E N Viro N M En T an D S Ecu Rity

Eastern Caspian Environment and Security Environment and Security and Environment risks into cooperation Transforming The case of the Eastern Caspian Region Environment and Security

The United Nations Environment Programme (UNEP), as the world’s leading intergovern- mental environmental organisation, is the authoritative source of knowledge on the current state of, and trends shaping the global environment. The mission of UNEP is to provide lead- ership and encourage partnership in caring for the environment by inspiring, informing, and enabling nations and peoples to improve their quality of life without compromising that of future generations.

The United Nations Development Programme (UNDP) is the UN’s Global Development Network, advocating for change and connecting countries to knowledge, experience and resources to help people build a better life. It operates in 166 countries, working with them on responses to global and national development challenges. As they develop local capacity, the countries draw on the UNDP people and its wide range of partners. The UNDP network links and co-ordinates global and national efforts to achieve the Millennium Development Goals.

The United Nations Economic Commission for Europe (UNECE) strives to foster sustainable economic growth among its 56 member countries. To that end UNECE provides a forum for communication among States; brokers international legal instruments addressing trade, transport and the environment; and supplies statistics and analysis. The broad aim of UNECE’s environment activities is to safeguard the environment and human health, and to promote sustainable development in its member countries in line with Agenda 21.

With 56 participating States, the Organisation for Security and Co-operation in Europe (OSCE) is a pre-eminent instrument for early warning, conflict prevention, conflict management and post-conflict rehabilitation in continental Europe, the Caucasus, Central Asia and North America. Since its beginnings in 1973 the OSCE has taken a comprehensive view of security, including through the protection and promotion of human rights and fundamental freedoms, economic and environmental cooperation, and political dialogue.

The Regional Environmental Centre for Central and Eastern Europe (REC) is a non-parti- san, non-advocacy, not-for-profit international organisation with a mission to assist in solving environmental problems in Central and Eastern Europe. The centre fulfils this mission by promoting cooperation among non-governmental organisations, governments, businesses and other environmental stakeholders, and by supporting the free exchange of information and public participation in environmental decision-making.

The North Atlantic Treaty Organisation (NATO) embodies the transatlantic link that binds Europe and North America in a unique defence and security alliance. In response to recent changes in the overall security environment, NATO took on new fundamental tasks. These include addressing both instability caused by regional and ethnic conflicts within Europe and threats emanating from beyond the Euro-Atlantic area. NATO’s “Science for Peace and Secu- rity” programme brings scientists together to work jointly on new issues and to contribute to security, stability and solidarity among nations.

The views expressed in this document are those of the authors and do not necessarily reflect views of ENVSEC partner organisations or their member-countries.

The designations employed and the presentations do not imply the expression of any opinion on the part of the organisations concerning the legal status of any country, territory, city or area of its authority, or delineation of its frontiers and boundaries.

This report was prepared on behalf of the partner organisations of the Environment and Security initiative by:

Luigi De Martino (lead author, University of Geneva); Viktor Novikov (UNEP/GRID-Arendal);

with inputs from:

Serik Akhmetov (Kazakhstan); Timur Berkeliev (Turkmenistan);

and with extended advice and support from:

Alexander Bragin, Iklas Nogaev, Gulzina Konysbaeva, Sapar Bazarbaev, Farida Akiyanova, Dinmuhamed Sunnatov, Misha Karapun (Kazakhstan); Oleg Guchgeldiyev, Viktoria Kim (Turkmenistan);

Christophe Bouvier, Frits Schlingemann, Otto Simonett, Nickolai Denisov, Petter Sevaldsen, Emmanuelle Bournay, Elena Kvitsinskaia, Marika Palosaari, Jaco Tavenier (UNEP); Bernard Snoy, Alexey Stukalo, Marc Baltes, Raul Daussa, Saba Nordström, Gaurav Thapan- Raina, Lyale Nazarova, Jan Olsson (OSCE); Ben Slay, Inkar Kadyrzhanova, Saija Vuola, Peter Svedberg, Ajiniyaz Reimov, Rovshen Nur- muhamedov, Natalya Panchenko (UNDP), Bo Libert (UNECE), Hamid Ghaffarzadeh (CEP); Susanne Michaelis, Chris De Wispelaere (NATO), Stephen Stec (REC);

and the participants of ENVSEC consultations and field missions in Aktau and Caspian region (Kazakhstan) and Ashgabat and Caspian region (Turkmenistan) in 2006–2007.

Language editing: Harry Forster (Interrelate, Grenoble). Maps and graphics: Viktor Novikov and Matthias Beilstein (UNEP/GRID-Arendal). Design and layout: UNEP/GRID-Arendal.

The governments of Canada, Sweden and Norway have provided financial support for the assessment and for the preparation and publication of this report. Environment and Security and Environment risks into cooperation Transforming

SWEDISH ENVIRONMENTAL Canadian International SWEDISHPROTECTION ENVIRONMENTAL AGENCY NORWEGIAN MINISTRY Development Agency PROTECTION AGENCY OF FOREIGN AFFAIRS

UNEP promotes environmentally sound practices globally and in its own activities. This report is printed on 100% recycled paper, using vegetable-based inks and other eco- Printed on 100% recycled paper at Imprimerie Nouvelle Gonnet, friendly practices. Our distribution policy aims to

The case of the Eastern Caspian Region F-01303 Belley, France. reduce UNEP’s carbon footprint. Environment and Security Eastern Caspian Environment and Security

Contents

Hinterkaspien 6 Introduction and executive summary 7

The Caspian region 13 Overview 15 Recent transitions 18 Striving for energy security 21 An area of geopolitical importance 25

Changing livelihoods in the eastern Caspian region 29 Natural capital, energy resources, and wealth distribution 30 New opportunities or a gloomy outlook? 34

Environmental degradation and security 41 Environmental consequences of oil and gas development 42 Legacy of the military-industrial complex 50 Freshwater 55 Marine resources and biodiversity 58 Fluctuating sea level and natural hazards 62

Conclusions 67 Conclusions and recommendations 68 Possible actions under the Environment and Security Initiative 72

Annex 73 Bibliography and references 74 Endnotes 82 Environment and Security and Environment risks into cooperation Transforming The case of the Eastern Caspian Region Environment and Security

Hinterkaspien

The geographical focus of this report used threats be confined to the region or would to be a classical hinterland. For a long peri- they affect much larger areas? Or does the od in history the area was even called Tran- environment build bridges, does it connect? scaspia, in other words the land behind the Caspian Sea. Also from the perspective of This set of relatively simple questions the now independent former Soviet Repub- serves as the guiding principle for how the lics Kazakhstan and Turkmenistan the strip environment and security initiative works. of land bordering the Caspian Sea is a dis- Both Kazakhstan and Turkmenistan joined tant province remote from the capitals. the ENVSEC club early on and asked for assistance in addressing common issues of But things are changing. The geopolitical environment and security, outlining possible centre of gravity has shifted east and with solutions, and communicating the findings the rapid development of China’s economy, in a way that can be understood by a larger another pole has emerged, rendering the public both in and outside the region and its terms ‘trans’, ‘hinter’ or ‘behind’ invalid for constituencies. this region. And with the rapid developments linked to oil and gas exploration in This publication is the result of more than Kazakhstan and Turkmenistan, the sleepy three years of intensive work done by Ka- provinces along the coast are waking up. zakhstan, Turkmenistan and international Aktau, for instance, has become a boom- organisations: first diplomatic, then more town by international standards. hands-on environmental assessments including field work and consultations, writing Now this assessment puts the region centre texts and making maps and graphics. Con- stage, where it belongs. What are the impacts sidering the perceived sensitivity of some of these tremendous dynamics on the envi- of the topics the report was dealing with, ronment, and, going one step further, can en- further diplomatic efforts have deployed to vironmental issues, such as pollution on land ensure that countries agreed about the key and sea, desertification, species extinction outcomes of the document. After all, there is be a threat to security? What are the poten- no more hinterland, in the traditional sense, tial impacts of climate change? Would these east of the Caspian Sea. Eastern Caspian Environment and Security

Introduction and executive summary

In the past, the notion of security was pri- through public consultations, joint assess- marily conceived in terms of neutralizing ments, and information from authoritative military threats to the territorial integrity and international and national sources. political independence of a state. However, in recent decades, it has been considerably The report is a product of a comprehensive broadened through incorporation of non- process that started with a study of the ex- conventional threats and factors promoting isting literature and information available tension and conflicts. on the Caspian region. In particular, analytical work done by the Caspian Environ- This report considers the role and impact mental Programme (CEP) and the eastern of environmental factors in securing hu- Caspian countries from 1998 to 2007 has man safety and sustained development of been extensively used throughout the En- the eastern Caspian Sea region, including vironment and Security Initiative (ENVSEC) the parts of Kazakhstan and Turkmenistan assessment. The CEP is an umbrella pro- opening onto the Caspian Sea. Furthermore, gramme of the five littoral states and group the analysis presented here introduces a of international donor organisations, and security perspective as it seeks to identify is financed by the Global Environment Fa- those environmental, socio-economic and cility (GEF), the World Bank (WB), the Eu- political issues that are profoundly affecting ropean Union (EU) through its TACIS pro- the livelihoods of the populations and could gramme, the United Nations Environment lead to social tensions and instability. Programme (UNEP), and United Nations Development Programme (UNDP). Through The environment and security approach its ten thematic centres operated from 1998 aims not only at comprehending and re- to 20021 the CEP has extensive monitor- solving local and regional environmental ing and research capacities able to carry problems but also at reducing the potential out an in-depth analysis of Caspian envi- for tensions and improving cooperation and ronmental issues. The Programme’s main stability. This also concerns actions targeted research output is the 2002 Trans-diagnos- at specific issues in the so-called “environ- tic Analysis (TDA), and its 2007 Revisit. For mental hotspots”, identified and prioritized these reasons the present ENVSEC report Environment and Security

The Environment and Security Initiative (ENVSEC)

The Environment and Security Initiative (ENV Likewise it aims to promote more sustainable SEC) was launched in May 2003 simulta- solutions to security challenges by address- neously at the 5th Environment for Europe ing their environmental aspects. The Initia- ministerial conference in Kyiv and the OSCE tive seeks to contribute to solving existing Forum in Prague, by three international or- or emerging political disputes by improving ganisations with different while comple- dialogue and promoting cooperation on en- mentary agendas and missions: the UN vironmental issues throughout the pan-Euro- Environment Programme (UNEP), the UN pean region. Assessments in South-Eastern Development Programme (UNDP) and the Europe and the Southern Caucasus have so Organisation for Security and Co-operation far led to a broader, deeper and more con- in Europe (OSCE). In 2007 the Initiative has crete understanding of how environmental been joined by the UN Economic Commis- and security concerns and policies intervene sion for Europe (UNECE), the Regional En- and affect each other. ENVSEC analyses vironmental Centre for Central and Eastern and maps are known and used at schools Europe (REC), and the Public Diplomacy Di- and universities, in public debates as well vision of the North-Atlantic Treaty Organisa- as in governmental planning. Assessments tion (NATO) as an associated partner. are accompanied by projects on the ground ranging from awareness-raising and in- From the outset ENVSEC has seen its prima- depth field investigations of specific issues ry goal as helping countries to identify, un- to helping countries strengthen their institu- derstand and where possible mitigate risks tions, improve policies and find solutions to to stability and security that may stem from concrete problems in the environment and environmental problems and challenges. security domain.

has been able to draw on research and Both CEP and ENVSEC look at environmen- analysis produced within the framework of tal issues, however the main strength of the the CEP. Production of the ENVSEC East- ENVSEC initiative is to combine environ- ern Caspian report also included independ- mental analysis with a security perspective, ent assessment missions on the east coast trying to understand how these two dimen- of the Caspian Sea region in 2006. During sions are related. these field assessments to the Turkmen and Kazakh provinces on the Caspian, local In a context where fossil fuels are of para- authorities, local experts and NGOs were mount importance for the global economy, consulted. The field missions were followed energy policy is a key area in which stakes for by national-level consultations in Ashgabat both the environment and security are very in September 2007. This event brought to- high. The issue of stable energy supply be- gether international and national experts on comes a matter of national security and the the issues raised by the report. At the same centre of geopolitical interests. The drive to- time, these consultations were instrumental wards energy security and away from extreme in developing recommendations and pro- energy dependence can have both positive posals for follow-up actions. and negative local and global environmental Eastern Caspian Environment and Security

effects depending on which resources, solu- The increased specialization of the region tions and technologies are prioritized. in the production of fossil fuels combined with the degradation of marine biological States that are well endowed with oil and resources, freshwater and agricultural land gas resources, such as Kazakhstan and are sources of concern. Rapid industrial Turkmenistan, are confronted with the chal- development without due consideration for lenges of managing them. These include, environmental security, especially in the for example, the risk of over-emphasising shore and sea zones, can lead to environ- the development of the energy extraction mental degradation and loss of livelihoods. sector and the consequent weakening of The rapid negative changes associated with the manufacturing and agricultural sector of the latter could erode the region’s resilience an economy, with the development of high and increase vulnerability to societal ten- economic inefficiencies. Such a situation sions. Population growth combined with can increase socio-economic inequalities, unequal access to natural resources could and widen the gap between underprivileged further contribute to discriminating against communities and those that have benefited and marginalizing specific social groups. from the revenue generated by the energy Overuse of resources will have long-term sector. Rural-urban inequality is a typical in- consequences that will affect the region stance of this trend. long after the oil and gas resources have been used up. The quality and availability of freshwater in the arid eastern Caspian region is a key The security anxiety that was fuelled by factor for rural development and public the Cold War (1945-1991) also had impor- health. While urban centres located on the tant environmental ramifications. By far the seacoast can afford expensive desaliniza- largest environmental impact of this period tion plants and/or the delivery of water via was caused by the construction and oper- regional pipelines, access to reliable fresh- ation of military-industrial complexes and water sources for the hinterland remains dif- arms testing sites. In the context of our ficult and the vulnerability of these regions report this is particularly apparent in Kaza- could increase with rising problems of envi- khstan, where the Soviet nuclear industry in ronmental pollution and degradation. the formerly “secret” town of Shevchenko (now Aktau) flourished until the 1990s cre- State institutions play a key role in coping ating a large uranium-tailing dump and an with such challenges since their capacities onshore nuclear station. The vast Kazakh for managing the wealth generated by the ex- steppes favoured the creation of large- traction of resources have had an impact on scale military testing ranges stretching for the country’s economic and political stability. hundred of kilometres, now polluted with In the eastern Caspian region the booming rocket fuel components and radioactivity, energy sector can lead to core changes in making it difficult or impossible to use ag- the socio-economic conditions of the whole ricultural land. area. This situation presents both opportunities and risks since rapid development of Finally the fluctuating sea level and, in a me- energy resources can imperil the region’s dium to long-term perspective, the issue of delicate environmental balance. climate change represent a major challenge 10 Environment and Security

Understanding the relationships between the environment and security

Links between environment and security are sumption that multiple stress factors may cause the subject of heated debate in the academic insecurity, whereas other factors may promote community. This report is based on the as- security for individuals and groups of people:

