International Regulatory Governance of the Caspian Pipeline Policy Game

Abstract

Oil and gas exploration and energy transport are intimately intertwined with Azerbaijan’s history. Exploiting natural energy resources and achieving success in the regional pipeline strategy are key parts of Azerbaijan’s foreign policy. This will be even more visible in the near future as Azerbaijan has become pivotal to the energy security of Europe and a crucial hub in the ‘great pipeline policy game’. ‘Energy security’ is inseparable from open access to networks and functioning markets and comprises both security of supply (energy imports) and security of sales to consumers (energy exports). Two simultaneous lines of action are proposed in the present contribution: first, in a balanced approach the European Union (EU) should recalibrate its policy towards the Southern Caucasus and in particular help solve the Nagorno-Karabach conflict, which is the main obstacle to regional cooperation and growth. Secondly, an effective international regulatory governance of the pipeline policy game is needed, ie, the international rule of law as the necessary companion of functioning markets should prevail; in this respect an enhancement of the Energy Charter Treaty (ECT) and a renewed launch of the ‘Baku Initiative’ would be helpful.

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Notes on contributors

Ambassador Klaus W Grewlich

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Ambassador Prof Dr jur Dr sc econ Klaus W Grewlich, LL M (Berkeley), Bonn University. Ambassador Grewlich can be reached at: [email protected]. The author would like to thank Professor Nigel Bankes for valuable observations; the views expressed are the author’s.