US-Russian Energy Security in the Caucasus: The Prospects for Conflict in the National Interest

It has taken energy (namely coal and oil) to produce the industrialized and economically prosperous nations of today. That is certain to change in the future, as fossil fuels are expiring; however, until that period comes to pass, oil will continue to be an integral part of the modern world. As the world is running out of oil, the choice is now whether to make realistic efforts for a viable alternative sooner, with the least amount of growing pains, or later. The US government, as well as, it seems, the other industrialized nations, have chosen the latter; and, therefore, they have concluded they have a need to secure what fossil fuels still remain.

The Caspian issue may be seen as an extension of the 19th century Great Game (Hopkirk 1990, 1; STRATFOR1 2000), though this “round” reflects the economic importance of energy resources in southern Eurasia. Early in the 1900s, it became well apparent that oil would be vital for the future security of states (Engdahl 2004, 37). From European navies switching to oil as their primary power source (Klare 2004, 148), to the battle for Stalingrad in World War II, the efforts for control of energy resources still abound in the Caucasus.

The majority of proven global reserves lie in the Middle East, where the US already has made significant inroads in Saudi Arabia (Klare 2004, 26), and has a formidable presence in Iraq. With the threat of an impending oil peak on the horizon, western efforts to secure an alternate source of energy outside of the Middle East has become a matter of national security.

From the Silk Road Strategy Act and the Quadrennial Defense Report, to observations in pipeline politics and military activity in Eurasia, efforts to secure US supply is evident. Clearly US activities in the Caucasus can be seen to reflect the US policy of maintaining its position as global hegemon. This policy has not come without its challengers, notably Russia. (Mahnovski 2003, 116)

These events have helped spur a struggle for influence in the region. Particular issues of debate are: 1) Does Russia have the right to exact rents on Soviet energy infrastructure and 2) Does the US has the right to protect energy resource supplies from the Caspian. If the two powers do not to cooperate in the region, there is question as to what extent the US will be willing to project its energy security, and whether this could involve force protection.

By referencing current policy and examining current events, it is possible to make a fair assessment of the possible use of force in Transcaucasia.

(Mahnovski 2003, 116)

A Look at Policy and Action

Perhaps the first indication of establishing influence in the Caspian region of the Former Soviet Union (FSU) came in 1992. Abroad, the US was involved in the Balkan conflict; and at home, a policy memo called the Defense Planning Guide (DPG) for 1994-1999 was drafted. By this time, it was clear that for any state to maintain its own welfare, it must have a reliable source of energy; and that if it had not already secured this, it had better begin. This need significantly increases should a state wish to project power beyond its borders. When the DPG first appeared, this certainly seemed to be the main goal, to protect US hegemony. To do so, it was willing to dominate the Eurasian landmass in order to thwart any foreign competition (Gellman 1992; Tyler 1992). A goal in this approach was to diversify US sources of petroleum as outlined in the 2001 National Energy Policy. While the language may be softer, and with less emphasis on unilateral action, the proposal of looking toward the Central Asian/South Caucasus (CASC) region for trade, investment and resources remains unchanged (NEPDG 2001).

In order to bring more oil to market, the US has adopted a policy of diversification, where the Caspian region has been suggested as one possible alternative source of energy. Geostrategically, the area also has immense importance (Blandy 2001, 38). In fact, the East-West (E/W) energy and transportation corridor that has been proposed may have more to do with geopolitics rather than the consolidation of resources. As the route bypasses Russia and Iran, the route’s importance may simply be to curb rival influence in the region (Nanay 2003, 3). Alternatively, Caspian oil may not even be intended for US consumption, but rather for the European market (Oliker 2003, 221) (STRATFOR2 2003). Nonetheless, repeated US calls for CASC resources come from analysts and US politicians alike (Baker 1997).

Economic Ties, and Energy Acquisition

Further evidence demonstrating US energy interest within the region is in the Silk Road Strategy Act (SRSA) of 1999, where its findings support stability, democracy and an E/W corridor with US investment across the Caucasus and into Central Asia (U.S. Senate 1999, 2-4). Emphasis on US investment in the region was also forwarded by special advisor for the US on Caspian energy issues, Steven Mann (STRATFOR3 2003).