Security-promoting vs. Insecurity-promoting mechanisms

Systems Security-promoting mechanisms Insecurity-promoting mechanisms

Economic Wealth and welfare Poverty Wealth policies Inequity

Political Law Corruption Legitimate force Unlawful use of force

Cultural Social identity Discrimination Justice Injustice

Demographic Low birth rate High birth rate Urbanization Rapid population flows

Ecological Life support Scarcity Natural resources and raw materials Degradation Stable climate Lack of access Disputed right of resource use Extreme natural events and climate changes Disease and epidemics

Adapted from Dabelko et al., 2000 and Maltais et al., (2003)

Although still very broad in its scope, the ta- level, but also in a world of rising connectivity ble above underlines the need to look at the and progress, both in the regional and global problems and issues that lower the resilience dimensions. In general, one can say that re- of groups and societies, in other words their source scarcity and degradation, access to capacities to absorb shocks, and make them critical resources on which people may de- more vulnerable to tensions and threats, in- pend, competition to extract and control valu- cluding the threat of violent conflict. able commodities and outbreaks of diseases are significant non-military threats to security For this reason, the analysis needs to assess and prosperity of nations and individuals. the complexity of the relationship between different security or insecurity-promot- In more vulnerable areas, such as arid plains, ing factors, not only at a local and national mountain areas with highland-lowland inter- Eastern Caspian Environment and Security 11

actions, and transnational river basins, insta- debate on the impact of climate change, say- bility related to environmental degradation ing that “when resources are scarce – whether can contribute to conflict development (Bae- energy, water or arable land – our fragile eco- chler, 1999). systems become strained, as do the coping mechanisms of groups and individuals. This When discussing the importance of environ- can lead to a breakdown of established codes mental and demographic factors in modern of conduct, and even outright conflict”2. conflict, academic research points out thatthe loss of livelihoods is, to a greater extent than Changes in the natural environment affect poverty, the common denominator for many human societies and their survival capaci- recent internal conflicts. ties. Recent reports underline the fact that changes in climatic conditions “will over- stretch many societies’ adaptive capacities Livelihood definition within the coming decades. This could result A livelihood comprises the capabilities, assets in destabilization and violence, jeopardizing (stores, resources, claims, and access) and activities required for a means of living. national and international security” (WBGU, (Chambers and Conway, 1992) 2007:1). Such changes could exacerbate existing environmental crises such as drought, water scarcity and soil degradation, and Ohlsson (2005) argues that “while poverty may intensify existing problems. Weak and frag- be a near-endemic condition in certain socie- ile states are more exposed to the risks in- ties, loss of livelihoods marks a rapid transi- duced by climate change as their capacity to tion from a previous stable condition of relative adapt may be rapidly overstrained and lead welfare into a condition of poverty or destitu- to increased instability (WBGU, 2007). tion”. It is the rapid process of change resulting in a sudden fall into poverty that creates Another approach in research has been to the potential for livelihood conflicts. Losses of consider that dependence on natural re- livelihoods have many causes in the contem- sources, as measured by the percentage porary world, most of them being related to of GDP stemming from primary commodity job scarcity, population increase, and degra- exports, increases the risk of conflict (Col- dation of key environmental resources. lier et al., 2003). Recent analysis (Kahl, 2006) shows the importance of going beyond the Scarcity can arise either when the quality and abundance versus scarcity dichotomy. This quantity of resources decreases (supply-in- is particularly true in the case of abundant duced scarcity), population grows (demand- energy resources, in high demand in national induced scarcity) and/or resource access and global markets. Hence in an increasingly becomes more unequal (structural scarcity) interdependent world, abundance and scar- (Homer-Dixon, 1999). The UN Secretary-Gen- city of resources need to be put into their eral, Ban Ki-Moon, corroborated the scarcity context to understand how they become hypothesis during the recent Security Council factors of security or insecurity. 12 Environment and Security

and a considerable threat for vulnerable so- ally, Caspian Sea states have been able to cieties such as coastal communities and develop a positive dialogue on how to deal ecosystems. The Caspian Sea coast is with environmental issues in the region. highly vulnerable to rapid and destructive fluctuations in sea level. The latter, together Local environmental authorities have been with other natural hazards, including storm entrusted with decision-making power over surges, earthquakes and regional epidem- environmental performance in the Caspian ics, presents a serious risk to human se- area, a measure accompanied by improved curity and loss of livelihoods for the whole financial resources allowing them to -miti Caspian Sea region. gate some of the environmental problems. National environmental legislation and A number of these ecological problems regulations were improved and, for exam- were inherited from the past, whereas new ple, Kazakhstan approved in 2007 a new challenges are arising from the region’s Ecological Code4 including a critically new economic development since independ- approach to the issues of environment pro- ence. As the economic life of the region is tection, including inter alia special status closely linked to the development of energy for the Caspian Sea, and a zero-emissions resources, it is an open question whether policy for the land and sea. adequate measures are being taken to ensure environmental safety and sustainable Several national and international oil compa- development of the eastern Caspian. An- nies have introduced ISO 14000 standards swering such a question is a complex task. addressing various aspects of environmen- On the one hand, many positive initiatives tal management and better technologies for have been implemented. For example, the environmentally safer oil exploration and natural canal between the Caspian Sea and production. Energy companies and littoral the Kara Bogaz Gol has been reopened, al- states have embarked on remediation ac- lowing the bay to fill once more with water, tivities on polluted land and oil-storage pits. which has in turn significantly improved its Globally significant biodiversity regions bio-diversity. National authorities consider such as the Khazar reserve and the Ural the Caspian Sea region as an important and river delta have received valuable support. vulnerable area since all five Caspian states Mass media and public organisations have signed the Framework Convention for the helped draw attention to the issues of oil Protection of the Caspian Sea Marine Envi- industry development and made ecological ronment (the Convention was signed in Te- information more transparent for the pub- hran in 2003 and came into force in 2006). lic. Related activities include media tours The Caspian Environmental Programme around the Caspian, public Environmen- (CEP) was instrumental in launching this tal Impact Assessment (EIA) hearings and Convention, facilitating the Transboundary ecological expertise, and regular coverage Diagnostic Analysis (TDA) of the Caspian of environmental issues in the local and na- Sea in 2002 and its update in 2007, estab- tional newspapers. lishing expert working groups and regional thematic centres. Several international On the other hand, a number of existing projects and national actions have been and emerging environment and security catalyzed and implemented since then3. problems are still unsolved and appropri- Signatory states have also developed Na- ate action is needed at both local and national Caspian Action Plans, which aim to tional level in cooperation with neighbouring implement nationally the Framework Con- countries, as recommended in the conclud- vention. These initiatives show that gener- ing chapter of this report. Eastern Caspian Environment and Security 13

The Caspian region

15 Overview 18 Recent transitions 21 Striving for energy security 25 An area of geopolitical importance 14 Environment and Security

on D Volgograd Emba

Akhtubinsk K A Z A K H S T A N

U a Makat b r a m ATYRAU l E

V PROVINCE o lg Atyrau R U S S I A a Kulsary

Elista Astrakhan

Lagan Beyneu

Budennovsk Fort-Shevchenko Mineralnye Vody

Kislovodsk Prokhladny Kizlyar C MANGYSTAU UZBEKISTAN T ere Aktau PROVINCE Nalchik k Grozny Khasavyurt A Zhana Uzen C

a Vladikavkaz Makhachkala u S c Buynaksk Kutaisi Tskhinvali a

Gori s P u Derbent Sarygamysh

G E O R G I A K Lake s a I r TBILISI Rustavi a b o g A a Shaki Khachmaz z g Gyumri o l Kars Ganja ARMENIA Mingacevir N Hrazdan Sumgayt

T A Z E R B A I J A N

K T U R K M E N I S T A N ura BAKU Turkmenbash y YEREVAN U Khankendi Ali Bayramli Agri (Stepanakert) S R Balkanabat

r K a k s Nakhchivan Serdar E

E Khoy BALKAN Lankaran

Ahar VELAYAT Van Y A Baharly

Ardabil k Tabriz e tr Urmia A Bojnurd Esenguly Lake Maragheh Mianeh Bandar-e Anzali Urmia Gonbad-e Kavus Rasht Miandowab d Bandar-e fi e Torkeman Gorgan S Mahabad Zanjan A Babol s Arbi l l Sari n 2000 m Qazvin b Amol i o r t a Emamrud I R A Abhar N z u n M o 1000 m I R A Q Karaj Kirkuk Sulaymaniyah TEHRAN Semnan 0 m Sanandaj

Saveh 0 100 200 300 km

Map produced by UNEP/GRID-Arendal, August 2008 Eastern Caspian Environment and Security 15

The Caspian region Overview

Located at the crossroads between Europe and foxes pass along the semi-desert coast- and Asia, the Caucasus and Central Asia, al zones of the Caspian Sea. The north Cas- Russia and Iran, the Caspian Sea is the pian shelf, Ural river delta, Mangystau penin- world’s largest body of inland water covering sula – which boasts impressively diverse and 371 000 sq km, slightly larger than Germany. unique geological sites – and the Turkmen- It is landlocked and drains inward. For this bashy gulf are amongst the most important reason the inflow of its rivers largely deter- biodiversity areas. They also hold the great- mine the level of the Caspian Sea. With no est potential for local eco-tourism. outlet the Caspian Sea is the repository of all that is transported by and discharged into The coastal regions located to the northeast its waters by the rivers, including pollution. and east of the Caspian in Kazakhstan and Human life and the rural economy in these Turkmenistan display many similarities: a dry rugged conditions depend on the ecosys- climate5 and a mostly desert landscape with tem’s resilience and stability. Globally signifi- very low population density. The majority of cant biological species of sturgeon, Caspian the population currently lives in urban set- seals, pink flamingo, and about 400 endemic tlements along the coast. There are marked species live in the sea. Sturgeons look very differences between coastal and hinterland much as they did 100 million years ago, in regions, the latter usually depending on cat- the age of dinosaurs. Migration routes of rare tle farming whereas the coastal regions fea- species, such as saigak antelope, wolves ture well-developed industries.

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Kazakhstan’s provinces of Atyrau to the population in each province. Kazakhs con- northeast and Mangystau to the east of the stitute the ethnic majority (80–90%) in both Caspian make up 10% of the country’s ter- cases. Russians, Tatars and other nationali- ritory and about 5% of its population6. With ties, including foreign labourers and labour 2–4 inhabitants per sq km, population den- migrants, make up the rest (Agency of the sity is low. However in the past 30 years the Republic of Kazakhstan on Statistics). region’s population has increased by about 35%7. The provincial capitals of Aktau and The Balkan province of Turkmenistan occu- Atyrau accommodate nearly half the total pies 138 500 sq km stretching 1 200 km along Eastern Caspian Environment and Security 17

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the east coast of the Caspian. The population Berkeliev 2006, CEP 2006 a), compensating of the province exceeds half-a-million8 (8.5% even the emigration of the 1990s. The popu- of the country’s total), with the majority (about lation of the region is young with a median 80%) living in the urban centres (especially age of 27.5 (UNICEF 2004). Turkmens con- Turkmenbashy, formerly Krasnovodsk, and stitute the ethnic majority. In keeping with the Balkanabat, formerly Nebit Dag). Despite hav- urban profile of the province, the fertility rate ing the lowest population density in the coun- is low. On the other hand the province has try, the population has increased by a factor rather high mortality rates, possibly related to of 1.8 since 1976 (Great Soviet Encyclopedia, its industrial profile (UNICEF 2004). 18 Environment and Security

The Caspian region Recent transitions

The Caspian region has been inhabited since Turkmenistan experienced similar develop- prehistoric times, the sea providing an ac- ments. Nomadic populations were forced cessible source of food for coastal commu- into sedentary settlements and the republic nities. The sea has also represented an im- became one of the USSR’s most important portant waterway for trade, sea routes being cotton-producing centres. Industrialization more efficient than the long overland routes. included the development of the oil-gas and The Caspian Sea has hence represented an chemical industry in the Caspian region. important north-south and east-west com- Turkmen gas in 1990 represented almost munication platform, allowing the exchange 11% of total Soviet gas production (Djalili of goods and the movement of people. and Kellner, 2003: 186).

In the days of the USSR the Caspian region The process of change has continued or underwent considerable social and eco- even accelerated over the last 15 years. In nomic change. Compulsory free, universal 1991 the newly formed eastern Caspian education and the provision of universal states of Kazakhstan and Turkmenistan health care were among the Soviet Union’s found themselves, along with the central major social achievements. But the devel- Asian and southern Caucasus republics, opment of large-scale agriculture and the separated from the USSR. At first they faced meat industry was accompanied by a radi- many challenges: finding their place in the cal change in the traditional way of life of international community as sovereign na- the nomadic populations of Kazakhstan and tions, establishing political systems, secur- Turkmenistan, pushed into adopting a sed- ing their borders, and establishing their own entary life style. position in the global market without any support from the centrally-managed redis- In the Soviet Union’s centrally planned econ- tributive mechanism of the Soviet economy. omy, Azerbaijan was an important centre for industrial oil production, while Kazakhstan Many activities and jobs that previously en- developed its mining and processing indus- joyed central promotion and support, such try. Oil production expanded although most as the uranium-production complex in Ak- of its output went to the military–industrial tau, and the mineral extraction plants in Ga- complex, well established in the Kazakh rabogaz and Khazar, shrank significantly or SSR, with the nuclear test sites at Semipal- disappeared. The previous system of sup- atinsk and Kapustin Yar, and the Baikonur plying the coastal cities with food and other space centre (Akiner, 2004: 8). goods was reduced to a trickle. Eastern Caspian Environment and Security 19

The break-up of the Soviet Union introduced for the distribution of wealth and benefits four new actors to the region: Azerbaijan, generated by this sector, and strengthens the Russian Federation, Kazakhstan and the dependence of the local economy and Turkmenistan. With Iran they all now border job market on the energy sector. on the Caspian Sea. The legal status of borders on the Caspian Sea and its shelf re- The most vulnerable local communities, sources have been under negotiation ever in addition to the crisis in the system as a since, accompanied by a build-up in military whole, faced severe environmental prob- forces in the region. lems: the rise in the Caspian Sea level between 1978 and 1996 flooded pasture and Over the last 25 years the Caspian has at- other land and destroyed infrastructure. tracted increased global attention. The pres- Flooding also contributed to the salinization ence of significant oil and gas deposits and of the areas affected. Overfishing, pollution the lack of thorough geological exploration and the invasion of external species con- before 1991 fuelled hopes of unproven re- tributed to a significant drop in fishery out- serves capable of rivalling the Persian Gulf, put, while damage to water supply networks according to the most optimistic estimates9. and interruption of service (in some cases In a period of growing demand, and world- regional networks crossing borders) led to wide decline in oil and gas reserves and cor- lower drinking water availability and quality. respondingly high prices for hydrocarbon Coastal provinces in the eastern Caspian derivatives, these hopes have done much became increasingly dependent on the sea to encourage interest in the region, focusing for their water supply by desalination. in particular on the size of its hydrocarbon reserves, its geopolitical influence and the Such challenges and in many instances route taken by export pipelines. hardships caused an overall reduction in the quality of life, especially in rural areas, The transition from a planned to a market prompting outward migration from such ar- economy has built largely on the extrac- eas. The declining biological resources of tion and export of hydrocarbon resources, the sea combined with pollution, often inher- a situation that is now changing the national ited from the past, and recent environmental importance of coastal areas, the structure changes, made it increasingly difficult for the of national economies and the livelihoods of local population to live in a healthy environ- people living in the region. The development ment, produce food, and generate sufficient of the oil and gas sector is also a challenge income outside of the energy sector. 20 Environment and Security

The Caspian region Striving for energy security

The development of energy resources is not sian Gulf. The latter plan prompted fierce a new phenomenon in the Caspian region. opposition from the British, who saw it as Oil (in the form of naphta) has been extract- a challenge to their strategic interests, so ed and used for centuries in the Apsheron the pipeline was not built. The competition peninsula (situated in today’s Azerbaijan). over oil transport routes in the 19th century From the mid-19th century, oil extraction in bears important similarities with the “pipe- the Caspian (especially in the Baku oilfields) line politics” of the late 20th century, after became an industrial operation10. Western the disintegration of the USSR. and Russian interests allowed the Baku oilfield to expand and by 1897 it accounted Oil transformed the city of Baku, which by for almost half of global oil production (Djal- 1908 had a population of 248 300 (Akiner, ili and Keller, 2003; Akiner, 2004)11. Fierce 2004). By the end of the 19th century Baku competition over transport routes emerged: had become one of the largest industrial north by sea to Astrakhan, west overland to centres of the Russian empire. The first im- Batumi (and then via tanker to international portant oil field in Kazakhstan was discov- markets), or south by pipeline to the Per- ered in 1911, east of Guriev (now Atyrau)

��

�� Eastern Caspian Environment and Security 21

��

�� (Akiner, 2004). The same period saw at- �� tempts to extract oil on the Caspian coast �� of Turkmenistan on the Cheleken peninsula �� and at Krasnovodsk (now Turkmenbashy).

