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Central Asia's Risky BusinessAuthor(s): Amy Myers JaffeSource: Foreign Policy, No. 112 (Autumn, 1998), p. 170Published by: Washingtonpost.Newsweek Interactive, LLCStable URL: http://www.jstor.org/stable/1149053 .

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LETTERS CENTRAL ASIA'S RISKY BUSINESS

To the Editor: Martha Brill Olcott's "The Caspian's False Promise" (Summer 1998) elo- quently questions whether the region's promising oil and gas potential will restore its "centrality" and help solve the massive problems that face its peoples. She is correct that "enormous hurdles must be cleared" before oil money begins to flow. But the obstacles go beyond the limitations of the old Soviet pipeline system and U.S. opposition to pipelines through Iran.

As described in a recent Baker Institute study, the landlocked geogra- phy of the Caspian Basin region creates other serious logistical impedi- ments. The region is distant from major supply centers for exploratory equipment and faces a crippling shortage of modem drilling platforms and other related materials. Constraints on infrastructure, drilling equipment, and rigs are so severe in the region that an oil well completion that might take two to three months to finish in the United States or the Middle East could take up to two years in Central Asia or Azerbaijan.

As if drilling constraints were not enough, geologic projections are also not panning out as expected. Drilling at two major fields, Karabakh and Ashrafi, has not yielded the anticipated treasure, causing some ana- lysts to lower their production forecasts for the next five to ten years.

Finally, Olcott wisely questions what can be done if the Caspian states start to destabilize. The vast distance between Central Asian and Azer- baijani reserves and the world's key energy-consuming regions implies a huge financial burden to bring these resources to market. Before Western energy companies plunk down billions of dollars, they must ask them- selves: How will investment in the region's oil resources be protected? The U.S. Sixth Fleet that guards Persian Gulf oil supplies will be useless against a disruption of remote, landlocked oil production. That leaves ground forces as the chief means to "defend" Caspian production from interdiction. NATO will likely find such a proposition too risky to touch.

Amy Myers Jaffe Project Coordinator for Energy Research James A. Baker Institute for Public Policy Houston, Texas

170 FOREIGN POLICY

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