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Home Archive April 2012 Issue Issue Content NATO and the Caspian

NATO and the Caspian

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As NATO continues its transition from a Cold War military alliance, energy security is playing an increasingly important role albeit an ill-defined one. The rise of energy security as a challenge for NATO and the factors that are driving and shaping it help explain the nature of the contemporary global security framework and in many cases the constraints that NATO, as an organization, faces in driving forward consensus on select energy issues.   

During the Cold War, energy security in the NATO context meant ensuring a reliable supply of fuel to Allied Forces, but the concept of energy security has evolved, covering a range of issues that include critical infrastructure protection, reliable access to affordable energy, security of energy supplies at a fair price, and diversification of energy transit routes. Rising energy demand has also figured into the picture. NATO countries account for only 6% of proven oil reserves, but concurrently account for approximately 39% of the global oil consumption.  The situation in gas is not much different.  NATO member states control only 7% of global conventional gas reserves, but account for 34% of gas consumption.  For NATO, reliable energy imports are critical. NATO expansion has also highlighted the importance of energy reliability in particular for its newest members which are geographically proximate to the former Soviet Union.   

The growing concern that Russia will continue to use energy to coerce European states has further brought energy into the security realm, as vulnerable NATO members have called for mutual energy-security guarantees.  While NATO lacks a response to deal with this issue, it has evolved into a flexible organization with a network of partners and allies capable of promoting activities that may mitigate this energy security dilemma and help preserve the integrity of the energy market. NATO’s partnerships, particularly those in the Caucasus and Central Asia, contribute to European and Caspian energy security within the framework articulated at NATO’s Bucharest Summit in 2008. 
 
The rise of energy

NATO has increasingly recognized energy security as an emergent security concern.  The Riga Summit Declaration stated, “Alliance security interests can also be affected by the disruption of the flow of vital resources” and the Council in Permanent Session should “consult on the most immediate risks in the field of energy security, in order to define those areas where NATO may add value to safeguard the security interests of the Allies.” The Riga Summit of 2006 followed the first Russia-Ukraine price dispute over natural gas, which was at least partly motivated by Russian political objectives. 

In April 2008, the Allied Heads of State declared at the Bucharest Summit that NATO would contribute to energy security by engaging in information and intelligence sharing, projecting stability, advancing international and regional cooperation, supporting consequence management, and supporting critical energy infrastructure protection.  They would ensure NATO’s efforts “add value” and be “fully coordinated and embedded within those of the international community, which features a number of organizations that are specialized in energy security.” In August 2010, the Emerging Security Challenges Division was created at least in part to meet these goals.  NATO’s Lisbon Summit declaration of November 2010 further emphasized these goals and a commitment to enhanced consultation and cooperation with partners and other international actors by resolving to integrate energy security concerns in NATO’s policies and activities where appropriate.  Importantly, NATO’s new Strategic Concept asserted the alliance would “develop the capacity to contribute to energy security, including protection of critical energy infrastructure and transit areas and lines, cooperation with partners, and consultations among Allies on the basis of strategic assessments and contingency planning.”

NATO is in a position to complement the EU’s energy security initiatives, particularly because of the partnerships it has cultivated in the Caucasus and Central Asia.  On September 12, 2011, the EU adopted a mandate to negotiate a legally binding treaty between the EU, Azerbaijan, and Turkmenistan for building a trans-Caspian pipeline system which was the first operational decision generated by the EU’s unified external energy strategy.  The mandate represents a political and legal commitment to support a Southern Corridor, which would bring natural gas directly from the Caspian basin and the Middle East to Europe. 
 
Select NATO Member State Gas Consumption (Billion Cubic Feet), 2010
Source: US Energy Information Administration
 
 
NATO Total Oil Consumption (Thousand Barrels Per Day) 2010
Source: US Energy Information Administration
 
 
 
NATO’s Caspian partners

The Caspian also punctuates the increasing role of energy in NATO’s calculations.  NATO has played a role in Caspian energy security since the 1990s through the framework of its Partnership for Peace (PfP) Program.  The basic aim [of the Partnership for Peace] is to stimulate and support domestic defence reform in partner countries and the creation of modern, effective and democratically responsible armed forces and other defense institutions. Furthermore, to help countries manage the social and material consequences of such reform

A fundamental commonality among PfP Caspian countries are their rich endowment of their natural resources.  Since  the Clinton administration, US policy has been to encourage the development of multiple oil and gas pipelines for exporting Caspian energy, creating a corridor between east and west that would facilitate economic and political cooperation, and minimizing the risk that one nation would use energy to dominate another.  Through the PfP program NATO has promoted defense reform and associated activities with the consequence [directly or indirectly] of having brought together producers, consumers and transit countries to build confidence and promote cooperative relations among NATO member and partner countries. The terrorist attacks of September 11, 2001, and subsequent military engagement in Afghanistan, have heightened the strategic importance of the Caspian region for the Alliance.  NATO took command of the International Security Assistance Force (ISAF) in 2003, and since then Afghanistan has been the Alliance’s number one priority. 
 
