Within the wake of its brutal conflict in Ukraine, as of Sept. 5, Russia’s pure fuel exports had fallen to 21 billion cubic meters, two-thirds decrease than final yr and 6 occasions decrease than in 2021.
The EU has responded by upping its renewable power technique whereas searching for different sources to assist meet its pure fuel calls for within the meantime. Azerbaijan (part of the previous Soviet Union) is a kind of international locations, signing a new deal for doubling fuel exports to Europe by 2027.
Nevertheless, growing power imports from petro-states corresponding to Azerbaijan won’t hasten Europe’s renewable power transition; it is going to solely complicate it.
Azerbaijan just isn’t the primary petro-state the place undemocratic and aggressive governments are propped as a result of their oil and fuel exports; Saudi Arabia and Iran are the best-known examples. However Azerbaijan’s state of affairs, mendacity on the middle of the Eurasian heartland, and its proximity to the conflict in Ukraine are distinctive. Worldwide help for international locations corresponding to Azerbaijan engaged in “petro-aggression” has implications for the broader world shift to renewable power, and it’s price asking what multinational corporations can, and will, do in response.
Of pipelines and battle
If the world has rejected normalizing Russia’s aggression, why the double customary with Azerbaijan? As an American of Armenian descent, I’ve adopted the lengthy historical past of violence within the South Caucasus between Azerbaijan and Armenia, most lately ensuing within the “Second Karabakh Conflict” and 1000’s of casualties on each side. As of September, Azerbaijan has forcibly eliminated and ethnically cleansed 100,000 Armenians from the area often called Nagorno-Karabakh.
Shortly after President Ilhan Aliyev claimed victory in Karabakh, Turkey, which additionally has a historical past of genocide and violence towards Armenia, Azerbaijan signed a brand new fuel pipeline deal connecting the Turkish metropolis of Igdir with Nakchivan, a area managed by Azerbaijan, simply west of Karabakh and Armenia. The brand new pipeline will be a part of different pipelines connecting the Caspian Sea oil and fuel fields with the Mediterranean.
Anna Ohanyan, a professor of political science and worldwide relations at Stonehill Faculty, wrote lately in International Coverage that Azerbaijan seemingly seeks to obtain an extraterritorial hall that will enable it to steadily take management of Armenian land and circumvent geopolitical sanctions for ignoring internationally acknowledged borders.
False energy and petro-aggression
Azerbaijan’s rise as an power exporter is already giving it “false geopolitical energy.” The nation’s fossil assets are shortly diminishing as its personal home calls for enhance, limiting its export provides even because it tries to execute offers with Europe and leverage them to stop European nations from thwarting its ambitions in Armenia.
“It is vitally unlikely that Azerbaijan will be capable of meet its rising export calls for to the EU,” wrote analysts at The Economist Intelligence Unit. Azerbaijan’s oil and fuel reserves could possibly be depleted by 2030, based on a report in Third World Quarterly. “Azerbaijan’s leverage is actually a puzzle to me and is massively overestimated,” Ohanyan instructed me. “Azerbaijan signed an settlement with Russia earlier than Russia invaded Ukraine for power cooperation; Azerbaijan is unable to satisfy its personal calls for and guarantees to Europe and consequently is principally shopping for fuel from Russia after which promoting it to Europe.”
Azeri-style belligerence is typically often called petro-aggression: when a rustic’s fossil gas riches and supposed financial clout embolden it to be extra aggressive, concentrating on neighboring states to increase its geopolitical energy. “On this state of affairs, … [Azerbaijan] just isn’t solely an authoritarian state, which is already a threat issue, but it surely’s a petro-state,” stated Ohanyan. “Petro-states behave utterly in another way and they’re extra more likely to begin wars.”
Totally 50 % of Azerbaijan’s state finances and 90 % of its export income comes from oil and fuel output, showcasing simply how intertwined fossil fuels are with the nation’s future.
The shift to renewables must speed up
Because the world shifts to extra renewable power, international locations corresponding to Azerbaijan or Russia, which closely depend on fossil gas exports for his or her geopolitical energy, will face new limits as demand for fuel and oil decreases. Renewable power is a pressure operate for democracy and democratic practices because it decentralizes energy and privatizes financial authority, however solely when met with authorities help. “[President Aliyev] going to withstand the inexperienced transition as a result of if carried out, it might diversify Azerbaijan’s economic system and produce new gamers into it together with decentralizing energy, that are all issues President Aliyev has been working towards,” stated Ohanyan.
Even authoritarians corresponding to Aliyev can’t cease this transition: Azerbaijan lately signed agreements with the Abu Dhabi Future Power Firm for photo voltaic and wind initiatives totaling 1 GW, and the nation has a acknowledged aim to succeed in carbon neutrality by 2050.
Name to motion
The battle within the South Caucasus issues to giant multinational firms and their shift to a greener future, and they need to get entangled, stated Ohanyan: “I believe corporations want to take a position and begin taking note of how conflicts are resolved. Conflicts needs to be resolved by means of negotiation and corporations want to talk a lot louder towards using pressure.”
Multinationals, she added, “are a beneficiary of a peaceable transition to a inexperienced economic system.” Relatively than counting on fossil gas provides from petro-states, multinational firms can speed up their investments within the power transition and cut back the necessity for such fossil-fuel imports. Applications such because the REPowerEU, launched in response to Russia’s invasion of Ukraine, are an instance of promising motion; however for now, the give attention to Russia has solely shifted fossil-fueled energy grabs elsewhere.