The security of future pipelines in Eurasia will be defined by the distance separating them from potentially unstable areas

The meeting of the Big Eight energy minister that was held in Moscow on April 1-2, was devoted to the prospects for the development of the global energy industry. It has demonstrated that the center of the international hydrocarbon extraction and transportation industry is moving towards the Eurasian continent. Boris Nemtsov presided over the session, and acting Premier Sergei Kirienko was present at the session for a while. One of the main issues discussed by the specialists was the issue of a route for transporting oil from the Caspian Sea. Americans insisted that there should be several routes for transporting the hydrocarbons. At the same time, they argue that pipelines should be built along the bed of the Caspian Sea for the sake of economy.

This thesis was once again parried by Sergei Kirienko. As Fuel and Energy Minister, he often said that economic calculations, and not political ambitions, should serve as the basis for determining the routes for transporting oil. These calculation demonstrate that it is now more beneficial to use the infrastructure of Russian pipelines. Two routes are currently in use for transporting Caspian oil:

1) The Baku-Grozny-Novorossiysk pipeline. The main oil is transported along this route from the Chirag oil field on the bed of the Caspian Sea. Transneft has fulfilled its obligation to pump 200,000 tons of Azerbaijani oil, as stipulated in the schedule for the first quarter of the current year. Overall, plans call for 1.5 million tons of oil from this field to be pumped out in 1997.

2) The route from the Kazakh oil field at Tengiz to Baku, and then through Tbilisi to Batumi. This is a difficult route. The oil is delivered from Aktau to Baku by the Caspian Shipping Company’s tankers. The oil is then pumped through the pipeline to the city of Ali-Bairamly, situated 120 km to the southwest of Baku, and then transported to Batumi by rail.

Meanwhile, plans call for the main route for Tengiz oil to cross Russian territory. It is being constructed by the Caspian Pipeline Consortium, and Russia possesses 44% of its shares. This is the cheapest route. When compared with the route from Aktau to Baku, and then to Batumi, the cost is lower by $10/ton. In January Chevron President Bindra expressed the opinion that, in comparison with any other routes currently being discussed, the oil pipeline from Tengiz to Novorossiysk is the shortest, cheapest and safest route for delivering Caspian oil to international markets,.

However, recent events demonstrate that the Americans have some other plans regarding construction of the main pipeline to transport fuel from the Caspian Sea. During hearings held by the Senate Foreign Relations Committee at the end of February, US Deputy Energy Minister in charge of International Affairs Robert Gi reported that the US Administration prefers the route through Georgia and Turkey for transporting Caspian oil to international markets. This statement was made on the eve of the meeting between Turkish, Georgian, Azerbaijani, Kazakh and Turkmen foreign ministers on March 2-3 in Ankara. The ministers also expressed their joint support for the Baku-Djeikhan project in order to transport Caspian oil to international markets.

It must be noted that, under certain circumstances, the southern pipeline that is being planned presents a threat of a global ecological catastrophe, since the US and Turkey, with the active support of the Kazakh, Georgian and Azerbaijani leaders, are offering to switch the underwater oil pipeline from Tengiz to Baku to the planned southern pipeline. This circumstance makes construction of a pipeline through Turkey and then to Europe profitable. Russia and Iran have already spoken out against such a decision. During former Premier Viktor Chernomyrdin’s visit to the US in March, former Fuel and Energy Minister Sergei Kirienko drew American’s attention to the fact that the possibility that a trans-Caspian oil pipeline will be constructed had been a source of “serious concern” for Russia.

It is possible that this concern stems from several factors. One of them is connected with military considerations. The Caspian Sea’s undefined status and the arguments about the ownership of the deposits that have been discovered, the struggle for influence over these deposits, the close proximity of “hot spots” to the sea, the concentration of weapons in these “hot sots,” discussions about the oil pipeline routes, ecological problems and so on, represent the background against which discussion continues regarding the pipelines’ routes. Thus, the region is becoming explosive and unpredictable. After the USSR’s collapse, the total strength of the armed forces in the states surrounding the Caspian grew by 100-150%. This despite reductions in some Caspian littoral states’ armed forces (Russia, Kazakhstan and Turkmenistan). In addition, the tasks of the region’s military units are clearly connected with the geographic location of the Caspian Sea, the oil fields and the valuable fishing grounds. However it is also possible that the main contradictions, connected with the military factor, may crop up with regard to the routes for transporting Caspian oil. Which of them is the safest and most cost effective? Many analysts are currently thinking about the answer to this question. We will also try to analyze it.

1) The Baku-Dagestan-Chechnya-Novorossiysk route. This is the route which is currently in use, and has a well-prepared pipeline infrastructure. However, part of the pipeline crosses Chechnya, which is de-facto living according to its own laws, and does not recognize the federal center. It is possible that in the future the republic will use the pipeline as a bargaining chip in its struggle for independence. Pumping oil along this route does not have a high degree of reliability. Russia, with the highest concentration of armed forces in the North Caucasus, as well as a tremendous economic capacity (in comparison with Chechnya), may utilize not only political, but also forceful methods to reach a compromise with the rebellious republic (blockade, demonstration of force, and so on). Russian leaders have often stated their intention to construct a pipeline from Baku to Novorossiysk, bypassing Chechnya. This is the most acceptable and inexpensive project, which to some extent solves the problem of the safe oil transportation. However it also, (if the Chechen route is also used) increases the amount of oil that can be transported. It can be built parallel to the Tengiz-Novorossiysk route, or appended to it.

