An Unlikely Peacemaker: Will The Pope Bring Resolution In The Caucasus?

Featured in The Daily Caller on April 27, 2016. To access the original article, click here.

Hope for peace may be coming to the Caucasus. The Holy See has announced Pope Francis has accepted the invitation of the Catholicos of all Armenians, His Holiness Karekin II, to visit Armenia in June. The pope is also scheduled to visit Georgia and Azerbaijan on September 30-October 2 at the invitation of the governments of those states.

The papal visits could not come at a more important time. On April 2, fighting in the Nagorno-Karabakh region of Azerbaijan broke out on the contact line between Azerbaijani and Armenian forces. Over 75 soldiers and many civilians were killed in the worst outbreak of violence since the two sides signed a ceasefire in 1994. The Minsk group, and two of its co-chairs France and the United States, failed to restore the peace. The only effective movement was from the third co-chair, Russia, acting in a unilateral capacity. This is unfortunate.

The Minsk group is the negotiating body charged by the international community to negotiate a peace between the two sides. While it is strong in international representation, its influence is weak in the region. The outline of that peace has been known — and accepted by the presidents of Azerbaijan and Armenia — since 2007. The “Madrid Principles” call for the following:

• Return of the territories surrounding Nagorno-Karabakh to Azerbaijani control;

• An interim status for Nagorno-Karabakh providing guarantees for security and self-governance;

• a corridor linking Armenia to Nagorno-Karabakh;

• future determination of the final legal status of Nagorno-Karabakh through a legally binding expression of will;

• the right of all internally displaced persons and refugees to return to their former places of residence; and

• international security guarantees that would include a peacekeeping operation.

Russia has considerable weight in the area. It owns a large, 5000-man military base in Armenia, and sells weapons to both Armenia and Azerbaijan. “Beyond all doubt, we are interested — maybe more than the other foreign partners of these two countries — in this conflict being settled as soon as possible,” said Russian foreign minister Sergei Lavrov.

Russia carries considerable baggage, however; primarily because of its support to separatists in neighboring Georgia, as well as in Moldova and Ukraine. The West should share the diplomatic lead, because Western interests are at stake. The area is a geopolitical tinderbox:  wedged between Turkey, Russia and Iran, this area could easily become a proxy war between any of these contending forces. Oil and gas pipelines running from Azerbaijan westwards bypassing both Russia and Iran offer Europe an alternative to the Russian energy monopoly. The countries are an easy day’s drive from Moscow, and sit astride the new Silk Road to Central Asia.

A lasting peace will not be easy to achieve. Negotiators have been arguing about various interpretations of the Madrid principles for almost a decade. The problem is a lack of mutual trust between the two sides. The current generation of fighters has inherited the conflict from their forbearers.

The current conflict began in 1988, in the ashes of the imploding Soviet Union. Fighting killed 30,000, and displaced almost a million, mostly Azerbaijanis. Both sides have suffered: Azerbaijan has lost 20 percent of its internationally recognized territory, and Armenia has lost the chance to share in the area’s economic development. The energy pipeline, whose most direct route from the Caspian would have taken it through Armenia, was routed through Georgia. Today, Georgia collects money from the State Oil Company of Azerbaijan in two forms: transit fees and tax revenues from the country’s largest taxpayer. By contrast, Armenia had to sell its energy distribution network to the Russians, to stay financially afloat.

The United States and France need to be more actively involved to protect the West’s interests in the peace process.  Lacking any movement from the White House or the Elysee Palace, however, a visit from the Supreme Pontiff of the Roman Catholic Church is a good second choice.

Creating Civil Wars is Russian Foreign Policy

Featured in Stars and Stripes on March 24, 2016. To access the original article, click here.

Russia is increasing its presence in Syria, while its efforts to find a diplomatic solution to the impasse grind to a halt. T-90 main battle tanks with explosive armor, only previously deployed in Chechnya and Ukraine, have been spotted outside of Aleppo. Reuters reports seven T-90s are at the Russian airfield in Latakia. Russia took over the main international airport in Damascus last year, and began airlifting tons of supplies, soldiers and armaments into the country, according to Business Insider. President Vladimir Putin confirmed in December that Russia is providing support to the Free Syrian Army.

“We support it from the air, as well as the Syrian army, we assist them with weapons, ammunition and provide material support,” he said.

This is part of a long pattern of Russian expansion of its military reach since the fall of the Soviet Union.

In March 1992, elements of the Russian 14th Army sided with separatists to oppose the central government of Moldova’s efforts to exert sovereignty on the ethnically Russian enclave of Transnistria. Russian officers trained the Transnistrian defense forces, and transferred weaponry to them. The separatist regime engaged in ethnic cleansing, leading to 25,000 Moldovans becoming internally displaced persons (IDPs). Russia then engineered a cease-fire patrolled by predominantly Russian peacekeepers, and the 14th Army remains on Transnistrian soil.

From 1991 to 1993, when Azerbaijan faced a war of occupation by neighboring Armenia, Russia put its entire weight behind pro-Russian Armenia against pro-Western Azerbaijan. This support allowed Armenia to occupy the Nagorno-Karabakh region as well as seven surrounding regions of Azerbaijan. During the war, in February 1992, Russia’s 366th Motorized Rifle Regiment surrounded the Azerbaijani town of Khojaly, while Armenians massacred the residents. Moscow said the Russians who had been involved in this action were “volunteers.”

By 1993, the Russian 7th Army was already protecting Armenia’s borders. Russia then arranged to be a co-chair of the OSCE Minsk Group, which has mediated Armenian-Azerbaijani peace talks for decades without any results. Azerbaijan houses approximately 600,000-1,000,000 IDPs expelled from its occupied regions. For Russia, however, the continuing unrest provides an excuse for maintaining 3,000 troops at the 102nd Military Base, north of Yerevan, Armenia.