There is no doubt that Western investors have contributed heavily to energy development and its transportation to Western markets (Goldman 1995); from the Caspian to the Mediterranean (Baran 2003) as well as to Kazakhstan (Nanay 2005, 142; STRATFOR4 2003). In the West’s quest for diversified energy acquisition, the Caucasus’ strategic position bridges two vital areas (Blandy 2001, 38).

Contested Pipeline Routes: E/W vs. N/S

Soviet infrastructure in northern and central Eurasia relied on routes stretching from north to south (N/S), as well as from east to west through Europe. However, with the fall of the USSR, Russia is more restricted in CASC. Now looking toward energy resources in CASC, the US and Europe require transport on an E/W axis. As previously mentioned, at stake for Russia are transit rights through old Soviet and new Russian lines, giving Russia the ability to tax the transfer of petroleum (Ebel 2005, 6). For the US, secure transit of oil resources from east to west, not hindered by former, current, or future adversaries, is of utmost importance.

Now that Russia has encountered transit difficulty from parts of its former empire in the Caucasus and Central Asia, Russia wants to ship as much as possible through Europe and the Black Sea (through the Straits). So far, Russia has been able to build the Caspian Pipeline Consortium (CPC) pipeline (partially backed by Western investment), from the Tengiz oil field in Kazakhstan, through the northern Caucasus to Novirossiysk on the Black Sea (Matzke 1997). Russia has also been able to transport some oil through its soviet lines from Baku, in Azerbaijan, going north through the northern Caucasus to, again, Novirossiysk, the Northern Pipeline (Matzke 1997). However, it faces increasing opposition from a US NATO ally, as Turkey has insisted that increased shipping through the Straits will be restricted (STRATFOR2 2003). In addition to the Black Sea/Turkish Straits route, Russia carries approximately 40 percent of its oil exports to Eastern and Central Europe through its Druzhba and Adria lines (Kalicki and Elkind 2005, 151).

Challenging Russia’s former control over the region and its energy infrastructure is the US and its series of pipelines, both existing and proposed. The most popular Western-backed pipeline, running along the E/W corridor, is the Baku-Tbilisi-Ceyhan (BTC) Pipeline. This line avoids both Iran and Russia as it winds from the Azeri coast through Georgia and out onto the Turkish Mediterranean coast (Svante, Tsereteli and Socor 2005, 20, 30; STRATFOR5 2003; 2005; Matzke 1997). Also, the Baku-Tbilisi-Supsa (BTS) route, mostly used to ship “early” oil from the Caspian to the West, also uses the Turkish Straits from the Black Sea to bring oil to western markets (Svante, Tsereteli and Socor 2005, 20, 30; Matzke 1997). As more oil is shipped through the BTC and/or the BTS, it is likely to reduce the amount shipped through Russia’s lines. The issue is a source of friction between the two powers. It would seem from the two Western pipelines in the region that the main focus is on Azerbaijan, as it is from its source in Baku that the shipments begin. However, this is not the case.

Azeri’s claim on the Caspian has never been the main aim of the US search for diversification. Instead, it has been the vast oil fields in Kazakhstan (Nanay 2003, 4; USACC1 2006; STRATFOR6 2002; Paton 2003). At the moment, while not the best alternative, oil from Kazakhstan is being shipped across the Caspian to Baku (Starr and Cornell 2005), extending the Eurasian Corridor past the Caucasus and into Central Asia (Matzke 1997; STRATFOR7 2005; USACC2 2006). Whether the countries choose to send oil through the BTC (STRATFOR8 2006; USACC3 2006) or the BTS (STRATFOR7 2005; USACC2 2006; Matzke 1997), a significant portion of Kazakh oil would be shipped via western pipelines, rather than Russian lines. At a glance, the BTC looks more convenient as it ships directly from the Mediterranean, rather requiring passage through the Straits, already congested with a multitude of other tankers. In the near term, however, this should not pose a problem as crude shipments from Supsa will follow a different route to the world market.

