Caspian uncertainties

Aug 16, 1999 02:00 AM

by Gregory P. Nowell

Is there a logic to events in the Balkans and the Caspian?
The goals of American policy are reasonably clear: Washington wants Caspian oil and gas resources to transit through Azerbaijan and from there to Supsa and also to Ceyhan.
The Supsa and Ceyhan lines are not in direct competition with each other if exports to Supsa go to Ukraine, Bulgaria and Romania, helping these countries to become more independent of Russia. The remaining oil, flowing to Ceyhan, would turn Turkey into an energy emporium for exports to the rest of the world. Iran would be cut out of the game by trans-Caspian pipelines that carry oil and gas from Turkmenistan and Kazakhstan.
Initial exports from Supsa to Romania and Bulgaria would be used in those countries domestically. They might also start export programs by sending small amounts of refined products up the Danube River via barge. If all went well, a pipeline would eventually supplant the Danube shipments. Such a pipeline might run up the Danube valley or, as Romania's President Emil Constantinescu mentioned before the recent Kosovo war, across Yugoslavia to Trieste.
In this kind of geo-strategic game plan, the following events "make sense":
* Turkey and Azerbaijan quarrel now over royalties and other rights, slowing down development, because they know the stakes are big and that they have a winning hand.
* Turkey, which supported the Chechen rebels in their war against Russia, continues to do so. The goal would be to provide an "Islamic buffer zone" that runs from Dagestan through Ingush territory. Georgia is kept on board by the promises of oil revenues and help against the Abkhazians. The whole Caucasus is thus geographically cut off from Russian influence and falls into the orbit of Turkey, which gets overt U.S. support for its campaign against its Kurds and emerges as a regional superpower on the model of Iran 20 years ago. In this context, the now-strong alliance between Turkey and Israel bears a striking resemblance to the Iran-Israel foreign policy strategy of the 1950-1979 period. Armenia, completely encircled, is curbed, and military pressure on Azerbaijan eased or eliminated.
* Yugoslav leader Slobodan Milosevic has to be brought to heel, preferably thrown out. If he is not, plans to integrate Romania and Bulgaria into the greater European economic sphere (i.e., the pattern that prevailed after World War I but was changed by Stalin after World War II) will be slowed down as commerce of all types will have to be routed around the Danube basin. This is possible but not desirable, and it undermines the advantages of having built the now completed trans-European system of canals and rivers that run from Rotterdam to the Black Sea. Slowing down Bulgarian and Romanian economic development means that these countries' ability to finance loans to buy NATO-standardised weaponry will also be weakened. It follows, therefore, that there is nothing illogical in an American policy that punishes Serbian ethnic cleansing but not Turkish persecution of the Kurds.

If these strategies pay off, the "Silk Road" policies touted in the pages of the New York Times will become a reality. There is much, however, that can go wrong:
* The Chechens may play their own game if not paid off handsomely enough. They are difficult friends to have. If they controlled Dagestan and Chechnya together, the protection they provide from the Russians could easily turn into threats against Azerbaijan, in an effort to extort revenue. If Azerbaijan plays the game wrong, it could have find itself stuck between hostile Chechens to the north and hostile Armenians to the west. Basically, more groups are demanding pipeline gravy than the pipelines can support. Even with Turkish support, Azerbaijan would have a difficult time controlling the Chechens. The Chechen sword is very much double-edged.
* North Caspian exports, whether from Russian-controlled territory or Kazakhstan, may make Novorossiysk the dominant export point, not Ceyhan. This would put further downward pressure on Ceyhan export prices and further squeeze the complicated revenue-sharing agreements that govern the pipelines that feed it. Turkey may try to block Russian access to the Bosporus Straits. But that will simply push Russian oil exports towards Bulgaria, Romania and even Ukraine, and it will undermine rather than reinforce efforts to pry these countries from their dependency on Russia. Milosevic might even help Romania and Bulgaria export Russian oil and gas to Trieste. That could hardly be characterised as a "Western" policy.
* Turkey is obviously trying to hedge its bets and is not acting as if it has full confidence in the American strategy. Gazprom's Blue Stream project, which envisions a pipeline across the Black Sea, will increase Turkish dependency on Russian gas and will perhaps be followed by an oil pipeline. If that is so, it will put further price pressures on the competition -- i.e., the trans-Caspian routes from Turkmenistan and Kazakhstan.
* The situation in Serbia may prove utterly intractable. That would put a damper on development in the Danube basin and tend to make Russian-oriented trade a more logical option for all Caspian littoral parties.
* The development of pan-Asian export facilities (Kazakhstan-China, Turkmenistan-Pakistan, etc.) could be a wild card that would change the complexion of relationships on the east side of the Caspian.

The problems of exporting long distances from landlocked production areas over ethnically diverse territory have not been solved. And it may be a while yet before the issue is resolved in the Caspian. In Iraq, for example, experts suspected oil as far back as the 1890s, but the oil didn't actually flow till 1932. Even so, most of Iraq's oil remains in the ground to this day, largely due to a series of crises in all of its export route alternatives. This would suggest that the manoeuvres that we are seeing around the Caspian and the Balkans are exactly that, and that in 10 years we may still be wondering how the bulk of the region's energy potential will be developed.

Source: NewsBase
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