to European Commission statistics, the EU dependency rating has
increased from 47.2 to 53.7 percent since 2002” (Ec.europa.eu, 2014). In light of this, critics
claim that due to high energy consumption and demand in the world market, this dependence
rate will be higher in the near future. In addition, European countries import their energy
resources from different countries that influence their foreign policy priorities. Each of the
member states has independent energy relations with different countries, and their position and
policy toward energy exporter countries differentiate. Thus, high energy dependency is not only
making security of EU countries vulnerable and weak, but also it impacts foreign policy
priorities of its member countries.
Secondly, critics claim that the EU does not have reliable energy partners because energy
rich countries are either undemocratic and authoritarian states-like Russia- or unstable places like
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the Middle East. In other words, because of energy interest, some European countries undermine
traditional values of the European Union and overlook undemocratic regimes. “Even Saudi
Arabia’s violent oppression of the unfolding revolt in Bahrain in 2011 did not lead to any serious
reaction from the EU and its member states” (Keukeleire & MacNaughtan 2008, p. 225 ). Russia
also oppresses human rights and has a lack of democracy, but to maintain sustainable oil and
natural gas imports, the EU condones Moscow’s poor democratic and human rights values. In the
light of this, Youngs mentions that “the standard critical view was that where the West did focus
on such values it was only as a cloak for pursuing oil interests” (Youngs 2009, p. 11).
Meanwhile, most energy producer countries do not ‘really’ support the spread of traditional
Western ideas in their countries so that the EU does not want to destroy its oil interests and
relations with these states.
Some European countries imported their energy resources from the Middle East. Although,
the Middle East is very rich in its oil and natural gas resources, there is always conflict between
countries which makes this region an unreliable energy partner. For example, there has been
conflict between Israel and Palestine since the beginning of the Cold War, and also, during the
1990s, the war between Iran and Iraq in the 1980s, then Iraq invaded Kuwait which led to the
Gulf War. After that, in 2003, the U.S invasion of Iraq. In short, the common point of most
experts is the EU should increase diversification of energy sources to response energy shocks
and disruptions. Meanwhile, instead of undermining democratic values, the EU should use its
energy relations to develop and spread the rule of law and democracy.
The last and the most important challenge of the European Union is the absence of internal
unification that prevents the EU from implementing a common ‘external energy policy’. This
idea is also supported by both experts and the Commission. Amelia Hadfield mentions this issue
in her article on ‘EU-Russian Relations’, explaining how member states accept energy as a
national policy of their countries. According to her, “each EU member state places a different
emphasis on the role of energy within its own national foreign and security policy’’(Hadfield
2008, p. 237). This is also one of the main reasons of high energy dependency because instead
of establishing energy relations under the EU, member states prefer to establish bilateral relations
with exporter countries. At the same time, they do not want the EU commission to interfere their
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national energy relations. “Even energy policy was not formally incorporated within the scope of
the Common Foreign and Security Policy (CFSP) and no legal base existed for the development
of common external energy policy” (Youngs 2009, p. 22). Florian Bauman mentions this
problem in his ‘Outer Dimension of Energy’ article. According to him, “during the gas disputes
between Ukraine and Russia, the common approach of the EU failed due to some bilateral
actions of member states like Germany”(Baumann 2010, p. 78) In other words, most of the
experts and also the EU politicians believe that the disunity among members and ineffective
collective responsibility are more significant obstacle than Russia. “At the end of 2006,
Commission president Jose Manuel Barroso declared that energy had been until recently a
forgotten subject in the European agenda”(Youngs 2009, p. 24).
But, what are the main reasons of these problems? The first reason is the differences
between power and capabilities of member states that impact both their foreign and energy
policy priorities. Small member states fear the power games of great ones. Meanwhile, for the
largest states, “EU composed of powerless member states with little capabilities to
offer” (Keukeleire & MacNaughtan 2008, p. 123). Moreover, divergent levels of capabilities
leads to the second problem: different interests among member states. In other words, due to
their power and capabilities, member states are following different foreign policy interests. Some
members of the EU – France, the UK – have different agendas because they have nuclear
weapons. Due to these reasons, they want to maximize their power capabilities and establish
bilateral relations with third party countries in terms of economic, security and energy policy.
