The not-so Great Game: political economy of changing US energy policy in the Caspian Sea

Abstract

There have been significant changes in US energy policy in the Caspian over the last two decades, which have recently tended towards disengagement. The dominant explanations in the literature prioritized a narrow view of geopolitical perspective, the Great Game, which emphasizes the rivalry between the United States and Russia over the control of the Caspian Sea region. However, this perspective has not been able to explain why US policymakers started to disengage from the Caspian Sea energy projects despite increasing Russian and Chinese activism after the late 2000s. In this article, I explain the US disengagement from Caspian energy projects by drawing from the principles of energy security and the dynamics of international political economy (IPE) of energy. I show that this disengagement is heavily shaped by concerns about energy security and the IPE of energy, rather than bilateral power politics between the US and Russia. Applying a four-dimensional IPE framework to the US policy in the Caspian Sea, I demonstrate that energy endowments, technological advancements, and profitability of operations and companies shape the energy security considerations of the US, leading to shifts in foreign policy.

Keywords:

• US foreign policy
• energy security
• international political economy
• energy policy
• Caspian Sea
• unconventional oil and gas revolution

Acknowledgements

I want to thank Eleanor Gordon and the three reviewers for their constructive feedback on previous versions of this paper.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 Established in 2009, NDN supplies non-lethal cargo to Afghanistan through neighboring Turkmenistan, Uzbekistan and Tajikistan. It also runs through Georgia and Azerbaijan. For more on Azerbaijan’s role in NDN, see Shiriyev 2013.

2 The Nabucco Project was a proposed gas pipeline that would connect the Caspian and the Middle Eastern natural gas with Eastern and Central European markets (via Turkey, Bulgaria, Romania and Hungary), therefore bypassing and decreasing the importance of Russia.

3 PSAs are contracts outlining the regulatory, financial, organizational, legal and compensatory relationship between investors and host governments. Under the PSAs, contractors are granted the sole and exclusive exploration, development and production rights within the contract areas (Bindemann 1999).

4 For more on state-society relations in Azerbaijan, see Bashirov (2018, 2020).

5 Indeed, Europe and Asia appear to be the markets where global competition for energy exports are taking place (Mitrova and Boersma 2018).

6 These attempts have had mixed success. The expectation in the late 2010s that the new LNG projects will increase LNG exports to Europe and drive Gazprom’s market share in Europe downwards has not materialised. Russian gas has remained competitive against the LNG in Europe and maintained its market share (Mitrova and Boersma 2018).

Additional information

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Galib Bashirov

Dr. Galib Bashirov is a researcher at the Alfred Deakin Institute for Citizenship and Globalisation, Deakin University, Australia. He has a PhD from Florida International University. He does research on US foreign policy in the Caspian Sea region, state-society relations in the post-Soviet region and Turkey. His work has been published in Third World Quarterly, Democratization, Cambridge Review of International Affairs and Australian Journal of International Affairs.