�� In 1991 Caspian oil production represented only 3% of total output in the USSR (Djalili and Kellner, 2003: 186). In global terms the �� importance of other regions such as the Middle East overshadowed the Caspian as an oil producing region for a long time. � �� However, in the last decade, the situation has changed. ��

Current oil estimates for the five states range from 17 to 49 billion barrels (bbl) of proven �� reserves (Ladaa, 2005; EIA, 2007; BP 2008). �� Globally the region’s reserves represent between 3 to 5% of world reserves. As for �� natural gas, proven reserves in the Caspian �� region are estimated at 5.9 trillion cubic me- �� tres, comparable to Saudi Arabia with pos- �� sible reserves estimated at 7.2 trillion cubic �� metres (BP 2008). At the end of 2007 Kaza- �� khstan’s proven oil reserves were estimated �� at 39.8 bbl (3.2% of world’s reserves) and Turkmenistan’s at 0.6 bbl (BP 2008). �� The frenzy surrounding the region’s oil and gas reserves that characterized much �� of the 1990s, is somewhat tempered by an analysis of production figures. In 2006 regional oil production reached roughly �� 2.3 million barrels a day, comparable to Brazil, South America’s second largest � oil producer. By 2010 the EIA expects the �� countries of the Caspian region to produce �� 22 Environment and Security

��

between 2.9 and 3.8 million barrels a day, The large energy reserves of Kazakhstan and which would exceed annual production by Turkmenistan have attracted the interest of South America’s largest oil producer, Ven- international energy companies and states ezuela (EIA, 2007) although expectations alike. The combination of high oil prices, may be tempered by the fact that Kasha- geographical position – at the crossroads of gan, one of the biggest Kazakh oil fields will Europe and Asia, two energy importing re- not come online before 2013. As for gas, gions – diversification of demand in Europe regional production reached approximately and USA, fast growing fuel consumption in 138 billion cu m (bcm) in 2004 and 163 bcm India and China and political instability in in 2007, exceeding the combined produc- the Middle East, ensure that the Caspian tion of South America, Central America, region will continue to attract considerable and Mexico (BP 2008). international attention in coming years. Eastern Caspian Environment and Security 23 The New Great Game line by 2012. The CPC pipeline currently has an annual throughput capacity of 32 million tonnes; The competition for the control of access to the this is expected to rise to 67 million tonnes16. hydrocarbon reserves and their transportation routes to the international markets has been Tanker system capacity is projected at 25 million called the “New Great Game”. tonnes a year in the first stage and 38 million tonnes in the second stage, primarily serving the Pipelines create an end-to-end supply line inte- transportation of oil from Tengiz and Kashagan grating the economies of consumer and produc- with adjacent oilfields. Such significant quanti- er (as well as transit countries), hence pipeline ties of oil being transported by tankers is of great routing is not only a question of economic cal- concern due to the risk of accidents and spills at culus and cost-benefits ratios. In a world heavily sea or oil product leakages in the seaports. For- dependent on fossil fuels and in a region at the tunately there have not so far been any large oil crossroads between Europe and Asia, pipeline spills along the eastern shore of the Caspian. A routing depends on geopolitical interests. tonne of oil was spilled in 2006 during loading of an Azerbaijan tanker in the port of Aktau (Minis- The first generation of pipelines was built during try of Environment Protection of the Republic of the Soviet era and consisted, among others, of Kazakhstan 2007, Akhmetov 2006). A larger oil the Central Asia-Centre and the Bukhara–Ural spill polluting 12 sq km of the sea outside Baku pipeline networks. However these networks had occurred as the result of the Mercury-2 tanker only limited capacity and in the course of time the accident involving 18 fuel tanks. infrastructure became inefficient and degraded. The Central Asia–Centre gas pipeline will under- The third generation of pipelines is still at the go major modernization work to boost capacity planning stage and mainly includes gas pipelines to 50 billion cubic metres (bcm)12. According to that either run north to Russia and Europe, west a recent agreement between the Russian, Ka- to Turkey and Europe (through, for example, the zakh and Turkmen governments, the Central Nabucco project or the Turkey-Greece-Italy (TGI) Asia–Centre gas pipeline will be complemented pipeline17), or south via Iran, or east to China by a new project, the Pre-Caspian gas pipeline. via Turkmenistan, Uzbekistan and Kazakhstan. The new pipeline will skirt the east coast of the The 7000 km long Trans-Asia Gas Pipeline from Caspian Sea carrying 20 bcm a year of Turkmen Turkmenistan to China, for example, with capac- and Kazakh gas along the Caspian shores north ity more than 40 bcm per year, should become to Russia’s Saratov oblast13. operational after 2010. Moreover, designing a Trans-Caspian gas pipeline along the seabed Construction of the second generation of pipelines from Turkmenistan to Azerbaijan and thence to started in the mid-1990s and includes the small Europe has become a realistic venture. A feasibil- Turkmenistan–Iran (Kurt Kui) gas pipeline, the ity study for the project is already under prepa- significantly larger Caspian Pipeline Consortium ration. Another project is 3 000 km oil pipeline (CPC) from the Kazakh field of Tengiz to the Rus- linking Caspian oil fields of Kazakhstan to China, sian Black Sea port of Novorossiysk where crude which will become operational after 2010. oil is transported further by tanker to markets, and the Baku-Tbilisi-Cheyan (BTC) pipeline14. In late Finally, energy demand in India and Pakistan is 2005 Kazakhstan agreed to supply up to 600 000 growing rapidly and both countries seek to im- barrels a day of crude oil to the BTC pipeline. The prove their access to Central Asian energy re- oil would be delivered from Kuryk, near the oil port serves. In April 2008 the projected Trans-Afghan of Aktau, and would then be shipped via tanker gas pipeline that aims to connect the Davletabad across the Caspian to the port of Sangachal, the gas field in Turkmenistan (estimated gas reserves starting point of the BTC. This decision was com- 4.5 trillion cu m) to Pakistan and India via Af- plemented by the signature in Astana, on January ghanistan reached a new phase when the four 24 2007, of a Memorandum of Understanding to countries signed the agreement for the construc- create a trans-Caspian oil transport system15. In tion of the 1 700 km gas pipeline. Construction early May 2008 the Kazakh and Russian energy should start in 2010 at a cost of US$8 billion. authorities reached an agreement to more than The pipeline would have a projected capacity of double the throughput capacity of the CPC pipe- 30 bcm of gas per year. 24 Environment and Security

Oil and gas infrastructure in the Caspian region

on D Emba Volgograd

Akhtubinsk K A Z A K H S T A N

U a b r a m ATYRAU l Makat E

V PROVINCE o lg R U S S I A a C CP Atyrau Kulsary

Kashagan Elista Astrakhan to China

Tengiz

Lagan Beyneu

Budennovsk

Mineralnye Vody Fort-Shevchenko

Kislovodsk Prokhladny C Te Kizlyar MANGYSTAU re k PROVINCE

Nalchik Aktau UZBEKISTAN Grozny A C Khasavyurt Jana Uzen Vladikavkaz a Makhachkala

u S Kuryk c Buynaksk

Tskhinvali a

s P Gori u Derbent Sarygamysh

G E O R G I A K Lake s a I r TBILISI Rustavi a Khachmaz b o g A a Sheki z g Gyumri o l Kars Minga cevir BT ARMENIA Ganja C N Hrazdan Sumgayt

T YEREVAN AZER BAIJAN BAKU Dubendi K T U R K M E N I S T A N ura Turkmenbashy

U Ali Bayramli Khankendi

Agri (Stepanakert) S R Balkanabat Sangachal A

r K a k Serdar s Nakhchivan Cheleken E BALKAN

E Khoy VELAYAT Lankaran

Van Ahar Y A Baharly

Ardabil Okarem Tabriz k e tr Urmia A Bandar-e Anzali Bojnurd Lake Maragheh Esenguly Urmia Mianeh Rasht Bandar-e Gonbad-e Kavus Miandowab d fi Torkeman e Gorgan S Neka Mahabad Zanjan A s Arbi l l Sari n b Amol i Emamshahr I R A N Qazvin o Babol t a r z M o u n I R A Q Abhar Karaj Sulaymaniyah TEHRAN Kirkuk Sanandaj Semnan 0 100 200 300 km Saveh

Oil and gas fields Oil and gas pipelines Terminals (ports)

Potential oil and gas fields Tanker delivery and proposed oil and gas pipelines

Map produced by UNEP/GRID-Arendal, August 2008 Eastern Caspian Environment and Security 25

The Caspian region An area of geopolitical importance

The transportation of energy not only cre- Iran, itself a producer of fossil energy, ates various forms of interdependence be- seems mostly interested in better connect- tween producers and consumers but also ing Caspian oil to the facilities in the Persian involves numerous actors and stakehold- Gulf. The country has developed coopera- ers. This situation increases the complexity tion with Russia and, more importantly, em- of planning and building pipeline systems. barked on development of its military ar- senal and especially its missile capabilities For energy-thirsty consumers such as Eu- and a controversial nuclear programme. rope, the United States, India and China di- This situation is a source of international versifying the suppliers of energy contributes tensions and regional insecurity. to reducing vulnerability created by dependence on a specific energy source (oil), from an For transit states such as Georgia, but also insecurity–ridden supplier (the Middle East). Turkey and Ukraine, pipelines are financial life- Diversifying energy suppliers increases en- lines, with states being paid rent and duty for ergy security. In this context the gas and oil use of their territory and for damage caused resources of the Caspian are of great interest by building and operating the pipelines. So, to China and India, whose economic growth increasing the number of pipelines crossing a relies on increasing demand for energy. At given country not only means increasing rev- present the European Union imports half of enue for the state but also establishing that its energy products. The estimates published country as a “hub” or “pivot” in the political by the European Commission in 2006, for economy of energy transportation19. the G8 meeting in St. Petersburg – suggest that the EU’s dependence on energy imports The US oil industry has been present in the will further increase, reaching 70% of its to- Caspian since the 19th century, but only since tal energy consumption by 2030 (94% of oil the disintegration of the Soviet Union has the and 84% of natural gas). The role of gas will US developed closer links with the region. increase considerably, hence the importance of securing the flow of energy18. The presence of energy resources and the geographical position between global ac- Russia is both a producer and a transit tors such as Europe, Russia and China en- country. Russia is the world’s largest ex- sure that the Caspian region retains its full porter of natural gas, the second largest oil geopolitical significance for the US. As for producer and exporter, and the third larg- other economies, US dependence on oil est energy consumer. It also controls vari- increasingly supplied by countries in the ous pipeline routes to Europe and Asia. This Middle East, Africa and other non-Western positions Russia as a strategic energy sup- areas means that the American economy is plier and “energy axis” between Europe and becoming increasingly exposed to supply Asia, which also allows Russia to assert its disruptions in overseas production areas. influence politically. The problem of energy Diversifying energy suppliers increases en- security is also a priority for the Shanghai ergy security. As they strive to control the Cooperation Organisation (SCO), in which most promising sites in terms of new oil, US Russia and China play significant roles. interests are competing with other indus- 26 Environment and Security

trialized regions and especially China. The Furthermore other oil rich areas are increas- conflicts in the Middle East and Afghanistan ingly prone to instability, making it imperative have amplified the region’s overall insecu- to protect – including by military means – in- rity, increasing the risk of critical infrastruc- vestments in the energy sector and ensure ture becoming a target for terrorist attacks. the constant flow of energy to the markets.

A sea or a lake? Beyond hydrology: the uncertain status of the Caspian Sea

The main question is whether the Caspian to its natural resources. Clear and agreed reg- should be considered a sea or a lake. The ulations increase the predictability of the situ- answer to this question has considerable ation, while at the same time decreasing the implications for use of the resources of both political risks related to possible confrontation the Caspian’s surface waters and its sea- over access to these resources. This in turn bed. If the Caspian counts as a sea then makes the Caspian region more attractive to the United Nations Law of the Sea – the global, regional and national investors. Montego Bay Convention of 1982 – would be the applicable body of law. In this case, The fact that the legal status of the Caspian each littoral state would be allotted a strip of Sea is still an open question underlines this re- coastal waters of a few tens of kilometres, ality and the weight of political and economical or in other words 12 nautical miles of territo- interests in finding a common solution. At the rial waters as well as an exclusive economic same time, states have been able to find coop- zone where states have sovereign rights erative solutions not only on a bilateral or trilat- over surface water and seabed alike. eral basis but also in a multilateral framework.

From 1921 to 1991, the Caspian was consid- By ratifying the Framework Convention on the ered a lake, and its waters were consequently Protection of the Marine Environment of the divided by extensions of the land borderlines Caspian Sea (Tehran Convention) that entered by consensus of the bordering states, Iran and into force in 2006, the signatories – all five bor- the USSR. The status of the Caspian was then dering states – signalled that they were willing regulated by bilateral international treaties and to search for common strategies to protect national legislation. The resources of the sea the Caspian environment. These include the were considered to be the joint, exclusive prop- prevention of pollution, the development of erty of the two littoral states (Djalili and Kellner, preventive measures, and access to and ex- 2003; Granmayeh, 2004). With the break-up of change of information. Progress in negotiating the Soviet Union, the situation changed com- and implementing the Convention’s protocols pletely. There were now five states (instead of is “mixed” and further cooperation is urgently two) each with an interest in the Caspian and required to achieve efficient control of human its resources21. To date the five countries are activities affecting the Caspian’s marine envi- still negotiating a regional convention on the ronment. In this context environmental issues legal status of the Caspian but an overarching have become the basis for planning and im- agreement has yet to be reached on the divi- plementing common measures, allowing the sion of the Caspian waters and – indirectly - its concerned states to improve stability and se- natural and mineral resources. curity in the region.

