With the Trans Adriatic Pipeline (TAP) set to start operations in November 2020, the Black Sea once again lives up to its reputation as being of strategic interest to European energy security. As the final component of the European Union’s Southern Gas Corridor, TAP allows gas from Azerbaijan’s Shah Deniz field to be pumped to Georgia and onward to Turkey, Greece, and Albania. Coming ashore in Italy’s Apulia region, it can be distributed across Europe, decreasing its dependence on Russian gas. TAP has thus achieved for gas what the Baku-Tbilisi-Ceyhan pipeline has for oil and the Baku-Tbilisi-Kars railway has three years ago for freight traffic. With pipelines, ports, rails and roads in place, the vision of an integrated transit corridor connecting Europe, the Caucasus and Asia – the Transport Corridor Europe-Caucasus-Asia initiative of the 1990s – is taking shape.
However, cooperation on large infrastructure projects has not been enough to promote economic development and – by extension – peace in the region. On the contrary, oil and gas projects did initially add to regional tensions as they bypassed Russia and undermined the Kremlin’s resource-based leverage over its claimed ‘sphere of influence.’ The six-week war over Karabakh and the ongoing occupation of parts of Ukraine and Georgia point to the sobering fact that hard security issues do not simply disappear as trade and transport achievements emerge. In fact, any of the simmering or open conflicts, limited as they may seem, regularly engender scenarios in which the scope of confrontation could widen and engulf other countries of the region. Infrastructure has clearly linked the region with the West, but it has not yet brought the peoples of the region closer to each other.
While the huge infrastructure projects were primarily initiated by the US, Europe and international corporations, it is now the regional powers setting the agenda. In late September, with financial support from its hydrocarbon base and increased military and diplomatic strength from cooperation with Israel and Turkey, Azerbaijan came to the conclusion that the international and regional situation was conducive to restoring its control over Karabakh and the seven adjacent areas occupied by Armenia since 1994. These actions highlight a new reality: the old days of great powers dominating and commanding stable alliances are over. Now, regional powers have filled the vacuum, aiming to pursue their objectives based on variable agreements. This corresponds to the demise of multilateralism in favor of regionalism.
In articulating their ambitions, regional powers consider their potential vulnerabilities as manageable, notably in the energy sector. In past decades, conflicts in energy rich areas would have sent oil prices sky high. Not anymore. While Russia had repeatedly used gas as a weapon against Ukraine, the analysis in Ankara was that Turkey could position itself in support of Azerbaijan without fearing negative repercussions on its Russian gas deliveries across the Black Sea. Energy sources, it appears, have become increasingly interchangeable. The reasons why conflicts do not necessarily lead to dramatic price increases anymore are manifold: ranging from a general oversupply of oil and gas – including more and more LNG – to the worldwide decline in economic activity due to Covid-19. In its latest World Energy Outlook 2020, the International Energy Agency (IEA) states that the pandemic had caused “more disruption to the energy sector than any other event in recent history,” forecasting for 2020 a 5 percent drop in total energy demand, with oil falling by 8 percent and gas by 3 percent.
These policy considerations and regional dynamics correlate with the overall decreasing role of fossil fuels in the global energy mix. BP’s annual Energy Outlook 2020 published last month posits in all three of its key scenarios that absolute demand for fossil fuels will decline over the next 30 years as the world gradually, but constantly, moves towards the use of energy sources limiting the effects of climate change. While the IEA maintains that the estimated 18 percent drop in energy investments might delay the energy transition, the BP study forecasts that renewables are set to dominate growth in primary energy and would thus “penetrate the energy system more quickly than any fuel in modern history.” It is therefore plausible that, in a world in which the pivotal role of fossil fuels is in decline, some countries may end up being perceived as less important than before. Countries that built their security architecture around being of crucial importance to Western energy interests may now feel the need to re-explain their relevance in the international system.
This relative decline in the importance of fossil fuels will not diminish the centrality of the energy sector as a whole but may shift in some areas some strategic weight to regional actors. Turkey is a case in point. It not only imports pipeline gas from a variety of sources in Iran, Azerbaijan, and Russia. It also has diversified its LNG imports from Algeria, Nigeria, Qatar, and the US, in addition to expanding its LNG handling installations and pursuing gas explorations in the Aegean and Black Seas. Turkey has also substantially increased its storage facilities. With gas consumption from Russia remaining well below its take-or-pay commitments since 2019, Turkish companies owe Russia billions of dollars – but Gazprom is aware that it should not alienate Ankara.
Despite commercial quarreling over gas and political tensions over Syria, Libya, and now once more the Caucasus, Russia continues to engage with Turkey and vice versa. Ankara is keen on renegotiating long-term contracts for pipeline gas that are about to expire. In addition, it aspires to be an energy hub. Through Turk Stream, in operation since January 2020, Moscow has acquiesced to this ambition. Given Russia’s share of deliveries to Turkey, it appears controllable. It also allows Gazprom to maintain its vertically integrated structure: Turkey is not an EU member and therefore not bound by the EU’s unbundling provisions, which oblige companies to separate generation and sale operations from their transmission networks. From this emerges a not so tacit strategic, albeit limited, partnership between Ankara and Moscow in which both sides try to maximize their benefits.
Where does this leave the initial vision of projecting the West’s strategic interests into the wider Black Sea region and assuring its countries of US and European support?
First, it would be shortsighted for the West to reduce the region’s energy issues to their commercial dimension. The West needs to be reminded of the political vision, not to let the region fall back under Russian tutelage.
Second, the West needs to re-engage in political dialogue to resolve the conflicts Russia chose to freeze (or ignite) in Ukraine, Georgia, Moldova, Armenia, and Azerbaijan. It is high time for governments and peoples in the South Caucasus to escape the logic implanted in them in Soviet times – and that Moscow now aims at perpetuating by posing as peacekeepers in Karabakh.
Third, the West needs to engage with Turkey to avoid the possibility that Moscow and Ankara might strike side deals at the expense of other Black Sea nations. Turkey should lead regional cooperation in the Black Sea by going beyond the temptations – and limitations – of a perceived Russian-Turkish marriage of convenience.
Ekaterine Meiering-Mikadze is a fellow with MEI's Frontier Europe Initiative. She is a diplomat and development professional who served between 2004 and 2017 in subsequent postings as ambassador of Georgia to Jordan, Lebanon, Iraq as well as the countries of the Gulf Cooperation Council (GCC) Kuwait, Bahrain, Qatar, the United Arab Emirates, Oman and Saudi Arabia. The views expressed here are her own.
Photo by Mustafa Kamaci/Anadolu Agency via Getty Images