Ambassador (ret.) John J. Maresca was formerly the United States negotiator for the conflict over Nagorno-Karabakh and was sent as a Special Envoy to open US relations with the newly independent states of the former USSR. Ambassador Maresca now serves as Direcotr of Seach for Common Ground's European partner organization, the European Centre for Common Ground.

If Azerbaijan does not seize on the possibility of building its oil pipeline across Armenia and Nakhchivan to the Turkish Mediterranean coast, it will be wasting what is a unique opportunity for ending the conflict over Nagorno-Karabakh on acceptable terms. Once a decision is made to route the pipeline elsewhere, this opportunity will be lost forever. No other possible route can offer such benefits to both Azerbaijan and Turkey. it would truly be a "Peace Pipeline".

There are a number of options for long-term pipeline routes, none of them very attractive, for there is instability throughout the Trans-Caucasus region. There have been local wars recently in Abkhazia in Northwestern Georgia, in Chechnya in the northeastern Caucasus, in the southwest of Azerbaijan along the country's Aras River border with Iran, and in the Kurdish area of southeastern Turkey.

Even those areas where there has been no real fighting are filled with local mafia, bribe-seeking officials, potentially restless ethnic groups and loose gangs of roaming bandits. Ex-Soviet weaponry is found in abundance everywhere, the newly-independent governments are weak and subject to manipulation and no place can be called truly stable. But oil is a high-risk business and oil men are historically used to making rational plans in even the most unpredictable environments. And so consideration of the options is going ahead, in spite of the daunting obstacles facing any of the possible routes.

A route requiring major construction through Iran is unlikely to find ready financing. The US Government has made it clear that it will oppose any project from which Iran would gain benefit, and this will discourage major banks from participating.

A route through Georgia would benefit from the fact that there is an existing pipeline from Baku to the Black Sea ports of Poti and Batumi. But this pipeline would have to be completely replaced and thus the only real advantage is the use of a ready right of way. Using tankers from the Georgian coast would have many disadvantages, while a land route looping around Armenia would be much longer than a direct route through Armenia.

A possible route through Russia has been made much less attractive by the Russian attack on Chechnya. Not only do many existing pipeline routes pass through Chechnya, meaning that they are now unusable, but the likelihood is that this entire region of Russia will be unstable for years to come. In any case a Russian route would require the undesirable use of tankers from the Black Sea port of Novorossisk, and would put Moscow in control of all Caspian Sea oil exports.

This leaves the option of a pipeline along the Azeri side of the Aras River to the Armenian frontier, then either through Armenia or Iran (or both) to the Azeri exclave of Nakhchivan. The route would then continue to the Turkish border and turn Southwest to link up with the currently unused Turkish-Iraq pipeline leading to the oil terminal near Ceyhan on the Mediterranean Coast. This is technically on of the most feasible routes, and has the advantages of providing a direct connection to the Mediterranean and a short section permitting alternative routings through Iran or Armenia.

One of the problems with this choice is the fact that it would pass through the currently unstable Kurdish region of Turkey but this would also apply to a Georgian overland route, and the Turks maintain that they can assure the pipeline's security on their territory. They are determined that at least part of a Caspian pipeline should cross Turkey.

Despite its traditional hostility toward Turkey and Azerbaijan, Armenia would be a reliable partner if an agreement could be reached. But the war over the Armenian populated enclave of Nagorno-Karabakh, in Azerbaijan, makes it difficult to foresee construction or even agreement unless a peace settlement can be found. In fact, much of the southwestern part of Azerbaijan, where the pipeline would run, has been occupied by Karabakh Armenians for more than a year, making almost a million Azeris refugees in their own country. Nonetheless, construction could begin on the Turkish and Azeri sections of this route, with an Iranian segment in view and the possibility of adding on an Armenian segment later.

With a de facto Armenian-Azeri ceasefire in place for more than six months, increased probability of an international peacekeeping force following agreement on this at the summit meeting of the OSCE in Budapest in December, and the effects of the war in Chechnya, a trans-Armenian route looks more feasible now than it did a few months ago.

Discussion of pipeline options has up to now been a disjointed, sporadic thing, occurring on the margins of other meetings and without an organized approach. This is because the industry is highly competitive, the issue is politically explosive and the money involved is considerable. In particular, companies exporting oil from the northern Caspian, including Kazakhstan, have a different perspective from those working in the southern Caspian, particularly Azerbaijan. But this must now change, with a new phase of urgent discussions opening, involving oil and construction companies, banks and financial institutions and area governments. Given the difficulty of formal decision-making on a sprawling subject of this kind, incremental steps may be taken instead of a single decisive choice. Independent entrepreneurial actions may narrow the options until one becomes inevitable. This would eliminate the possibility of choosing the best route on a rational basis.

The Russians will have to be satisfied with whatever pipeline arrangements emerge, or they will obstruct and undercut them. All heavy construction materials must be shipped to the Caspian through Russia's Volga-Don Canal system, thus giving Moscow an effective means for controlling events. Satisfying Russian interests need not mean a single pipeline across Russian territory, however. The Russians may be satisfied with a Kazakh-Novorossisk pipeline, recognizing that the total volume of oil coming out of the Caspian Sea Basin will justify more than one route. Alternative routes would be useful in such a generally unstable area. Russia might also accept shared control of the pipelines, or guaranteed usage, in exchange for its acquiescence.

The economic effects of these pipelines will be so important that they literally make this a unique opportunity for development of the region. They represent huge investment and construction projects in a generally poor area, and will knit together the nations which share them with common reasons to preserve peace and stability. Ultimately, they can bring prosperity to all the countries of the Caspian Sea Basin, much as oil changed the economies of the Persian Gulf states

The possibility that a pipeline could be built across Armenia could encourage rational Armenians to join in an honest effort to find a solution to the Karabakh conflict, in order to capitalize on this unique opportunity. It will be a foolish mistake if the pipeline is not used with this possibility in mind.

The US Government has not taken a position on the route the pipeline should follow to reach Turkey, but it should. Given the financial influence of the United States, a decision by Washington to support a specific route could be a decisive factor. It is in the US interest that the pipeline cross Turkey to the Mediterranean; it is also in the US interest that the pipeline cross Armenia; and it is in the US interest that the conflict over Nagorno-Karabakh be ended, so that the refugees can return to their homes and the peoples of the region can begin to build the positive neighborly relations which they so badly need.

Caspian Crossroads, Num.1, Winter 1995