Politics
Even before its completion, the pipeline was having an effect on the world's petroleum politics. The South Caucasus, previously seen as Russia's backyard, is now a region of great strategic significance. The U.S. and other Western nations have become much more involved in the affairs of the three nations through which oil will flow. The countries have been trying to use the involvement as a counterbalance to Russian and Iranian economic and military dominance in the region.[16] Russian specialists claim that the pipeline will weaken the Russian influence in the Caucasus. The Russian Parliament Foreign Affairs Committee chairman stated that the United States and other Western countries are planning to station soldiers in the Caucasus on the pretext of instability in regions through which the pipeline passes.[27]
The project has been criticised due to bypassing and regional isolation of Armenia,[28][29] as well as for human rights and safety concerns.[30] Ilham Aliev, the president of Azerbaijan, which is in conflict with Armenia, was cited as saying, "If we succeed with this project, the Armenians will end in complete isolation, which would create an additional problem for their future, their already bleak future".[29]
The project also constitutes an important leg of the East–West energy corridor, gaining Turkey greater geopolitical importance. The pipeline supports Georgia's independence from Russian influence. Former President Eduard Shevardnadze, one of the architects and initiators of the project, saw construction through Georgia as a guarantee for the country's future economic and political security and stability. President Mikhail Saakashvili shares this view. "All strategic contracts in Georgia, especially the contract for the Caspian pipeline are a matter of survival for the Georgian state," he told reporters on 26 November 2003.[31]
Economics
Although some have touted the pipeline as easing the dependence of the United States and other Western nations on oil from the Middle East, it supplies only 1% of global demand during its first stage.
The pipeline diversifies the global oil supply and so insures, to an extent, against a failure in supply elsewhere. Critics of the pipeline—particularly Russia—are skeptical about its economic prospects.
Construction of the pipeline has contributed to the economies of the host countries. In the first half of 2007, a year after the launch of the pipeline as the main export route for Azerbaijani oil, the real GDP growth of Azerbaijan hit a record of 35%.[32] Substantial transit fees accrue to Georgia and Turkey. For Georgia, the transit fees are expected to produce an average of US$62.5 million per year.[33] Turkey is expected to receive approximately US$200 million in transit fees per year in the initial years of operation, with the possibility that the fees increase to US$290 million per year from year 17 to year 40. Turkey also benefits from an increase of commerce in the port of Ceyhan and other parts of eastern Anatolia, the region which had experienced significant decrease in economic activities since the Gulf War in 1991. The reduction of oil tanker traffic on the Bosphorus will contribute to greater security for Istanbul.[34]
Security
Concerns have been addressed about the security of the pipeline.[35][36][37] It bypasses Armenia, which has an unresolved conflict with Azerbaijan over the status of Nagorno-Karabakh, crosses through Georgia, which has two unresolved separatist conflicts, and goes through the edges of the Kurdish region of Turkey, which has seen a prolonged and bitter conflict with Kurdish separatists. It will require constant guarding to prevent sabotage, though the fact that almost all of the pipeline is buried will make it harder to attack.[16] Georgia formed a special purpose battalion that would guard the pipeline while the US watched over the area with unmanned aerial vehicles (UAVs).
On 5 August 2008, a major explosion and fire in Refahiye (eastern Turkey Erzincan Province) closed the pipeline. The Kurdistan Workers Party (PKK) claimed responsibility.[38]
Environment
Critics of the pipeline have pointed out it should be properly earthquake engineered because it travels through three active faults in Azerbaijan, four in Georgia and seven in Turkey. Environmental activists fiercely opposed the crossing of the watershed of the Borjomi-Kharagauli National Park in Georgia, an area known for mineral water springs and natural beauty, although the pipeline itself does not enter the park.[47] The construction of the pipeline left a highly visible scar across the landscape. The Oxford-based "Baku Ceyhan Campaign" stated that "public money should not be used to subsidize social and environmental problems, purely in the interests of the private sector, but must be conditional on a positive contribution to the economic and social development of people in the region."[48] As Borjomi mineral water is a major export commodity of Georgia, any oil spills there would have a catastrophic effect on the economy.
The field joint coating of the pipeline has been controversial over the claim that SPC 2888, the sealant used, was not properly tested.[49]
Human rights
Human rights activists criticized Western governments for the pipeline, due to reported human and civil rights abuses by the Aliyev regime in Azerbaijan.[54] A Czech documentary film Zdroj (Source) underscores these human rights abuses, such as eminent domain violations in appropriating land for the pipeline's route, and criticism of the government leading to arrest.[55]
