Vol. 1, No. 22 (December 15, 2008)

Baku energy summit highlights Azerbaijan’s role

Paul Goble
Director of Research and Publications
Azerbaijan Diplomatic Academy

As all maps show and as President Ilham Aliyev has repeatedly said, Azerbaijan stands at the intersect point of the major north-south and east-west transportation and communication routes in Eurasia, a location that gives Baku a special, even growing role in larger energy issues throughout the world.  That role was highlighted over the last month by the Baku Energy Summit in mid-November, the meeting of the presidents of Azerbaijan, Turkmenistan and Turkey in Turkmenistan, and Baku’s decision this week to cut oil production in line with OPEC efforts to stem the decline in the price of oil.
The fourth such meeting after sessions in Krakow in May 2007, Vilnius in October 2007, and Kyiv in May 2008, the Baku session attracted political leaders and key oil and gas industry officials from the Baltic, Black Sea and Caspian Basin as well as from the United States and the European Union to discuss energy security issues and the development of additional supply routes across the region and from it to the countries of Western Europe.
Most reporting about the session focused on the specific accords reached including Azerbaijan’s commitment to supply gas to Georgia for five years and Baku’s new agreement with Kazakhstan on transportation routes, but the most important aspect of the meeting was its reaffirmation of the centrality of Baku in any discussion of these issues.  As President Aliyev told the group, Azerbaijan has “an enormous role to play” in promoting the transportation of oil out of the region and ensuring the energy security of its partners in the region and in Europe more generally. 
He found support for that idea in the remarks of US Energy Secretary Samuel Bodman, Ukrainian President Viktor Yushchenko, and Polish President Lech Kaczynki, among others.  And the meeting was the occasion for progress on the Nabucco gas pipeline project, something that the European Union is devoting increasing attention to given its unwillingness to be held hostage by Russian control of many of the existing routes. 
And what is striking is that at a time when international demand for oil is dropping given the worldwide financial crisis, Azerbaijan has succeeded with this session in underscoring a reality which no one in Europe, the United States or the Russian Federation can ignore: no solutions to the existing energy problems of Eurasia are going to be possible without the direct participation of Baku.
While that represents a significant diplomatic triumph for Azerbaijan, it also creates two new problems.  On the one hand, it guarantees that various outside powers will seek to pressure Azerbaijan to accede to their point of view, a situation that likely means there will be more problems over Karabakh and the occupied territories – Russia’s typical lever on Baku – with the ethnic Azerbaijanis in Iran – Tehran’s usual diplomatic weapon of choice – and concerning human rights and international broadcasting – major concerns of Western countries and especially the United States.  Azerbaijan may assume it can parry these challenges because of its favored position, but it will have to address them.
And on the other hand, this triumph carries with it new responsibilities.  Azerbaijan now will have to take a more public and more carefully defined position on a wider variety of energy issues.  Other countries involved with these questions will expect that, and if Baku fails to deliver in the very short term, other governments are certain to look elsewhere, a shift that could cost Azerbaijan dearly and one that its geographic position alone will not prevent.  In short, a failure here could seriously hurt the country’s standing in other forums.
The Azerbaijani-Turkish-Turkmen summit in Turkmenistan underscored both these possibilities and these risks.  As several commentators have noted, this meeting at the end of November “cemented” the development of ties among three key Turkic states all of which are involved in the energy business either as suppliers – Azerbaijan and Turkmenistan – or as transit routes –Azerbaijan again and Turkey.  Here too Azerbaijan was the link between these two very different communities, and consequently, it played the dominant role, something few might have expected given Turkmenistan’s earlier intransigence and Turkey’s historically larger geopolitical role. 
And this week, Azerbaijan again underscored its regional leadership role by saying that it would follow OPEC plans to cut production in the hopes of stemming the decline in the price of oil.  While some have seen this as a mistake that will offend Western consumers, a more reasonable reading is that Baku was staking out its own regional position.  After all, Moscow did not make a similar commitment.  And consequently, Azerbaijan which is not only a supplier but a transporter of energy and not only a Muslim state but a very secular one as well took a position that allows it to stand between various groups.
That is a remarkable achievement, one that elevates Baku to a new level in the international game.  But it means that Azerbaijan now faces expectations and challenges that it did not face earlier.  And while Baku may welcome them as evidence of its new prominence and independence, it will have to work harder than ever in 2009 in order to ensure that it can build on what it has achieved rather than find itself in a position of geo-economic and geo-political overreach.