• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month
Page
  1. 1
    1
  2. 2
    2
  3. 3
    3
  4. 4
    4
  5. 5
    5
  6. 6
    6
  7. 7
    7
  8. 8
    8
  9. 9
    9
  10. 10
    10
  11. 11
    11
  12. 12
    12
  13. 13
    13
  14. 14
    14
  15. 15
    15
  16. 16
    16
  17. 17
    17
  18. 18
    18
  19. 19
    19
  20. 20
    20
  21. 21
    21
  22. 22
    22

Geopolitical consequences of the demise of the Soviet Union

Extracts from this document...

Introduction

One important geopolitical consequence of the demise of the Soviet Union was the rise of intense political and commercial competition for control of the vast energy resources of the newly independent and vulnerable states of the Caucasus and Central Asia. The fact that the three countries which share the majority of the region's energy and resources, namely Kazakhstan, Azerbaijan and Turkmenistan, are landlocked makes them depend on their immediate neighbors for access to the World markets. Foreign policy concerns related to the regional balance of power, national security, and potential economic benefit have led four external powers to strive for export pipelines to be built across their territory: Russia, Iran, Turkey, and China. A fifth country, the United States has increased its own efforts to influence the pipeline derby. The alternatives to exporting oil and gas through the Russian pipeline system are exporting through war-torn Afghanistan, through Iran, or by building some of the world's longest pipelines to markets in China and Europe. The routing of new oil and gas pipelines from the Caspian basin will greatly influence the region's future geopolitical orientation. The United States supports the construction of a longer pipeline, which would begin at Baku, transit Georgia and much of Turkey before exiting at the Mediterranean Sea port of Ceyhan. The United States supports the construction of a longer pipeline, which would begin at Baku, transit Georgia and much of Turkey before exiting at the Mediterranean Sea port of Ceyhan. However, oil companies have been lukewarm towards the Baku-Ceyhan route because due to its enormous cost. Crossing roughly 1040 miles through mountainous territory, construction of this pipeline would cost $4 billion, exceeding by cost substantially any likely alternatives. The AIOC's successive refusals to commit to the Baku-Ceyhan route, ending in a final, indefinite postponement of any decision until today, created a disappointment for the US, Turkey, Georgia and Azerbaijan. If genuine American national interests are at stake, the US government needs to enhance its efforts throughout the region to support the Baku-Ceyhan pipeline route as well as to support American companies. ...read more.

Middle

The CPC received final approval from the Russian government in November 1998 to build the pipeline, allowing construction to begin. During its 35-40 year expected life, the pipeline could bring in about $33 billion in revenues for the Russian government, including $23 billion in taxes. Novorosiisk also has been chosen as the last stop for the northern route for early oil export route for AIOC oil. An existing pipeline runs from the capital of Baku to Novorosiisk, a Russian port on the Black Sea. This 60-cm-diameter pipeline, while recently rehabilitated, only retains the capacity for 180,000 barrels per day, runs through the war-torn Chechnya region, and is considered a medium-term option only. The pipeline will not be able to handle the expected volume once the three major oil fields in Azerbaijan come fully on-line, expected in the early part of the next decade. In fact, Moscow has urged construction of a larger pipeline that would run alongside the existing line. However, both Azerbaijan and the U.S. government oppose this proposal, because they fear that it would provide Moscow with undue leverage over Azerbaijan. Western Route: The United States supports the construction of a longer pipeline, which would begin at Baku, transit Georgia and much of Turkey before exiting at the Mediterranean Sea port of Ceyhan. In an effort to turn this into an alternative not only for Azerbaijan but for Central Asia as well, the US began in 1997 to push the idea of an oil pipeline that would pass under the Caspian Sea itself, winning the backing of both Kazakhstan and Turkmenistan. The US has supported trans-Caspian routes also as an alternative to pipelines passing through Iran. However, the cost of Baku-Ceyhan has been a major issue. Despite Turkey's assertions that Baku-Ceyhan would be economically viable, members of the Azerbaijani International Operating Company, a consortium consisting of twelve shareholders in which American companies have %43.8 share, have delayed choosing a route, especially at a time of low world oil prices. ...read more.