After the fall of the Soviet Union, the Balkans underwent a significant chain of events which resulted in NATO intervention and occupation. This area, which allows for secured transit along an ancient Roman E/W trade route known as the Via Egnatia, is even more important than Central Asia locations. A US-sponsored Albanian Macedonian Bulgarian Oil (AMBO) pipeline will transport CASC resources along this route from the Bulgarian port at Bourgas to its exit at Vlores in Albania (FreeRepublic 1998; Engdahl 2004, 238-245; Mahnovski 2003, 119; STRATFOR11 2000). The direction of AMBO runs nearly perpendicular to Russia’s N/S line from Bourgas to its exit at Alexandroupolis, Greece (STRATFOR1 2000; STRATFOR9 2003; STRATFOR4 2003). Consequently, Russia has lost another export option (Alexander’s Gas and Oil 2000; Deliso 2005; BBC News 2004). Once AMBO is completed, the Turkish Straits may very well see a sharp decline in Russian tanker traffic. In addition to supplying oil to European and world markets through Western pipelines in the Caucasus and Balkans, another major development in the Crimea is taking place.

Russia sends approximately 40% of its petroleum export to Europe, through its Druzhba line, which traverses Belorussia, Ukraine, Poland, Hungary, to Croatia’s port on the coast through its Adria line (Kalicki and Elkind 2005, 151). Russia’s export to Europe was challenged by a Western pipeline through the Black Sea port of Odessa to Brody in Ukraine (STRATFOR10 2004). The pipeline, however, was not used for a period of time, until the Russian government convinced Ukraine to reverse the flow to enable more Russian oil shipments into the Black Sea (STRATFOR11 2003). While Russia has been able to capitalize on the West’s temporary disuse of the line, that may change very soon (STRATFOR12 2005). As the AMBO and Odessa-Brody lines could impose on Russia’s current supply into the regions of the Crimea and the Balkans, the addition from Brody to Plock, in Poland, has the potential to further restrict Russia’s export routes to market (STRATFOR13 2005).

When observing the recent and current pipeline maneuvers within the Eurasian theatre, a pattern to outflank the Russian state comes into view. The E/W pattern of Western pipelines should prove to highlight this. However, pipelines are vulnerable, as states are also vulnerable to oil dependency. It has, therefore, been necessary to secure these routes militarily.

Military Ties, and Energy Security

As energy diversification has become more important since the 1990s, so has the increase in energy security. A combination of reasons (international terrorism, regional insurgency, foreign competition) requires states to physically protect their energy supply lines. Through individual bilateral agreements, the US has taken steps to do so. As well, NATO is fast becoming a valuable force in energy security (Gallis 2006, 5). US/NATO troops are in the three regions with sensitive western pipelines noted above, along the E/W corridor.

The 1990s Balkan conflict saw an expansion of NATO influence into the region. Following the countries involved in the AMBO pipeline, we see Albania and Macedonia participating in NATO’s Membership Action Plan, slated to become members in NATO’s sixth round of expansion (NATO1 2006). NATO currently has missions that are based in Albania (NATO2 2006), Kosovo (NATO3 2006), and Macedonia (NATO4 2006). Bulgaria, already a NATO member, has allowed a series of US bases within its territory, where joint NATO exercises have taken place (STRATFOR14 2006; RoB-MoD 2006).

Bulgaria’s access to the Black Sea makes it a very strategic ally in the E/W energy corridor (NATO5 2004). Two other littoral states on the Black Sea also would like closer ties with the West and the security of NATO: Ukraine with its Odessa-Brody to Plock pipeline; and Georgia with the West’s Caucasus pipelines.

Presently divided along its mountainous terrain, the Transcaucasus region is split with Russia to the north and the FSU to the south. The two countries bordering Russia in this region are Georgia and Azerbaijan. It is within these two geostrategic states that two very important pipelines run (with the BTC this includes Turkey) and where the US is attempting to stabilize the flow of oil (Cornell, Tsereteli and Socor 2005, 21,26,28). Both countries participate in  NATO’s Partnership for Peace program (Cornell et al. 2004, 70, 73). While Georgia has benefited from relations with NATO, it has also had bilateral military ties with the US (DoD 2006, 12, 14), particularly through US European Command (Klare 2004, 72). For Azerbaijan, in addition to training (ANS News 2004), the US has cooperated with the Azeris on Caspian security (USACC4 2006), and may be asked to resolve the Nagorno-Karabakh dispute (Blank 1994, 11), an issue under current Russian arbitration. To complete the solidification of the Caucasus, even Armenia, traditionally a Russian ally, has expressed interest in NATO (RFE/RL 2004). NATO has a keen interest in the Caucasus, as well as across the Caspian (NATO5 2004).

