Azerbaijan's Caspian energy strategy: key benefits Kazakhstan, Turkmenistan are not to miss

Oil&Gas Materials 7 February 2023 09:34 (UTC +04:00)
Azerbaijan's Caspian energy strategy: key benefits Kazakhstan, Turkmenistan are not to miss
Emin Sevdimaliyev
Emin Sevdimaliyev
Read more

BAKU, Azerbaijan, February 7. Baku has once again hosted a key event that became a highlight in the energy industry. With a combination of the Advisory councils’ meetings, Azerbaijan served as a gateway for European and some neighboring states to the energy potential of the Caspian Sea. So far Azerbaijan managed to put together two elements of the puzzle of hydrocarbon supplies from the Caspian Sea basin to the western states: provide a reliable partner for its European customers in the Caspian Sea region, and establish mutually beneficial relations with them.

For the puzzle to be complete it is vital that Central Asian oil and gas exporting states join the initiative. Baku is already offering a solid framework and a solution for Kazakhstan and Turkmenistan by being a platform to extend political and economic interests of Astana and Ashgabat to new partners and areas in a totally different format.

The Southern Gas Corridor Advisory Council 9th Ministerial Meeting and Green Energy Advisory Council 1st Ministerial Meeting, which took place in Baku, was a major event, which illustrated the evolving views of the global community on the energy potential of the Caspian Sea region.

Geopolitical transformations, which have taken place in the last year, reinforced the importance of cooperation as a global paradigm, which has a considerably larger creative potential compared to non-cooperative Machiavellian approaches.

Analysts and journalists covering the event, however, looked past the omission that could have created additional value added for all sides involved. The absence of Kazakhstan and Turkmenistan at the events held in Baku, was regrettable.

In addition, the green energy possibilities discussed in Baku provided an excellent opportunity to change the image of the Central Asian energy exporters and explore the new trends in energy policy, as well as security.

It is somewhat puzzling not to see representatives of Kazakhstan and Turkmenistan at such a major event. The benefits that Kazakhstan and Turkmenistan could have enjoyed are necessary to be pointed out.

A promising avenue for Central Asian countries

Central Asian states have a large untapped potential that they can realize. Kazakhstan and Turkmenistan will find joining this framework very productive due to several reasons.

The first rationale is economic. Since the end of the Second World War, liberalism and cooperation became the dominating paradigm in the minds of decision-makers. The global population managed to generate significant wealth and benefits by engaging in global trade. The Southern Gas Corridor Advisory Council 9th Ministerial Meeting encapsulates the model of global cooperation perfectly. Even countries with a somewhat contradicting outlook on global and regional affairs, like Türkiye and Greece, find a way to cooperate to produce benefits for their respective populations and their neighbors.

From this perspective, this is not even an issue for Kazakhstan and Turkmenistan, as they enjoy much warmer relations with their neighbors and other states located in proximity to them. Simply expressing a desire to participate in the program would have been sufficient, considering that both Astana and Ashgabat have a lot to bring to the table. The two countries could have introduced their products to a new market, creating benefits for each county in the process.

The second motive is financial. Both Central Asian nations will have an excellent opportunity to attract investments to various sectors of the economy, including transport, energy, and capacity building of the local staff.

The third one is a combination of economic and political considerations. Companies like BP, Masdar, WindEurope, SolarPower Europe, and others participated in Southern Gas Corridor Advisory Council's 9th Ministerial Meeting and the Green Energy Advisory Council’s 1st Ministerial Meeting have transitioned from being just energy companies. They become extensions of foreign affairs and economic ministries of their states. And the event held in Baku was an excellent opportunity to foster relations with businesses and, indirectly, with the governments they represent.

The fourth element is strictly geopolitical. Engaging with foreign partners and investors will result in an elevated level of political security for Central Asian states. As mentioned earlier, modern energy companies operate as an extension of diplomatic and economic representations in host countries. Engaging in economic and investment ventures with these companies gives them a higher level of confidence and propensity to protect their investments.

Finally, it is necessary to say that participation in these programs will aid the legislative transformation of the Central Asian energy giants. Major cooperation between several diverse countries makes it essential to have their legislative foundation to be complimentary.

Green energy is the future

It is, perhaps, too naive to believe that green energy is already playing a major part in global energy security. However, it would be even more naive to think that this is a temporary trend, which will fade away into oblivion in a few years. The reality of the question is that the energy “revolution” has already been triggered, and any oil and gas exporting state that neglects this element will be left behind.

The general view that green energy is a new direction of the global energy policy is a relatively one-sided argument. Green energy must be seen in a broader context of climate change and natural resources security, which will be an existential issue that most industrialized nations will face in the next decades. Generally speaking, people are very poor at estimating long-term risks. Sometimes they underestimate the risks, sometimes flat-out rejecting the possibility of the scourge happening. However, climate change is a problem that can dramatically reduce the economic and political capabilities of any state. This is especially familiar to Kazakhstan, which witnessed the drying-up of the Aral Sea, a once fourth-largest lake.

From this perspective, Central Asian countries could have benefited dramatically from joining the events held in the capital of Azerbaijan.

True, Kazakhstan already initiated certain projects and gradually executes the doctrine to achieve carbon neutrality by 2060. Particularly noteworthy developments in this respect include recent agreements signed during the visit of President Kassym-Jomart Tokayev to the United Arab Emirates.

There is little doubt that we shall be able to observe the first results of the policy shift in the not-so-distant future. However, the Green Energy Advisory Council 1st Ministerial Meeting could have become the catalyst, which would magnify the efficiency of Kazakhstan’s approach to restructuring energy policy and learn from the best practices of foreign partners.

This is an important opportunity for Astana and Ashgabat that they should consider joining. The earlier the decision on joining is made, the easier it would be for Kazakhstan and Turkmenistan to make the transition.

Not too late yet

It is too early to label the lack of Kazakh and Turkmen representation as a squandered potential. It is true that should Astana and Ashgabat participate, things could have been more interesting for all parties involved, including Kazakhstan and Turkmenistan themselves.

Certainly, Kazakhstan and Turkmenistan have enormous energy reserves, which can boost the energy security of European countries. In the context of the increasing interest of western states in the Caspian Sea countries, the Advisory Council meetings’ role in promoting Central Asian states would have had a major positive impact on the image of Kazakhstan and Turkmenistan.

The events held in Baku, have a clear potential to generate advantages in several separate fields, including economic, political, security, and policy development areas. Participation of Kazakhstan and Turkmenistan will supplement their efforts and positively impact their relevance, value, and their long-term security.