Conclusion

This neglect of oil companies carries important lessons in a world where multinational corporations often now influence geopolitical developments to an equal or greater extent than sovereign governments. While the support of the Azerbaijani government was crucial to construction of Baku-Ceyhan, that support was not sufficient by itself. The issue of the Caspian Sea pipelines remains a matter for the private sector. The oil companies are the primary customers of pipelines; consequently, the oil companies must pay the costs for new pipeline construction. Amoco, Mobil, and British Oil hold no concern for U.S. geopolitical interests or the Western orientation of Central Asian republics; their only priority lies in more profit. As a result, the combination of expensive construction/transit costs and low oil prices doomed the Baku-Ceyhan for the time being. If genuine American national interests are at stake, the US government needs to enhance its efforts throughout the region to support the Baku-Ceyhan pipeline route as well as to support American companies. Other governments, such as Japan recognized the commercial opportunities in the region and have supported strongly their companies with high-level engagement, extensive credit lines, and other incentives. While understandable from a perspective of political feasibility, Clinton administration's firm refusal to consider any direct US assistance to reduce the costs of the Baku-Ceyhan route strongly undermined its prospects for success until now. If the US government places so much strategic value in the construction of Baku-Ceyhan pipeline, it should offer greater incentives for the oil companies. Alternatively, it should persuade Turkey to provide significant reductions in transit fees and other concessions to reduce the overall costs of the Baku-Ceyhan pipeline. Finally, the US government should encourage greater communication and dialogue between AIOC representatives and Turkish, Georgian and Azerbaijani government officials. Turkish government officials are reluctant to engage in specific negotiations with AIOC representatives over cost issue. The US government should encourage Turkey to be more cooperative. The US government should also consider offering greater economic assistance in comparison with the commercial relief the Turkish government should offer. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Politics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related GCSE Politics essays

  1. Free essay

    Reforms of Turkey under Mustafa Ataturk, with regards to the revelutions from above

    Another reason for the provocation of such negative feelings is that these states were imposed upon the people of this region by western powers and imperialism, and therefore see it as an invasion. This is mainly why the governments is place are not successful, in that they are constantly being

  2. How and why did Federation occur?

    Universal suffrage for men was also marginally ahead. Australian men could vote in national elections from 1901 compared with USA (1913) and Great Britain (1918). How and why did Australia's patterns of migration change? What contribution did migrants make to Australia's social, cultural and economic development? * Since W.W.11 50% of Australia's population increase has been due to migration.

  1. Assess the impact of the Vikings on the political development of western Europe in ...

    For example, Alfred married his daughter to the count of Flanders and his father had taken a Frankish bride. The tenth century saw the decline of Viking power, although their invasions did not cease. In England during the late 940s and early 950s political support wavered between King Aedred of

  2. Malta at the turn of the 19th Century.

    This denotes a good system of administration. More people had to lend money and each institution had to do its work properly thus leading to money wastage from the part of the government. An interesting thing was the survey on the population of the Maltese Islands.

  1. American Iran Relations For years, relations between the U.S. and the Middle Eastern country ...

    and Iran. For years, the U.S. has sought to isolate Iran through a strict regime of trade embargoes and other sanctions. Many human rights activists, business leaders and other interests have come to the conclusion that such measures are counterproductive, and have called on U.S.

  2. Using the evidence of Sources 2, 3 and 5, and your own knowledge explain ...

    Source 4 shows that part of the nation wanted the "traditional ways of government", whereas others wanted "radical" reform, and others wanted a leader who would rule "in cooperation with their greater subjects", unlike Cromwell. Thus the divisions and political confusion shows that the 'fatal internal contradictions' prevented a lasting settlement to be found during the Protectorate.

  1. Russia - political past, present and future

    The first sign of democracy was that Yeltsin was elected president in a direct, popular, competitive election, rather than just emerging in a time of chaos. This gave him a great advantage in acquiring people's support for creation of the new government.

  2. The Rise and fall of the Ottoman Empire.

    The Ottoman State The Ottomans inherited their varied and rich mixture of traditions from many sources; the Turks, Persians, Mongols, Mesopotanians alongside Islam. The state gave absolute authority to the monarch, like Turkish, Mongol and Mesopotamian states before it. The nature of the autocracy however has a habit of being misunderstood.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work