Submarine Oil and Gas Pipelines under the Aktau Convention and the EIA Protocol to the Tehran Convention

On August 12, 2018 at the fifth Caspian Summit in Aktau, Kazakhstan, the Convention on the Legal Status of the Caspian Sea (hereinafter Aktau Convention) was signed by the Presidents of the five Caspian littoral states. If this landmark treaty comes into force, it will establish a new legal order for the Caspian Sea. The Aktau Convention is the result of 21 years of difficult negotiations, whereby the Caspian states endeavored to create a unique legal regime that would reflect the characteristics of the Caspian Sea and the diverse interests of its littoral states in the post-Soviet era. Indeed, if the Aktau Convention is implemented, it is likely to have a substantial impact on the geopolitical landscape of the Caspian region. A key element of the new Caspian legal regime is its submarine oil and gas pipelines. This was a point of contention throughout the negotiations on the above-mentioned issue. On the one hand, Azerbaijan, Kazakhstan and Turkmenistan sought the right to lay submarine pipelines on the bed of the Caspian Sea to transport their oil and gas to European markets and on the other, Russia and Iran, ostensibly concerned with the environmental effects of submarine oil and gas pipelines, believed that the construction of such pipelines should be approved by all littoral states. Still, the Russian and Iranian position had more to do with their opposition to the Trans-Caspian Pipeline (hereinafter TCP) project. Under the TCP project, it is proposed that a submarine pipeline be constructed on the Caspian seabed that would connect Turkmen gas fields to the Azeri shores in order to export Turkmen gas to the European market. Originally conceived and supported by the United States (US), the TCP project is also supported by the European Union (EU), which wants to import Turkmen gas to Europe via the so-called Southern Gas Corridor. But Russia and Iran have long been opposed to the TCP project since it effectively circumvents them as transit countries; not to mention that it would enable Turkmenistan to compete with Russia in the European gas market.
Of course, the dispute over the TCP must be seen in the wider context of energy geopolitics in the Caspian Sea region. Given that Azerbaijan, Kazakhstan and Turkmenistan are land-locked states, they are dependent on pipelines for the export of their oil and gas to foreign markets. That is why various pipeline projects have been either planned or implemented in the Caspian region during the past three decades. The underlying geopolitical significance of these pipeline projects is due to their transit routes as transit states, whose territories, not only benefit economically but are also able to exert political influence over the exporting states and its customers. As such, since the fall of the Soviet Union, Western policy has supported pipeline projects along the so-called Western Route, namely from Azerbaijan via Georgia and Turkey to terminals on the Black Sea and Mediterranean coasts or to southern Europe. The purpose of this policy is to deprive Russia and Iran form the political and economic benefits of transit pipelines and reduce Europe’s dependence to Russian gas. The TCP would connect Turkmenistan to the Western Route through which Turkmen gas can be transported to Europe without transiting either Russia or Iran, hence their opposition to the TCP and conceivably similar submarine-pipeline projects will arise.  
It was in this context that the two sides reached a compromise, which is reflected in Article 14 of the Aktau Convention. According to paragraph 1 of Article 14, Caspian littoral states “may lay submarine cables and pipelines on the bed of the Caspian Sea”. However, paragraph 2 of the said Article provides that “[t]he Parties may lay trunk submarine pipelines on the bed of the Caspian Sea, on condition that their projects comply with environmental standards and requirements embodied in it... the Framework Convention for the Protection of the Marine Environment of the Caspian Sea and its relevant protocols”. Therefore, the construction of submarine trunk pipelines such as the TCP is conditional upon compliance with the environmental standards and requirements of the Framework Convention for the Protection of the Marine Environment of the Caspian Sea (hereinafter Tehran Convention) and its protocols.
At first view, Article 14 should satisfy both sides as it allows Azerbaijan, Kazakhstan and Turkmenistan to construct oil and gas pipelines on the bed of the Caspian Sea while addressing Russia and Iran’s concerns about the environmental impacts of such projects. However, the key phrase in paragraph 2 of Article 14 is “relevant protocols”, which is a hidden reference to the Protocol on Environmental Impact Assessment in a Trans boundary Context (hereinafter EIA Protocol). This additional protocol to the Tehran Convention was signed in Moscow three weeks before the Aktau Convention. Indeed, Russia and Iran reportedly considered the conclusion of the EIA Protocol as a precondition for signing the Aktau Convention. More importantly, Russia and Iran seem to have a peculiar understanding of the legal effects of the EIA Protocol insofar as Russian and Iranian authorities have implied that the EIA Protocol effectively gives them environmental veto power over submarine trunk pipeline projects such as the TCP.
This paper seeks to examine the provisions of the Aktau Convention and the EIA Protocol with regard to submarine oil and gas pipelines to clarify their effect on the TCP and other similar projects in the future. As such, the paper’s main question is how will the implementation of the Aktau Convention and the EIA Protocol to the Tehran Convention impact submarine oil and gas pipeline projects in the Caspian Sea? The hypothesis is that although the EIA Protocol enables all Caspian states to participate in the environmental impact assessment procedure of submarine oil and gas pipeline projects, it does not make such projects subject to their approval.