Russian forces supported Abkhazian separatists in their fight with the Georgian government in 1992. Human Rights Watch reported, “The conflict in Abkhazia was heightened by the involvement of Russia, mostly on the Abkhaz side, especially during the war’s initial stages. … Russian arms found their way into Abkhaz hands, Russian planes bombed civilian targets in Georgian-controlled territory, Russian military vessels, manned by supporters of the Abkhaz side, were made available to shell Georgian-held Sukhumi, and at least a handful of Russian-trained and Russian-paid fighters defended Abkhaz territory in Tkvarcheli.”

Human Rights Watch later interviewed a group of six armed Russians in Abkhazia who admitted they had been brought to the conflict area on Russian helicopters, were all former KGB and Spetznaz forces, had been fighting Georgian troops, had previously been fighting in Transnistria, and had begun in Moscow as a group of 30 “experienced, disciplined, Russian professionals.” They then denied being members of Russian government forces, but said they were “independent, patriotic forces.” (It was one of the earliest examples of the “little green men” made famous in the 2014 Russian seizure of Crimea.) The result: a cease-fire patrolled by Russian peacekeepers.

This led to devastating results in 2008, when the Russian army intervened in Abkhazia and Ossetia to “restore the peace.” Georgia cares for approximately 300,000 IDPs. Russia is one of three parties involved in the Geneva peace talks. Today, Russian troops remain in these separatist areas, on soil recognized by the international community as Georgian, without the permission of the Georgian government. Russia also recognizes these areas as independent states.

In 2014, Russian forces stationed at the Russian naval station in Crimea surged out of their base in uniforms without insignia, to forcibly evict Ukrainian forces from their own territory. Russian “volunteers” have fought on the side of separatists in eastern Ukraine, and these separatists are armed with Russian tanks, anti-aircraft missiles and personnel carriers. Crater analysis shows that mortar rounds and missiles fired in support of the separatists have their origins inside Russia itself.

Russia has now annexed Crimea, and called for diplomacy to solve the crisis it created in eastern Ukraine. It is a cosponsor of the Minsk talks. Today, Russian troops are stationed in Crimea, and Putin has threatened to introduce Russian troops overtly into eastern Ukraine to “protect” the citizenry.

The pattern is clear: Russian military support for a side in a civil war contributes to unrest, and then Russian diplomatic efforts keep the conflict simmering. The continuing problems justify maintaining a Russian troop presence.

In all these instances, Russian military interventions and/or peace efforts have led to a continued expansion of Russian power and influence. America and its allies in Syria need to learn from history, and not just repeat it.

James J. Coyle, director of Chapman University’s Center for Global Education, is former director of Middle East studies at the U.S. Army War College.

Russian Disinformation Alienates the West from Russian Periphery

Published by the Atlantic Council on July 20, 2015, and featured in Newsweek as “How Putin Keeps His Neighbors On Edge,”  and in the Orange County Register as "Chapman's James Coyle: How Putin spins events, issues to keep Russia's independent neighbors in line"on September 13, 2015. To access the original article, click here.

The Russian Army has released a photo of a Ukrainian tank decorated with a swastika, yet the original Reuters photograph shows no such emblem. Russia also released a photo of a Ukrainian soldier covered in Nazi tattoos, but that picture was actually taken in 2005, inside a Russian prison. Europe is revolted by any reminders of its Nazi past, which is why Russia plays up false claims that Kyiv is a product of that tradition. At a time when Ukraine and other former Soviet republics need worldwide support, Russia continues its media barrage to alienate these countries from their natural allies in the West.

The stakes are enormous. In 1997, former US National Security Advisor Zbigniew Brzezinski identified Azerbaijan, Iran, South Korea, Turkey, and Ukraine as "critically important geopolitical pivots" in The Grand Chessboard. Without Ukraine, he writes, Russia ceases to be a Eurasian empire. Similarly important is Azerbaijan, which Brzezinski calls the cork in the bottle containing the riches of the Caspian Sea Basin and Central Asia.

Russia continues a strategy of keeping its former republics separate and reliant on Moscow. It opposed construction of the Baku-Tbilisi-Ceyhan pipeline until a Russian company was included in the consortium. When Azerbaijan, Georgia, and Turkey announced their willingness to build the Nabucco natural gas pipeline, Russia retaliated by promoting the rival South Stream pipeline. As Ukraine pulls further away from the Russian orbit, Moscow supports the creation of Turkish Stream to bypass Ukraine as a transit state. When Azerbaijan and Turkmenistan announced their intention to build a Trans-Caspian pipeline, Moscow raised environmental concerns—while ignoring similar environmental issues surrounding Russian platforms in the northern Caspian.

There are differences in how Moscow uses its information operations in the various countries. According to the Monterey Institute's Ruben Gzirian, "Russia targets political and business elites, whereas it targets ethnic Russians among the general populations of Ukraine, Moldova, and the Baltics." Such targeting furthers the Putin doctrine justifying Russian intervention to protect Russian-speakers, no matter where they are. As an example, in May 2014 Russian Deputy Prime Minister Dmitry Rogozin played up to sympathizers in Transnistria and Ukraine when he tweeted future plans to visit the area on board a TU-160—Russia's largest strategic bomber.

But Russian disinformation isn't the only thing that alienates the Russian periphery from the West. A recent spate of press reports has detailed Azerbaijan's detention of Radio Free Europe/Radio Liberty reporter Khadija Ismayilova. Reports on Azerbaijan's dire human rights situation often give short shrift to the country's rapid economic transformation. According to the World Bank, about half of all Azeris lived in poverty in the early 2000s; by 2013, that ratio had fallen to 5 percent. This remarkable feat took place while roughly 600,000 people—about 7 percent of the population—remain displaced because of Armenia's occupation of Nagorno-Karabakh and surrounding regions.