Other reasons are political will and strategic culture. In other words, due to cultural differences,
it is very difficult to establish a common approach. Meanwhile, because of different interests,
capabilities and strategies, member states do not have strong political unity to establish a
common EU approach. But, a lack of universal will doesn't mean that there is a strong
disagreement between EU countries and that they are not united. It rather means that member
governments are reluctant and do not want to take the risk of maximizing their own interests.
Finally, critics claim that the last reason is the differences between energy dependency and
preferences of states. As it has been mentioned before, the energy dependency of states is
different from one to another. For example, “although Latvia, Lithuania and Slovakia are
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obtaining 100 percent of their imported energy from Russia, Sweden, Spain and the UK have a
low dependency on Russia”(Youngs 2009, p. 79). Also, member states have different energy
preferences like, nuclear power plants, that some of them prefer to change their energy from
natural gas and oil to nuclear but others are against this idea. “For instance, France and Finland,
prefer nuclear energy, whereas others such as Germany opted to close nuclear power plants
(Youngs 2009, p. 225). In short, the main point here is to show that many of the issues of EU
energy security are interconnected.
However, after the gas disputes between Russia and Ukraine, European states realized their
own vulnerabilities and energy weaknesses. External-relations commissioner Benita Ferrero
Waldner admitted that “the Russia - Ukraine gas dispute at the beginning of 2006 was a
‘wakeup call’, reminding us that energy security needs to be even higher on our political
agenda”(quoted in Youngs 2009, p. 224). As a result, the importance of common energy policy
was mentioned at Green Paper of Commission in 2006. Also, it was followed by the ‘Lisbon
treaty’ in 2007. In his article ‘Energy Policy of European Union’ Seymur Huseyinli claims that
the ‘Lisbon Treaty’ was a successful development in the energy sector (Huseyinli 2013, p. 22).
However, Kaveshinkov claims that the Lisbon treaty could not influence the foreign policy of the
EU powers. According to him, “although treaty of Lisbon has significantly expanded the EU
competency in the internal aspects of energy policy, EU powers in external policy still remain
very modest” (Kaveshinkov 2010, p. 587).
The Importance of Caspian Energy
“The Caspian is the largest salt lake in the world” (Encyclopedia Britannica 2014). But,
because of scientific controversies about this idea, it is called the Caspian Sea. Five nations
border the Caspian's shores: in the southwest by Azerbaijan, in the south by Islamic Republic of
Iran, in the northeast by Kazakhstan, in the southeast by Turkmenistan and in the northwest by
Russian Federation.
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! Source: U.S Energy Information Administration.
After the collapse of Soviet Union, three border countries of the Caspian Sea- Azerbaijan,
Turkmenistan and Kazakhstan- became independent states. Meanwhile, due to its rich energy
resources and geopolitical importance, the region gained the interest of foreign oil and natural
gas companies and great powers. However, these newly independent states had weak
governments and economies. This led to powerful countries in the region, such as Russia and
Iran, intending to monopolize on the Caspian’s energy resources and strengthen their political
influence over these three countries. Due to its strategic geography and rich energy resources, the
Caspian Sea gained the attention of the United States. Washington immediately recognized the
independence of these states and intended to spread its political influence over them. Thus, the
Caspian Sea has become the ‘new power game’ of great powers.
Although, the European Union did not present themselves as being particularly interested
in the region’s geopolitical importance and energy resources. In his article ‘Ensuring European
Security in Russian Near Abroad: the Case of the South Caucasus’, Lussac explains that “for a
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long time, some EU actors have been reluctant to promote European activism in the South
Caucasus due to Russia’s longstanding influence there” (Lussac 2010, p. 608). This idea is also
supported by other experts. Youngs claims that “European foreign policy struggled to gain a
meaningful foothold”(Youngs 2009, p.102). However, it does not mean that the EU was inactive
in the region during those times. Rather, European programs were mainly intended to spread the
idea of democratization and rule of law. In other words, Lussac claims that at the beginning of
1990s, the EU did not want to compete with Russian energy interests. But, how did European
activities start to change from democracy to energy politics? What are the main reasons that have
prevented the EU from utilizing of oil and natural gas resources of the Caspian Sea?
1. European Union Assistance Programs and Their Limits
After the collapse of the Soviet Union, the EU started to implement several political and
economic development programs. First of them was the Technical Assistance to the Community
of Independent States (TACIS) program. “It wanted to help these new independent states to
implement reforms in the administrative, institutional and legal sectors”(Lussac 2010, p.610).