Clarifying the legal status of the Caspian Sea The ratification of the Tehran Convention is one of the key issues for regulating access and the work done within the framework Eastern Caspian Environment and Security 27

In keeping with concerns mentioned above, Europe and East Asia and redeploying forces in April 2005 the American Department of in other regions including South East Asia, Defence announced a major restructuring Africa or the Caspian Region (Klare, 2006)20. of the US military presence overseas which Since the late 1990s the US has increased foresees closing some military facilities in military cooperation with (training and arms

The uncertainThe uncertain status status of the ofCaspian the Caspian Sea Sea

RUSSIARUSSIA RUSSIARUSSIA

KAZAKHSKAZAKHSTAN TAN KAZAKHSKAZAKHSTAN TAN

AZERBAAZERIJANBAIJAN TURK. TURK. AZERBAAZERIJANBAIJAN TURK. TURK.

1935 1935 Ast Ast ara-Gasa ara-Gasa n- n- Kuli line Kuli line I R A NI R A N I R A NI R A N

If the CaspianIf the Caspian was a sea... was a sea... If the CaspianIf the Caspian was a lake... was a lake...

Soviet borderSoviet border Claims of Claimsthe riparian of the countries riparian countries

ContiguousContiguous zone 24 Miles zone (4424 Mileskm) (44 km) Territorial Tewatersrritorial 12 waters Miles (2212 Mileskm) (22 km)

Source: Vital Caspian Graphics 2005 Map produced by UNEP/GRID-Arendal, August 2008

of the Caspian Environmental Program are state of the environment in the Caspian as certainly positive examples of the ability of well as the importance of enhancing en- the Caspian states to operate in multilateral vironmental cooperation and coordination policy frameworks to develop alternative of national policies in order to improve the sources of regulation and decision-making. protection and use of biological resourc- In the meeting held in Tehran on 16 Octo- es. At the same time, the combination of ber 2007, the Presidents of the five Caspian geopolitical and national interests with the states (MFA RF 2007) not only underlined the profound changes occurring in the region importance of developing legal documents is such that the model based on compe- regulating that status of the Caspian Sea tition will continue to influence events in but also highlighted their concerns over the the region. 28 Environment and Security

supplies) Georgia, Azerbaijan and Kaza- disparities in military strength between the khstan in order to strengthen the capacity of five Caspian states. The Caspian being a local forces to protect oil–related infrastruc- maritime region, the naval component is ture (Klare, 2004). The new US doctrine fore- particularly important. Russia and Iran are sees the establishment of US military facili- the leading naval forces in the region, while ties in the Caspian region (so-called Forward Kazakhstan24 and Turkmenistan are invest- Operating Locations) (Klare, 2006) – possibly ing in increasing their military forces in the in Azerbaijan or Kazakhstan. region and upgrading capacity.

Deploying military forces in such a region The 2001 Iran-Azerbaijan confrontation25 is modifies the balance of power between ac- an illustration of the security risks related tors. The August 2008 military actions in to the unresolved legal status of the Cas- Georgia, which is strategically positioned pian Sea. However, since then there have on the oil routes from the Caspian Sea to been no other inter-state military confronta- the Black and Mediterranean seas, coupled tions although states have been strength- with alleged terrorist attacks on the BTC ening their naval forces and border troops pipeline in north-east Turkey over the same in the region. Certainly all the actors are period, underline the high vulnerability of well aware of the negative political and the energy infrastructure to conflicts and economic impact of military conflict in the instability22. region where even a limited confrontation between two or more coastal states would The military presence has increased in the be enough to slow or halt offshore explora- Caspian region over the last ten years, with tion and put investors to flight. Further sig- coastal states increasing military spend- nificant investment in the energy sector will ing and modernizing military infrastructure only occur if there is political stability and (Katlik, 2004)23. At present there are large security in the region. Eastern Caspian Environment and Security 29

Changing livelihoods in the eastern Caspian region

30 Natural capital, energy resources, and wealth distribution 34 New opportunities or a gloomy outlook? 30 Environment and Security

Changing livelihoods in the eastern Caspian region Natural capital, energy resources, and wealth distribution

The World Bank estimates that oil and Though oil-related revenue helps reduce cash gas-related financial flows in Kazakhstan constraints for the state budget, there are sev- could reach up to US$7 billion a year in eral risks associated with rising oil revenue. two decades (World Bank, 2005). Turk- menistan has also benefited from high The Kazakh government is aware of these world prices for oil (reaching US$136 a challenges and a large share of oil revenue barrel in June 2008), boosting its foreign is allocated to the National Oil Fund of the currency reserves and cutting external Republic of Kazakhstan. The National Fund debt. Turkmenistan also gained from the was established in 2001 with the main ob- improvement in the terms of payment26 jectives of reducing the impact of volatile for its natural gas exports to Russia and world prices and smoothing the distribution Ukraine, two key commercial partners for of oil-wealth over generations. The fund’s the country. Furthermore, the long-term capital comes from a share of government agreements with Russia and China for nat- income from the oil sector, royalties, bo- ural gas exports will guarantee the influx of nuses and revenues from Production Shar- foreign exchange into Turkmenistan for the ing Agreement (PSA). The fund is invested next three decades. in foreign equities. By the end of 2007 the fund had accumulated over US$21 billion27. At the same time the oil and state-owned sectors of the economy still attract the larg- �� est investments in Kazakhstan, while ag- �� riculture, tourism and other sectors of the economy show signs of disinvestment28. Oil �� remains the main driving force and a strong �� factor in the vulnerability of the economy. �� In Kazakhstan, as in most oil exporting countries, oil is produced in only a few regions of �� the country: five out of fourteen oblasts, with 21 oil-producing districts out of a total of 158 districts (not including cities). The Atyrau �� and Mangystau provinces play an important �� role in the country’s economy: in 2006–7 �� two-thirds of Kazakhstan’s crude oil29 and a third of natural gas30 were produced in the �� Caspian region. Their combined output accounted for 16.5% of Kazakhstan’s Gross �� Domestic Product in 2006 (Agency of the �� Republic of Kazakhstan on statistics). Indus- �� try, mainly the oil and gas sector, contributes �� 70–90% of Gross Regional Product followed by transport31 and services. �� Eastern Caspian Environment and Security 31

The “Dutch Disease”

From an economic perspective, the World governments typically own such resources Bank considers that oil-rich countries are or otherwise control the bulk of their reve- confronted with problems related to volatility nue streams (Karl, 1997; Ross, 1999, 2001). issues, quality of government spending, in- Likewise “honey pots” drive conflicts when flexibility of government policies in an uncer- valuable natural resources are concentrated tain environment, and boom-bust economic in specific areas or otherwise easily seized cycles (World Bank, 2005: 9). However one of and controlled; therefore, concentrated re- the key problems for oil producing countries sources such as valuable minerals are more is the “Dutch Disease”, a situation that devel- likely to produce conflict than diffuse re- ops when the economy is overheated by an sources such as cropland or freshwater. In increase in oil-related revenue and the associ- this context it should be remembered that ated fiscal, monetary, and credit growth. This up to 80–90% of Kazakhstan and Turkmeni- can lead to excessive appreciation of the local stan’s proven oil reserves are concentrated currency, exerting negative pressure on sec- in the Caspian region. tors such as farming and manufacturing. Societies and countries are not powerless Resources may also give rise to grievances when confronted with tension, instability and if state institutions, responsible for manag- conflict. They have the capacity to deal with ing them fairly, engage in private accumula- such problems. How resources are managed tion and even criminal dealings. The weak- and revenue stemming from such resources ness and failure of political systems is a key redistributed influences the overall stability factor in environmentally–related instability of a country. Institutions, particularly political and violent conflict (Kahl, 2006). This prob- bodies, can work to defuse conflict. Exam- lem is aggravated by the fact that govern- ples from countries such as Norway or the ments often rely on natural resources rather United Kingdom show that “Dutch Disease” than taxation for their sustained develop- or the “resource curse” are not an inevita- ment and prosperity. ble outcome for economies well endowed with natural resources. In a well-managed States dependent on natural resources often economy the extraction of mineral resources feel little need to respond to the demands can have a strong, positive impact on the of their citizens and consequently tend to local economy even in peripheral regions use revenue generated by the extraction of that may face strong centrifugal forces from natural resources to secure their own pow- the national core region (Auty, 2006). Poli- erbase and the support of political allies cies fostering broad-base, long-term human (Karl, 2000). In this case links between the capital investments not only enhance the centres of political and economic power are population’s opportunities to find employ- very close. This situation has been qualified ment (and improve workforce productivity as the “resource curse” (Ross, 1999)32. An too) but also mitigate potential deterioration important factor worth considering is that in income distribution that oil inflows may the potential of natural resources to cause create. The main challenge for states is how conflict varies according to their character- best to manage wealth generated by the istics and distance from the political cen- extraction of natural resources. Successful tre (Le Billon, 2001). Valuable minerals, for countries are the ones that invest heavily example, are much more likely to produce and well in broad-based human capital – not resource curses than agriculture because just in a narrow elite (World Bank, 2005). 32 Environment and Security

��

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Since independence, the coastal provinces has increased since 1991 respectively by a of Kazakhstan have enjoyed a boom in the factor of two and four (Agency of the Re- energy sector with massive investment in public of Kazakhstan on statistics, Ministry local industry and infrastructure. The in- of Natural Resources and Environment Pro- vestments have mainly been made by major tection of the Republic of Kazakhstan 2001). Western energy firms, which expanded their The industrial sector employs 25–30% of presence in the region in the early 1990s. the economically active population in each Between 1993 and 1999 Kazakhstan at- province. tracted US$9.29 billion in Foreign Direct In- vestment (FDI), about 53% of which went to Turkmenistan is facing similar challenges. the oil and gas industry (Brill Olcott, 2002). Initially revenue from energy and cotton ex- FDI has continued to increase from US$1.8 ports accumulated in the Foreign Exchange billion in 1999 to US$4 billion in 2004. An Reserve fund (FERF), an off-budget fund estimated 80 to 90% of total FDI goes to the controlled by President Niyazov until his oil and natural gas sector. death. Spending from FERF is discretionary and is used to support major government Because of the booming oil and gas sector, infrastructure projects, some of which have GRP in Mangystau and Atyrau provinces been criticised for not being genuine de- Eastern Caspian Environment and Security 33

��

velopment priorities. According to the Min- tion (26%), transportation and communica- istry of Foreign Affairs of Turkmenistan, in tion (10%)33. Since 2000 the province’s in- order to achieve more efficient use of state dustrial output has doubled, largely due to funds, the new President signed a decree on the energy sector. The transportation sector 4 February 2008 ordering the closure of the is growing steadily. The port of Turkmen- FERF. Although this measure may contribute bashy is the largest terminal in Turkmeni- to more transparent and efficient use of the stan and an important stretch of the interna- state’s financial resources, the country will tional corridor linking Europe to Central Asia still have to deal with the challenges repre- via the Caucasus. The province contributes sented by its dependency on revenue gener- roughly 18–23% of the country’s GDP but ated by the extraction of natural resources. accounts for the largest share of added value in the production sector (33.7%). The Turkmenistan’s Balkan province displays Balkan province produces 95% of the coun- similar trends to its Kazakh neighbours, try’s oil and about 15% of its natural gas. It Mangystau and Atyrau. The province has a has consequently attracted almost 40% of marked industrial profile, the main drivers of FDI, at a national level, primarily directed the regional economy being fuel and energy, towards the development of the fuel-and- chemicals (almost 50% of GRP), construc- energy industry. 34 Environment and Security

Changing livelihoods in the eastern Caspian region New opportunities or a gloomy outlook?

The disintegration of the USSR in 1991 led to and social structure of the whole region. As a systemic crisis in all the countries of Central we have seen above, all coastal provinces – Asia. In the Caspian region these changes af- particularly in Kazakhstan – enjoyed a boom fected all sectors of society and all provinces. in the energy sector and massive investment Many activities and jobs that previously en- in local industry and infrastructure. joyed central promotion and support, such as the uranium-mining complex in Aktau or the But alongside the booming energy sector, minerals extraction plant in Garabogaz, lost the share of agriculture in GRP in Atyrau and their importance. Former collective farms and Mangystau provinces has steadily dropped. fisheries in the Caspian region suffered vari- Experts report that a significant reduction in ous fates. Some were modernized, adapt- agricultural output, coupled with a threefold ing in the main to the conditions of a market fall in farm-gate prices, led to a fivefold drop economy. Others underwent serious transi- in agricultural added value. This cut living tional shocks, leading to a general decrease standards and increased poverty in rural ar- in the importance of farming in the region. eas (Chulanova, 2007: 17). Fifteen years ago the agricultural sector of the Atyrau province In the eastern Caspian, development of the contributed 22% of GRP whereas it now energy sector has changed the economic accounts for less than 3%34. Cereal cultiva-

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�� Eastern Caspian Environment and Security 35

tion decreased tenfold and cattle and meat production dropped substantially, though in �� 2000–7 the trend was once more upward. In �� Mangystau province, where the role of agriculture was much less important than in �� Atyrau, the contribution of the agricultural �� sector to GRP – essentially cattle breeding �� – dropped from 4% to less than 1%35. �� The amount of land under cultivation in �� Atyrau province fell from 80 000 ha in 1990 to around 2 000 ha in 2005–7, and in Man- �� gystau from 1 500 ha to 50 ha (Agency of the Republic of Kazakhstan on statistics). The number of sheep and goats decreased �� two to threefold. Many areas of cropland and pasture especially in Atyrau were flooded due to a rise in the sea level. Other areas � were significantly degraded by overgrazing or industrial development. As a result of these factors and changes in land use pri- � orities, the area legally designated for agri- �� cultural use has substantially declined. �� Over the same period fishery output from the Caspian Sea and the Volga-Ural deltas decreased by a factor of two to three. Fish �� catches in Atyrau fell from more than 20 000 �� tonnes in the early 1990s to 15 000 tonnes in the 2000s. In Mangystau catches plummet- �� ed from 9 000 tonnes to 500 tonnes (Agency �� of the Republic of Kazakhstan on statistics). Sturgeon catches dropped dramatically, by �� a factor of more than 20, despite increasing efforts to farm the fish. Illegal poaching �� of sturgeon and black caviar, the cash commodities for many rural coastal communities, � has aggravated the productivity losses of the Caspian’s biological resources (Akhmetov 2006; CEP 2002). The world food crisis may � amplify the potentially fragile situation in the eastern Caspian region with declining agri- � cultural and fish production or may be also an opportunity for reversing the local trends. �

The trends described so far underline the � regional economy’s increasing dependence �� on the energy sector and the impact of hu- �� 36 Environment and Security

man pressures and environmental change near the oilfields and other mineral depos- on economic sectors and livelihoods that its. This concentration of population also depend on the ecosystem. There are how- increases demand for resources such as ever several sides to the picture. energy, water and food.