The Transcaspian region, being the link between Central Asia and the Caucasus, is a focus of the new Great Game. Moving across the Caspian, we also see NATO has given Central Asia particular attention (Cornell, Tsereteli and Socor 2005, 21,27). As the Caspian is a geopolitically important zone (Sokolsky and Charlick-Paley 1999, 81), NATO also has formed an individual partnership with Kazakhstan (NATO6 2005). Additionally, in 1999 US Central Command’s area of responsibility was expanded to include this vitally important region (Klare 2004, 4, 132).

It is possible now to see the significance of the Caucasian bridge between east and west. Countries in the south Caucasus have an important role to play in the transit of resources and the regions’ security (NATO8 2000). And it is in the Caucasus, should tensions escalate between the great powers, that a conflict could arise between the US and Russia.

Energy Security and Force Projection

Having outlined recent trends in energy security, through the routing of pipelines and the expansion of the US dominated security organization, it is possible to look at circumstances in which the US could be heading for a direct confrontation for power in the Transcaucasus. The Caspian sits at the heart of a zone of instability that Zbigniew Brzezinski has referred to as the “Eurasian Balkans” (1989, 123). The area “threatens to become a cauldron of ethnic conflict and great power rivalry” (Brzezinski 1989, 195); one in which American personnel could be deployed for combat operations (Klare 2004, 139). Whether the threat originates from within the region, or outside of the region, it is pipeline security that would bring troops into harm’s way.

For the West, security along the Caucasian energy routes has been a great concern. The three countries along the BTC have been fraught with secessionist movements: the Abkhazians, South Ossetians, and Adjarians in Georgia (Pravda.Ru1 2003); the Karabakh issue in Azerbaijan (MacDougall 1997, 96-97); and the Kurds in Turkey (STRATFOR15 2005). Mitigating these threats, the South Caucasus countries are working on safeguarding the energy routes (RGA1 2003). With our commitment to the region, through investment and security ties, the US is at an increased risk of being drawn into conflict (Oliker 2003, 225).

The RAND Corporation has concluded that conflict resulting in a US armed response is fairly likely in CASC (Oliker and Szayna 2003, 353). Other analysts concur that instability in the Caucasus is likely (Cornell et al. 2004, 12, 13). While it may be that conflict and response would most likely stem from regional terrorism (Oliker and Szayna 2003, 355), it is energy security that is the key driver (NIC 2000, 10), and it would be to secure energy supplies that would bring US military action (Oliker and Szayna 2003, 356-357; Klare 2004, 137). However, it is not necessarily internal disputes that will destabilize the region. Resembling south Eastern Europe, the “Eurasian Balkans” can assign much of its instability to outside sources.

Like the Great Game of the 1800s, great powers are maneuvering for control of key territory. It is this competition that could spell conflict due to escalating tension (Oliker 2003, 185, 240). In the case of pipelines, we can see how Russia’s energy dominance in the region has waned. From independence in the FSU, along with western investment, events could eventually lead Russia to rely on western supply lines (STRATFOR16 2003). It has already been suggested that they may utilize US backed pipelines to ship oil to the world market (RGA2 2004). This turn of events, of course, is not favorable to Russia (Blum 2002, 3).

In fact, Russia has been working hard to prevent this dependency and weakened influence in the region (Blagov 2006; Klare 2004, 154). It is clear that Russian leaders are upset by US and NATO’s growing military presence in the region (Klare 2004, 156). Some Russian analysts even believe that the only reason for expansion could be to prepare for a likely conflict (Pravda.Ru2 2004). Putin wants to put Western expansion in check and reassert influence through the Caucasian corridor (Torbakov 2004), and if need be by force (Oliker 2003, 187). Russia has a history of destabilizing the CASC region for its own purposes (MacDougall 1997, 96-97; STRATFOR17 2006). It has even been alleged that Russian intelligence has attempted to sabotage the US’s E/W corridor (Walsh 2003). If proven, Russian presence and possible attempts to reassert influence in the area would not be taken lightly by the US.

The US, with its increasing involvement in the region, would react sharply to renewed Russian expansion into the Caucasus (Blum 2001, 4). Since the recent western supported coups from the Black Sea to Central Asia, the region is increasingly dominated by western influence (STRATFOR18 2005). As such, there are calls from within the US to keep hegemony within the region (Brzezinski 1989, 30), and on energy security in particular (Kalicki and Goldwyn 2005, 12). To what ends the US has been willing to guarantee this is an intriguingly curious matter, as it has been claimed that the US has had its hand in the northern Caucasus.

