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Major Caspian Oil and Natural Gas Export Routes

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Chart 4-4: Major Caspian Oil and Natural Gas Export Routes

Source: U.S. Energy Information Administration, U.S. Geological Survey, IHS EDIN http://www.eia.gov/todayinenergy/detail.cfm?id=12931

4.3.2 Competition for Central Asian Energy: the US’s Strategies

4.3.2.1 Diversification of Geographical Sources for US Energy Imports

After the events of 911, the United States fully recognized the importance of diversification of risk in regard to sources of oil, and thus Central Asia has become an important objective for the United States. Explicitly, the US has security concerns in that it sees the region as a potential source for support of ideologies and political and religious affiliations to which it is opposed be it Islamist Iran or Fundamentalist Al-Qaeda or Taliban-linked organizations.

America is the world's largest oil importer and consumer. Securing supplies of oil is extremely important to ensure the economic prosperity and national security of the United States. U.S. oil imports mainly come from the turbulent Middle East. After the events of 911, the United States fully recognized that the importance of diversification of risk in regard to sources of oil, and thus Central Asia has become an important objective for the United States.

U.S. interests in Central Asia can be divided into political, economic, and security interests.

220

The American government’s political interests are mainly based upon a geopolitical perspective, due to Central Asia’s importance as a land-based hub between Europe and Asia, within the former sphere of influence of the Soviet Union; and that it is a key area of geostrategic importance to both Russia and China. Hence, one reason for America’s involvement in Central Asia is to limit the presence of Russia and China in Central Asia. 221

Central Asia is an important international producer of oil and gas resources and regarded as a “second Persian Gulf." Therefore, certainly it is in America’s economic interests

220 中國周邊外交戰略之研究」,楊宗鑫 (2001-2009)國立政治大學碩士論文,「 ( 台北 2010 年 1 月) , 157-159。[Yang, Chunghsin. Zhongguo Zhoubian Waijiaozhanlue Zhi Yanjiu (China's strategy of peripheral diplomacy (2001-2009)), unpublished thesis, National Chengchi University (Taipei: January 2010), pp.

157-159.]

221 Mankoff, Jeffrey. “The United States and Central Asia after 2014,” Center for Strategic & International Studies, Jan , 2013, available at: http://csis.org/files/publication/130122_Mankoff_USCentralAsia_Web.pdf,

to be involved in the region. Control of the oil and gas resources in this region, not only can ensure that the United States suffers no shortage of oil and gas to meet its domestic demand, but also thereby contain other foreign powers. Many scholars believe that the oil and gas resources in Central Asia are the most important point of interest for the U.S. 222

Explicitly, the US has security concerns in that it sees the region as a potential source for support of ideologies and political and religious affiliations to which it is opposed be it Islamist Iran or Fundamentalist Al-Qaeda or Taliban-linked organizations. The frontier character and lack of infrastructure and economic integration of the region make it more likely that such ideologies could find support; such is the opinion of Western

policy-makers.223

4.3.2.2 American Geo-strategy and Energy Cooperation with Central Asian States

After the five Central Asian countries gained independence in 1991, American economic interests initiated energy cooperation with Central Asian countries almost immediately and may be considered as having a plan to expand involvement. Specifically, U.S. energy strategy for the Central Asian countries can be categorized on the basis of energy interests, and geo-strategic considerations. The United States actively entered joint cooperation with the UK, France and other Western countries in the construction of westward oil pipelines, the BP-led BTC oil pipeline (Baku-Tbilisi-Ceyhan). Following the inauguration of the Baku-Tbilisi-Ceyhan (BTC) oil pipeline in July 2006, the US started to lobby more intensively for the construction of a Trans-Caspian natural gas pipeline to avoid Moscow’s control of natural gas entering European markets from Central Asia.

After the five Central Asian countries gained independence in 1991, American economic interests initiated energy cooperation with Central Asian countries almost immediately and

(accessed: 20140519).

222 Arvanitopoulos, Constantine. “The Geopolitics of Oil in Central Asia,” Hellenic Resources Network, available at: http://www.hri.org/MFA/thesis/winter98/geopolitics.html, (accessed: 20140519).

