The assured, affordable supply of energy is an essential component of a country’s security. Development of a portfolio of energy resources for supplying energy along with the development and maintenance of cross-border and domestic oil and gas pipelines, electrical transmission lines, and other such infrastructure are among the aspects of a sound energy security policy. At the same time, international energy systems in Central Asia can be pathways for increasing connectivity while boosting stability, prosperity, and well-being in the states of the region. International energy security discussions traditionally focused on the assured, affordable availability of oil and, increasingly in recent years, of natural gas. The United States, Japan, Western Europe, China, and others have acted to boost supplies of oil, refined products, and natural gas; to build pipelines to bring needed hydrocarbons to their consumers; and to ensure energy transport routes stay open. Few, if any, countries can be entirely self-self-contained when it comes to obtaining all the energy they need. Moreover, experience shows problems one state may have in obtaining needed energy supplies can have consequences in the region or even more broadly. Developing the extensive oil and gas reserves in the Caucasus and Central Asia and bringing these hydrocarbons to market is and has been a component of U.S. diplomacy in the region, for example, via the realization of the Southern Gas Corridor and energy supply discussions with the Central Asian states. A key component of this effort to develop and ensure adequate hydrocarbon resources is the on-going and active effort of American and other private sector companies bringing experience, know-how, and often capital to the equation. Continued Increasing Demand for Energy in Central Asia and Globally The evolution of China, India, and other emerging economies as increasingly hungry consumers has transformed the global energy picture. Emerging economies have supplanted the western industrialized economies as the main driver in the growth in demand for energy. Central Asia is a part of this new reality. The countries of the region have their own growing energy needs, but at the same time Central Asia has become a focus for China and South Asia as those countries look to meet their increasing demand for energy. Thus, while the West has tended to focus on the construction of pipelines towards the Mediterranean and European markets, Central Asian states are looking east and south to find customers outside of traditional Western markets. The Central Asia/China gas pipeline and the Kazakhstan/China Crude Oil Pipeline highlight the region’s role in East Asia’s energy security. The Central Asia/China gas pipeline with a transport capacity of 55 billion cubic meters (bcm) annually, is approaching maximum utilization, providing approximately 20 percent of Chinese consumption. Moreover, it would have the ability to supply 85 bcm when the fourth string comes on line in 2020. The growing energy demand in South Asia presents further opportunities for Central Asian oil and gas. Pakistan’s energy needs, including for natural gas a fuel for generating electricity, have been particularly pressing. The long-discussed Turkmenistan/Afghanistan/Pakistan/India could bring 33 bcm annually to Pakistan and perhaps India from Galkynsh, considered the world’s second largest gas field, in Turkmenistan. Such a line would also help meet Afghanistan’s energy needs. However, while the international community focusses on hydrocarbon supplies moving to other regions, the countries in Central Asia need to focus on energy needs closer to home to meet needs of their private and commercial/industrial consumers. Meeting the Need for Electricity, Taking into Account Water and other Environmental Issues Central Asian states should develop integrated strategies, encompassing all available sources of energy, to manage their evolving needs. Oil and gas supplies, while important, are one part of the overall energy security equation. Just as the scope of the energy security conversation has evolved with the levels of demand in emerging markets and other portions of the developing world coming into greater focus, that conversation has broadened to include the needed, affordable supply of electricity, the role of renewables (solar, wind, and hydropower), and the increasing connection between energy and developments in information technology (including the application of artificial/augmented intelligence). There is recognition too that it is ill-advised to talk about energy without reference to environmental matters, including climate change. In Central Asia the connection between energy generation and supply and the complexities of water supplies is also integral to energy security considerations. Just as the development, construction, and maintenance of transnational oil and gas pipelines develops and reinforces connectivity, addressing these new aspects of energy security can offer vectors for boosting the connectivity among Central Asian states as well as with states further afield. The realities of the region’s geography and of the general needs for electricity can serve to foster beneficial cooperation along with renewed and new paths of connectivity. While the uneven distribution of electricity is an issue today in the region, it is important to remember Central Asian countries (except Afghanistan) were once integrated within the Soviet electrical grid. That said, the level and extent of service during Soviet times, especially in more remote rural areas would have been inadequate for today’s needs. Furthermore, the level of metering, public expectations in parts of the region, and the business model and organization structures from that period mean that older system is not/would not be adequate to finance/run the systems needed to meet all the countries’ needs today. There are several ongoing projects to increase intraregional connectivity in electrical power. The Central Asia/South Asia Transmission and Trade Project (CASA 1000) initiated in March 2014 and supported by the World Bank, European Investment Bank, USAID, IDA, and others, and scheduled for completion in 2020 will enable transmitting electricity from Kyrgyzstan and Tajikistan to Pakistan and Afghanistan. The Energy Supply Improvement Investment Project will expand power exports from Turkmenistan through an interconnection with Afghanistan’s grid. This project will also reach into the central part of the country. Such transmissions, like the the electricity that Uzbekistan has been supplying Afghanistan, will help boost prosperity and stability in that country. Increased Energy Security and Efficiencies Coming with More Connectivity Though it is often overlooked, such electrical projects foster cooperation and connectivity among the Central Asian states by definition. Officials, engineers, technicians, planners, economists, and others meet, talk, jointly monitor operations, and engage on an on-going basis in order for this electricity — or other energy projects — to be built and operate. Thus they establish and strengthen links organically among the participating states and can be a vector for greater integration among the Central Asian countries overall. Emerging developments, such as the growing application of information technology, including artificial and augmented intelligence, should reinforce this need for increased ongoing communication among individuals, enterprises, and ministries in the Central Asian states. Climate change and other environmental issues, which have inextricable links with energy matters, will provide further need and even urgency for such communication, cooperation, and connection among the relevant entities in the region. Water issues are one example underlining this emerging reality. Concerns about the changes in Himalayan glacier levels and their impacts on river flows and thus on hydroelectricity generation — first with heavier river flows and subsequently in the century decreased water supplies — can be best addressed through communication and exchanges among the appropriate entities, including the government, private sector, and academic entities, in each of the Central Asian states. The bottom line for the region is that it is important, and beneficial, to build on the connectivity that has already begun to develop in energy matters in Central Asia. The experience with oil and gas pipelines, with electricity transmission lines, and with evolving commercial arrangements for energy products provides a springboard for further connectivity among the relevant parties. Such increased connectivity should develop organically; it does not need to be — and should not be — forced. Increased connectivity should not be thought of as an end in and of itself but rather as a way for the governments, businesses, and people of the region to identify and address the evolving energy security/supply picture in each of the Central Asian states.
CPC - Caspian Policy Center
the role energy systems can play in fostering integration in central asia