Seeking to fill a gap in the Baku
embassy which has hindered US policy in the region for months, the Obama
Administration has nominated
Richard Morningstar, longtime Caspian hand and current Special Envoy for
Eurasian Energy, as ambassador to Azerbaijan. He is likely to fare better in
the nomination process than his predecessor Matt Bryza.
Bryza was sent to Baku in
February 2011 after the White House gave him a recess appointment, a temporary
fix to circumvent congressional opposition from Senators representing
constituencies with large Armenian-American populations (Bryza is regularly
accused of being too close to Azerbaijan and Turkey, and correspondingly biased
against Armenia). His appointment ended in December, and he has since taken up
the think-tank and
conference circuit.
Charge D’Affaires Adam Sterling
has been minding the shop in the absence of an ambassador. This is becoming the
usual state of affairs – since Obama took office, the embassy has been run by a
lower-ranking diplomat for the better part of two years. The perceived slight
has provoked consternation
in Azerbaijan, which was used to being assiduously courted by the US under the
Bush Administration.
Below is my
latest article for Natural Gas Europe, original here:
In a surprise late-game announcement, Hungary has apparently
switched its support from Nabucco to
Gazprom’s rival South Stream pipeline, leaving the once-mighty
pipeline consortium looking weaker than ever. If, as rumoured, Hungary’s MOL is
pulling out of the project, it may – as analysts are already predicting - be a ‘terminal blow’.
The news emerged on 23 April at
an event hosted by the European Policy Centre in Brussels, at which one of the
speakers was Hungary’s controversial, Eurosceptic Prime Minister Viktor Orbán.
When asked to comment on a 17 April meeting with
Russia’s Gazprom at which two sides discussed giving South Stream “national
significance status”, Orbán focused his response on the woes of Nabucco.
“Nabucco is in trouble”, he said,
and that although he did not have all the details, “what I have seen is that
even the Hungarian company MOL is leaving the whole project”. His comments
prompted a flurry of articles saying that
MOL was pulling
out of the pipeline to
bring gas from Azerbaijan’s Shah Deniz field to Europe. A decision on either a
southern or central European route will be made by June – if a central European
route is chosen, the contest will be between BP’s South East Europe Pipeline and
a shortened version of Nabucco.
Leaked figures on the cost of Turkey’s gas imports, and sharp hikes in domestic electricity and gas prices, have refocused attention on the country’s energy strategy. With economic growth beginning to slow, the high price of imports may become an increasing burden. Analysis of the leaked figures suggest that, despite Turkey’s commercial stand-off with Iran, the real problem lies to the north.
On 1 April the government hiked domestic gas prices by 18.7%, with electricity prices (which are linked, since most power plants are gas-fired) rose 9.3%. The rises were intended to stop losses occurring at state energy firm BOTAŞ and followed three consecutive rises in gasoline prices last month.
Energy Minister Taner Yıldız, taking what some called a “defensive” stance on the issue, sought to deflect anger from both the opposition and the wider public by insisting that he too was displeased by the price hike but that it was unavoidable in the current climate. He said that the prices rose due to a weak lira and increasing oil prices on the back of geopolitical tensions, which had a knock-on effect on natural gas prices.
Most significantly, Yıldız asserted that the price rises would be even higher without the – still unspecified - discount obtained from Russia at the end of last year. That discount was obtained after Turkey gave permission for Gazprom’s giant South Stream pipeline to cross Turkey’s Black Sea waters.