One clearly identified trend relates to the in- Massive investment in urban centres and creasing differences between urban centres infrastructure is widening the gap between on the coast and areas in the rural hinter- rural and urban areas. Despite the fact that land. Urban centres, especially the Kazakh rural communities may also benefit from an provincial capitals Atyrau and Aktau, have range of social investments financed by the become strategic nodes for services to the energy companies – such as the construc- energy sector (financial services, transpor- tion of schools and gas mains, road repairs, tation, housing, etc.), attracting population etc. – many rural communities remain mar- from rural areas, other parts of the country ginalized and impoverished. and other states. The energy sector needs a qualified workforce, often drawn from At the same time the rapid development of abroad by the high wages paid in the region. urban centres often lacks consistent plan- The presence of large numbers of foreign ning, leading to major differences within the workers may cause social tension36. centres themselves between areas served by recent municipal infrastructure, and More than half the region’s population is those that lack such services or depend on currently living in urban centres on the coast decaying infrastructure. Eastern Caspian Environment and Security 37

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Another factor relevant to the impact of the despite these provinces’ high levels of per energy sector’s development in Kazakhstan capita GRP. Between 2001 and 2006 the is the overall increase in per capita income percentage of the population living below in Atyrau and Mangystau (twice as high as the subsistence minimum in Mangystau fell the average for Kazakhstan). Average wages from 60% to 26%, and in Atyrau from 56% rose to the top of the scale in Kazakhstan to 24%38 (Agency of the Republic of Kaza- (Agency of the Republic of Kazakhstan). On khstan on statistics). the other hand the rise in salaries can hide the persistence of substantial wage differ- The widening gap between urban and rural ences – sometime exceeding a factor of 1837 areas is also apparent in income and poverty – between the oil-and-gas sector and other levels. Although poverty rates in Mangistau sectors, especially farming. The Gini Coeffi- and Atyrau provinces are generally among cient is an indicator measuring inequalities in the highest nationwide, there is cause for income distribution. For Atyrau and Mangys- even greater concern regarding rural poverty. tau in 2002 it showed values 0.43 and 0.36 In Atyrau it has come close to 44% at cer- respectively, compared to Kazakhstan’s aver- tain times, while in Mangystau it culminated age 0.33 (Pomfret 2006; World Bank 2004). at 85% of the rural population (the highest level in the country) compared with a nation- Although in 2006–7 inequality and pov- al average of 35% for the rural population39. erty levels decreased all over Kazakhstan Despite the importance of oil production in compared with 2001–2, they nevertheless Mangystau, almost 40% of its total popula- remained high in Atyrau and Mangystau tion is poor, which is higher than a poverty 38 Environment and Security

headcount in Kazakhstan’s Jambyl province, sector. Employment options in other sec- which has the lowest regional product per tors are limited, a situation worsened by the capita (Pomfret 2006; ILO 2004). At the same fact that many industries on which various time, in Mangystau in 2003, three out of five small towns such as Garabogaz or Khazar people were poor in rural areas, compared depended have gone into decline due to low with only one in five in urban areas (Chu- profitability. Furthermore the low incomes lanova, 2007: 18). The differences in income from traditional activities such as grazing or distribution between urban and rural areas fisheries, combined with a rise in living stand- have significantly increased since independ- ards, make these sectors less attractive and ence40 although the underprivileged can ob- may even lead to the gradual destruction of tain some social assistance and partly com- the way of life in Turkmenistan’s fishing and pensate the differences in revenues. pastoral communities. There are also recent plans to boost coastal tourism develop- A recent survey of the coastal regions of Ka- ment on the Caspian Sea41, particularly in zakhstan (CEP 2004 c; CEP 2004 d; CEP the Turkmen sector. Recently the President 2006 b; UNDP 2007) showed that the rural of Turkmenistan, Mr. Berdymuhamedov, population’s main problems were unem- pointed out that the “Caspian seashore is ployment and low salaries, lack of enter- a unique, ecological zone well-known by its tainment and more generally opportunities favourable climate and the richest potential for children and young people, and envi- that opens wide perspectives to convert it ronmental impacting on the quality of life to the true recreational pearl”42. According to in these regions. The sharp decline in the recent studies (CEP 2007), the north-eastern importance of agriculture and fishing, which and eastern shores of the Caspian Sea have face a gloomy future, are key factors under- low levels of pollution, except for hydro- pinning the deterioration of the economic carbons which sometimes exceed permis- situation in rural areas. sible concentrations in industrial areas and sea ports. Compared with other larger parts Turkmenistan’s Balkan province displays of the Caspian Sea – of Iran, Azerbaijan or similar trends to its Kazakh neighbours. While Russia – the eastern Caspian is considered the energy sector is growing in importance, less polluted. There are two main factors agriculture accounts for about 7% of GRP. contributing to this: fewer rivers – the vec- The province’s arid pastures are an impor- tor for most of the pollution – draining into tant feeding ground for about 15% of coun- the sea, and fewer sources of land or sea- try’s sheep and goats and for one third of based pollution, combined with low popu- its camel stock (Turkmenmilliihasabat; CEP lation density. Although there is still some 2006 a). Fisheries have generally declined in uncertainty regarding the realization of these importance since the 1980–90s, yet they re- plans, in some cases such as Avaza, in Turk- main an important source of income for fish- menistan and Aktau-city in Kazakhstan of- ing communities and state enterprises, with ficial local tourism and general development an annual catch totalling 15–20 000 tonnes plans have been approved. of fish in the Caspian (Berkeliev 2006). At the same time the Turkmenistan govern- The Balkan province shows signs of de- ment’s policies of state support and subsi- veloping into an increasingly specialized dies for the public sector – mostly financed by economy dependent on the fuel-and-energy oil and gas revenue – has largely maintained Eastern Caspian Environment and Security 39

living standards. An analysis (UNICEF 2004) ing natural resources. Revenue from natu- of living standards in Turkmenistan in 1998- ral resources usually starts by benefiting a 2003 revealed two main positive trends: con- country at the national level. Local authori- stant growth in income in all regions; levelling ties are often unable to raise and use funds of income disparities between regions43 and to develop infrastructure and provide serv- household income groups. Thanks to gov- ices in line with a realistic local economic ernment policies regulating the size of mon- development scenario. Developing the en- etary and in-kind labour remuneration, the ergy sector may therefore lead in the long- income of an average household increased run to unbalanced growth of the local econ- during the relevant period. However major omy, accentuating the risk that local and differences still exist between urban and regional communities will have to pay a high rural living standards (Library of Congress - social and environmental cost for extraction Federal Research Division 2007). activities with little compensation. Many of the environment costs that local communi- The preceding paragraphs have outlined ties in extraction regions face are caused by some of the challenges associated with the the pollution related with the production and management of wealth derived from extract- transportation of extracted resources.

Salt production in Garabogaz, Turkmenistan

The towns of Khazar (formerly Cheleken) and azsulfat, an organisation specialising in the

Garabogaz (formerly Bekdash) on Turkmeni- extraction of mineral salts (mostly Na2SO4) stan’s Caspian shore were established in the available in the gulf. The geographic and cli- early 20th century mainly to support extrac- matic conditions here are harsh, with almost tion of minerals from surface salt deposits no natural sources of freshwater, and a hot, (sodium sulphate, bischofite, Glauber’s salt) arid climate. An industrial plant was estab- and underground iodine and bromine brines. lished in 1975, but mineral extraction started The population of these towns consisted pre- in 1929 relying exclusively on human labour dominantly of workers of the enterprises and and natural methods. The break-up of the members of their families. Their mineral pro- USSR substantially reduced the town’s sup- duction was exported to the Soviet republics, ply of food, water and other essential goods. while centralized supplies handled imports of Garabogaz now has a population of about food, water and goods to sustain their op- 6 000 people (1 000 less than in 1991), 800 of erations. With independence, the situation in whom work in the salt industry. Currently the these industrial towns became critical. Over sodium sulphite is mainly exported to Iran, and above the consequences of the adverse however there are also buyers in Central environmental impacts accumulated during Asia and other countries in the post-Soviet the period of active mineral extraction, the space. The sharp drop in wages and em- region lost its centralized support. ployment made many local inhabitants seek alternative sources of income in commercial The town of Garabogaz is a typical example activities and fishery. The current situation in of this situation. Founded in the 1930s be- Garabogaz is emblematic of the risks asso- tween the Caspian Sea and the gulf of Kara ciated with excessive specialization and de- Bogaz Gol, the town depended on Karabag- pendence on exporting raw materials. 40 Environment and Security Eastern Caspian Environment and Security 41

Environmental degradation and security

42 Environmental consequences of oil and gas development 50 Legacy of the military-industrial complex 55 Freshwater 58 Marine resources and biodiversity 62 Fluctuating sea level and natural hazards 42 Environment and Security

Industrial activity, pollution, extraction of valuable raw materials and natural resources (oil, gas, uranium, but also commercial fish stocks such as sturgeon) can cause environmental degradation and in their most severe forms loss of livelihood (as with the collapse of fisheries or the flooding of cropland). The exploitation of essential natural mineral resources, available in large quantities, attracts considerable economic and political interest. But in such situations environmental protection may often be a low priority. Furthermore extreme natural events and global changes exacerbate anthropogenic activity. Subsequently climate change, natural hazards, migration of alien species and epidemics stress the ecosystem, with the risk of damaging ecological security and the living environment.

Environmental degradation and security Environmental consequences of oil and gas development

Of all the economic activities in the eastern of sea water, air and soil in the Caspian region Caspian region, oil and gas exploration and have been reported. An area covering as much extraction are probably causing the greatest as half a million hectares is now affected by concern among the local population and au- desertification, soil compaction and pollution thorities regarding the current and future en- due to oil extraction and transportation activi- vironmental situation and potential risks. The ties (CEP 2006 b). Severe land degradation, problems related to poor environmental prac- caused by lakes of oil waste and spills, affect tice in the past, as well as several mass fish up to 5 000 hectares in Atyrau and Mangys- and seal die-offs in recent years, have been tau provinces (CEP 2006 b; NESSD 2006; on the agenda of governments, experts, mass Akhmetov 2006; Ministry of Environment Pro- media and public organisations addressing tection of the Republic of Kazakhstan 2007). the energy sector’s present and future. Information about land pollution in Turkmeni- stan is limited, but according to data collected Lack of knowledge about the actual state of during field missions, severe land degradation marine ecosystems and their vulnerability to may affect as much as 1 000 ha. pollution, coupled with inadequate environmental monitoring, also fuel concern and After independence the region saw a drop uncertainty for the future. in pollution levels, partly due to declining economic activity and partly due to the in- During the Soviet period, oil and gas develop- troduction of better environmental practice ment in the region was often conducted using and cleaner technology. However increas- environmentally unsound practices and out- ing oil prospecting and production, on land dated technologies. Many cases of pollution and sea, the expanding pipeline networks Eastern Caspian Environment and Security 43

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and the high expectations placed on rev- aesthetic appeal and water quality, along enue from hydrocarbon extraction have with other negative factors, may wreck its prompted renewed environmental concern. prospects for further development, especially in fishery and tourism. Annually thousands of tonnes of petroleum hydrocarbons are discharged into the Cas- The northern Caspian Sea, which is the main pian Sea by the Volga river alone from land- habitat for sturgeon, seal and waterfowl, based sources (CEP 2007). Overall, rivers once enjoyed the status of a protected area. draining into the Caspian Sea carry more However the situation changed in 1993 when than 50% of total oil pollution. Further ex- a Kazakh government decision44 allowed the ploration of coastal and offshore fields may geological exploration and development of increase pollution. High concentrations of oil deposits in the area (especially Tengiz). phenols and oil by-products, which may damage biodiversity, are already being ob- Given the rich biological diversity and vul- served in the northern part of the Caspian, nerability of the shallow northern Caspian in mainly at the mouth of the Volga. The fall in the event of an accident, the environmen- fish stocks and the decline in the region’s tal impact of oil pollution in this area could 44 Environment and Security

Oilfields of the northern Caspian – Kashagan and Tengiz, Kazakhstan

The giant Kashagan offshore field was dis- to more than US$136 billion, with the start of covered in July 2000, 80 km south of Atyrau. operations now delayed from 2008 to 2013. It is the largest Caspian offshore field and one Oil and gas production at the Kashagan field of the largest fields discovered anywhere in will be based on several artificial islands, be- the world in the last 30 years. Named after a ing built at present. An underwater pipeline prominent, 19th century Kazakh poet, it cov- will transport hydrocarbons to the Boloshak ers an area 75 by 45 km. The Kashagan field oil and gas terminal 30 km from Atyrau. It is was formed 350 million years ago in shallow estimated the oilfield will operate for 30–40 warm sea conditions, lying below salt fields years. If all goes according to plan Kasha- at a depth of 4–4 500 metres. The oilfield is gan oil output should increase from an initial estimated to contain reserves of about 38 bil- 75 000 barrels a day to 1.2 million barrels lion barrels, 9 to 13 billion of which can be a day (more than 55 million tonnes a year) extracted using the gas re-injection method. at the peak of production in 2015–2045. For Analysts hope that Kashagan will prove to be the sake of comparison, in 2006, total oil one of the world’s largest offshore fields and production in Kazakhstan amounted to 1.43 also provide a reliable indicator of the Cas- million barrels a day, with 0.22 million barrels pian’s potential oil supply (German, 2008). daily consumption (BP, 2007). Overall, in the Its oil is characterized by very high pressure coming decades, offshore energy produc- (800 bars), temperature (125°C), hydrogen tion in the Kazakh sector of the Caspian Sea sulphide content (15–20%), and the pres- could jump from almost zero to more than ence of naturally occurring toxic substances 88 million tonnes of oil and 80 bcm of gas (mercaptanes). This creates major logistical a year (Atyrau Oil and Gas, 2007). Bautino difficulties and could turn even a small emer- Base, located in the Mangystau province gency into a large environmental disaster. For 265 km south of the Kashagan field, is the example, in 2000 and 2001, minor emergen- main maritime-support base and oil-waste cies during exploratory drilling reportedly led recycling centre. to the discharge of pollutants into the sea. In August 2007 the Ministry of Environmental Tengiz, another giant oilfield (size 19 x 21 km) Protection of Kazakhstan stopped explora- was discovered in 1979, however large-scale tion of the Kashagan oilfield due to alleged exploitation only started in 1993 due to tech- violations of environmental legislation. On 14 nology problems similar to those encountered January 2008 a new Memorandum of Under- at Kashagan. The Tengiz field is expected to standing was signed between the companies contain about 3 billion tonnes of oil and will be in the Kashagan consortium, increasing the exploited over the next two decades. In 2006 oil share of Kazmunaigaz, Kazakhstan’s national output from the Tengiz field amounted 291 000 oil company from 8.3% to 16.8%45, a situa- barrels a day. By 2008–10 the volume of oil tion that led some to conclude that the hold- production is slated to double. A new process- up was partly due to delays in production, ing plant is planned to come online by then. frustrating all project partners, but also due to an interest in revising the PSA agreement. One of the main problems encountered on Tengiz is that sulphur accumulates during oil The estimated cost of developing the and gas extraction at the rate of more than Kashagan field is likely to rise from US$50 5 000 tonnes a day. Yet the total storage ca- Eastern Caspian Environment and Security 45

