Ethan Steakley, MPP Staff Writer, Brief Policy Perspectives
The Caspian Sea is the world’s largest landlocked body of water and its fourth largest oil and natural gas reserve. In August 2018, after more than two decades of legal dispute, the five nations with Caspian coastline signed the Convention on the Legal Status of the Caspian Sea which granted the resource special status as an intercontinental body of water. The terms of this treaty may have important implications for U.S. security interests by unlocking the potential for Azerbaijani and Turkmen oil to relieve European dependence on Russian energy.
What’s in a Name?
Until 1991, the Caspian Sea was considered a lake by Iran and the Soviet Union. After the collapse of the Soviet Union, however, tensions emerged as the new nations of Azerbaijan, Kazakhstan, Russia, and Turkmenistan all claimed parts of the resource. Ensuing disagreement over whether the Caspian Sea should be classified as a lake or sea halted energy development in the area for decades. This disagreement stemmed from the different legal implications associated with classifying the body of water as a lake or sea. In accordance with the UN Law of the Sea, classification as a sea would have allowed countries without Caspian Sea coastline to seek access to its resources. Seabed territory would have been split proportionally amongst the five nations with Caspian coastline. Iran, which has the smallest coastline of the five nations, strongly opposed this.
If considered a lake, however, the water body would have been divided equally with the five littoral nations remaining firmly in control of the region’s 48 billion barrels of oil and nine trillion cubic meters of natural gas. Russia, the Sea’s foremost naval power, opposed this alternative because it would have resulted in the confinement of its Caspian fleet to the northwestern sector (Russia’s portion of the resource under these terms). Russia’s Caspian fleet has been crucial to its interest and gained particular prominence in 2015 when Russia launched 26 Kalibr NK (SS-N-30A) missiles into Syria.
Terms of the Treaty and Implications for Energy Development
Ultimately, the classification of the Caspian Sea as an intercontinental body of water means that the UN Law of the Sea will not apply and that the water body is now considered a “Common Maritime Zone” that any littoral nation can access. However, to achieve these terms and thereby sustain its naval presence in the region, Russia forfeited its power to veto the establishment of a proposed Trans-Caspian gas pipeline. This proposed pipeline would deliver oil and natural gas from Azerbaijan and Turkmenistan directly to Europe, providing a new way for Europe to reduce its heavy reliance on Russia for natural gas. Historically, Russia has used its power to veto this pipeline to wield significant political influence over Europe.
Thirty-eight percent of the European Union’s imports of natural gas came from Russia in 2017 and the figures are only increasing. The European Union now demands 193.9 billion cubic meters of natural gas imported from Russia, eight percent more than its previous record in 2016. Southeastern Europe is nearly 100 percent dependent on Russian energy. The Convention on the Legal Status of the Caspian Sea asserts that construction in the Caspian region is the business of the five littoral nations and only they can determine what sort of construction passes through their own territorial waters. Russia’s inability to block a pipeline passing through Azerbaijan’s or Turkmenistan’s territory creates an opportunity for these nations to capitalize on Europe’s demand for oil and natural gas.
U.S. Interests in the Region
The Convention on the Legal Status of the Caspian Sea is an important step in easing tension in the region and has paved the way for a Trans-Caspian pipeline, although Russia may still attempt to block the development of such a pipeline by citing environmental concerns. The U.S., which originally proposed the development of a Trans-Caspian pipeline in 1996, could support this development to promote a safer Europe. Azerbaijan and Turkmenistan have the available resources and now the capability to relieve some of Europe’s heavy dependence on Russia for energy and support U.S. security interests in the region.