Also, it was the first tool of the EU to interact with Caspian and Caucasus countries. After this
program, the Commission began to implement the Transport Corridor Europe-Caucasus-Asia
(TRACECA). “It aimed at the development of the transport corridor from Europe, crossing the
Black Sea, the Caucasus, the Caspian Sea and reaching the Central Asian countries”(Traceca-
org.org, 2014). Lussac claims that this program opened trade and transport opportunities with the
European states. “This program contributed substantially to the development of the Azerbaijan
and Kazakhstan oil transportation networks” (Lussac 2010, p.611). Nevertheless, D. Helly claims
that this program was implemented slowly and ineffectively “due to the intertie of member states
and the General Secretariat” (Lussac 2010) However, Youngs mentions that first important
attempts toward the Caspian Sea started by European Neighborhood Policy (ENP). At the
beginning of 1992, the European Union launched the INOGATE program to solve energy crisis
in these countries but its main purpose was a ‘humanitarian aim’. On the other hand, another
critic Bahgat explains that ‘INOGATE’ aims at promoting European investment in Caspian Sea/
Central Asian states in return for their cooperation in supplying energy to the EU (Bahgat 2006,
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p.960). In short, the EU intended to implement several programs to establish both energy and
politic relations with the Caspian Sea in 1990s but these programs could not be successful
enough.
In other words, although, these programs assisted the development of mutual relations
between regional countries and the EU, they were very limited and weak. Especially, some
experts criticize the EU due to its limited diplomatic presence. In his book ‘Energy Security’,
Youngs mentions that the main reason of limited EU presence were disappointments and failures
of diplomats during that times. Lussac mentions unwillingness of the member states. For him,
“member states were not willing to see the EU playing a stronger role in the South
Caucasus” (Lussac 2010, p.612). Furthermore, the EU intended to address internal problems of
countries. Issues such as democracy, civil servants and rule of law effectively implementing
projects, yet the Caspian countries wanted to decrease their economic and politic dependency on
Russia and gain of assistance the West. They aimed to export their energy resources to Western
countries.
Another limit of the programs was budgetary. The Commission provided limited budget
for target countries. In their book ‘The Foreign Policy of the EU’, Keukeleire and Delreux
explain that “the Commission did not have the strength, the economic, and financial capacity to
play a more active role there”(Keukelerie and Delreux 2008, p.124). However, critics claims that
European countries especially big three-Britain, France and Germany,- wanted to establish
bilateral relations with both the Caspian and Caucasus countries because they believed that the
intention of the European Union would be accepted as an anti-Russian policy. Lussac asserts that
the main reason is “any EU political involvement could harm the relationship between Europe
and Russia”(Lussac 2010, p.613). Therefore, these paradoxes blocked the effectiveness of the
EU’ programs and due to the bilateral interests, the EU could not utilize its common approach
toward the Caspian Sea countries. Zeyno Baran is also support this idea in her article ‘EU Energy
Security’, she claims that “Azerbaijan Kazakhstan and Turkmenistan have each been subject to
intimidation by Russian government but the EU leaders could not stand up to this
harassment”(Baran 2007, p.133). In other words, these examples briefly show that the
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Commission and the member states did not want to sacrifice their energy and political relations
with Russia because of the Caucasus and the Caspian Sea.
However, before to pass the importance of the Caspian energy resources, it is important to
mention briefly about the relationship between the EU and Russia. This way, it will be clear why
Russia is very significant for the EU. Also, the question will be asked: does Russia need the EU
more than the EU needs Russia?
Russia
The relation between Russia and the European Union is very special because before the
end of the Cold War, some of its member states especially the Baltic countries were the members
of the Soviet Union. After the collapse of the USSR, they joined the EU and Russia has become
the main ‘successor’ of the USSR. After that, the EU launched several programs to establish
and develop mutual relations with the Russian government. Amelia Hadfield claims that, “the
centerpiece of the EU-Russia relationship is the Partnership and Cooperation
Agreement” (Hadfield 2008, p. 233). However, in his article ‘Towards Strategic Partnership’,
Abellan explains that “PCA is fundamentally limited, acting primarily as an ambitious
normative framework”(Abellan 2004, p.14). Besides spreading democracy and rule of law, using
rich energy resources of Russia was the particular purpose of the EU. Nevertheless, Javier Solana
- High Representative for the EU Common Foreign and Security Policy- “argued that to develop
the partnership with Russia was the most important and the most challenging task that the Union
faces at the beginning of the twenty first century”(Hadfield 2008, p.234).
