Vital Caspian Graphics - Challenges Beyond Caviar

Environment and security As a source of potential wealth the environment with its natural resources can easily fuel tensions between neighbours and endan- ger the security of people living in the region. Threats may stem directly from environmental im- pacts on health and well-being, but also from conflicts triggered by the associated pressures.

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– a fragile balance

To further complicate matters, the region’s political order has recently been reshuffled and there remains an unresolved dispute about terri- torial claims to the sea basin and the natural resources that may be found there.

Clarifying territorial limits to prevent conflict Access to hydrocarbon resources has caused several disputes between the five states bordering on the Caspian. The une- ven distribution of hydrocarbon resources gives rise to disputes over oilfield owner- ship. There is also disagreement as to how best to use the sea (separate or joint exploi- tation). The inadequate legal framework and overlapping claims to ownership have made it more difficult to find solutions to these disputes. Preference has so far been given to bilateral agreements to facilitate the exploitation of the Caspian’s energy resources. Transport of oil and gas further complicates conflicting interests and claims, and brings additional players into the game. So far the main export pipelines run through Russia. A recently developed alternative, the Baku- Tbilisi-Ceyhan (BTC) pipeline that started operation in 2005, opened a new possibil- ity for transporting 1 million barrels of oil daily. Other similar pipeline projects are also being developed like the one that goes through Kazakhstan to China.

In areas where the economic interests vested in nat- ural and mineral resources are as strong as around the Caspian, environmental protection tends to be a low priority. But some of the natural resources such as fish, which form the basis for human survival and economic activities in the region, depend on an intact environment. The exploitation of other natu- ral resources is particularly profitable, because little account is made for possible negative side-effects. The region’s valuable natural resources – some non-renewable such as oil and gas, others renew- able such as fish – are an important factor in rela- tions between states and the various communities living around the Caspian sea. In particular they may create international tension, as for instance with the ongoing discussions about sustainable ex- ploitation of fish resources. With dwindling overall oil resources, enduring in- stability in the Middle East, new markets and rising demand for energy, many players have good reason to be interested in the Caspian basin and the export of its resources: states (the producers themselves, the countries through which products transit, and end users), and oil and gas companies. In princi- ple it is in the interest of such players to maintain regional stability in order to secure investments in the energy sector.