Wednesday, December 21, 2011

Azerbaijan - the crucible for Eurasia's energy brew....

Azerbaijan - the crucible for Eurasia's energy brew....
By Robert M Cutler

MONTREAL - The geo-economics of Central Eurasian energy have continued along analytical lines previously outlined in this space. (See
A delicate dance of power, Asia Times Online, December 24, 2009.) The years 1993 through 2010 were a "macro-phase", representing the "emergence" of post-Cold War patterns of organization of international energy geo-economics in the different sub-regions of Eurasia (various European regions plus the various areas of Asia - such as Southwest, Central, Southeast, and so forth).

Some of those patterns have fallen away and others have survived. The various sub-regions have evolved practical overlapping interests and intersections with one another, and they variously cohere in different and changing ways. What follows seeks to tease out the characteristics of the years through which we are now beginning to live given the period just concluded in Eurasian energy geo-economics.

The current, new macro-phase of Caspian Sea basin energy geo-economics is a phase of "settling down" of patterns that have emerged since the end of the Soviet Union, but it is not only that. To express the character of the new phase, we need to use the technical term (in so-called "complex systems" theory) "autopoiesis", of which the Greek root means "self-creation" or "self-production".

Applied to systems analysis, acquiring the sense of "self-reproduction", it originated in biological science in the 1970s. [1] The concept has since been extended in application throughout the physical, natural, and social sciences.

The meaning and application of "autopoiesis" changes, however, with the field of knowledge to which it is applied, just as Jean Piaget pointed out was the case with Claude Levi-Strauss's "structuralism" in his survey of the approach from mathematics to anthropology. [2]

As applied to the analysis of complex systems that happen to be social systems, principally by the German sociologist Niklas Luhmann, complex systems are open to their environment, where events may trigger internal processes but cannot determine them. [3]

That is because a "complex system" is precisely a system in which the behavior cannot be predicted by observing the behavior of its parts. The canonical example of an autopoietic system is the living cell. Its opposite is an "allopoietic" system, of which the canonical example is an automobile factory: by looking into the workings of an automobile factory, it is possible precisely and correctly to predict what will be its output, based upon its input.

Thus over the past two decades, actions and policies by such external actors as Russia, China, the United States, and the European Union have created conditions promoting but unable to determine new patterns of adaptation and evolutionary change in the development of Caspian Sea basin energy resources.

Perhaps most notably, for example, Azerbaijan has diversified its potential export partners by continuing its energy trade with Russia and Turkey while exploring possibilities to deliver natural gas to Bulgaria and Romania. Minor trade with Iran also continues.

Azerbaijan has this month postponed until March 2012 the decision among export pipelines for the gas to be produced by the second-phase development of the Caspian Sea offshore Shah Deniz deposit ("Shah Deniz Two"). In addition to the Nabucco pipeline project and other such as the Trans-Adriatic Pipeline and Interconnector Turkey-Greece-Italy projects, a new late entrant proposed by the energy major BP called the South-East European Pipeline added uncertainty, and actually gave Baku more leeway in negotiating with other, previously proposed projects.

In addition, further confirmations of offshore gas deposits in Azerbaijan's sector of the Caspian Sea have only consolidated Baku's role as a continuing driver of Central Eurasian energy geo-economics.

For all the hyperbole about the present day being "unprecedented", it is historically accurate that the situation in Russian-Turkish relations has no precedent in the centuries of the two states' relations in whatever historical incarnation. In the longer perspective, the current international situation in Central Eurasian energy geo-economics is in fact unprecedented, in that neither the contemporary Russian nor the contemporary Turkish state is weak, and they have principally cooperative, rather than principally conflictual, relations. When we add to this, that China also is not a weak state, then the distinctive aspect of the present day is thrown into even greater relief.

However, the distinctiveness of the present era runs still deeper. In all these countries throughout Greater Central Asia, and including for that matter also the "Southern Tier" of Southwest, South, and Southeast Asia, the reason why these states are not weak is not just their possession of hydrocarbon energy resources, but also the ever-increasing literacy and education levels of their populations. These facts, together with their economic development, oblige their governments to seek ways to respond to the populations' political demands for economic well-being.

International energy geo-economics are the co-principal basis for the structuration and restructuration of the international system, along with the projection of military force and its threat. Russian President Dmitri Medvedev's recent comments let the cat out of the bag concerning Russian motives for using military force in Georgia, all but admitting that Russia instigated the conflict in order to prevent the North Atlantic Treaty Organization's eastward enlargement, as Tbilisi had consistently insisted was the case.

It may even be no accident that those comments preceded by only several days Russian Prime Minister Vladimir Putin's barely concealed threat to use military force to prevent the laying of a Turkmenistan-Azerbaijan gas pipeline across the floor of the Caspian Sea.

Meanwhile, Russia recently announced its intention to pursue further development of hydrocarbon resources in the sector of the Caspian Sea to which it claims subsea rights. In the past, it has developed fields jointly with Kazakhstan, and this development has necessarily entailed construction of pipelines underneath the waves. For this, Moscow has not felt it necessary to obtain the permission of other Caspian Sea littoral states or enact specially tailored ecological legislation, much less draft international ecological conventions as a precondition to the exploitation of its own offshore resources.