Although, following the collapse of the Soviet Union, Russia had a weak economy and
was struggling with a political transition, rich energy resources of the country strengthened its
economy and provided a more or less smooth transition. Therefore, both oil and gas resources
and pipeline projects have become national power and new foreign policy tools of Moscow. In
his ‘Russia and Europe’s Mutual Energy Dependence’ article, Paillard, claims that “Russia used
its energy resources, just as it used missiles in the 1980s to disorganize NATO”(Pillard 2010, p.
78). However, Kaveshinkov claims that it is the easiest way to explain power of energy but the
question is “how the peculiarities of the energy industry and the domestic regulatory regime
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influence the goals and practice of external energy policy”(Kaveshinkov 2010, p.587). He claims
that energy should not be explained only from the perspective of politics.
According to statistics, “Russia accounted for 40 per cent of the growth in world oil
production between 2000-2007” (Youngs 2009, p. 79). Russia has become the biggest energy
trade partner of Europe. According to statistics of the European Commission: “in 2007, 44.5% of
total EU’s gas imports (150bcm), 33.05% of total EU’s crude oil imports, and 26% of total EU
coal imports came from Russia. In total, around 24% of total EU gas sources are originating from
Russia” (Ec.europa.eu, 2014). In light of this, according to some experts, the energy dependency
rate of countries differentiate from each other and can be divided to three groups, law, medium
and high dependent on the level of the Russian energy dependency. Spain, the UK and Sweden
are among the less dependent countries. France, Germany and Italy comprise the second group.
“The last group with high dependency on Russian energy, including Finland, Latvia, Lithuania
and Slovakia that obtaining 100 per cent of their imported energy from Russia”(Youngs 2009, p.
80). However, this dependency is not bilateral. In his article ‘The Prism of Interdependence’,
Proedrou claims that, “Russia is dependent on the EU with its vast market power and potential.”
In other words, there is a mutual vulnerability between both sides and this claim is supported by
the Commission. According to the statistics of the Commission, “in terms of overall trade, the
Russian Federation is the third biggest world trade partner of the EU” (Ec.europa.eu, 2014).
Until the gas dispute between Ukraine and Russia in 2006, the EU has been trying to
improve energy relations and partnership with Russia. The EU launched several civil society,
political and especially economic programs to establish strong relations with the Russian
government. In addition, before the dispute, most of European countries believed that with this
partnership they would assure sustainable and cheap energy. As mentioned before, Russia energy
has been a new weapon to dominate over other countries, especially in Europe. Russia believes
that with these means, it can influence political and foreign policy decisions of the EU countries.
Indeed, this policy had been successful until 2006 since Moscow could limit the critics of the
member states. According to Zeyno Baran advantages of energy interest blinded the EU
members.
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“The July 2006 shutdown of the Lithuanian pipeline drew little protest outside of Poland and the
Baltic states. The response from most western European countries was rather muted during that
time” (Baran 2007, p.132).
Diversification of Energy Resources and the Importance of Caspian Energy.
The beginning of 2006 was a turning point of the EU’s energy policy. First, due to high
prices, Moscow cut gas supplies to Ukraine which influenced negatively energy flows to the EU
member states. In the same year, due to so called technical excuses, energy to Lithuania was
stopped by Russia. “Moscow then more than doubled gas prices to Georgia, and in 2007 cut gas
supplies through Belarus in relation to another pricing dispute, this time with President
Lukashenko”(Youngs 2009, p.3). The last example of Russian energy aggression is a second gas
crisis with Ukraine which led to huge protests. In other words, these examples, especially within
Lithuania, increased and warned the EU to evaluate its energy relations with Russia since the
next energy victim would be its member states. For some critics, it is a very significant issue and
the EU should not undermine it. For instance, in her article ‘EU Energy Security’, Baran claims
that the unjust manipulation and interruption of energy supplies is as much a security threat as
military action is” (Baran 2007, p. 133). In light of this, “in late 2006, the Commission
proposed plans to move towards sub-regional energy markets in the Caspian basin, Caucasus and
Central Asia, through a new EU-Black Sea Synergy initiative” (Youngs 2009, p. 105). The aim of
this proposal was to increase EU engagement with region countries and integrate their energy
resources to the European market. After these energy flow issues, the Commission started to give