While Western human rights organizations focus negative attention on Azerbaijan, Russia has been offering an olive branch. Russian President Vladimir Putin recently criticized Russian TV for not sufficiently covering the 2015 European Games in Baku. Putin attended the games himself, and used the occasion to meet with President Ilham Aliyev. The timing was no coincidence.

Ukraine and Azerbaijan have a lot in common with Moscow: many Russian speakers, a shared past in the former Soviet Union, and transportation and communication links through the old imperial center. What keeps these countries out of the Russian orbit is their desire for sovereignty. Russia or its allies already control large swaths of territory in both those states. Those occupied lands house the Russian Black Sea Naval Fleet, and justify a major Russian Air Force base in Armenia. The United States and the European Union must give the independence of Ukraine and Azerbaijan the highest priority. If Russia manages to convince the West to avoid former Soviet states as illiberal entities, the only winner on the global chessboard will be Putin.

In February, Ukrainian President Petro Poroshenko told US Secretary of State John Kerry that Russian actions are an affront to Ukrainian sovereignty, and that he appreciates US support of Ukrainian independence. Meanwhile, Aliyev emphasizes the territorial integrity and sovereignty of Azerbaijan, a country former Secretary of State Hillary Clinton called a strategic partner of the United States.

Indeed, partnerships are there for the taking. The real questions are whether Kyiv can maintain its country's unity and pro-Western orientation, and if Azerbaijan will partner with the West—or the Kremlin—or try to dance with both.

James J. Coyle is a Research Fellow at the Atlantic Council and the Director of Global Education at Chapman University in Orange, CA.

James J. Coyle: We don't have a strategy yet

Published in the Orange County Register on September 10, 2014. To access the original article, click here.

Two and a half years after President Barack Obama ended American military involvement in Iraq, the United States has resumed “limited” air operations in that country. American war planes bombed forces of the Islamic State threatening the Kurdish enclave in the north. The White House is at a loss to explain this tacit admission that the Obama administration’s “success” in withdrawing American troops did not protect American interests in the area.

The President does not know the next step to take. Speaking at a news conference, he admitted “We don’t have a strategy yet.” The lack of planning is a surprise, as a former Pentagon official told Fox news that the President had been given detailed and specific intelligence about the rise of the Islamic state on multiple occasions, and for over a year. The former official described the information as strong and “granular” in detail.

The President’s words may well be his foreign policy epithet. Without considering the potential outcome, the United States stood on the side line when the Muslim Brotherhood replaced decades-old allies in Tunisia and Egypt. Our air force flew ninety percent of the sorties over Libya that resulted in the overthrow of the Gadhafi regime, the eventual murder of our Ambassador, and the current occupation of the US embassy in Tripoli.

Syria is in flames with 150,000 dead in their civil war. That is the equivalent to the death count of 50 World Trade Centers, or 75 Pearl Harbors. The only local group strong enough to confront the Islamic State is the government of Syria, the overthrow of which the US is committed. Iraq is teetering on the edge of a total breakup. In Afghanistan, the Taliban is waiting for America’s withdrawal to retake the country, while the Afghan government cannot choose a successor. Russia has annexed the Crimea and has invaded eastern Ukraine with over 1,000 troops. There is shooting on the cease fire line between Armenia and Azerbaijan. China is making territorial claims in the South China Sea that puts it in conflict with American allies. An ebola outbreak in Africa has infected 3,000 people, killing half. The World Health Organization says the world response to the illness has been inadequate, and the epidemic could spread. Boko Haram is seizing territory in northern Nigeria.

American policy is adrift. The United States remains the sole superpower in the world, with more military and economic might than any other country. For some reason, however, the White House is reacting to events instead of taking charge of them.

The creation of a national security strategy is a simple process to explain, and a difficult process to implement. One must identify American interests in the area. If there are no interests, the strategy should dictate that the United States steer clear. If there are interests, however, the next step is to identify at what point America will employ its levers of national power: military, political, economic, and ideological. The government needs to be clear on the ends, ways and means to be employed to safeguard the U.S.’s interests. They must determine that implementation of that strategy has an acceptable cost, and that the plan is sufficiently robust that it will actually achieve US objectives. The Obama administration published a strategy in 2010. It is time for another, one that the White House can use to protect our interests.

James J. Coyle is the Director of Global Education at Chapman University, and the executive director of the Caspian Research Institute, an online think tank.

James J. Coyle: Iran's threats to American interests

Published in the Orange County Register on February 26, 2014. To access the original article, click here.

As Iran receives limited sanctions relief in return for a six-month moratorium on the enrichment of uranium to 20 percent, pundits are alive with speculation that this is the precursor to restoring relations with the Islamic Republic. Ali Khamenei remains the “supreme leader” and Iranian president Hassan Rouhani remains the regime insider who bragged of his prior expansion of the Iranian nuclear program without incurring international sanctions.

That means recent history is full of hurdles that need to be overcome.

Despite the nuclear accord, Iranian activities continue to threaten the United States and its allies. The U.S. Institute of Peace reports Iran has developed the Sejil-2 ballistic missile that can deliver a payload 1,500 miles and a top Iranian military commander bragged that Iran has developed drones with a range of 1,250 miles. These activities threaten U.S. allies such as Azerbaijan, Israel and Saudi Arabia. A 2012 Pentagon report estimated that Iranian missiles could reach U.S. shores by 2015.

Iranian-supplied weapons have already killed Americans, if WikiLeaks is to be believed. U.S. officials raised to Armenian President Serzh Sargsyan that his country sold rockets and machine guns to Iran in 2003, which then provided them to Iraqi Shiite militants to kill American soldiers in 2007. Sargsyan denied any transfer had occurred. However, a Western diplomat said the U.S. had multiple streams of intelligence connecting the Armenian arms shipment to Iran with the deaths of the U.S. soldiers.