be far greater than in other parts of the sea (Ministry of Environment Protection of the Republic of Kazakhstan 2007). pacity currently is 9 million tonnes (Ministry of Environment Protection of the Republic of Some environmental experts suggest that Kazakhstan 2007). This means that with low- damage caused by oil pollution could – in the er demand for sulphur and fewer exports the long term – exceed short-term profits gener- heap of sulphur stored in the open air may ated by oil development (Nogaev 2007; Di- continue to increase, prompting concerns arov 2007). Experts point out that once the among local authorities and in the commu- region’s energy resources are exhausted, it nity. The Kazakh environmental authorities will have to cope with the results of several have recently imposed a US$309 million fine decades of oil and gas extraction (polluted on TengizChevroil (TCO) – the field operator environment, depleted biodiversity, etc.) and a Chevron-led venture – for breaches of without the financial resources to remedy environmental regulations – including stock- the damage wrought by industry. Long-term piling sulphur46. damage and impacts could consequently far exceed current short-term benefits48. In 2006 local authorities and TCO carried out an assessment of environmental and health effects of storing sulphur in the open air at Several Caspian oil deposits contain natu- Tengiz. The Kazakh Institute of Oil and Gas rally occurring radioactive elements. Long- admitted that increased sulphur accumula- term exploitation of these deposits, espe- tion and storage could raise environmental cially in Mangystau province, has caused pressures, and risks to the public and oc- the formation of 10–15 000 tonnes of low- cupational health47. With the introduction level radioactive oil waste and scrap metal, of stricter environmental targets, moderni- which is being temporarily stored on-site zation of production methods and facilities (Ministry of Environment Protection of the gas flaring on the Tengiz field was reduced Republic of Kazakhstan 2007). These radia- from 1 800 million cubic metres in 1999 to tion sources represent an additional threat 420 million cubic metres in 2006 (TCO En- to environmental security. vironmental Bulletin 2006). Further cuts in this type of pollution are planned after 2008, There is a serious risk of industrial pollution when a new plant will start producing granu- in the northern Caspian. An accident already lated and block sulphur using the deposits occurred in 1985, when Tengiz well #37 shot stored on the Tengiz oilfield. Finally the new a column of flame 150–200 metres into the ecological legislation (Environmental Code air. It took more than a year to put out, burn- of Kazakhstan 2007), coupled with stricter ing 3.5 million tonnes of oil and half a million enforcement, will also contribute to improv- tonnes of hydrogen sulphide. This accident ing the situation in the region. significantly impacted biodiversity and public health within a 50–100 km radius (Akhme- On the other hand changes at Kashagan and Tengiz indicate that the Kazakh authorities tov 2006; Ministry of Environment Protection – perhaps following the Russian example on of the Republic of Kazakhstan 2007). In the the Sakhalin-2 oilfields in Siberia – seem to Beyneu and Karakiyan districts industrial de- be stepping up pressure on energy multina- velopment has so severely damaged pasture tionals operating in the Caspian region. that the population has started to move grazing cattle to neighbouring areas. 46 Environment and Security

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Similarly in Turkmenistan oil production platforms producing 350 000 tonnes of oil a around the Cheleken peninsula, and oil and year. So far, six cases of oil fountain ignition gas transportation by tankers and pipelines accidents and numerous seepages of an have affected biodiversity and the local oil and water mixture have been registered, ecosystem. The Cheleken peninsula is also especially during exploration in the 1970s home to specialized chemical enterprises. and 1980s. The concentration of oil and chemical industries calls for particular attention to the Before the intense oil development around environment and safety. In addition to pos- Cheleken now culminating in annual oil out- ing a risk of increased water and air pollu- put of 2 million tonnes, salty hollows on- tion these industrial activities may suffer ad- shore (takyrs) served as natural reservoirs. verse effects due to the rising sea level. They could store and supply water for some 10 000 people, as well as farm animals In Cheleken, Turkmenistan, offshore oil pro- (camels, goats and sheep) and migratory duction is concentrated on dozens of sea birds. When oil production started, many Eastern Caspian Environment and Security 47

such hollows were used as waste ponds oil wells, particularly in the flat coastal areas of for evaporating associated water, filling up Mangystau province, Kazakhstan, causing oil with oil residues, surface-active agents and spills as recently as the winters of 2001 and heavy metals. These water sources are con- 2003. The Kazakh authorities reacted to this sequently no longer usable and the popula- threat by identifying the largest abandoned oil tion must rely on mains water, tanker deliv- wells, which exceed 150 in number with more eries or supplies from desalinization plants. than half located in the flooded zone. How- ever the shortage of funds hinders progress The Turkmenbashy refinery and marine ter- and only about 30 priority wells were secured minal, with annual capacity of 10 million in 2004–6. In Turkmenistan oilfields situated tonnes, were significant sources of oil pol- near the shore of the Caspian Sea have been lution from the 1940s to 1980s due to their partly flooded, for example in the north- primitive treatment systems and poor envi- ern Cheleken peninsula and at Kenar which ronmental practices. Large amounts of waste serves as a transfer base for oil delivered to oil and polluted water were discharged into the Turkmenbashy sea port and refinery. Saymonov Bay, which now contains more than 16 million cubic metres of a mixture of In large-scale onshore oil extraction, the hydrocarbons, chlorine-organic compounds, use of outdated technologies in the past heavy metals and phenols (Barsuk 2007). had a significant environmental impact, with Evidence of previously severe oil pollution re- a corresponding effect on livelihoods. This mains in the form of “asphalted paths” along is particularly apparent at Uzen and Senek the beaches in Turkmenbashy Gulf. Recon- in Kazakhstan. struction of the refinery and improvements to oil extraction practice have reduced oil pol- In spite of clean-up efforts at Uzen and lution of the bay and the waters of the Cas- other oil-polluted sites in Kazakhstan, with pian, but it still exceeds permissible limits more than 180 000 tonnes of waste oil ex- due to inefficient wastewater treatment and tracted and recycled in 2001–7, the extent the legacy of previous pollution. The nearby of historical pollution is decreasing slowly. A area serves as a local tourist attraction due similar situation prevails in Turkmenistan es- to ease of access and proximity to the city49. pecially at Gum Dag and other locations. Oil In other parts of the Caspian, also potentially leakages and accidents continue to pose a attractive for tourism, oil contamination af- threat to the environment (CEP 2007e). fects areas near terminals. Lack of research makes it difficult to estab- The growing cargo traffic in the Caspian re- lish clear links between these sources of gion, especially transportation of oil by sea, pollution and health problems. Nevertheless is also increasing environmental risks. Acci- the deterioration in public health, and partic- dents or discharge of contaminated ballast ularly the increased incidence of respiratory waters can harm the marine environment, diseases and cancer can be partly attributed and require constant monitoring by the au- to the impacts of air pollution. In 2005 there thorities and interstate bodies50. were three times more respiratory diseases among teenagers in Atyrau province than Not only active oil extraction, but also aban- in 2001. Health authorities also reported a doned wells represent a risk for livelihoods in threefold increase in neuropathy problems the region. Experts estimate that leakage from (Granovsky 2003; Akhmetov 2006). abandoned and flooded oil wells and other seepage significantly contribute to overall oil There has been additional public concern pollution in the Caspian (CEP 2002). Fluctuat- since large petrochemical plants and a tech- ing sea levels and wave surges have flooded nology park started operations near Atyrau, 48 Environment and Security

with fears the local air quality may deterio- and safety. In particular Kazakhstan has rate, which in turn would have a negative banned gas flaring (natural gas combustion) effect on public health51. and dumping of waste into the sea. In both countries environmental standards and ac- An additional source of concern is the dis- cident-prevention rules have been brought mantling and disposal of shipwrecks in Bau- in line with international standards. Addi- tino Bay, where the remains of more than 50 tionally several measures designed to im- sunken and stranded vessels are located. prove the response in the event of oil spills Though many of the ships have already been have been adopted, including the creation broken up and removed, the remaining wrecks of a maritime emergency unit. National Ac- not only pose a danger to passing boats but tion Plans for Oil Spillage Prevention and may also contribute to sea pollution. Response have been developed for the sea and inland waters. Finally, within the Realizing the necessity to protect the eco- Framework Convention on the Protection system of the Caspian Sea and its biodi- of the Marine Environment of the Caspian versity while developing the oilfields in the Sea (the Tehran Convention) several proto- region, the governments and local authori- cols in priority areas have been drafted and ties of both Kazakhstan and Turkmenistan submitted to the littoral states for review have prioritized issues related to ecology and ratification52.

Oil extraction and water use in Uzen, Kazakhstan

The Uzen oilfield was discovered in 1959 and originated as emergency oil retention ponds in development began in 1964. The oilfield is the early 1970s. Overall almost no attention has 35 km long from east to west and 8 km wide been paid to protecting the environment from from north to south. It is the largest in size in oil exploitation over the last 30 years. As a result the eastern Caspian region. In 1975 produc- nearly 30 000 ha of land have been damaged tion culminated at 330 000 barrels of oil a day. by mechanical compaction, spills and erosion. Since 1990 there has been a sharp decline in According to the local authorities and EBRD, overall output (down to 50–60 000 barrels a the cost of improving environmental protec- day in the mid-1990s) mostly due to obsolete tion, mitigating damage and rehabilitating land technology and the degraded state of pro- at Uzen is estimated at US$100 million. duction facilities. In 2005, after the introduction of improved technology and increased The town of Jana Uzen (70 000 people) and water-pumping to maintain pressure, produc- the oil-extracting enterprise Uzen use a lot tion rose to 132 000 barrels a day. In all 4 500 of water. The bulk of water is supplied by a wells are now operating on the field. By 2006 water pipeline from the Volga river and from about 300 million tonnes of oil had been ex- the Caspian Sea. However a smaller part of tracted at Uzen since the start of operations. the water is pumped from nearby natural groundwater reserves. Since 1971 intense Increasing oil production gave rise to severe exploitation of the Tyu Suu fresh groundwa- environmental problems. An aerial survey ter lenses has lowered the water table, af- conducted in 1989 showed that an estimated fecting vegetation and creating large sand 10 000 ha of land in Uzen were polluted by oil dunes. These moved towards the village of spills; of these 3 600 ha were considered se- Senek, Mangystau Province’s largest farm, verely polluted. Spillage around the wellheads partly burying the north-western edge of the or pipeline failures had contaminated about village. Scientists have warned that similar 3 million tonnes of soil. Two large oil-waste pits expansion of deserts near the Ushtagan Eastern Caspian Environment and Security 49

Local authorities have also received in- gramme amounted to almost US$30 million creased financial means that should allow by 2007. them to respond more effectively to environmental degradation. For example in Despite the fact that these and other 2005 the local budgets of Atyrau and Man- measures should help minimize pollution gystau received US$30 million (3.65 billion risks and remediate the consequences in KZT) and US$7 million (0.76 billion KZT) re- the case of historical pollution, there are spectively in compensation for environmen- still areas in which international experience tal damage53. However, questions remain on may be of use to states in the Caspian Sea how effectively local environmental funds region. These areas include the assess- are spent since only 10–20% of all the funds ment and mapping of ecologically sensi- were allocated to environmental remedia- tive areas on the sea and in coastal zones, tion, monitoring and/or preventive activities. continuous monitoring of oil pollution, In the same year environmental expenditure transfer of experience and best practice in by industry amounted to 29.4 billion KZT the remediation of historical land-based oil and 13.1 billion KZT in Atyrau and Man- pollution and development of action plans gystau respectively (NESSD 2006). At the to reduce contamination of transboundary same time expenditures on project activi- waters, such as the Ural river or Turkmen- ties under the Caspian Environmental Pro- bashy gulf.

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and Tishukuduk villages will occur unless ad- authorities, is implementing a pilot project equate action is taken. Kazakhstan’s Institute to stabilize the sand dune at Senek (NESSD of Geography, funded by the Mangystau local 2006; Akianova 2006; ENVSEC 2006a). 50 Environment and Security

Environmental degradation and security Legacy of the military-industrial complex

Another dimension of Environment and Se- curity analysis is the impact of military activities on a specific area. The anxiety about security fuelled by the Cold War also had significant environmental consequences for Soviet Central Asia. The construction and operation of military-industrial facilities and weapons testing sites caused the arms race’s greatest environmental impact. In the region this was particularly apparent in Kazakhstan, where the vast steppes lent themselves to the creation of large-scale military testing ranges stretching for hun- dreds of kilometres, now often polluted with rocket fuel and radioactivity making agricultural use of the land either difficult or impossible. The Soviet nuclear industry also flourished in the region until the early 1990s, for example at the formerly “secret” town of Aktau where it created a large uranium-tailing dump and onshore nuclear station. Major military sites in Kazakhstan included the nuclear and weapon test sites of Azgir, Kapustin Yar, Taysogan, Ashuluk and Say-Utes, as well as the uranium-mining industry in Aktau.

Activities in the military ranges in the northeast Caspian region had numerous impacts on the environment, the health of the local civilian population and their livelihoods. Most of all these activities reduced scope Eastern Caspian Environment and Security 51

Military-industrial facilities in the eastern Caspian region

The Azgir range (also known as Galit) is located (UNDP 2004 a) indicate that there are danger- in the Kurmangazy district, Atyrau province, ous legacies left around the site. The fact that near the border with Russia. Between 1966 and both sites are included in the National Action 1979, 17 underground nuclear tests were car- Plan of the Republic of Kazakhstan on Envi- ried out in salt domes at depths between 160 ronmental Health (2000) shows that Kazakh and 1 500 metres in ten wells with an explosive authorities are concerned about possible im- power ranging from 1 to 100 kilotonnes (Krivo- pacts on the environment and human health. hatsky et al 1999; Swedish Defence Research Agency 2004; UNDP 2004 a). These so-called The Taysogan range, located 180 km north-east peaceful nuclear explosions were carried out of Atyrau and covering nearly 1 million ha, is part with the stated purpose of creating underground of the Kapustin Yar military range. It was desig- cavities for large-scale oil and gas storage. The nated as a recovery area for burned out missile wells where nuclear explosives were used were stages and other military exercise purposes. It is usually sealed. In two tests, however, radioac- currently leased by the Russian Ministry of De- tive gases escaped into the atmosphere and fence from the government of Kazakhstan. Here affected personnel. In 1989–94 the radioactive again there are signs of soil, water and vegeta- defence forces from Arzamas-16, the special- tion being affected by human activities. ized Russian military station, arranged a major clean-up of the territory. Kazakh scientists have The above mentioned areas adjacent to military monitored the nuclear test area since then, and ranges and rocket launch sites are generally doctors have carried out a medical examination exposed to a high risk of contamination with of the local population. Estimates of the envi- radionuclides, heavy metals, toxic rocket pro- ronmental and radiological impacts of the site pellants and scrap metal. As a consequence, vary depending on the source of information large expanses of land and many surface wa- and range from a “normal situation” to a “situa- ter sources are unfit for use and more research tion of concern” (Office of Public Prosecutor in is needed to identify and reduce the risks. Atyrau 2002; CEP 2006 b; NTI 2007). The Ashuluk, the primary surface-to-air mis- Another military range and rocket launch site, sile training range in Russia, which has been the Kapustin Yar (area within Kazakhstan is ap- operating since 1960 and is located near the proximately 1.5 million ha), on Russia’s border border with Kazakhstan (under the USSR, it with Atyrau and West Kazakhstan provinces, also included part of Kazakhstan’s territory) has operated since 1947. Between 1957 and occupies almost 300 000 ha. In all there were 1962, 11 nuclear explosions in the atmosphere more than 150 manoeuvres conducted, involv- at heights from 5 to 300 km were conducted; ing various missile systems and aerial bombs 24 000 guided missiles were tested and 600 (Ministry of Defence of the Russian Federa- RSD-10 “Pioneer” medium-range missiles de- tion). Unfortunately data on contamination stroyed in 1988–1991 under the USSR-USA and ecological risks are not available. disarmament agreement. The site is also being used for launching various space rockets. The Finally, the Say Utes – another nuclear test total fallout of toxic substances from rocket site in the Mangystau province – experienced launches and missile elimination is estimated three underground nuclear explosions be- at several thousand tonnes, while the land- tween 1969 and 1970 at depths of 400–700 ing area of rockets’ detachable sections cov- metres. The environmental effects of these ers thousands of square kilometres, mostly in explosions seem to be of minor concern to low-populated territories of Kazakhstan. Much the local authorities. Surface radioactivity is as the site discussed above, assessments of reported to be close to normal levels and no environmental and radiological impacts at Ka- traceable impacts on the health of local popu- pustin Yar provide contrasting pictures. Some lation are apparent (ENVSEC consultations in studies suggest that today’s impacts are not Aktau, April 2006; Mangystau’s rural areas de- significant (Berkinbaev et al 2006); others velopment programme 2004–2010). 52 Environment and Security

