FIGAROVOX/TRIBUNE – The European Union announced on July 18 an agreement with Azerbaijan to double the import of natural gas from the Caucasus country. For Nerses Kopalyan, Europe has no valid reason to approach such a questionable actor on the world stage.
Nerses Kopalyan is the Associate Professor-in-Residence of Political Science at the University of Nevada, Las Vegas. He specializes in international security, geopolitics, political theory and philosophy of science.
The war in Ukraine has disrupted global energy markets, fueled inflation and prompted the European Union to seek alternatives to Russian natural gas. The EU has found nothing better than begging from Azerbaijan. However, he had to look elsewhere, and quickly.
First, replacing Vladimir Putin’s trust in Russia with Ilham Aliyev’s trust in Azerbaijan does not mean making a deal with another devil (by the way, the two regimes signed a far-reaching alliance some just days before the invasion). Second, it eases Russian sanctions, as the Russian company Lukoil now owns about 20% of the important Shah Deniz pipeline in Azerbaijan after the sale earlier this year.
The regret of giving Putin a free hand for two decades should have given this kind of cynicism enough bad press for Europe, a union based on values, which is not quick to too.
But the main reason why Europe should continue is practical: Azerbaijan is very unlikely to provide such a quantity of gas, despite the bluster that accompanies its alleged capabilities.
This is also what emerged from the agreement signed in recent days in Baku, where Azerbaijan promised to double its deliveries of natural gas to Europe, to bring it to 20 billion cubic meters per year. . Visiting European Commission President Ursula von der Leyen called the deal “new chapter in our energy cooperation with Azerbaijan, an important partner in our efforts to move away from Russian fossil fuels“.
How much is a key partner? What is the significance of the additional 10 billion cubic meters? The number may seem large, but it must be put in context: The annual natural gas consumption in Europe is close to 400 billion cubic meters, and Russia provides between a third and a half of that. Moreover, even this modest (but well-packaged) goal is presented in the context of a deadline 15 years from now – a time when the current problems will be replaced by new ones unrelated to Ukraine. .
The annual consumption of natural gas in Europe is about 400 billion cubic meters, and Russia supplies between a third and a half of that.
Idealists may wonder why Europe would aid and abet another dictator for such a small return on investment. But even the most cynical might wonder why Azerbaijan, whose ruling family has been embroiled in a series of domestic and international corruption scandals, is unwilling to do more to aid its rehabilitation. Why won’t Aliyev give Europe what it owes?
Because it is not possible, as shown by recent studies of the energy economy of Azerbaijan by respected institutions in the world. It is a kind of Potemkin petro-state.
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According to a report by the Oxford Institute for Energy Studies, Azerbaijan has limited capacity to produce more gas for Europe and will never be able to supply it profitably. He quoted “high cost of delivering Azerbaijani gas to Europe (and) expansion of the Southern Gas Corridor“, as well as the complications associated with the necessary exploration and development of the Caspian Sea.
The natural gas already delivered to Italy, for example, costs almost twice as much as Russian gas and three times as much as Algerian gas. Although Azerbaijani gas competes with Turkey, it is not in the European market.
The Oxford report concluded that “even the most optimistic assumptions about the development of gas exploitation do not suggest that many additional quantities will be available around 2020. There is no plausible scenario where the expansion of the transportation infrastructure will be completed in this decade.“
Boasting of Azerbaijan’s oil wealth is a publicity stunt. How little wealth sustains a dictatorial regime, which has allowed the Aliyev family to consolidate power over the past decade at the cost of brutal repression.
Freedom House’s US Democracy Index rates Azerbaijan as one of the most repressive countries on the planet (141st out of 167), stating that “Authorities have launched a widespread crackdown on civil liberties in recent years, leaving little room for free expression or activism.“. Bertelsmann’s Transformation Index also ranked Azerbaijan the lowest globally, marking its latest report last year”the consolidation of the authoritarian regime continues.”
Azerbaijan ranks among the lowest oil-producing countries when it comes to over-reliance on government spending on oil.
The IMF says that a reduced The increase in oil production is expected to lead Azerbaijan to become a net debtor country by 2030. As Azerbaijan does not save oil revenues to reduce the effects of the transition to a post-oil future, the costs of the public remains primarily dependent on oil revenue. In fact, Azerbaijan ranks among the last of the oil-producing countries when it comes to over-reliance on government spending on oil.
The link between economic decline and domestic instability is a constant axiom in rentier states, and especially in those whose economies are less diverse. In this context, Azerbaijan has become extremely vulnerable to economic shocks and, by extension, to domestic shocks.
In fact, the IMF predictive models suggest that there is a significant risk of domestic instability in Azerbaijan. The World Bank has consistently downgraded Azerbaijan’s political stability, giving it a score of -0.75 on a scale of -2.5 to 2.5. This is a remarkable fact for a dictatorship whose main goal is to preserve stability at all costs.
Of course, the Aliyev regime is a threat not only to its people but also to its neighboring country, Armenia, which Azerbaijan attacked in 2020. There is every reason to believe that the Aliyevs will return to Armenia if they need to divert attention from of internal conflict. The world – and especially neighboring countries – should closely monitor changes in terms of unrest and repression in Azerbaijan.
Meanwhile, the Aliyev facade of building a strong state and economy should not fool anyone.
There is no valid reason for Europe to approach such a questionable player on the world stage. There are better routes for oil supply – by pipeline or by liquefied natural gas delivered by sea from North Africa, the Eastern Mediterranean, the Persian Gulf or elsewhere.
Europe may get some natural gas from Azerbaijan, the immorality of this option, far from being a panacea, is not worth selling the tormented soul of Europe.
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