priority to energy security. In 2006, a French diplomat had a message: “Brussels was willing to
support new gas transportation infrastructures between the Central Asian producing states and
the EU, bypassing Russia” (Lussac 2010, p. 619). But before that, the initial energy step of
European countries was to include the Southern Caucasus in the ‘European Neighborhood
Policy’(ENP). “When Azerbaijan was indeed included in the ENP, Commissioner Benita
Ferrero-Waldner declared that “this offer reflected the country’s geo-strategic location and
energy resources” (Youngs 2009, p. 104). Also, Central Asian states were included in the
Development and Economic Cooperation. This led the EU to increase its energy relations with
countries in the region. However, energy policy of the EU was complicated at that because the
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EU implemented two different cooperation programs dividing the countries in the region into
two. Due to that, “Kazakhstan reacted badly to being excluded from the Neighborhood
Policy.”(Youngs 2009, p. 105). Despite these complications, the EU approach started to change
positively in 2006. For example, although the partnership meetings started with South Caucasus
countries at the beginning of the 2004, the significant decision occurred in 2006. During the
second Baku Initiative ministerial meeting the EU and Caspian countries decided to establish
new ‘Energy Road Map’ to improve mutual energy partnership and cooperation. In addition to
that one European diplomat identified as the main energy related priority “the need to lead
Central Asian states (Turkmenistan and Kazakhstan) towards membership of the World Trade
Organization (WTO)” (Youngs 2009, p. 112).
Although, the Caspian Region cannot be considered a new Middle East, these countries
have several political and economic advantages for the EU. Firstly, they are the source of
sustainable alternative energy. According to the International Energy Agency, “it is the world’s
largest undiscovered reservoir of energy resources.” In his ‘Ensuring Energy Security’, Daniel
Yergin claims that “ the first principle of energy security is diversification of supply.”(Yergin
2006, p. 76). This idea is also supported by Hadfield in his EU-Russia Energy Relations article.
He mentions that “Europe must put its external instruments at the service of more secure and
competitive energy.” However, Noel P. explains energy security from different perspective in his
‘Beyond Dependency’. He does not support the idea of diversification. According to him, “the
most efficient solution to the Russian gas problem lies not in the development of an external
energy policy but in further restructuring of the EU’s internal gas market.” Nevertheless, G.
Bahgat claims that “the potential for energy self-sufficiency within the EU is limited.” Although,
Baran also supports the idea of strong internal market, she claims that “diversifying oil and gas
supplies would not only decrease Russian’s influence but would also loosen Moscow’s grip on
Europe’s neighbors” (Baran 2007, p. 135). Therefore, there are two possible solutions of energy
dependency but in terms of energy diversification, the Caspian countries can be the key to
diversification. Meanwhile, for energy resources, they can be distinguished from each other. For
instance, Azerbaijan is important not only for its natural resources but also its geostrategic
location. Especially, its location is a key aspect of pipeline projects since Azerbaijan is part of
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South Caucasus and the traditional Silk road; meanwhile it has borders with Georgia, Armenia,
Iran, Russia and Turkey. In addition, after the 2001 terror attacks, its location has become a
crucial transportation route to Afghanistan. According to former U.S. Special Envoy for Eurasian
Energy and former U.S. Ambassador to Azerbaijan Richard Morningstar, “Azerbaijani natural
gas is absolutely essential to the development of the Southern Corridor. Furthermore,
“Turkmenistan was also positioned in the top 15 of world gas reserves” (Youngs 2009, p. 102.).
Nevertheless, according to report of Congressional Research Service, despite Turkmenistan’s
desire to export more of its gas, thus far, its orientation seems to be toward the east and not yet
toward Europe. On the other hand, critics explain that the main reason for this attempt is Russia,
because the Russian government prevents Turkmenistan from competing directly with Russian
natural gas. Kazakhstan shares the most important part of Caspian oil and natural gas reserves.
Due to its rich oil reserves, the Kashgan field has special importance. “The EU’s most senior
fording-policy figures defined Kazakhstan as the main target for European energy security
concerns in Central Asia” (Youngs 2009, p. 117). However, critics mention that some EU
energy firms and other private foreign investors have become discouraged in recent years by
harsh Kazakh government terms, taxes, and fines that some allege reflect corruption within the
ruling elite. Turkmenistan and Kazakhstan are also the largest countries of Central Asia.