2) Military problems associated with the southern route for transporting Caspian oil. By fall the western pipeline from Baku to the Georgian port of Supsa should begin operations. By the beginning of the next century its capacity will reach 7-8 million tons of hydrocarbons a year. This is a realistic route, but it is possible that its functioning (as well as the functioning of the planned pipeline to Turkey) can be hindered. This may happen as a result of a resumption of combat operations, terrorist actions, etc., because the pipeline will pass near the Armenia-Azerbaijan and Georgia-Abkhazia conflict zones.

The future oil pipeline will pass near the Kura river. The Azerbaijan districts situated along this river border with the districts of Nagorno-Karabakh, and come close to the border of Armenia. After Robert Kocharyan’s victory during presidential elections in Armenia, the possibility that Armenia will make concessions in resolving the Nagorno-Karabakh conflict is low. For this reason their is a possibility that, in the event that Azerbaijan resumes combat operations, Nagorno-Karabakh’s self-defense forces will strike at the important energy arteries in the territory of their enemy in response. We can expect the development of an analogous scenario in Georgia as well. As of July 1 this country is going to start guarding its marine borders near the port of Supsa with its own troops. The Caspian oil is pumped into tankers at this port, which is very close to Abkhazian territory. So far this territory has been controlled by Russian peacekeepers. However Shevardnadze expressed his wish to replace them with peacekeepers from other countries. That is, we can see the intention to make the conflict international.

At present it is difficult to predict how the situation will develop in the event that Russian peacekeepers withdraw from Abkhazia, and probably from Georgia itself. However, it is possible that combat operations on the Georgia-Abkhazia front will resume. Thus, oil transport near the conflict zone will once again become doubtful.

The plan to transport oil through Turkey deserves special consideration. This country has been engaged in its own large-scale war for more than 10 years. At $7 billion is pumped into this war each year. Along with this, we have to bear in mind that the Kurds amount to almost one-fifth of the country’s population. And they are concentrated in the area through which Turkey plans to build the pipeline to transport Caspian oil.

Thus, the issue of safe routes for transporting Caspian oil doesn’t seem to be the most important consideration here. The US and NATO understand this very well.

For example, in March an international advisory group of military experts started working in Tbilisi. The commission will give recommendations on strengthening the country’s security. The commission is presided over by British General Harry Johnson.

In early March it became apparent that US President Bill Clinton had approved a new variant of the NATO joint command plan, in accordance with which former Soviet republics, except for Russia, will be “attributed” to two joint commands. As of October 1, Ukraine, Belorus, Moldava, Georgia, Armenia and Azerbaijan will be referred to the European Command’s responsibility. As for Kazakhstan, Uzbekistan, Tajikistan, Turkmenistan and Kirgistan, they will be included into the Central Command zone as of October 1999. Each NATO regional command is to maintain contacts with the defense ministries of those countries in their zones of responsibility and organize joint military exercises, provide for military cooperation and assist in providing regional security with the participation of the countries that are under their guard.

We will point out that the assignment of CIS countries to the zone of the European Command’s responsibility is connected with the time (October 1998) at which the active phase of some Caspian Sea oil deposits development began and the transnational companies made a final decision regarding the main route for transporting Caspian oil. Thus, a conclusion that has been made by Russian experts before is being confirmed, that one of NATO’s military-economic goals is to tie international oil resources to their nearest military bases.

So far there are no NATO bases in the Caspian region, but the desire of some countries in this region to be friends with NATO is becoming more and more evident. They have different motivations for this, including anti-Russian predilections. For example, Geidar Aliev has often addressed US leaders with an appeal to repeal an amendment to the Freedom Support Act that was passed by the US Congress, in connection with the fact that the Armenian-Azerbaijani conflict has not yet been resolved. In doing so, he is motivated by the idea that Russia is allegedly supplying weapons to Armenia. Statements made by Azerbaijani Foreign Minister Gasan Gasanov are also well-known. He has often announced his country’s intention to actively participate in NATO’s Partnership for Peace program, and the Euro-Atlantic Partnership Council organized within the framework of this program, as well as the alliance’s other new structures.

In addition, there are indications that NATO should not view Transcaucasia as a “united territorial formation.” Cooperation with each of the region’s countries should be individualized. Along with this, the alliance should take into account, for example, that “there are Russian military bases in Armenia, and the Turkish border is still guarded by Russian border guards”.

So far Russia has no means to respond. It has committed and is still committing many unpardonable mistakes, which have serious injured its geopolitical position in the Caspian region. These did not prevent the signing of the “contract of the century,” although the Russian Foreign Ministry made attempted to do just that. It has changed its position with regard to the Caspian Sea’s status several times, and as a result has alienated both Turkmenistan and Kazakhstan. Until recently Russia had not developed a clear position and principles concerning the division of the Caspian Sea. However the multi-billion dollar contracts that were signed by other countries regarding the development of the “disputed” oil fields create the preconditions for the internationalization of possible conflicts, and, probably, will increase the role of the military in resolving such disputes.