29
• For markets to work, those who agree to buy must pay, and those who agree to
sell must deliver, assuming all other contracts terms are met. Simple as these
principles appear, they are often not adhered to in the Caspian region.
To sum up, oil and gas reserves are almost worthless if transportation cannot be
classified. International oil firms and governments alike face major project challenges in identifying markets, costs, transit routes, and financing, as well as
ensuring that production and transport capabilities are completed together.
Doug Stokes and Sam Raphael argue (2010:112–144) that US interests in Caspian
Basin hydrocarbon resources were insignificant before the collapse of the Soviet
Union. In the early years after the Cold War, US interests in the region remained
relatively minimal and still fell in line with the sensitive underlying strategy
employed toward the former Soviet Union as a whole. This strategy was one focused
on managing relations directly with Moscow in lieu of a regional outlook throughout the 1990s. For the first time, transitional capital could permeate the region,
while Washington moved gently toward securing access with diplomatic, political,
and military statecraft to woo over the newly emergent nations.
Brenda Shaffer (2009:83–114) believes that after the collapse of the Soviet
Union, Russia and Iran presented a united position against delimitation, encouraging instead a policy of common ownership of the Caspian and its seabed, prohibiting exploration of the seabed energy resources in sectors in accordance to each
state’s cost. As part of the “condominium” policy, oil and gas drilling and exploration in any part of Caspian would require approval of all five littoral states. The main
motivation for this initial proposal by Russia and Iran was to ensure that the Caspian
states only exported oil and gas through their territories, thereby preserving their
dependency. Energy is an integrated policy tool in US foreign policy; with energy
security in general falling within the remit of the country’s national security policy
at large. However, it is the scale of both the US’ energy production and consumption
which has always accounted for its extra reach in this regard, with country uniquely
positioned to affect energy policy globally and in a variety of regional setting. By
the end of the 1990s, the US was openly promoting oil and natural gas pipeline
routes as an adhesive to political and security relations.
Declaring that “Caspian energy development is not and should not be viewed as
zero-sum game,” Michael Klare, an advocate of deep American involvement in the
Caspian Basin, as well as a number of US government officials, argue that the production and sale of Caspian Basin energy supplies will generate sufficient wealth to
satisfy the aspiration of every key actor involved thus reducing the risk of regional
conflict. The US has two key objectives: First, to develop the Caspian Basin as an
alternative to Persian Gulf supplies; and second, to ensure that the Caspian oil and
natural gas is supplied to its market without passing through Russia and Iran. With
aim of bypassing Iran and Russia, the US desires to build new oil and gas pipelines
running beneath the Caspian Basin from Kazakhstan and Turkmenistan to Azerbaijan
and then onward to Georgia and Turkey. In contrast, Russia is trying to ensure
Caspian energy output is transited via Russian infrastructure on the Black Sea and
then delivered to Europe (Klare 2002:81–92). Klare argued quite astutely, that in the
Literature on the Region
• For markets to work, those who agree to buy must pay, and those who agree to
sell must deliver, assuming all other contracts terms are met. Simple as these
principles appear, they are often not adhered to in the Caspian region.
To sum up, oil and gas reserves are almost worthless if transportation cannot be
classified. International oil firms and governments alike face major project challenges in identifying markets, costs, transit routes, and financing, as well as
ensuring that production and transport capabilities are completed together.
Doug Stokes and Sam Raphael argue (2010:112–144) that US interests in Caspian
Basin hydrocarbon resources were insignificant before the collapse of the Soviet
Union. In the early years after the Cold War, US interests in the region remained
relatively minimal and still fell in line with the sensitive underlying strategy
employed toward the former Soviet Union as a whole. This strategy was one focused
on managing relations directly with Moscow in lieu of a regional outlook throughout the 1990s. For the first time, transitional capital could permeate the region,
while Washington moved gently toward securing access with diplomatic, political,
and military statecraft to woo over the newly emergent nations.
Brenda Shaffer (2009:83–114) believes that after the collapse of the Soviet
Union, Russia and Iran presented a united position against delimitation, encouraging instead a policy of common ownership of the Caspian and its seabed, prohibiting exploration of the seabed energy resources in sectors in accordance to each
state’s cost. As part of the “condominium” policy, oil and gas drilling and exploration in any part of Caspian would require approval of all five littoral states. The main
motivation for this initial proposal by Russia and Iran was to ensure that the Caspian
states only exported oil and gas through their territories, thereby preserving their
dependency. Energy is an integrated policy tool in US foreign policy; with energy
security in general falling within the remit of the country’s national security policy
at large. However, it is the scale of both the US’ energy production and consumption
which has always accounted for its extra reach in this regard, with country uniquely
positioned to affect energy policy globally and in a variety of regional setting. By
the end of the 1990s, the US was openly promoting oil and natural gas pipeline
routes as an adhesive to political and security relations.
Declaring that “Caspian energy development is not and should not be viewed as
zero-sum game,” Michael Klare, an advocate of deep American involvement in the
Caspian Basin, as well as a number of US government officials, argue that the production and sale of Caspian Basin energy supplies will generate sufficient wealth to
satisfy the aspiration of every key actor involved thus reducing the risk of regional
conflict. The US has two key objectives: First, to develop the Caspian Basin as an
alternative to Persian Gulf supplies; and second, to ensure that the Caspian oil and
natural gas is supplied to its market without passing through Russia and Iran. With
aim of bypassing Iran and Russia, the US desires to build new oil and gas pipelines
running beneath the Caspian Basin from Kazakhstan and Turkmenistan to Azerbaijan
and then onward to Georgia and Turkey. In contrast, Russia is trying to ensure
Caspian energy output is transited via Russian infrastructure on the Black Sea and
then delivered to Europe (Klare 2002:81–92). Klare argued quite astutely, that in the
Literature on the Region