Caucasus and Central Asia Natural Gas Production (Billion Cubic Feet) 2010
Source: US Energy Information Administration
 
 
NATO’s PfP program provides a framework for security cooperation and focuses on defense reforms and interoperability with NATO forces. Its goal is to influence partners’ approach to security, the role of the military, and international cooperation to bolster political stability. The by-product of these modernization efforts has made the Caspian more attractive to foreign investment and energy development. This process has had mixed results; for example, while Kazakhstan is a key player, the region is still prone to territorial disputes and political instability which discourages foreign energy investment. Kazakhstan’s security environment radically changed after 9/11, making it more inclined to cooperate on energy. By June of 2009, Astana hosted a Euro-Atlantic Partnership Council Security Forum that focused on Afghanistan and energy security. Yet Kazakhstan’s sees such ties to NATO as only  a complement to its security.  It has a legacy of bilateral security ties with Moscow which only complements Russia’s bilateral approach to energy diplomacy.  
    
Nevertheless, NATO’s engagement with partner-countries has enabled it to secure transit routes for supplies and energy to Afghanistan.  NATO has also made multiple contacts throughout the region and encouraged transnational professional networks to form through its emphasis on cross-regional workshops, conferences, and exercises.  For example, Azerbaijan, which pursued an independent energy policy after the collapse of the USSR, has facilitated contacts with energy consumers, producers and transit countries outside of Russia’s traditional sphere of influence.  For Azerbaijan, partnership with NATO has served its strategic goal of integration into Euro-Atlantic structures.  For example, in 2009 Baku hosted a seminar co-organized by the NATO Defense and Security Economics Directorate and the Ministry of Foreign Affairs of the Republic of Azerbaijan, entitled "Energy Security: Challenges and Opportunities". NATO members, partners from the Euro-Atlantic Partnership Council (EAPC), Mediterranean Dialogue, Istanbul Cooperation Initiative countries, and representatives from the Organization for Security and Cooperation in Europe (OSCE), business, academia and think tanks gathered to discuss NATO’s role in energy security and highlight the importance of energy resources in the Caspian region.  

Turkmenistan’s recent commitment to a trans-Caspian pipeline follows years of uncertainty.  Ashgabat has been quietly altering its strategic orientation since the death of its “President for life” Saparmurat Niyazov in 2006.  New President Gurbanguly Berdymuhammedov has been tentatively engaging the international community welcoming NATO’s efforts to secure Turkmenistan’s oil and gas export pipelines to Europe.  
 
NATO and Russia

It is impossible to discuss NATO and energy security without consideration of Russia. Russia signed a PfP framework document in June of 1994, but strongly opposed NATO expansion and engagement in its near-abroad.  However, since 9/11, Russia has found shared interests with NATO with respect to terrorism, drug trafficking and proliferation.  During summits in Rome (May 2002) and Moscow (June 2002), NATO and Russia formally agreed to work toward a cooperative security regime throughout the Commonwealth of Independent States (CIS). The NATO-Russia Council (NRC) was also established in 2002 to provide a mechanism for consultation and cooperation between NATO member states and Russia on issues which theoretically could include energy.  While the NRC’s formal meetings were suspended after Russia’s military action in Georgia in August of 2008, meetings were resumed in March 2009.
 
In some ways, Russia is playing a decidedly negative role in the development of Caspian energy.  Beyond its well-known use of energy as a tool of foreign policy, Russia has also challenged energy infrastructure projects.  It has strongly opposed the Nabucco pipeline and a Trans-Caspian oil pipeline from Kazakhstan to Azerbaijan to connect to the Baku-Tbilisi-Ceyhan pipeline.  Russia’s support of Iran’s opposition to settling the issue of the legal status of the Caspian Sea has further impeded energy development.  Iran, which has the world’s 2nd largest proven gas reserves, opposes a trans-Caspian gas pipeline from Turkmenistan to Azerbaijan because it would compete with Iran’s opportunity to export gas to Europe.  Nevertheless, European Commissioner for Energy Gunther Oettinger’s recent public statements regarding a trans-Caspian pipeline agreement between Azerbaijan, Turkmenistan, and the EU have been optimistic, emphasizing the EU’s willingness to speak with one voice in support of a southern gas corridor. 