The second advantage of the Caspian region is its strategic location. In his article
‘Geopolitics and Energy Security’, Justyna claims that the control of this area formed the basis
for the domination of the Eurasian landmass. In other words, to establish strong relations with
Azerbaijan, Turkmenistan and Kazakhstan will provide not only economic advantages for the EU
but also assure geopolitical control of the region. It is clear that both the South Caucasus and
Central Asia are backyard of Russia and this gives them a significant political control over the
region. Its political control limits the spread of democratic values of the EU. In other words, with
strong energy cooperation, the EU can effectively implement and spread its traditional ideas like
rule of law, human rights and democracy. Also it can influence future foreign policy decisions of
Caspian countries. However, it is significant to note that the EU should not separate energy
policy from human rights and democratization. As mentioned before, due to energy relations
with Russia, some European countries limit criticism of Moscow and ignore several human
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rights abuses. If this situation is repeated in the Caspian region, these countries will use
European money for increasing their authoritarian regimes. According to Sir Halford Mackinder,
regarded as one of the founding fathers of geopolitics and geostrategy, “the Caspian region and
its hinterland, can be called the Eurasian Heartland”(Misiagiewicz 2013, p. 64). That is why,
after the collapse of the USSR, Moscow implemented several aggressive politic and military
policies to monopolize region’s control. Justyna claims that “the Caspian states, assisted by
foreign aid, tried to limit their dependence on Russian-dominated infrastructure at the heart of
Caspian geopolitics”(Misiagiewicz 2013, p. 63). However, critics mention that Central Asian
(Turkmenistan and Kazakhstan) states failed to accomplish this idea. According to Huseyinli
“Kazakhstan and Turkmenistan are strongly under Russian influence”(Huseyinli 2013, p. 26)
Moscow knew that after the collapse of the USSR, the Caspian basin would gain foreign interest
of great powers like the United States, China and the EU. At the same time, newly independent
Caspian states intended to explore and deploy their resources with support of Western countries.
To prevent this, the Russian government aimed to monopolize the regional pipeline projects and
make its land as a main energy transport route. In other words, strong European support for these
countries is very significant because it will decrease the dependency of both the EU and the
Caspian countries on Russia. According to experts, “the exploitation of energy resources and the
future routes of pipelines from the oil and gas fields in the Caspian basin will also determine the
future economic and politic development of the region (Misiagiewicz 2013, p. 63).
Lastly, strong EU cooperation with the Caspian states will increase the strategic sphere of its
partner United States. Contrary to the EU, the US has started to play an active role in both the
Caucasus and the Caspian region since the collapse of the Soviet Union. Firstly, the U.S
recognized their independence and then implemented several development and aid programs for
post-Soviet countries. “In the late 1990s, the United States pushed hard for the construction of
several oil and gas pipelines that would carry Caspian energy westward without transiting
through Russia”(Baran 2007, p. 136). The Washington intended to provide newly independent
states with ‘non-Russian perspectives’ and also to decrease economic and pipeline monopoly of
Russia. During the 1990s, Washington supported vital projects such as the Baku-Tbilisi-Ceyhan
(BTC) pipeline is one of the first and most important energy project of the region. It is also called
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the “Contract of the Century”. Although, the EU did not provide strong support for this project,
for the U.S politicians accomplishment of it became very significant until the end. Another
project was the ‘Trans Caspian’ pipeline project which was aimed to transport the Turkmenistan
natural resources.
The construction of these pipeline projects provided significant freedom for region states
and decreased Russian energy monopolization over these countries. In addition, successful
construction of BTC led to the implementation of other energy projects such as the Baku- Tbilisi-
Erzurum gas pipeline. “The gas is extracted from Shah Deniz field in Azerbaijan, crosses Turkish
territory to Greece and from there it is to be extended toward Italy”(Misiagiewicz 2013, p.72).
Meanwhile, Trans Adriatic (TAP) and Nabucco pipeline project are two crucial future oriented
projects that bypass Russia. ”Once built, TAP will play a part in helping secure Europe’s energy
future. One of the most important energy infrastructure projects, TAP will allow Caspian natural
gas to flow into Europe’s energy markets”(Tap-ag.com, 2014). “Nabucco project is also a big
pipeline which aims at directly connecting the Caspian and Middle East gas resources to the EU
gas market”(Huseyinli 2013, p. 27). Despite Nabucco was signed in 2009, due to some
disagreement between project states, its construction process is progressing too slowly. However,
it is important to note that both South Caucasus and Caspian Sea are in the backyard of Russia.
“It is also the largest trading partner of the newly independent states.”(Misiagiewicz 2013, p. 66).
