ARI Foundation Held "Caspian Energy" Discussion
The Turkish Times, April 11, 2002 [Washington, D.C.] - The ARI Foundation and TUSIAD-US organized a panel discussion in Washington D.C. on "Caspian Energy: Economic, Political and Environmental Considerations" featuring Justin Friedman, Special Assistant at the Office of Caspian Basin Energy Diplomacy, Department of State, and Jayhun Mollazade, President of the U.S.-Azerbaijan Council.

Yavuz Arik, Energy Programs Coordinator at the ARI Foundation, presented introductory remarks on the economic, political and environmental dimensions of Caspian energy and of the Baku-Tblisi-Ceyhan pipelines (BTC), in particular. He emphasized the importance of the Caspian Sea region to world energy markets due to its large reserves of undeveloped oil and natural gas. Arik also pointed out that without BTC, "exports from these major projects, as well as current production delivered to the Black Sea via Russia or Georgia currently go through the Turkish Straits and hence cause a very important environmental concern." The most recent catastrophe resulted in a spill of 20,000 tons of crude oil and a fire that lasted over four days.

Jayhun Mollazade noted that the BTC pipeline will have the capacity to export 1 million barrels per day beginning in 2007, when oil output from Azerbaijan will begin to accelerate. Mollazade argued that "Novorssiysk nor Supsa nor any port on the Black Sea were cabale of supporting oil Super Tankers like the port of Ceyhan. This made oil transportation and export via Ceyhan the most efficient option."

Mr. Mollazade also mentioned that when the BTC was first proposed there was a great deal of pessimism about its commercial viability. "However, over time, with the discovery of gas reserves in Azerbaijan in Shah Deniz and of potentially huge oil reserves in East Kashagan in Kazakhstan support for the project has grown." Mollazade claimed that the oil industry now regards the BTC project as commercially viable, while the U.S., Turkey, Azerbaijan and Georgia see it as politically and strategically imperative.

Justin Friedman's presentation focused on U.S. policy toward the Caspian Basin energy. He noted that the U.S. wants to avoid the risk of corruption surrounding Caspian energy money as was experienced in the case of Nigeria. Therefore, Friedman claimed, the U.S.'s main goal is to promote sovereignty and independence in the region.

Friedman noted that currently all pipelines head north to Russia, hindering competition. Accordingly, he argued that BTC is central to increased competition in the region. Finally, Friedman emphasized that the BTC pipeline is a not a mere political project, but also an economically viable one.