Energy Security and Foreign Policy: The Case of the Caspian
October 27, 2017
ME Lecture Hall
Professor Brenda Shaffer
Center for Eurasian, Russian and Eastern European Studies (CERES), Georgetown University
Since the breakup of the USSR and the establishment of independent states in the Caspian region, the US has exerted significant policy efforts in the Caspian region, with special focus on developing the region's energy resources and establishing westward export pipelines. US presidents rarely mention international pipelines, especially ones with no direct connection to the United States, yet every American president since the Soviet collapse has expressed public support for the Caspian export pipelines. Most recently (October 17, 2017) during a press conference at the White House with Greece's Prime Minister Alexis Tsipras, President Trump pointed out the importance of the Trans-Adriatic Pipeline of the Southern Gas Corridor which connects Caspian gas to Europe. Successive US administrations have also appointed special envoys to promote Caspian energy development and export.
However, with the US now awash in oil and natural gas, should the Caspian region and Caspian energy remain a focus of US foreign policy? This presentation claims that Washington's primary goals in promoting the development of Caspian energy export and westward pipelines are those of international security. The pipelines and energy resources are tools that enable the Caspian states to maintain independent international security policies, by creating sources of economic revenue, which are not controlled by their powerful neighbors and infrastructure links to the West.
A continued US presence in the Caspian region has strategic benefits for Washington. The region is a meeting ground of two of the world's global powers-Russia and China-as well as several regional powers: Iran, Turkey and Europe. The states in the Caspian region by and large possess a solid pro-US security orientation and desire a stronger relationship with the US.
Furthermore, developments in the Caspian region affect arenas that are key foci of US foreign policy, such as Iran, Afghanistan and the Middle East. With the decision of the Trump Administration to extend the deployment of US troops in Afghanistan and to conduct a more assertive policy aimed at limiting Iran's activities beyond its borders, American alliances with states in the Caspian region, are ever more important. Furthermore, domestic stability in Iran is directly affected by developments in the neighboring Caspian states. Iran is a multi-ethnic country, with over fifty percent of its population comprised of non-Persian ethnic minorities, most of which share ties with co-ethnics in neighboring states.
In parallel to security interests, development of Caspian energy oil and gas also benefits European and global energy security and the Caspian energy resources are an object of significant Western commercial interest. During the recent period of a relatively low oil price, projects in the Caspian region were among the few international oil and gas endeavors that received commitments for major new investment. In July 2016, a consortium led by Chevron committed to $37 billion dollar investment in the Tengiz oil field in Kazakhstan. And in September 2017, a consortium led by BP and the government of Azerbaijan approved the extension to 2050 of a production-sharing agreement governing their mutual development of the Azeri-Chirag-Guneshli oil and gas field complex.
Development of increased pipeline supplied gas to Europe is necessary despite the growth in US LNG exports. US LNG supplies cannot solve most of Europe's security of supply challenges because most of the markets in Europe which face energy security challenges cannot access LNG supplies. First, most of these markets are landlocked and thus cannot directly access LNG supplies. Secondly, the higher cost of LNG versus pipeline supplied gas, makes large-scale LNG import prohibitive for some markets. Even states that have built LNG regasification facilities, such as Lithuania, are negotiating with Gazprom to increase Russian gas imports by pipeline, due to the higher costs of LNG. Next, countries in Europe have been hesitant to rely on energy import infrastructure in neighboring states for their energy imports. Many of the new LNG regasification facilities established in Europe have been built by neighboring countries that could have cut costs through building pipeline interconnections and sharing a facility, but have chosen to build their own instead, even when both are EU and NATO members. In addition, US and other LNG will face barriers in reaching the Black Sea region due to limitations on transit of LNG supply vessels through the Bosporus straits.
As a result, Europe's energy security of supply still remains highly challenged. Despite extensive European policy efforts, Russian gas comprises a rising proportion of Europe's gas imports and many markets in Europe rely still almost exclusively on Russian gas supplies. Moreover, despite extensive commitments to lower carbon emissions, consumption of coal is climbing in a number of markets in Europe—most notable Germany—leading both to rising emissions and air pollution. In 2018, Southern Gas Corridor will bring new gas volumes to Europe, the first new gas supplies to Europe in decades. This can lead to gas supplanting some of the coal consumption in Europe's fuel mix and thus to lowered air pollution and carbon emissions. While the first supplies are modest in scope, the infrastructure is scalable and will enable additional volumes to reach Europe, as well as to reach and supply additional markets, such as the Balkans. However, extensive conflict hot spots are located close to the pipeline route and it is important to continue to develop methodology for critical energy infrastructure protection.
Professor Brenda Shaffer is a foremost specialist on global energy trends and policies, politics in the South Caucasus, ethnic politics in Iran, as well as Caspian and Eastern Mediterranean energy. She is a Senior Fellow at the Atlantic Council’s Global Energy Center in Washington, DC, and a visiting researcher and professor at Georgetown University.
Professor Shaffer is the author of several books: Energy Politics (University of Pennsylvania Press, 2009), Borders and Brethren: Iran and the Challenge of Azerbaijani Identity (MIT Press, 2002) and Partners in Need: The Strategic Relationship of Russia and Iran (Washington Institute for Near East Policy, 2001). Energy Politics serves as a textbook on the geopolitics of energy in over 200 university courses in many countries. She has also served as the editor for Beyond the Resource Curse (University of Pennsylvania Press, 2012) and Limits of Culture: Islam and Foreign Policy (MIT Press, 2006).
Professor Shaffer's published articles have included "Natural gas supply stability and foreign policy" (Energy Policy, 2013), and three contributions to Foreign Affairs: "Nagorno-Karabakh after Crimea," "Pipeline Problems," and "Gas Politics after Ukraine." Her opinion columns have appeared in national and international publications, including the Wall Street Journal, the Washington Post, the New York Times, International Herald Tribune, and CNBC. She has given testimony to several committees of the US Congress, including the Senate Foreign Relations Committee, and to the European Parliament. She frequently appears on CNBC to provide insight on developments in the global oil market and in major news outlets worldwide on events in the Caspian region and Middle East. She provides research and expert counsel to international institutions, governments, and regional security organizations, such as NATO on energy security policies. In addition, she has been interviewed for dozens of television, print, and radio stories, including, Bloomberg, Fox Business News, CNN, NPR, BBC World Service, USA Today, Christian Science Monitor, and others.
Professor Shaffer holds a PhD degree from Tel Aviv University; she was a post-doctoral fellow at the International Security Program at Harvard University's Kennedy School of Government. She previously served as the research director for the Caspian studies program at Harvard University.
For additional publications by Brenda Shaffer, visit http://www.atlanticcouncil.org/about/experts/list/brenda-shaffer
Dr. Daniel A. Nussbaum
Naval Postgraduate School
Principal, Energy Academic Group
Monterey CA 93943