With respect to this, the Caspian states don't want to endanger their relations with Russia. That’s
why, they prefer to have strong energy cooperation particularly with the EU. In other words, US
is a strong economic, political and military competitor of Russia but the EU is not and it has
strong trade relations with Russia. So that, for Caspian states, cooperation with the EU is more
attractive than direct involvement of the US.
However, there are several problems of Caspian countries. The first problem is the status
of the Caspian Sea that hasn't been decided since the 1990. During the Cold War, Caspian Sea
was divided by the Soviet Union and Iran but the problem with boundaries in the basin appeared
with the dissolution of the Soviet Union. Critics mention that it is also a risk that investors have
to consider in doing business in the region. Secondly, there are several frozen conflicts in the
South Caucasus like Nagorno Karabakh and Abkhazia. Especially, the Caucasus is a very
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sensitive region because there is a significant nationalistic feeling among countries. “That is why
Zibgniew Brzezinski called it the “Eurasian Balkans”(Misiagiewcz 2013, p. 64). Therefore,
stability and peace of the region are as important as security of energy. In addition Misiagiewcz.
mentions that there was a lack of clearly defined mechanism for preventing regional conflicts
and instability within new states. In light of this, vulnerability of security is one of the obstacles
of the Caspian Sea. Finally, the EU shouldn't undermine Iran since it is also one of the biggest
and the strongest countries of the region. Meanwhile, it has both rich energy resources and
strategic location between the Caspian Sea and Persian Gulf. In other words, although due to the
sanctions of Washington, this possibility is not strong enough, “Iran could be a cheap and
natural corridor for the oil and gas to the world market”(Misiagiewcz 2013, p. 78).
Conclusion
The paper has explained that besides Russia there are significant external and internal
challenges that prevent the EU from establishing successful energy policies toward Caspian
countries. In light of this, the paper suggests three conclusions. Firstly, the lack of solidarity and
disunity between member states is the most important internal obstacle to the implementation of
a single European energy policy. It also provides advantages to Russia that by using this internal
problem Moscow is increasing their bilateral dependency. In addition, Russia is both a trade
partner and an obstacle of the EU. On the one hand, Russian’s economy highly depends on the
EU’s money and trade agreements and meanwhile, the EU needs Russian energy. In other words,
mutual vulnerability makes them partners. On the other hand, the monopolized energy policy of
Russia is another important reason that prevents both member states and the Caspian countries
from establishing energy relations with each other. Gazprom, the biggest state controlled energy
company in Russia, is particularly playing an active role in the Caspian’s energy politics. For
Gazprom, local state companies of the Caspian states are the potential competitors and it does
not want to lose its energy market in Europe to these companies. In light of this, during the end
of the 1990s, Russia allowed Turkmenistan to utilize its pipelines, if it would sell energy only to
CIS states. Meanwhile, Gazprom has significant partnership relations with the EU states. For
instance, it is supplying a third of the Germany’s natural gas by the ‘Nord Stream Pipeline’ and
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also it has an agreement with the French company Gas de France. In other words, the ambitions
of the Gazprom are wider than just the Caspian Sea. Meanwhile, transportation of the Caspian
resources is another problem that makes the Russian pipelines an alternative. The world energy
markets are far from the Caspian Sea which requiring the large amount of foreign investment to
construct the expansive infrastructures.
Finally, there are three main advantages of Caspian energy resources. First, the Caspian
Region is energy rich. The European Union can utilize the resources of the Caspian basin as one
of the alternative energy diversifications.. With respect to this, the EU should support the
important pipeline projects of the region like NABUCCO. The geostrategic location of the
Caspian Sea is another significant advantage. In other words, the region lies along the traditional
Silk Road and the ‘Eurasian Heartland’. To establish coherent relations with post-Soviet Caspian
countries will provide an opportunity to increase the EU’s political and economic influence over
them. Lastly, strong relations with the EU and the Caspian region directly influences and
reinforces the political position of the United States. However, the EU should notice several
significant aspects of region. Firstly, it is backyard of Russia and continuity of relations with
Moscow is also important. Secondly, the region has several frozen conflicts like Nagorno
Karabakh and Abkhazia. Also, the status of the Caspian Sea has been the controversial issue
since the 1990s. Lastly, beside Russia, Iran is another important factor that the EU should pay
attention to because its energy resources can be used as an alternative source for the member
states in the future.
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