Today marks the opening of the Baku-Tbilisi-Ceyhan crude-oil pipeline linking the energy-rich Caspian Sea basin to the Mediterranean. This historic event is being celebrated in Azerbaijan’s capital, Baku, with the presidents of Turkey, Georgia, Kazakhstan and Azerbaijan in attendance. The presence of U.S. Energy Secretary Sam Bodman (who will be carrying a personal message from President Bush) at the event signals the enormous geopolitical significance to the United States of this 1,087-mile pipeline.
The Caspian Sea basin contains approximately 80 billion barrels of oil, nearly 8 percent of the world’s remaining reserves. To put this into perspective, the United States has only 29 billion barrels of remaining oil reserves. Since the discovery of sizable hydrocarbon reserves in the land-locked Caspian Sea, a fundamental premise of U.S. energy policy has been the uninterrupted transportation of Caspian Sea oil to international markets in order to diversify world energy supplies. The new pipeline is the linchpin of this policy because it carries crude oil directly from Baku to the Turkish port of Ceyhan on the Mediterranean via Tbilisi, the capital of Georgia. This pipeline is operated by BP and has the capacity to deliver more than 1 million barrels per day of crude oil to international markets, including ultimately ports on the U.S. East Coast. The pipeline promises to bring prosperity to the region. The gross domestic product of Azerbaijan alone is expected to grow by 20 percent per annum, transforming this nation into the Kuwait of the Caspian Sea.
Sadly, the man responsible for making former Secretary of Energy Spencer Abraham’s “pipe dream” a reality will not be present. Former Azerbaijan President Heydar Aliyev used his formidable leadership capability, determination and courage to bring the pipeline into existence. In recognition, the Ceyhan oil-loading terminal will be named after him. The obstacles Mr. Aliyev faced were tremendous. When the U.S. government determined that it did not want any pipelines from the Caspian Sea to run through the territory of Iran, then-President Aliyev showed enormous courage and stood up to the clerical regime in Tehran, despite the latter’s vociferous objections.
Azerbaijan’s neighbor to the north also objected to this U.S. policy of multiple pipelines because Moscow wanted to hold oil-rich countries like Azerbaijan “by the pipeline” by insisting on a Russia-only route. But Mr. Aliyev did not buckle under Moscow’s pressure. He forged ahead because he realized very early that United States-Azerbaijan interests were mutually reinforcing, and nowhere did it overlap more than the uninterrupted exploration, development and transportation of Caspian Sea oil and natural gas to international markets.
Upon Mr. Aliyev’s death in December 2003, the responsibility for ensuring the completion of this historic pipeline was inherited by his son, Ilham Aliyev, who was elected president after his father’s death. The young president has continued the legacy of his father and can be credited for turning this South Carolina-sized country of 7 million into the transport hub of the Caspian Sea region, thus elevating Azerbaijan’s strategic importance to the West. For example, Kazakhstan needs more pipeline capacity to transport its increasing oil production, but Russia is reluctant to sanction the expansion of the Caspian Pipeline Consortium oil pipeline from Kazakhstan that runs through Russian territory. Therefore, oil-rich Kazakhstan has expressed an interest in using the new pipeline to deliver its increasing oil production to Western markets.
Credit for today’s historic event must also be given to those many individuals within the U.S. government who fought day and night for years to see this pipeline become a reality. Furthermore, the personal commitment to the pipeline by Sir John Browne, the chairman of BP, was also instrumental in giving confidence to the international financial community to finance the $3 billion project.
The completion of the pipeline marks another milestone in Azerbaijan’s long friendship with the United States and highlights the importance to Washington of America’s strongest ally in the former Soviet Union. Beyond its strategic position as the “cork in the bottle” of Caspian Sea energy reserves, Azerbaijan sits between an increasingly nationalistic Russia and a menacing Iran, thus making it of significant importance to the United States. Since Azerbaijan is a Shi’a Muslim state that is wholly secular, it could be a model for the Bush administration to use when promoting democratic pluralism within Muslim countries. Furthermore, Azerbaijan has stood side-by-side with the United States in the war on terrorism and sent troops to Iraq and Afghanistan.
History was made today when the hydrocarbon reserves of the Caspian Sea were unlocked, thus strengthening the strategic partnership between the United States and Azerbaijan and, in the process, enhancing global energy security.
S. Rob Sobhani is president of Caspian Energy Consulting and an adjunct professor at Georgetown University.