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for safe use of the land for agriculture and zakhstan has accumulated around Aktau, water for drinking and irrigation. In some of Mangystau province. the military sites mentioned above military tests and exercises will probably continue The price of uranium dropped in the 1980–90s subjecting the local environment to fur- reflecting changes in military priorities. Mean- ther stress. Lessons learned from the past while the uranium concentration in the mines should be taken into consideration to pre- gradually declined and the overall economic vent more environmental damage. crisis in the post-Soviet world of the 1990s cut back output until uranium milling opera- Uranium production is another feature of tions in Aktau were finally stopped in 1999. the eastern Caspian region. At its peak in In 1997 the US and Kazakh governments the 1980s Kazakhstan was producing more agreed to undertake a joint programme to than one-third of Soviet uranium at more improve the safety and security of pluto- than 30 mining sites. The discovery of vast nium-bearing spent fuel from the BN-350 uranium deposits in the deserts of West- fast-breeder reactor at Aktau. By the end of ern Kazakhstan led to the establishment 2001 all this material had been inventoried, and rapid development of uranium extrac- placed under International Atomic Energy tion and processing around Aktau54, with Agency (IAEA) safeguards, and packed into large open-cast mining pits55, a processing storage canisters. At the same time the dis- plant, the Koshkar-Ata tailing site, and the tillation plant supplying water to Aktau was MAEK nuclear power plant. At present more switched to oil and natural gas. At present than half of all the radioactive waste in Ka- the highly radioactive spent fuel containing Eastern Caspian Environment and Security 53

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3 000 kilos of plutonium, 10 000 kilos of high- gave the go-ahead to build a new nuclear ly enriched uranium (both could be used to power plant at Aktau, possibly using Rus- produce weapons of mass destruction and sian-built reactors. The feasibility study is are consequently a high priority for non-pro- underway and should be completed in 2009. liferation activities) and over 10 000 tonnes of Construction should start in 2011 with the other radioactive waste with a total activity of first unit commissioned in 2016 (Australian 14 466 Curie is being stored onsite. By 2010 Uranium Association 2007; Kazakhstan- the station’s nuclear waste will have been skaya Pravda Newspaper Jan 200856). transported for long-term storage at the Baikal-1 facility, Semipalatinsk. Operations World uranium prices have increased steep- will cost about US$300 million (NTI 2007). ly (sevenfold) since 2001. In this context, Kazakh uranium production facilities are On the other hand, increasing demand for now in demand and once more operating at energy and water in the booming eastern full capacity. Also the empty uranium mines Caspian region of Kazakhstan coupled with around Aktau are being considered as po- the rising cost of fossil fuel-based energy tential storage areas for radioactive waste generation and water desalinization are driv- of local and foreign origin. ing the search for alternative ways of meeting growing demand. To this end, a special One of the priority tasks should be to secure session of the interagency governmental the safety of the Koshkar-Ata tailing pond. commission of Kazakhstan headed by the At present 51.79 million tonnes of uranium- Prime Minister K. Masimov in the late 2007 mining waste (containing uranium-238, ra- 54 Environment and Security

dium-226, thorium-230) with a total activity Military sites are considered a problematic of 11 242 Curie, and over 50 million tonnes legacy for the whole eastern Caspian region. of other toxic waste are stored there. The Past and current activities still represent a pond is also used for dumping industrial risk factor for the region’s environment and and municipal waste from Aktau city and for the livelihoods of local people. To secure several local industrial enterprises. the environmental safety and sustainable development of the Caspian coastal zone, the In Turkmenistan, the environmental prob- problems related to military and industrial ac- lems resulting from Soviet military activities tivities, including uranium extraction, process- on the Caspian Sea coast are not as obvi- ing and storage, demand attention. Risk as- ous: several air defence and border-secu- sessment and land rehabilitation projects rity facilities are positioned here, but there could be developed and implemented, and is not sufficient information to conclude the information on risks for human health and whether their activities are affecting the lo- the environment in and around those sites cal environment. should be transparent for the public.

Koshkar-Ata tailing pond, Kazakhstan

Koshkar-Ata was chosen in 1960 as a con- gystau. The poor neighbourhoods of Aktau venient location to stockpile radioactive city, located only a kilometre from the most and toxic waste from the Caspian mining dangerous dry area of the tailing pond, are and hydrometallurgical industrial complex, particularly exposed to health risks. which produced uranium concentrate and rare-earth metals. It is located in a natural Groundwater monitoring around the lake depression about 5 km from Aktau and 8 suggests that the tailing does not currently km from the shore of the Caspian Sea. The constitute a significant health hazard. There Koshkar-Ata depression is one of the largest seems to be no firm evidence that pollutants industrial tailings in the world, occupying an have reached the Caspian Sea either. Howev- area of approximately 77 sq km. er, given its location near the sea, the problem has a transboundary dimension. The situation The southern part of the pond, an open sec- is clearly precarious, as a rise in the level of tion covering 10 sq km57, contains the high- groundwater and winds could cause more est concentration of contaminants (80 to 150 widespread dispersal of pollutants. micro roentgens per hour [uR/h] measured on the surface at this location). Large amounts Local environmental authorities and the of phosphoric gypsum formed a crust on population have expressed concern about the surface preventing the escape of radon the state and future of Koshkar-Ata. Recla- gas. However the amount of water pumped mation of the site is costly, and the meas- into the lake to prevent dispersal and reduce ures taken so far, although an important radon emission is insufficient, and as it is first step, are only a temporary solution. In constantly swept by strong winds, there is 2007, 125 million tenge (about US$1 million) a serious risk of pollutants being dispersed. were allocated from the local budget for the Higher concentrations of heavy metals in first phase of reclamation. The total cost of soils have been reported in the nearby set- initial reclamation measures is estimated at tlements of Akshukur, Bayandy, and Man- US$8–10 million58. Eastern Caspian Environment and Security 55

Environmental degradation and security Freshwater

All provinces in the eastern Caspian region There are substantial differences in the suffer from a shortage of good-quality fresh- sources of water supply. In Mangystau water. Water scarcity is a major hindrance province about 50% of drinking water is for local development. Water is delivered by provided by desalination of Caspian water tankers to remote villages, as only sizable (by the MAEK plant in Aktau, 100 million urban areas have access to tap water. cu m a year, and at Fort Shevchenko), the rest being supplied by the 1 100 km long Overall in the Caspian Sea provinces of Volga–Mangyshlak water pipeline and by Kazakhstan tap water is available to ap- underground reserves. proximately 70–75% of the population (living mostly in the towns of Atyrau, Aktau In Atyrau province the main water supply and Jana Uzen) (NESSD 2006; Mangys- is the Ural river, while distant rural settle- tau province programme “Drinking water ments draw water from tankers or wells. 2003–2010”). Again the main differences in The Ural river59 is also the second largest access are observed between urban and watercourse in the whole Caspian region, rural areas. In both Caspian provinces do- after the Volga river, forming part of the mestic use of freshwater (for drinking and geographic boundary between Europe and household services) amounts to 15 million Asia. Phenols, heavy metals and oil prod- cubic metres a year. In rural areas – such as ucts are the principal pollutants in the Ural Beiney, Mangystau, Tupkaragan, Karakyan basin. The diluting effects of Ural’s spring districts – water use is lower than 50 litres a floods decrease water pollution in the river’s day per person, which is below basic health lower reaches in the Caspian lowland and and sanitation requirements. permit self-purification of the river system.

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Water quality in the lower reaches of the riv- industry in Russia and western Kazakhstan. er in Atyrau province is considered normal The Ural delta is an important sturgeon and has generally improved since the 1990s spawning ground and a habitat for endan- (UNECE 2006, NESSD 2006, Kazhydromet gered bird species. Given the important role 2008 b), while further upstream the river is played by the Ural river in maintaining good still receiving contaminants – mostly from water quality, high priority should be given Eastern Caspian Environment and Security 57

to preventing pollution and conserving wet- Average domestic freshwater use in Balkan land biodiversity. To this end the Ak Zhayk province is 45 million cu m a year. About state nature reserve on the Ural delta is be- 70% of population has access to tap water. ing established thanks to the joint efforts of In the recent past a number of settlements the Kazakh government, local authorities, on the Caspian coast of Turkmenistan were international organisations and communi- supplied by water from the Volga and tank- ties (UNDP 2007). ers from Baku. After independence these services stopped and alternatives had to be The Kazakh government, which considers found: desalination and local water tanks. the supply and quality of water a high prior- These solutions were quite problematic and ity, has developed the “Drinking Water Pro- the water supply was repeatedly interrupted gramme 2003–10” which covers both east- due to technical failures62. ern Caspian provinces. The programme has been allocated substantial financial resourc- The towns of Esenguly, Garabogaz and es, with a national budget exceeding 100 bil- Turkmenbashy are supplied with water from lion tenge. Thanks to implementation of this desalination plants and receive additional programme the share of the population with water from the Balkan mountains via pipe- access to tap water increased by roughly lines. Traditional methods condensing water 3–7% by 2006. Furthermore water filters and from atmospheric moisture transported by modern desalination facilities are being in- sea winds are being used in some places. stalled to improve drinking water quality. Industry uses more than 50% of all water63, reflecting the province’s industrial profile. Turkmenistan’s Balkan province also suf- fers from water scarcity since permanent The question of the availability of water surface waters are limited to the Atrek river, and its quality is a key issue in the eastern the Yashan and Chilmamedkum groundwa- Caspian region. There are major differences ter lens and a number of shallow perennial in access between urban and rural areas, lakes and rivers60. The Karakum Canal, a with the latter at a clear disadvantage. In- gigantic 1 300 km long artificial waterway adequate access reinforces poverty in rural which takes water from the Amu Darya riv- areas, since poor families are forced to buy er terminates in Balkan province supplying water or fetch it from open sources (when agricultural fields and settlements along its available). In addition to low per capita wa- banks, including in the eastern Caspian re- ter availability, a significant proportion of gion61. The use of water from the Atrek river the eastern Caspian rural population drinks remains a sensitive issue between Iran and water that is often below quality limits. The Turkmenistan, because in dry years the delta high mineral content of drinking water of- receives virtually no water, which has a di- ten results in kidney and bladder diseases, rect impact on the livelihoods in the lower enteric infections and viral hepatitis, and a reaches and delta due to the reduction in the general decline in health. Poor water treat- volume of water available for drinking, ag- ment resulted in cholera outbreak in Aktau ricultural activities and especially fisheries. in 2001 when crops were irrigated with un- (See the box devoted to the Atrek river). treated wastewater. 58 Environment and Security

Environmental degradation and security Marine resources and biodiversity

Human activities have affected the Caspian Since the Caspian Sea is landlocked, con- environment in several ways. First of all, the taminants such as persistent organic pollut- flow of river water, especially in the Volga, ants and heavy metals entering the water has been regulated by dams, changing the body have no way of being removed. They hydrological balance of the sea. The gulf of are consequently retained. Pollution of the Kara Bogaz Gol, a large shallow lagoon cov- sea has increased due to industrial devel- ering 18 000 sq km, was separated from the opment of the coastal region and transport sea in the 1980s in an effort to halt the fall- of pollutants by rivers. In the late 1970s pol- ing sea level. Contrary to many people’s ex- lution with organic contaminants, including pectations the level has risen steadily since oil products and DDT, reached the biologi- 1978. This separation caused the gulf to dry cal limits of tolerance for sturgeon and their out with the formation of a salt basin that muscular tissue was exfoliated and weak- harmed biodiversity, particularly birdlife. In ened (CEP 2002; Berkeliev 2002). Tumours 1992 the flow of water was restored and the have been reported in common fish. Twenty water level in the gulf rose quickly. mass die-offs of Caspian seals (Phoca

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caspica) and sturgeon in the last two dec- pian-Ural river basin dropped from about ades were caused by the accumulated im- 8 000 tonnes in 1980 to less than 200 tonnes pacts of pollution, ecosystem change and in recent years (Agency of the Republic of epidemics. Although most of the pollution Kazakhstan on statistics; CEP 2006 b). Il- is brought to the sea by rivers, oil spills and legal sturgeon fishing (poaching) in the Cas- shelf exploration also have a negative effect pian Sea continues at a significant level, on the environment. such activities having been stimulated by the economic crisis, social problems and Eutrophication due to wash-out of agricul- increasingly lax controls. In 2006 almost tural fertilizers stimulates the growth of toxic 3 tonnes of illegal sturgeon catches, 127 ki- algae, especially in the northern and south- los of black caviar and 26 tonnes of other ern Caspian Sea. As the algae die and de- fish were registered in the Kazakh sector of cay, they rob the water of oxygen, creating the sea. In 2007 the Kazakh authorities re- dead zones where marine life cannot survive. ported catches of 0.5 tonnes of sturgeon, Mass flowering of toxic algae N.( spumigena, 33 kilos of black caviar and 19 tonnes of N. harveyana) is increasingly regarded as an other types of fish (KazInform news 2006 additional stress factor for the marine eco- a; Akhmetov 2006; Ministry of Environment system. The first evidence was reported in Protection of the Republic of Kazakhstan 1999, and in 2004 localized fish deaths oc- 2007). Poachers from other regions, mostly curred (especially phytophagous grey mullet Dagestan and Azerbaijan, on the opposite and goby) due to the algae’s toxic effects. In coast of the Caspian, are also operating in 2006 major spots of blue-green algae were the waters of the eastern Caspian. detected on the Iranian coast (CEP 2007). Although the importance of fishing as a Intensive fishing since the 1950s combined commercial activity has significantly de- with unsustainable fishery practices rapidly clined, fishing remains an important factor depleted fish stocks. The catch of sturgeon, in the survival of the coastal population of the main commercial fish of the Caspian Turkmenistan and Kazakhstan. Sturgeon is Sea, has dropped steadily in recent decades the main source of cash income, while small from 16 800 tonnes in 1981, through 8 000 fish are mostly used for food. Therefore, a tonnes in 1991, to less than 1 000 tonnes in stable, healthy environment plays a critical the 2000s. The official catch for the entire role for the livelihoods of coastal communi- Caspian Sea in the two years 2003–4 was ties. The gradual decline of these resources only about 100 tonnes, signalling the indus- could increase vulnerability to crisis, un- try’s complete collapse (CEP, 2007). Experts employment and hunger, undermining their link this dramatic decline with the combined overall situation. effects of damage to the spawning grounds in the Volga and Ural deltas, dam construc- Finally, the invasion of destructive species tion, over-fishing, increasing poaching and such as Mnemiopsis leidyi, a bioluminescent pollution, and increased competition for zo- jellyfish first observed in 1999 in the Caspian oplankton by invasive species affecting the Sea, affected the food chain with dramatic food available for the fish (CEP, 2007). Apart consequences for anchovy kilka (Clupe- from a small annual quota it has been ille- onella engrauliformis) in 2001–3. Kilka is a gal to catch sturgeon in Turkmenistan since main fishery product in the eastern Caspian 1946. In Kazakhstan the catch in the Cas- region, especially in Turkmenistan. 60 Environment and Security

