Cross-Border Oil and Gas Pipelines: The Intersection of Politics, Geography, and Energy Markets
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The emerging trend of cross-border oil and gas pipelines in Eurasia has immense geopolitical and energy market implications. With the changing landscape of global energy markets, both key consuming and producing states have strategic reasons to forge new transit routes and diversify supply lines with new overland (or undersea) pipelines. This dissertation examines what brings countries into binding cross-border oil and gas pipeline deals and why some proposed pipeline projects materialize quickly while others do not. It aims to provide a more systematic explanation of how politics and energy markets are interconnected in the choice of supply routes and of how political and economic factors play out interactively in decisions regarding cross-border pipeline projects. The dissertation employs statistical analysis and case studies to advance the hypothesis that, in addition to market considerations, the successful launch of a cross-border pipeline project and the speed of the deal depend on geopolitical factors, political alignment between host country governments, and pipeline ownership structure. The statistical analysis tests this argument through the dataset I constructed of all existing and proposed cross-border oil and gas pipelines in the world. The dissertation then examines four case studies: (1) the completed Eastern-Siberia Pacific Ocean (ESPO) oil pipeline from Russia to China; (2) the planned Altai and Power of Siberia pipelines, designed to bring gas from Russia to China; (3) the completed Baku-Tbilisi-Ceyhan (BTC) pipeline carrying Caspian oil to West from Azerbaijan via Georgia and Turkey; and (4) the planned Southern Gas Corridor (SGC) pipelines, designed to bring Caspian gas to Europe from Azerbaijan via Georgia, Turkey, Greece, Albania, and Italy. The dissertation finds that geopolitical factors profoundly shape energy relations and affect the likelihood of successful pipeline deals and their speed regardless of the degree of economic incentives involved in the project. Second, the degree of political alignment between host countries and the ownership structure of pipelines likely determine the success of cross-border pipeline deals. Third, the political-economic arrangements among host countries affect the likelihood of successful pipeline deals and their speed more significantly in the field of natural gas than in oil.