Iran has also used ad hoc terrorist groups to further their interests. In Washington, D.C., a guard at an Iranian diplomatic mission assassinated an exile leader in 1980. Years later, in 2011, the FBI and DEA uncovered a plot to assassinate the Saudi Arabian ambassador to the U.S. and to bomb the Israeli embassy.

Azerbaijan, an ally that has supported the United States in both Iraq and Afghanistan, uncovered a number of Iranian plots. In 2007, the government convicted 15 people on charges of espionage in favor of Iran. In February 2012, Azerbaijani authorities arrested a second group who planned to kill two teachers at a Jewish school in the country's capital, Baku. In March, the security forces arrested 22 people hired by Iran to attack the U.S. and Israeli embassies, as well as Western companies. Authorities seized assault rifles, grenades, ammunition and explosives.

Iran has supported Armenia in its conflict against predominantly Muslim – but secular – Azerbaijan as a means of avoiding economic international sanctions. According to American scholar Michael Rubin, in 2012 Bank Mellat, a sanctioned Iranian bank, was operating in the Armenian capital of Yerevan and Iranian businesses dotted the city.

Iran continues to back the Lebanese terror group, Hezbollah, which threatens Israel's northern border and supports the bloody Syrian regime of Bashar al-Assad. Argentinean prosecutors claim that Hezbollah has operated outside of the Middle East, alleging involvement in the 1992 and 1994 bombings in Buenos Aires. Israeli authorities report a February 2012 arrest in Thailand of Iranian citizens who were planning to bomb Israeli citizens. While Rouhani and Iranian Foreign Minister Mohammad Javad Zarif have dropped former president Mahmoud Ahmadinejad's anti-Israeli rhetoric, there has been no lessening in Iran's opposition to the existence of Israel.

One is encouraged by the efforts to overcome the decades of mistrust. There are a number of issues that need to be resolved, however, before Iran can be welcomed back into the comity of nations.

James J. Coyle is the director of Global Education at Chapman University and is the chair of the Eurasian committee of the Pacific Council on International Policy.

Azerbaijan: Kuwait of the Caucasus?

James J. Coyle: Azerbaijan, Kuwait of the Caucasus?

 

By JAMES J. COYLE / For the Register

Published: Jan. 9, 2014 Updated: 2:28 p.m.

It was the coldest January in a century. Throughout Italy and Southern Europe, people shivered in their homes. The year was 2009 and Russia had turned off the flow of natural gas over a price dispute with Ukraine. It was the second time in three years the Russians had closed the spigot. The European Union decided something needed to be done to protect their citizenry. Europe imports one third of its natural gas from Russia and the Russians had shown themselves to be unreliable suppliers.

The EU decided to support a pipeline to bring natural gas from the Caspian Sea to Europe, avoiding Russian territory and Russian infrastructure. This project was declared to be of community-wide importance, and was deemed eligible for EU grants to help with the construction costs. The original pipeline, named Nabucco after Verdi’s opera, was supposed to run from Baku, Azerbaijan to Baumgarten, Austria. It would carry 33 billion cubic meters, or bcm, per year. Azerbaijan pledged 10 billion bcm and encouraged the EU to find additional sources.
The Russians were alarmed: while Nabucco would only supply approximately 5 percent of Europe’s gas needs, it would break Gazprom’s monopoly on delivering pipeline gas from the East. It would gradually move Russia more to the edge of European energy concerns, instead of keeping it front and center. To counter this, Gazprom announced its own, rival pipeline project: South Stream. Designed to carry 63 bcm per annum, South Stream would take gas that had previously transited Ukraine and send it directly to Europe under the Black Sea. The EU refused to grant it the status of a community project, because it did not diversify the source away from Russia.
When the EU proved unable to make Nabucco work, Azerbaijan and Turkey decided to build the Trans Anatolian Pipeline. From 2018 on, this line is designed to carry 16 bcm per year of natural gas from Azerbaijan’s Shah Deniz gas field, one of the largest of its kind in the world. Six billion cubic meters will be offloaded in Turkey, leaving 10 bcm for delivery to Europe. TANAP will link up with the Trans Adriatic Pipeline at the Turkish border and the natural gas will be delivered to Greece and Italy. Eventually, as more Caspian gas becomes available, TANAP can double its capacity. Over the longer term,TANAP/TAP could supply 20 percent of Europe’s energy demand. A group of companies led by British Petroleum has signed a $45 billion deal to expand the gas field and construct the pipelines. The big question is whether TANAP/TAP can be built since Russia has already begun construction of the much larger South Stream to service the same markets?
On Dec. 4, the executive arm of the EU, the European Commission, announced that South Stream would not be able to operate on EU territory unless it complies with the EU’s Third Energy Package. This is a series of rules and regulations designed to increase competition in the European energy sector. The major impact on Russia: the package states that an energy supplier must “unbundle” itself from the energy distribution system. In other words, if Gazprom wished to sell natural gas to Europe, it could not own the pipeline system that would deliver it.
When the package was originally announced, Russian President Vladimir Putin had cried foul. He said the Third Energy Package was theft, a European attempt to seize Russian strategic assets. Gazprom decided to ignore the package and signed bilateral agreements with seven European transit countries (six EU members and Serbia, an EU-aspirant).
A European Commission official stated that if negotiations began immediately, it would take at least two years for the community to reach an agreement with Russia over implementation of the package. In the interim, the bilateral agreements that Russia had negotiated were all in breach of EU law. “We have told these states that they are under the obligation, either coming from the EU treaties, or from the Energy Community treaty, that they have to ask for re-negotiation with Russia, to bring the intergovernmental agreements in line with EU law,” said Klaus-Dieter Borchardt, director for energy markets at the European Commission.
The objection is not only to Gazprom’s failure to “unbundle” its ownership of the pipeline. The project also fails to meet the requirement that any pipeline system must grant access to other suppliers, and there are unresolved questions over how the price of the gas will be determined.
Dmitry Medvedev, Russia’s prime minister, took the position that the bilateral treaties were governed by international law, which trumped EU law. EU energy spokesperson Marlene Holzner responded that any member state who did not renegotiate with the Russians would be subject to penalties for infringement of EU regulations. The pipeline could be built, and Russia could fill it with gas, but no European state would be able to purchase it. Holzner added that, in her opinion, no bank would be interested in financing a project based on such legal uncertainty.
Given the complexities of the issues involved, southern European hopes are now squarely on the TANAP/TAP Southern Energy Corridor. British Foreign Secretary William Hague commented, “It will increase our energy security by providing an additional route and a new source for gas supplies to Europe. There is also the potential to expand the southern corridor to reach major gas suppliers in the Middle East, which could bring huge additional benefits.” BP’s vice president, Al Cook, concurred, noting that the pipelines were being built to accommodate gas from other suppliers.
Thus, European energy independence begins with the delivery of Azerbaijani natural gas.
James J. Coyle is a professor and the director of Global Education at Chapman University and chair of the Eurasian Committee of the Pacific Council on International Policy.

