Within the wake of its brutal battle 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 vitality technique whereas in search of various sources to assist meet its pure fuel calls for within the meantime. Azerbaijan (part of the previous Soviet Union) is a kind of nations, signing a new deal for doubling fuel exports to Europe by 2027. 

Nonetheless, rising vitality imports from petro-states equivalent to Azerbaijan is not going to hasten Europe’s renewable vitality transition; it can solely complicate it. 

Azerbaijan 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 scenario, mendacity on the middle of the Eurasian heartland, and its proximity to the battle in Ukraine are distinctive. Worldwide help for nations equivalent to Azerbaijan engaged in “petro-aggression” has implications for the broader international shift to renewable vitality, and it’s price asking what multinational firms can, and may, 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 not too long ago ensuing within the “Second Karabakh Warfare” and 1000’s of casualties on each side. As of September, Azerbaijan has forcibly eliminated and ethnically cleansed 100,000 Armenians from the area generally known as 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 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 School, wrote not too long ago in Overseas Coverage that Azerbaijan probably seeks to obtain an extraterritorial hall that might permit it to step by step take management of Armenian land and circumvent geopolitical sanctions for ignoring internationally acknowledged borders.

False energy and petro-aggression  

Azerbaijan’s rise as an vitality 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 rather unlikely that Azerbaijan will have the ability to meet its rising export calls for to the EU,” wrote analysts at The Economist Intelligence Unit. Azerbaijan’s oil and fuel reserves might be depleted by 2030, in accordance with a report in Third World Quarterly. “Azerbaijan’s leverage is truthfully a puzzle to me and is vastly overestimated,” Ohanyan instructed me. “Azerbaijan signed an settlement with Russia earlier than Russia invaded Ukraine for vitality cooperation; Azerbaijan is unable to fulfill 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 usually generally known as 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 scenario, … [Azerbaijan] isn’t solely an authoritarian state, which is already a danger issue, however it’s a petro-state,” mentioned Ohanyan. “Petro-states behave fully in a different way and they’re extra prone to begin wars.”

Absolutely 50 % of Azerbaijan’s state price range 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 vitality, nations equivalent 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 vitality is a drive perform 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 financial system and produce new gamers into it together with decentralizing energy, that are all issues President Aliyev has been working towards,” mentioned Ohanyan. 

Even authoritarians equivalent to Aliyev can’t cease this transition: Azerbaijan not too long ago signed agreements with the Abu Dhabi Future Vitality Firm for photo voltaic and wind initiatives totaling 1 GW, and the nation has a said aim to succeed in carbon neutrality by 2050.

Name to motion

The battle within the South Caucasus issues to giant multinational companies and their shift to a greener future, and they need to get entangled, mentioned Ohanyan: “I believe firms want to speculate and begin listening to how conflicts are resolved. Conflicts needs to be resolved via negotiation and firms want to talk a lot louder towards using drive.” 

Multinationals, she added, “are a beneficiary of a peaceable transition to a inexperienced financial system.” Relatively than counting on fossil gas provides from petro-states, multinational companies can speed up their investments within the vitality 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 deal with Russia has solely shifted fossil-fueled energy grabs elsewhere.