Earlier analysis in this space pointed out that the self-reproduction of complex systems runs through three phases. Emergence and autopoiesis have already been mentioned. The third is coherence. Thus the "macrophase" of autopoiesis in Central Eurasian energy geo-economics run through three microphases: the emergence of autopoiesis, the autopoiesis of autopoiesis, and the coherence of autopoiesis.

The result of the political and economic opposition between Russia and Turkmenistan will condition the further "self-reproduction" of Caspian Sea energy geo-economics, and Central Eurasian economic development in general, because it expresses an opposition between the traditional form of Machtpolitik ("power politics") and the new forms of multilateral cooperation.

From this it follows that we are now in the microphase of the emergence of autopoiesis. The evolution of Caspian Sea basin energy transmission networks is thus today entering a crucial phase. Azerbaijan is the crucible where questions concerning the future structure of the geo-economic relations in Eurasia (and also therefore crucial aspects of the general geopolitical structure of world politics) are today being resolved.

Azerbaijan's significance arises both from the volume of its natural energy resources and from its irreplaceable role as a bridge from Central Asia and the Caspian Sea basin to the Black Sea basin and Europe. Most recently, this significance has only been underlined by the implementation of a multivectoral energy export strategy.

A key question governing the oncoming evolution in Greater Eurasian energy geo-economics, therefore, is whether Turkmenistan will join Azerbaijan as a driver of specifically Euro-Caspian consolidation. It will do much to determine whether the "autopoiesis of the autopoiesis" sub-phase, which will begin later in the current decade (lasting provisionally from 2017 to 2023), confirms the dynamism of the sub-region's emergent autonomy.

In addition to the increased literacy and education of populations putting pressure on government performance domestically, a new geophysical element in the structuration and self-reproduction of regional international systems today is the pertinence not only of continental (ie land-based) but also littoral (ie sea-based) communications, including energy transmission.

This is evident in the new attention that the Caspian Sea and Black Sea littoral basins have gained, especially for energy transmission, over the past 20 years. The Mediterranean Sea has also acquired a higher profile separately over this period, particularly but not only for energy geo-economics between Europe and North Africa.

So the phase we are now about to enter, in the structuration of energy geo-economics in the Caspian Sea basin, is the emergence of the autopoiesis, or in terms used in previous year-end commentary here, the "bubbling-up" of the "settling down".

If the past is any guide, this phase will last for six years, from 2011 through 2016, with the whole "macro-phase" of autopoiesis/settling-down lasting through 2028. Then a meta-phase of coherence ("running deep") subdivided into three sub-phases, should follow, from 2029 to 2046. Coincidentally, the years around 2040 are independently projected by international relations analysts to be the next period of global-systemic transformation, which will undoubtedly be felt in the Caspian Sea basin and also in the geo-economics of the region.

Among the various Asian regions, South and Southeast Asia remain mainly unconnected with (Greater) Central Asia, although India is increasing its financial and industrial participation in Caspian Sea basin projects. It is likely that in coming decades, North Africa will be increasingly connected up with Europe, not only under the Mediterranean Sea but also through the Levant and Asia Minor.

For Europe, for example, the Southern Corridor strategy is the only option for avoiding a Russian chokehold on its own natural gas supply. Of the various cross-Black Sea projects, White Stream is the only strategic one (it would take Caspian Sea basin natural gas to the Georgian coast, then under the Black Sea directly to the EU, making landfall in Romania); yet for that reason there is greater difficulty to insure the tectonic shift in geo-economics that its realization would require.

This shift may be finally under way with the most recent reorientation of Turkmenistan's export policy towards a diversification of customer base. This re-orientation enhanced Azerbaijan's centrality, which makes it well placed to promote its own interests in such a context and also to participate in the shaping of the Euro-Caspian geo-economic space into the future.

Turkmenistan's increasing gas exports to China decrease the chances that Beijing's negotiations with Moscow over Russia's Siberian gas will ever successfully conclude, but Moscow seems to prefer this outcome over any possibility the Ashgabat sends gas under the Caspian Sea through the South Caucasus and Turkey to Europe.

Russia's attempt to convince Turkey to build a "Blue Stream Two" pipeline between the two countries under the Black Sea and its continuing bluff over the implausible South Stream pipeline project suggest as much.

Some form of the Southern Corridor will enter into service between Azerbaijan and Europe via Turkey well before the end of the decade. Russian leader Vladimir Putin's writing just a few weeks about his "Eurasian Union" project to re-integrate at least some Soviet successor states clearly indicates his preference for a presidential foreign policy with a strategic eastward rather than westward axis.

Any leverage Russia might use from its control over energy flows to Europe would not be limited to economic advantage but would extend to political compellence. Russia will continue to try to keep Europe boxed in as its own private cash cow for energy supplies. The Nord Stream project under the Baltic Sea to Germany is only the best-known prong in this strategy. [4]

1. Humberto Maturana and Francisco Varela, "Autopoiesis and Cognition: The Realization of the Living". Dordrecht: Reidel, 1980.
2. Jean Piaget, Structuralism (New York: Basic Books, 1970).
3. Niklas Luhmann, "The Autopoiesis of Social Systems," in Sociocybernetic Paradoxes: Observation, Control and Evolution of Self-Steering Systems, ed by F Geyer and J Van d. Zeuwen (London: Sage, 1986), pp 172-92.
4. Compellence - The situation in which an actor ceases or reverses actions because the costs imposed by other actors are or will soon outweigh the gains of those actions.

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