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Eastern Caspian
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Environment and Security
The transportation of energy not only cre-
ates various forms of interdependence be-
tween producers and consumers but also
involves numerous actors and stakehold-
ers. This situation increases the complexity
of planning and building pipeline systems.
For energy-thirsty consumers such as Eu-
rope, the United States, India and China di-
versifying the suppliers of energy contributes
to reducing vulnerability created by depend-
ence on a specific energy source (oil), from an
insecurity–ridden supplier (the Middle East).
Diversifying energy suppliers increases en-
ergy security. In this context the gas and oil
resources of the Caspian are of great interest
to China and India, whose economic growth
relies on increasing demand for energy. At
present the European Union imports half of
its energy products. The estimates published
by the European Commission in 2006, for
the G8 meeting in St. Petersburg – suggest
that the EU’s dependence on energy imports
will further increase, reaching 70% of its to-
tal energy consumption by 2030 (94% of oil
and 84% of natural gas). The role of gas will
increase considerably, hence the importance
of securing the flow of energy
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Russia is both a producer and a transit
country. Russia is the world’s largest ex-
porter of natural gas, the second largest oil
producer and exporter, and the third larg-
est energy consumer. It also controls vari-
ous pipeline routes to Europe and Asia. This
positions Russia as a strategic energy sup-
plier and “energy axis” between Europe and
Asia, which also allows Russia to assert its
influence politically. The problem of energy
security is also a priority for the Shanghai
Cooperation Organisation (SCO), in which
Russia and China play significant roles.
Iran, itself a producer of fossil energy,
seems mostly interested in better connect-
ing Caspian oil to the facilities in the Persian
Gulf. The country has developed coopera-
tion with Russia and, more importantly, em-
barked on development of its military ar-
senal and especially its missile capabilities
and a controversial nuclear programme.
This situation is a source of international
tensions and regional insecurity.
For transit states such as Georgia, but also
TurkeyandUkraine, pipelinesarefinancial life-
lines, with states being paid rent and duty for
use of their territory and for damage caused
by building and operating the pipelines. So,
increasing the number of pipelines crossing a
given country not only means increasing rev-
enue for the state but also establishing that
country as a “hub” or “pivot” in the political
economy of energy transportation
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The US oil industry has been present in the
Caspian since the 19th century, but only since
the disintegration of the Soviet Union has the
US developed closer links with the region.
The presence of energy resources and the
geographical position between global ac-
tors such as Europe, Russia and China en-
sure that the Caspian region retains its full
geopolitical significance for the US. As for
other economies, US dependence on oil
increasingly supplied by countries in the
Middle East, Africa and other non-Western
areas means that the American economy is
becoming increasingly exposed to supply
disruptions in overseas production areas.
Diversifying energy suppliers increases en-
ergy security. As they strive to control the
most promising sites in terms of new oil, US
interests are competing with other indus-
An area of geopolitical importance
The Caspian region