Steps Toward Peace in the Caucasus

James J. Coyle: Steps toward peace in the Caucasus

By JAMES J. COYLE / For the Register

Published: Nov. 27, 2013 Updated: Dec. 2, 2013 9:27 a.m.

GETTY IMAGES FILE PHOTO

Last week, the presidents of Armenia and Azerbaijan met in Vienna for the first time in almost two years.

The summit was important, because these two countries have been involved in a “frozen conflict” for two decades, ever since signing a ceasefire in 1994.

The discussions were held under the auspices of the Minsk Group, created by the Organization for Security and Cooperation in Europe and co-chaired by the United States, Russia and France. At the conclusion, the co-chairs issued a statement that the presidents had:

• Agreed to advance negotiations toward a peaceful settlement;

• Instructed their foreign ministers to cooperate with the co-chairs to build on the work done to date, with the aim of intensifying the peace process; and,

• Agreed to meet again in the months ahead.

In addition, the co-chairs agreed to hold working sessions in Kiev on Dec. 5-6, on the margins of an OSCE Ministerial meeting.

For many Armenians in Southern California with families and friends in the affected area, progress in the talks should be welcome news. Armenia's borders with both Turkey and Azerbaijan remain closed because of this conflict.

Today, Armenia is the poorest country in the South Caucasus and its population has decreased 40 percent since the conflict began in 1988. A settlement to the conflict holds the promise of greater prosperity in that country.

Azerbaijan has also felt the effects. Armenia occupies approximately 20 percent of what is internationally recognized as Azerbaijani territory, in defiance of four UN Security Council resolutions. This has resulted in the displacement of one million Azerbaijanis from their homes.

The United States also has interests in the area – domestically and internationally.

Domestically, Armenians have been immigrating to the United States since the 1890s; today, 1.4 million Americans can trace their heritage to Armenia. They have a great interest in what happens in their ancestral homeland.

Internationally, America's major ally in the Middle East, Israel, gets 60 percent of its oil imports from Azerbaijan. European allies, including Greece and Italy, are patiently awaiting the construction of the Trans Anatolian Pipeline that will bring desperately needed natural gas from Azerbaijan to their countries.

A renewal of the fighting could threaten these important economic lifelines. In addition, approximately 40 percent of all air freight for our troops in Afghanistan transit Azerbaijan.

This route, called the Northern Distribution Network, will be crucial in the withdrawal of our troops from Afghanistan. Azerbaijani troops have fought side by side with Americans in both Iraq and Afghanistan.

Putin leaves Azerbaijan With Limited Improvements

Russian President Vladimir Putin traveled to Azerbaijan in August 2013 to enhance Russian interests in the near abroad.  He was accompanied by six key ministers, including the Russian Minister of Defense, Sergei Shoigu and Minister of Foreign Affairs Sergey Lavrov.

The visit was surrounded by rumors.  Leonid Gusev, senior research fellow of the Institute of International Studies, Moscow State Institute of International Relations, focused on the inclusion of the defense minister.  "Why take Shoigu with you?  Because recently there was information that Azerbaijan and Turkey will create a unified army, and Georgia may join as well.  I think that the leadership of Russia wants to find out what it is, because you understand that Turkey is a NATO country."  Gusev's sources were remarks from Azerbaijani parliamentarian Zakhid Orudzh and Georgian Defense Minister Irakli Alasania.

Gusev's imaginings were quickly dismissed by Azerbaijani parliamentarian and political scientist Rasim Musabekov.  "There are issues in the military area that should be discussed," he said.  "It is not just military cooperation.  It is very important to consider issues that may affect Azerbaijan, such as the situation on the Caspian Sea where military activity has been gaining momentum; there is also the Iranian context, Middle East events and, most importantly, the settlement of the Nagorno-Karabakh conflict.  It is difficult to imagine the settlement of this conflict without Russia."

The Armenians also reacted negatively, convinced that the meeting would result in closer ties between Russia and Azerbaijan.  "Naturally, any bilateral relationship between our enemy and partner states cannot fail to worry us," said the chairman of the Armenian parliamentary committee on foreign relations.  "Azerbaijan is ready to exploit its relationship with any state for painting a distorted picture of its actions in the region."  Similarly, Armenian opposition leaders sounded the alarm.  Armenian National Congress spokesman Vladimir Karapetian said, "These are very worrisome developments for Armenia.  We must be prepared for further developments, especially in the Nagorno-Karabakh peace process."  Gior Manoyan of the Dashnaks criticized the Russian president, stating the visit was "not an ally's behavior."

