New Prospects in the Political Economy of Inner-Caspian Hydrocarbons and Western Energy Corridor Through Turkey

Abstract

This paper makes a new conceptualization on Caspian energy system and the transit routes that pass through Turkey. Firstly, it puts forward the term of "inner-Caspian", comprising Azerbaijan, Kazakhstan and Turkmenistan. Secondly, it identifies sub-systems of "western energy corridor through Turkey" (WECT) by diversifying: (1) "WECT inner-Caspian", which includes hydrocarbon transportation from Azerbaijan, Kazakhstan and Turkmenistan; (2) "WECT Russia", which is currently composed of Blue Stream gas pipeline and oil transportation by tankers through Turkish straits; and (3) "WECT Middle East", which refers to Iranian, Iraqi and Egyptian hydrocarbons. Thirdly, this paper makes a comparative analysis on WECT systems through selected economic (reserves, supply/demand, production and transportation costs), geo-political (e.g. moves of the concerned actors), political (e.g. recent developments in government structures) and security (especially in terms of transport) indicators which bring out that "it is more reasonable for the EU to first embrace WECT inner-Caspian, then develop WECT Middle-East in order to diversify its energy supply". (C) 2007 Elsevier Ltd. All rights reserved.