223 Kozhevnikov, Roman. “U.S. warns of al Qaeda threat in Central Asia,” Reuters News Service, Feb 20, 2010, available at: http://www.reuters.com/article/2010/02/20/us-usa-centralasia-idUSTRE61J13920100220, (accessed:

may be considered as having both a short-term plan to expand involvement as well as a comprehensive, long term strategy, which suggests movement in regard to both economic interests and geostrategic considerations. Specifically, U.S. energy strategy for the Central Asian countries can be categorized on the basis of these two concerns, one being

considerations based upon purely energy interests, and the other encompassing geo-strategic considerations. 224

Energy interests: The short-term goal is to promote U.S. business investment in Central Asia and the development of energy exploitation, while the long-term goal is to include the countries which have the potential of supplying oil and gas into America’s energy supply system in order to achieve the goal of energy diversification and energy security.

Geo-strategic considerations: The short-term goal is to support Central Asian countries’

energy exports, include the Central Asian countries in the US-led Western economic system, so as to ensure the independence of the five Central Asian countries politically and

economically. The long-term goal is to prevent Chinese or Russian interference with these goals for Central Asia.

In 2005, at a time when the international average crude oil prices exceeded $63 a barrel and with global energy supplies getting more strained, the U.S. Congress passed a bill, the

"Energy Policy Act of 2005,” which was signed into law by US President George W. Bush on August 8th, 2005. Broadening the channels of energy imports became a matter of top priority for the national interests of the United States. Due to the volatile situation in the Middle East, U.S. oil import channels are limited, so it is urgent to develop new sources of oil. In addition to Russia and Africa, Central Asia's vast oil reserves make the United States keen to access and exploit them. Controlling Central Asia's energy is one way that the U.S. can achieve

20140519).

224 國立政治大學碩士論文,「從地緣戰略論中國對中亞能源外交」,張鴻俊 ( 台北 2010 年 6 月) ,

38。[Chang, Hungchuen. Cong Diyuanzhanlue Lun Zhongguo Dui Zhongya Nengyuanwaijiao (Discussion of China’s energy diplomacy towards Central Asian countries, geostrategic study), unpublished thesis, National Chengchi University (Taipei: June 2010), pp. 38.]

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diversification of energy sources, and reduce its dependence on energy supplies from the Middle East. 225

Although the United States has abundant capital and advanced oil exploration and drilling technology and expertise, the difficulty that the US faced for entry into the region’s energy exploitation competition was that almost all oil and gas pipelines in Central Asia were entirely controlled by Russia. To break this monopoly, the United States actively entered joint cooperation with the UK, France and other Western countries in the construction of westward oil pipelines. The BP-led BTC (Baku-Tbilisi-Ceyhan) oil pipeline was completed in May 2005, and began operation in July of 2006, with Kazakhstan’s President Nursultan Nazarbayev announcing that a significant portion of Kazakhstan’s oil would transit via the BTC pipeline thereafter. At a length of 1,768km, the Baku Tbilisi Ceyhan (BTC) Pipeline travels from the Sangachal terminal near Baku, Azerbaijan, through Tbilisi, the capital of Georgia, and then through Turkey to the Ceyhan marine terminal on the Turkish coast of the Mediterranean (please see Chart 4-6 below), undoubtedly the key link in the so-called “East-West Oil Transportation Corridor.” It is one of the great engineering endeavors of the new millennium and has changed the international oil market landscape and it is at the forefront of energy politics in the region. 226

225 Zhao, Xiaoshuo. “An Analysis of the Strategic Competition between the US and Russia in the Middle East,”

Xinjiang’s philosophy and social science network, May 16, 2012, available at:

http://big5.xjass.com/zy/content/2012-05/16/content_232498.htm, (accessed: 20131201).

226 張鴻俊,「從地緣戰略論中國對中亞能源外交」,國立政治大學碩士論文 (台北:2010 年 6 月),頁 39。

[Chang, Hungchuen. Cong Diyuanzhanlue Lun Zhongguo Dui Zhongya Nengyuanwaijiao (Discussion of China’s energy diplomacy towards Central Asian countries, geostrategic study), unpublished thesis, National Chengchi University (Taipei: June 2010), pp. 38.]

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