The Armenians need not have worried.  Azerbaijani president Ilham Aliyev tried to enlist Putin's cooperation on the issue.  "Azerbaijan would like to see Russia as a referee," he said.  "The occupation of Azerbaijani land has continued for more than two decades.  What could be demolished has been demolished.  Twenty percent of our territory is occupied; the U.N. resolutions remain on paper."  In reply, Putin responded with a bland statement that any solution would have to be political.  "I want to stress that Russia is actively facilitating the search for the fastest conflict resolution, which is only attainable by peaceful means," he said.

Relations between the two countries have been strained over the past year.  Against Russia's wishes, Baku cancelled its use of the Baku-Novorossysk pipeline because it was uneconomical, and Russia cancelled its lease of the Gabala radar station rather than pay the rent Azerbaijan was demanding.  Despite these setbacks, Russian Foreign Minister Lavrov insisted the relationship had been neither affected nor deteriorated. 

Emphasizing the good relations between the two countries, President Aliyev highlighted the growing defense cooperation between them.  He said that Azerbaijan was among the top buyers of Russian arms and other military equipment, and the defense relationship was already worth $4 billion dollars.  This defense cooperation was highlighted by a visit of the Russian warship the Dagestan.

Missing from the summit’s summary were any agreements for Azerbaijan to join in Russian initiatives such as the Commonwealth of Independent States Free Trade Area (CISFTA), Eurasian Economic community (EurAsEC), or the Collective Security Treaty Organization (CSTAO-Azerbaijan allowed its membership to lapse in 1999)

The two presidents discussed the legal status of the Caspian Sea, a long-running dispute with ramifications for the underwater deposits of oil and gas there.    Putin described the discussion to reporters:  “During the talks we paid a lot of attention to the issues of the Caspian region,” reported Radio Liberty.  “There really are a very great number of unresolved problems, including security, border delimitation, preservation of biological diversity of the Caspian Sea, etc.  We have a vested interest in seeing all of these issues solved.”  In the past, Russia has used these issues to demand a veto over Azerbaijani proposals to build a Trans Caspian Pipeline.  No progress appears to have been made on these issues.

There were some positive results from the meeting.  The Russkiy Mir Foundation reported that a document on cooperation between emergency ministries was signed, as well as intergovernmental agreements on cooperation in air search and rescue, on the construction of a road bridge over the river that marks the border between the two countries, and a humanitarian cooperation program.

More importantly, Rosneft chief Igor Sechin signed an agreement with State Oil Company of the Azerbaijan Republic (SOCAR) cheif Rovnag Abdullaev.  The two CEOs pledged to cooperate on unspecified joint projects.  Sechin told reporters these would include "reciprocal deliveries, swap operations and opportunities for the use of joint infrastructure."  Rosneft subsequently released a statement that, "The companies agreed to cooperate in marketing and trading operations for hydrocarbons and petroleum products as well as jointly operate certain infrastructure facilities, such as pipelines and terminals."

In the end, both Azerbaijan and Russia emphasized the agreements that were signed, and labeled the visit a success.  On balance, however, when one balances what was achieved with the issues that were left unresolved, one can only conclude that Putin left empty-handed.  The summit meeting, Putin's first visit to Baku in seven years, was a lost opportunity.

Still a Future for Nabucco?

The vote is in, and the Shah Deniz 2 Consortium has chosen to link the Trans Anatolian Pipeline (TANAP) to the Trans Adriatic Pipeline (TAP) instead of Nabucco West.  Natural gas flowing from the Shah Deniz 2 field will feed the industries of Greece and Italy, instead of Austria and Central Europe.  Conventional wisdom is that the Nabucco project is dead.  "The Nabucco project is over for us," said Gerhard Roiss, CEO of OMV, the Austrian leader of the Nabucco consortium.

The funeral oration may be premature, however.  Nabucco has not disbanded.  Upon learning of its loss of the Shah Deniz 2 gas, Nabucco announced it was continuing to look for new sources for its project, justifying its continuation on the European energy market's need for diversification.  "We remain convinced that the Nabucco route offers the only possibility to answer these needs," the company said.  "Nabucco is confident of developing opportunities based on alternative gas sources."  Construction of the long-debated Trans Caspian Pipeline would bring gas toward Europe in quantities that far exceed TAP's projected initial capacity of 6 bcm per year.

One of the major members of the Shah Deniz 2 consortium, the State Oil Company of the Azerbaijan Republic (SOCAR), also has held out hope for a future Nabucco role.  Rovnag Abdullayev, president of SOCAR, noted that Shah Deniz 2 is not the only offshore gas field the company is developing.  As additional fields come on line, such as ACG Deep, Absheron, Umid and Shafag-Asiman, "We clearly see the Nabucco pipeline corridor as the natural market for our future volumes of gas...We expect that the ability of the southern corridor to bring new sources of supply to European markets will extend beyond the immediate areas transited by TAP."

The European Commission has also not totally abandoned its favorite pipeline project.  Despite statements welcoming the choice of TAP, the commission issued a statement holding out a lifeline to Nabucco.  "In principle, gas from the Caspian Sea could be delivered to the EU both to Baumgarten/Vienna (Nabucco West) or to Italy (TAP)," it said.

An open question remains:  will Europe need all this pipeline gas?  With TANAP/TAP poised to bring gas from the Caspian, North and South Stream scheduled to export Russian gas, the development of shale gas, LNG coming from Algeria...it may be that Nabucco's future will be hostage to the pending glut in natural gas supplies.