NATO’s reluctance to extend its energy security role beyond the framework outlined at the Bucharest Summit is influenced partly by sensitivity to Russian insecurity and to Russia’s control over significant oil and gas resources. In its Military Doctrine of 2010, Russia identified a ‘global NATO’ as its number one external threat.  For its own part, NATO hopes to avoid the impression it is “militarizing” energy security while trying to focus on value-added aspects of cooperative security to manage transnational issues that threaten both Europe and Russia. By embedding energy security within a host of other transnational issues, NATO overtly seeks to avoid antagonizing Russia.

Conclusions

NATO contributes to European and Caspian energy security indirectly by providing education and training support to NATO member and partner nations. The EAPC, the Mediterranean Dialogue, and the Istanbul Cooperation Initiative bring together energy producers, consumers, and transit countries to share best practices for mitigating energy security-related risks and threats. Increased planning of this sort should lessen the likelihood of having to manage an incident with an ad hoc coalition rather than with the full force of NATO.
 
Second, while NATO’s engagement with partners contributes to mitigating tensions among producer, transit and consumer countries, it should leave complex pipeline negotiations, such as those for the trans-Caspian pipeline, to the EU.  EU involvement emphasizes the economic, rather than the military-strategic aspects of infrastructure projects; a NATO role is thus likely to be complementary to an EU energy strategy.  NATO is also likely to maintain a light footprint in the Caspian because it does not want to antagonize Russia.  The US in particular needs Russian cooperation on a host of thorny geopolitical issues not the least of which is Iran’s nuclear program.

The PfP program has provided a means for NATO to project stability by encouraging transparency, good governance, and the rule of law thereby creating an environment more attractive for foreign investment in the region’s energy development. If NATO continues to focus on the cooperative aspect of its energy security strategy, it could mitigate regional tensions and pave the way for a true realization of the region’s energy potential and in doing so enhancing the energy security of Europe and its Caspian partners.

Third, as NATO continues its evolution from chiefly a military alliance aimed at securing Western Europe against Soviet threats, it would do well to continue to consider energy security as an area of increasing importance. While energy security does not represent the “high politics” of Cold War security issues, it will only gain greater importance as a security issue in the future. This is because oil is a finite resource and it does not appear that mass-consumption alternatives to it will come on line early enough to prevent increasing dependence on it. Further, as demand for oil outpaces supply new regions for major exploration and production such as the Caspian take on increased importance.  Further for security organizations in particular it is important to hold the use of energy for coercive purposes in check.  It may not be too soon for NATO to start thinking of producing such an energy security architecture t guard against this by perhaps including Russia in aspects of it.

Fourth, while presently a divisive area, energy is also a potential area for greater cooperation between Russia and countries in NATO, including the United States. This is not only because Central Asia has been far from meeting its promise in energy exploration, development and delivery but also because energy is an area in which synergies matter and in which multilateral cooperation can be beneficial. Different countries and their host governments can bring different capabilities to the task, making joint efforts more possible and profitable. Of course, that does not hold for all types of efforts, but a genre of efforts of this kind can be identified which also may have the spillover effect of generating better relations among countries. Drawing on that old notion of functionalism that helped develop the European Economic Community in the post-World War II period, countries that perform energy functions together may learn to trust each other more, to understand each other better, and to realize that the mutual benefits wrought from such cooperation produce vested interests in continued interaction. 
 
In real terms however as NATO is seen by Russia as a military alliance, efforts by NATO to enter more forthrightly into the energy space are likely to trigger a negative response from Russia. What NATO may need to do is to have two complementary agendas. The first is to identify key energy issues that it seeks to affect and the second is to create a diplomatic approach toward Russia that helps convince it that its move into the energy sphere is defensive and not a threat.

Finally, reaching a consensus on an energy security strategy has been as challenging for NATO as for the EU due to variations in the energy security concerns of member states.  How individual state dynamics cross-cut NATO’s energy concerns will continue to be of considerable interest and challenge to the Alliance both today and tomorrow. 
 
Contributor Jennifer Cunningham is a Graduate Student at Old Dominion University and Dr. Steve Yetiv is a Professor of Political Science at Old Dominion University  
 

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