EU’s Gas Deal with Azerbaijan Is Strategically Short-sighted and Hypocritical

Since signing the gas deal, the EU’s response to humanitarian abuses by Azerbaijan has been tepid, despite the continued alarm of NGOs. Last month, Human Rights Watch verified the authenticity of a video showing the extrajudicial killing of seven Armenian prisoners of war by Azerbaijani soldiers. The torture, rape, mutilation, and murder of a woman in the Armenian armed forces by Azerbaijani troops also surfaced after a video was posted online. The EU has stressed the need for a probe into alleged war crimes. However, an EU spokesperson also admitted that the bloc has no investigative power in the Caucasus and Azerbaijan was being encouraged to self-investigate.

Peace between Azerbaijan and Armenia remains elusive which means Brussels should be careful to avoid inadvertently funding war crimes. However, when asked if the EU would implement measures to ensure EU money is not spent on the conflict or human rights violations, an EU official commented that no such mechanisms exist

Short-sighted Strategy

In international relations ethical sentiments rarely triumph over the cold necessities of realpolitik. However, the Azerbaijan gas deal is also a bad long-term strategic move.

Authoritarian regimes have a tendency to wield energy exports as a tool for foreign policy leverage. For example, in the aftermath of the Yom Kippur War, several Arab states instigated an oil embargo to dissuade international support for Israel, causing the 1973 oil crisis. Today Putin is leveraging Russia’s position as an energy supplier to discourage foreign support for Ukraine. In the future, Aliyev may decide to leverage Azerbaijan’s energy supply to similar ends. In fact, Azerbaijan is alleged to have deliberately cut off gas supplies to areas of Nagorno-Karabakh in March this year. In choosing to import gas from Azerbaijan, the EU has opted to kick its energy dependency-problem down the road, instead of seeking a comprehensive long-term solution.

In its dealings with the EU, Aliyev’s regime has already demonstrated itself to be a thoroughly unscrupulous partner. In 2018, 13 members of the Parliamentary Assembly of the Council of Europe (PACE) were expelled from the organisation for accepting bribes and gifts from Azerbaijan. The Organised Crime and Corruption Reporting Project found that between 2012 and 2014, Azerbaijan had laundered $2.9 billion to pay off EU politicians. Bribes were used to assuage concerns regarding Azerbaijan’s human rights record. For example, a senior EU official in the PACE was paid a bribe of €500,000 to disrupt a 2013 report on political prisoners in Azerbaijan.

There is also the issue of whether turning to Azeri gas would satisfy the basic requirement of being an actual alternative to importing from Russia. In February this year, Lukoil increased its share in Azerbaijan’s Shah-Deniz gas project to the tune of approximately $1.45 billion, upping its stake from 10 percent to 19.99 percent. Lukoil is Russia’s second largest company, behind energy giant, Gazprom. Lukoil’s share in Azerbaijan’s primary source of natural gas is now second only to BP. The EU would therefore be unable to completely bypass Russian involvement in gas imports from Azerbaijan.

Alternatives to Azeri Gas

The gas deal is only part of a broader jigsaw puzzle that will need to be assembled for the EU to wean itself off Russian energy. Although the jump to 20 billion cubic meters of gas per year is significant, this delivery from Azerbaijan would not be anywhere near enough to entirely replace Russia. Russian gas exports to individual EU members far exceed the projected amount that Azerbaijan will export to the bloc in its entirety. Last year, Russia exported 56.2 billion cubic meters to Germany and 29.2 billion to Italy, alone.

Since Azerbaijani gas can only act as a partial replacement for Russian energy alongside other substitutes, this raises the question: can Azeri gas itself not be substituted for a better option?

The EU is making an effort to increase cooperation with gas exporters like Norway, the US, Japan, South Korea, Turkey, Qatar, Algeria, and Egypt. Some of these suppliers are sensible long-term alternatives to both Russia and Azerbaijan, whereas some pose similar concerns.

The EU should also consider alternatives to gas, altogether. Renewable energies like wind, solar, and hydropower, together with nuclear power present the best-long term solutions. They have the added benefit of being better for the environment. The main drawback is implementation time. In the short to medium-term, the EU would likely have to continue seeking alternative gas suppliers and potentially increase coal usage, which has fallen out of favour due to environmental concerns.

A perfect energy solution does not exist. The EU will have to make compromises, be they security-based, moral, environmental, or economic.  Nevertheless, if the definition of insanity is doing the same thing over and over and expecting different results; then the EU-Azerbaijan gas deal is insane. The EU energy crisis is a lesson on the perils of energy dependency on authoritarian regimes. Brussels should not fail to heed that lesson.

(This commentary originally ran in Moderndiplomacy.eu on November 5.)