Shah Deniz Consortium choose Trans Adriatic Pipeline

After two years of deliberation, the Shah Deniz Consortium (BP, Statoil, Socar, Lukoil, Nico, Total ) has decided to connect the Trans Anatolian Pipeline (TANAP) to the proposed Trans Adriatic Pipeline (TAP), instead of the longer Nabucco West pipeline.  TAP will carry Caspian-origin natural gas through Greece and Albania to Italy.  Nabucco West had planned to carry the gas northward to Baumgarten, Austria.  Speaking on behalf of the consortium, BP's regional director Gordon Birrell made the announcement to journalists in Baku on June 28, 2013.

The decision appears to have been made based on a number of factors such as  lower construction costs because of a shorter pipeline route, and  higher gas prices in Southern Italy.  Andrew Neff, an analyst with the Moscow market research firm IHS, said that a tipping point may have been the State Oil Company of Azerbaijan (SOCAR)'s purchase one week earlier of a majority stake in the Greek gas company Desfa.  "This gives Azerbaijan a direct supply relationship with Greece," he commented.

The government of the United States welcomed the announcement.  A statement issued by the US State Department called the choice "another important step in the process of advancing Europe's energy security and promoting competition in the supply of energy resources."  European Commission President Jose Manuel Barroso also expressed pleasure.  "This is a shared success for Europe and a milestone in strengthening the energy security of our Union," he stated.

Western support has little to do with the amount of gas that will be delivered to Europe.  At 6 bcm per year, TAP will only carry about 1% of European gas consumption.  The financial rating company Fitch Ratings commented that the limited capacity meant TAP would probably not contribute any downward pressure on gas prices.

Rather, the importance of TAP, and the TANAP line to which it will be connected, is that it challenges Russia's hold on natural gas exports to Europe.  US Heritage Foundation analyst Ariel Cohen called TAP an achievement, especially for Azerbaijan.  "This is the first gas pipeline from the former Soviet Union that is not controlled by Russia," he said.  "This is a precedent and a model for Europe to get gas by pipelines from the Caspian region or from other regions without the Russian control."

A country that will benefit substantially from the new pipeline is economically beleaguered Greece.  Prime Minister Antonis Samaras said the decision to use his nation as a transit zone was a vote of confidence in his country.  Samaras issued a statement that TAP would invest 1.5 billion euros (approximately $2 billion dollars) in Greece to construct the pipeline, would generate 2,000 direct jobs, and an additional 10,000 jobs in companies that would be supporting the project.  "After the TAP announcement, the 'disaster scenarios' for Greece and its exit from the euro definitely stop," he said.

Possible Political Implications of Russian decision to cancel Baku-Novorossiysk pipeline agreement

Russia is terminating the Northern Route Export Pipeline, running from Baku, Azerbaijan to Novorossiysk, Russia.  This oil pipeline, which stretches 1,330 kilometers (830 miles) at one time was considered an important national interest for both countries.  Today, it is considered a pipeline to be filled only if the economic conditions warrant it.

In 1994, when the government of Azerbaijan signed the "Contract of the Century" with Western oil companies to exploit offshore energy deposits, the United States opposed any proposal that would give Russia control over the export route.  But in February 1995, at a confidential meeting with the heads of the State Oil Company of the Azerbaijan Republic (SOCAR) and the Azerbaijan International Operating Company (AIOC, a BP-led consortium), President Heydar Aliyev directed early oil to be exported via the northern route.  According to the former President of the AIOC, "There were to be no situations created by Baku that would actively alienate President Aliyev's political allies in Moscow...Preparatory work could also start on WER (Baku to Ceyhan), but not brought into full effect until such time as Russian contracts had been signed.  For President Aliyev it was in Azerbaijani national interests to be aligned with but not subordinate to a cooperative Russia."  (Adams, Terry D.  "Baku Oil Diplomacy and 'Early Oil,' 1994-1998: an external perspective," in Azerbaijan in Global Politics:  Crafting Foreign Policy.  Baku:  Azerbaijan Diplomatic Academy, 2009, 242-243).

One reason that this pipeline route was important was the same reason that the original consortium included the Russian oil company Lukoil; namely, to avoid a Russian challenge to Azerbaijan's right to take oil from the contested waters of the Caspian.  The strategy worked:  in May 1995 Russian Energy Minister Yuri Shafranik proposed that the flow be reversed in the pipeline which had previously brought Russian crude to Azerbaijan to be refined.  In February 1996 the intergovernmental agreement was approved.  AIOC would ship oil across the border into Russia, from where the Russian pipeline company Transneft would take it to the Black Sea port of Novorossiysk.  There, it would be mixed with Russian "Ural light"-blend oil for sale on the international market.

The original agreement called for 5 million tons (approximately 35 million bbls) of oil to go through the pipeline annually.  The pipeline could carry up to 10 million tons, so the agreement only called for the pipeline to be 50% full.  In fact, however, the quantities shipped were far less than that.  Azerbaijan averaged 2.5 million tons per year, with the quantity decreasing in recent years:  2.2 million tons in 2010, 2.06 million tons in 2011, 1.99 million tons in 2012.

Because of these decreased flows, discussion about discontinuing the export through this line has been around for at least a decade, according to Azerbaijan's Ambassador to Russia Polad Bulbuloglu.  In 2007, SOCAR took over from AIOC as the operator of the Azerbaijani side of the pipeline.  Almost immediately, SOCAR President Rovnag Abdullayev announced a continuation of the use of the pipeline, but at reduced levels.  SOCAR cited the loss of revenues from the mixing with Ural light as the reason (Ural light sells for approximately $4 per barrel less than the higher quality Azerbaijani crude).