Russia’s debacle around its Chechen province has spurred the lack of investor confidence in Russia’s energy pipelines running parallel to the Caucasus mountain range (STRATFOR19 1999). A Chechen official has even stated that the Chechen rebellion was meant to aid the completion of the BTC pipeline (Kazaz 2000). If so, the Chechen rebels may not be acting alone (Kober 2000, 7-8). Russia has made claims that the CIA has been present, and operating effectively, in the North Caucasus (Simonov and Oku 2005; Mosnews 2005), against Russia (The Jamestown Foundation 2006). At minimum, we know that the US is considering direct aid development to the Chechen breakaway province (STRATFOR20 2005).

US actions, seen as provocation, have threatened Russia. As STRATFOR has noted, “Brussels and Washington alike envision ultimately adding a major natural gas export line and massive rail network, all designed to pry the entire southern flank of the former Soviet Union off of Russia” (STRATFOR21 2005). Along with the US, the OSCE is of the mind that the Caucasus is an integral part to European stability (Blank 1995). Due to this provocation, Russia is likely to react (STRATFOR22 2005).

Russia is sending clear signals that it aims to maintain its presence on its southern periphery. From a Russian regional air defense system in Armenia to Russian gunboats on the Caspian, the militarization of the region is increasing (Shermatova 1998). One year ago, Russia took effort to show the US that it is still a force to be reckoned with, and may act militarily to reign in territory it feels is within its sphere of influence. Russian military exercises have been meant “to check the expanding U.S. geopolitical offensive into Russia’s near abroad by sending a message to Washington and reinvigorating the Russian military” (STRATFOR23 2005). Additionally, Russia recently announced renewed effort through its Collective Security Treaty Organization, in reaction to NATO’s “growing encirclement” (Bhadrakumar 2006). As a possible showdown nears, the potential for armed conflict with Russian forces increases (Larouche 1999), particularly since the aim seems to be Russia’s isolation.


With the world’s oil supply nearing its peak, the powerful industrialized nations have taken measures to protect their supplies. As time passes, and the geostrategic value of key locations increase exponentially, and the melding of energy security and national security have come to be solidified as parallel policies.

This has been an analysis of the capacity and willingness of the US to secure Western petroleum supplies from the Caspian. Its primary challenger, Russia, threatens this and has shown that transporting oil through Russian pipelines is not within the US’s strategic interests. With the increased militarization in the Transcaspian region, along the Eurasian corridor, and claims of foul play from both sides, it is hard to imagine the region escaping another episode of great power intervention and conflict. As the US military is being transformed in order to better operate in the Central Asia and the Caucasus region (Giragosian 2004, 65), and as its government has established its willingness to act preemptively (Bush 2002, 15), the prospects of conflict exploding beyond the Transcaucasus region is frightening.

If policy continues along the current course of “securitizing” (Engdahl 2004, 12) the E/W energy corridor at the exclusion of Russia, as Brzezinski has advocated, one can wonder if we may be edging toward war. The escalating tension in the region could amount to the events in the Balkans prior to WWI, where Russia is forced to react in order to maintain its great power status. While possible, more likely will be a regional conflict(s) played out by proxies (Klare 2004, 178-179). Equally likely, particularly as time progresses, would be sporadic low-intensity conflicts involving US personnel as Klare refers to:

The consequences are not hard to imagine, American forces will speed overseas to protect oil fields, pipelines, refineries, and tanker routes more and more frequently, and they will often encounter enraged local populations. The American military can help deter attacks on vital oil facilities and ensure the continuing flow of petroleum, but it can never guarantee that our rising demand for imported oil will be satisfied. All that is certain is that we will pay for it with an increasing sacrifice of blood (Klare 2004, 73).

Unfortunately, much of the above may be unknown to the public, and unless governments choose to work toward a viable alternative energy source, perhaps in cooperation, eventual conflict and loss will be inevitable, with the ostensible goal to secure national interest.


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About the Author

Aaron G. Sander

Aaron G. Sander attends Washington University in St. Louis, Missouri, USA and is currently studying at MGIMO in Moscow through SRAS. He is working on a Masters in International Affairs, with a focus on Russian foreign policy.

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