In August 2008, possibly as a signal of their unhappiness, Transneft notified SOCAR of a temporary suspension of the transportation of Azerbaijan's oil, supposedly because of repair work on the pipeline. This was followed in May 2009 by a Russian proposal to alter the original transit agreement.  According to Russian Minister of Industry and Energy Sergey Shmatko, the agreement had become "old."  Shmatko wanted to see the quantity increased from the average 2.5 million tons per year to the originally conceived 5 million tons.  "It is necessary to make changes in the agreement and the draft of the revised agreement was sent to Azerbaijan.  We expect a response," said the minister.  Apparently, they did not get one as the oil volumes continued to drift downward.

In September 2012, SOCAR announced they were holding negotiations with the Russians as to how much oil would be transported through the pipeline.  SOCAR estimated the volume would be 1.6 million tons, a 20% drop from the already low level of 1.99 million.  The decrease was soon confirmed:  in January-March 2013, SOCAL exported 411,339 tons through the pipeline, a drop of 85,548 tons from the same time a year ago.  The volume decreased an additional 2.8% in April.

Faced with the declining volumes, and with Transneft already losing an estimated $50 million annually on pipeline maintenance, Russian Prime Minister Dmitri Medvedev signed a decree on May 5, 2013 terminating the arrangement.  The Russians did not give any advance notice of the action, although the termination was legal.  The original intergovernmental agreement stated either side could cancel the arrangement with six months notice, and Russia agreed to honor the current agreement until the beginning of 2014.  Transneft spokesman Igor Demin stated the agreement was being cancelled because Azerbaijan had not honored the terms as to the quantity being shipped. He added that the shipments could be resumed in 2014 if a new agreement were negotiated.  "From January (2014) we will calculate the tariff based on real rates," he said.

Azerbaijan also chose to look at the issue from an economic viewpoint.  "There will be no problem with oil exports," said SOCAR's leader Abdullayev.  "We have the Baku-Tiblisi-Ceyhan route, Baku-Supsa and a railway."  Abdullayev said he was ready to enter into negotiations with Transneft.  "The company will continue oil deliveries in case of economic suitability of new (contract) conditions for SOCAR.  In case of economic unsuitability, deliveries won't be implemented."  A separate report quotes Abdullayev saying, "This is a commercial decision and the matter has moved from the political perspective to the economic.  The State Oil Company understands the decision of the Russian side."

Both sides have gone out of their way to make the decision appear divorced from politics.  Russian Foreign Minister Sergei Lavrov announced the talks had already begun.  "Our respective energy agencies and companies are working on preparing a new intergovernmental agreement which will reflect current realities."  Similarly, the deputy chief of Azerbaijan's presidential administration, Novruz Mammadov, concurred that "the transportation of oil at the moment is simply not profitable to both parties in terms of economic and commercial viability..we accept the decision of the Russian Federation as perfectly normal."

SOCAR's Abdullayev is reviewing all options for the pipeline including the establishment of an oil quality bank in Novorossiysk, using the pipeline to transport oil from a third party, or even reversing the pipeline to its original orientation.  "Economic efficiency of all possible options may be considered," he said.  "There is enough time."

While economic considerations must play into the decision making, one is forced to ask:  Why now?  After all, the mixing with Ural light was included in 1995 in the original draft of the intergovernmental agreement.  And Azerbaijan has never sent more than 3 million tons through the pipeline since they began the northerly flow in 1996.  The conclusion, despite protests from both sides, is that Russia continues to ratchet up the pressure on Azerbaijan.

Russia has long tried to force Azerbaijan into a customs union or security treaty.  It has opposed Azerbaijan's claims to its territory in the Caspian (pending an all-party conference), supported Armenia against Azerbaijan over Nagorno Karabakh, and announced construction of the South Stream pipeline to choke any attempt for Azerbaijan to ship its gas to Europe independently.  When the Russian lease ended on the Gabala radar station in Azerbaijan and Azerbaijan demanded an increase in rent, Russia refused to renew the lease.  Instead, it announced it was increasing its troop presence in Armenia.  The cancellation of the Baku-Novorossiysk intergovernmental agreement appears to be yet another move to bring Baku back under Moscow's control.

TANAP meets EU criteria

In November 2012, the State Oil Company of Azerbaijan (SOCAR) opened a representation office in Brussels.  EU Energy Commissioner Guenther Oettinger attended the event, and signaled his potential support for the Trans Anatolian Gas Pipeline (TANAP).  Oettinger said the European Commission continued to back the classic Nabucco pipeline through Turkey, but "the TANAP pipeline which SOCAR now promotes may also be able to satisfy the criteria of capacity requirements, dedicated infrastructure, transparency and scalability.  We are therefore eagerly waiting for the necessary agreements to be ratified by both Turkey and Azerbaijan."

The proposed pipeline has undergone several changes since it was originally proposed as a 16 billion cubic meter (bcm) gas pipeline owned 80% by SOCAR and 20% by Turkish operators.  The Azerbaijan state oil fund has agreed to co-finance the project, according to fund chief Shakhmar Movsumov.  Additional funds are being raised by diluting SOCAR's share of the project.  According to SOCAR chief Rovnag Abdullayev, BP and Statoil have each agreed to acquire a 12% share of the project, and Total will purchase 5%.  BP's involvement was confirmed by spokeswoman Tamam Bayatly.  "BP is working with other paraticipants of the project in order to speed up technical and commercial aspects of its implementation," she said.

The project will also have scalability.  According to Gulmira Rzayeva of the Azerbaijani Center for Strategic Studies, the pipeline will be built in three stages.  Each stage will increase the amount of gas that can be carried to European markets.  "It will start with 16 bcm, continue with 20 to 30 bcm and at the end reach 60 bcm.  This is a long-term perspective.  It will also allow for the connection to Central Asian gas."  Rzayeva added that TANAP's headquarters would be in the neutral location of the Netherlands.  This has the possibility of bringing the consortium under the control of the European Union, which would guarantee increased transparency of its operations.