Fishery in the lower reaches of the Atrek river, Turkmenistan

The basin of the Atrek river64, with a total area dropped substantially. Furthermore Turkmen of 27 000 sq km, is shared by Iran and Turk- experts estimate that climatic changes could menistan. The river, which is 530 km long, further reduce river flow by 50% in the long rises in Iran, flows for some 150 km along term (Atamuradova, 2007). In the 1960–70s the border between Iran and Turkmenistan, the river was dry for five to seven months. and ends in the Caspian Sea. Since the 1990s (in 1990, 1995–97, 1999– 2000) the river has not reached the sea, vir- Historically the southern part of the Turkmen tually putting an end to fishing in the delta coast was the Caspian’s second fishery site and coastal zone (Berkeliev 2006). In this by value and productivity. In the Esenguly respect local experts consider the Atrek river district of Balkan province, the fish catch delta a regional environmental “hot spot” be- amounted to more than 10 000 tonnes a year cause of its essential role in the supply of fish in the 1930s. In the 1980s and 1990s com- and work for local people, coupled with the mercial fishing gradually declined to almost transboundary causes of degradation to the nothing. Local people link it to excessive di- river delta. Among noteworthy positive de- version of water for irrigation in Iran, affecting velopments, Turkmen and Iranian authorities the flow of the Atrek river, an important spawn- are currently discussing new cooperation ar- ing ground for roach (Rutilus rutilus caspicus) rangements on the Atrek river. Furthermore, and carp (Cyprinus carpio). Reportedly with there are plans to establish a national park the development of irrigation in the Iranian along the upper reaches of the Atrek river in section of this transboundary river, the flow Turkmenistan.

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In 2005 the density of Mnemiopsis leidyi in drop in the number of Caspian seals from the Turkmenbashy gulf exceeded previous 350–400 000 animals in the 1970s to 110 000 record levels in the Black Sea. As this jelly- at present, as well as frequent die-offs of fish has no natural enemies, the only factors seals measured in thousands (CEP 2006 b; limiting its spread are water salinity and tem- CISS 2006). These events attract considera- perature. The devastating effects of Mnemi- ble attention at a local and international level. opsis in the Azov and Black Seas are a pow- Whereas excessive poaching initially caused erful incentive for action as the jellyfish are the reduction in the number of seals, the lead threatening the existence of kilka and other causes of extinction are now environmental fish, with consequent effects on livelihoods, pollution, lack of food, changes in the eco- food sources for the local population, and system and epidemics. Yet in many cases it is for the Caspian seal and sturgeon. difficult to identify the precise root causes of the die-offs, and comprehensive international All in all excessive fishing and extraction of assessment may be required. In 2000–7 seal marine products, geological exploration, well die-offs raised concerns, particularly in Rus- drilling, offshore oil production and transpor- sia, which questioned the links between the tation, invasive species and climate change event and oil prospecting and extraction in are negatively affecting the livelihoods of the Kazakh Caspian shelf-coastal zone. Un- coastal communities, the sea’s ecosystem, fortunately the information available on Cas- and the overall biodiversity of the region. pian bio-resources is incomplete and littoral countries, local communities and internation- One indicator of the growing human impact al donors would benefit from more efficient, on the marine environment is the dramatic coordinated data gathering. 62 Environment and Security

Environmental degradation and security Fluctuating sea level and natural hazards

Caspian coastal regions, where most towns, of research, knowledge of the factors re- farmland, industrial activities and oilfields sponsible for fluctuating levels is still limited are situated are exposed to considerable and insufficient to make reliable, long-term fluctuations in sea level. Rising sea levels predictions. Researchers from Russia, Ka- and storm surges flood vast areas contain- zakhstan and Germany have suggested that ing oil wells and infrastructure, increase pol- the trend towards higher rainfall observed lution and damage scarce farmland. since the 1970s in the northern parts of the Caspian basin will in the long run increase The level of the Caspian Sea has fallen and water flow in the Volga and Ural rivers65. The risen, often rapidly, many times in the past. likelihood of rising sea levels consequently The main factor affecting the sea level is be- seems realistic66. Although such forecasts lieved to be changing climatic conditions, es- should be regarded with some caution, a pecially in the Volga river basin, the source of wise strategy for adaptation would be to pre- 80% of the water in the sea. Water diversion pare for the worst-case scenario of a 1–3 m and dams play a lesser role. Despite years rise in sea level. Under such a scenario, many coastal settlements could be flooded, and agricultural land would be lost, not to �� mention possible flooding of roads, oil wells and sites used for waste storage and other �� environmental hazards. All of this could be �� further aggravated by storm surges capable �� of raising water levels by an additional 2–3 m �� in the most extreme cases. Littoral states are aware of this danger and are taking meas- �� ures to reduce the negative consequences of such events. For example, planning and implementation of coastal protection measures is already under way in the most of vul- �� nerable areas of Kazakhstan.

The most recent 2.5 m rise in the Cas- pian Sea from 1978 till 1996, when the sea �� reached the highest level of –26.5 m, considerably affected Atyrau province in Kaza- khstan as well as Turkmenistan’s shoreline. In the past ten years, however, the level of �� the sea has been largely stable, even drop- �� ping 1 m then rising again, following a trend typical of seasonal fluctuation. �� Eastern Caspian Environment and Security 63

Industries in the Cheleken peninsula and sea level rise, Turkmenistan

Khazar (formerly Cheleken) is a town of occupational health risk for workers mainly 10 000 people (16 000 people in the past), lo- through inhalation. Radon concentrations in cated on the Cheleken peninsula on the Cas- the local air are 1 000 times higher than the

pian shore. Iron bromide (FeBr2) production average for Turkmenistan and close to the started at the Cheleken plant in 1940. The permissible limit values for exposure. Strong start of iodine production followed in 1976. winds and dust storms may disperse the The production capacity of the plant is about materials and contaminated carbon particles 250 tonnes of iodine a year. The natural wa- in the dump. Liquid acid effluents from the ter (brine) found here contains radioactive plant pose an additional environmental prob- elements. During iodine processing, using lem. Due to the appalling condition of the the coal absorption method, radionuclides pumping and neutralization stations these (mostly Ra) in the brine are deposited on the effluents are discharged almost untreated. surface of pipes and equipment, and in the The authorities have issued a call for tenders coal used in the process itself. About 18 000 to neutralize the site and build a radioactive tonnes of radioactive waste have accumulat- waste storage unit in Aligul, a safer location ed and are now deposited in an open storage 17 km away from Khazar. The NATO project area less than 200 m from the sea. Some of implemented under the Environment and the plant’s facilities have already been en- Security Initiative in Central Asia is assisting gulfed by the rising sea. The radiation dose Turkmenistan in the safe handling of radioac- on the plant’s dump varies from 2 500 to tive waste, including support to a radiochem- 4 000 micro roentgens per hour [uR/h], and ical laboratory in Ashgabat and training in in the surroundings 250–750 uR/h, posing an waste characterization and radio protection.

Estimates of the damage caused by the mentators attribute the decline in Atyrau’s rising sea level and wave surges in Kaza- agriculture to the flooding. The Tuhlaya Bal- khstan’s Caspian region over the period ka reservoir, which accumulates and evap- from 1978 to 1996 amount to US$1 billion, orates Atyrau’s wastewater, is just 10 km mostly due to the impacts on oil wells and from the Caspian Sea. Storm surges cut this coastal infrastructure67. Atyrau province distance to 3–4 km, and any further rise in suffered the most because of its flat terrain. sea level threatens to flood this major waste Over 1 million ha of coastal land, including site on the Caspian Sea shore. A forecast- more than half a million ha of pasture and ing and early warning system is now opera- other agricultural land, several oilfields and tional and should minimize possible dam- over 150 wells were flooded. Many com- age and enable prompt evacuation. 64 Environment and Security

Finally, global warming is directly affect- �� ing the Caspian Sea environment. Satellite �� data and meteorological records suggest that the extent and duration of winter sea- �� ice, which covers approximately 70–75%68 �� of the northern Caspian Sea, is declining, which is consistent with regional and global �� warming patterns (Kouraev, 2008). Because �� of milder winters with higher than normal temperatures, the extent of ice has been �� much smaller than usual during the last 10 years. Such a reduction of the ice affects �� the breeding habits and living conditions of the endangered Caspian seals and the en- �� tire ecological system (UNEP/GRID-Aren- dal 2006; CEP 2007; Ivkina and Stroeva �� 2007). Under these conditions seals must live closely packed on the little remaining �� ice, which in turn facilitates the spread of disease, including canine distemper virus �� (Kuiken 2006). �� It is worth considering the impact of natural �� disasters as factors of increased vulnerability and loss of livelihoods. Among natural In Turkmenistan the impacts of the ris- hazards present in the area, not only storm ing sea level are particularly apparent in surges deserve mention but also the seis- the Cheleken peninsula, where seawater mic activity and the related possibility of has submerged roads, a fragment of the tsunami generation. town of Khazar and some industrial infrastructure. Other towns (Garakol, Ekerem, One of the most devastating recent earth- Chekichler), oilfields (Goturdepe, Chele- quakes in the Caspian region was the Ash- ken) and pipelines are under threat. In the gabat M 7.2 earthquake in 1948 along the worst-case scenario (+5 m), the Cheleken Kopet Dag mountains fault zone. Despite peninsula could be completely separated being relatively shallow and localized, the from the mainland. Adequate adaptation quake caused massive loss of life and measures and coastal zone management property in the capital of Turkmenistan. may help to prevent many of the negative According to estimates 90% of Ashgabat’s impacts of fluctuating sea level. buildings collapsed or were too badly dam- Eastern Caspian Environment and Security 65

�� aged to be restored and from 27 000 as �� reported to the Soviet government in Mos- ��

cow in 1948, to 100 000 people lost their �� lives as now officially recognized by Turk- menistan, out of a total of 130 000 Ashga- �� bat residents at the time (Nikonov, 1998). �� In the Cheleken area powerful earthquakes �� are significantly deeper, yet their magni- �� tude could be high, with a corresponding �� destructive potential. Parts of the South Caspian region are seismically active and �� may become the area of tsunami generation, if submarine earthquakes exceed �� magnitude 7. Historical data contains evi- �� dence of small waves of 1 m (Dostenko et �� al 2002). �� In the shallow northern Caspian Sea, the risk of earthquakes and tsunamis is low; �� but the risk of extensive flooding due to storm surges is high. Storm surges have �� the potential to severely damage oilfields �� as well as populated areas and infrastruc- �� ture, especially in Atyrau province. Moreo- �� ver 0.8 million ha of agricultural land are subject to the risk of storm surges. In 1989, �� 1990, 1991, 1993, 1996 and 2005 such �� wind-induced surges of seawater pene- �� trated 15-30 km inland and affected settle- �� ments, oilfields (Prorva and Terenozek) and �� agricultural land. �� Regional or global epidemics could also af- �� fect living conditions and livelihoods. The �� risk of a possible outbreak of avian influ- �� enza spread by migrating birds, millions of �� which visit each year the eastern Caspian �� Sea’s lagoons and bays, should not be un- �� derestimated69. 66 Environment and Security Eastern Caspian Environment and Security 67

Conclusions

68 Conclusions and recommendations 72 Possible actions under the Environment and Security Initiative 68 Environment and Security

Conclusions Conclusions and recommendations

This report sets out to identify the issues diversify sources have encouraged competi- that affect the environment of the Caspian tion fuelled by commercial and political fac- Sea, focussing specifically on the eastern tors, making this part of the world the nub Caspian Sea shores of Turkmenistan and of the “New Great Game”. Over the years Kazakhstan. Reaching beyond an exclu- a large number of actors and stakeholders sively environmental perspective, the report have been involved in the complexities of analyses the changes that are profoundly planning and constructing pipeline systems modifying the livelihoods of people living in in a region that has undergone significant the eastern Caspian region and could lead political change since independence. to social tension or even regional instability. The analysis identifies several areas that The break-up of the Soviet Union introduced correspond to this concern. The boom in the four new actors to the region: Azerbaijan, the energy sector in the last ten years has left Russian Federation, Kazakhstan and Turk- a lasting mark on the region, changing its menistan, which with Iran now border the socio-economic conditions. In many cases Caspian Sea. Since then the legal status of these changes are a stress factor for both borders on the Caspian Sea and its shelf re- the environment and local communities. sources has been under negotiation. At the Furthermore, various military and industrial same time the military presence in the re- activities have in the past contributed to en- gion has increased, a trend that also needs vironmental degradation, or still do, which further monitoring. Protecting oil and gas in turn has a negative impact on human se- infrastructure is a security concern for both curity. Climate change and natural disasters littoral states and major energy consumers. are also a risk factor for the eastern Caspian Clarifying the legal status of the Caspian Sea region. As none of these elements can be is one of the key issues in regulating access isolated from the others, the report looks at to its natural resources. Clear and agreed how these risk factors interact. upon regulations increase the predictability of the situation while decreasing the politi- The eastern Caspian region is well endowed cal risks related to possible confrontation with oil and gas resources and since the over access to these resources. This in turn 1990s the region’s energy sector has enjoyed increases the interest for global, regional massive growth leading to core changes in and national actors to invest in the Caspian the socio-economic conditions of the whole region. The fact that the legal status of the area. Both the geographical position at the Caspian Sea is still an open question under- crossroads between East and West, be- lines this reality and the pressure of political tween Russia, Central Asia, the Caucasus and economical interests towards finding a and Iran, and the presence of hydrocarbon common solution. At the same time, states reserves have focussed global interest on have been able to find cooperative solu- the Caspian over the last 20 years. tions not only on a bilateral or trilateral basis but also in a multilateral framework (ie the Growing demand for energy, particularly Tehran Convention). Past experience has from Western (EU, USA) and Eastern markets shown that the Caspian States have been (China, India), combined with rising energy able to develop a positive dialogue, espe- prices and efforts by top energy importers to cially on environmental issues. Eastern Caspian Environment and Security 69

Geopolitical and energy security considera- in coastal urban areas near the oilfields and tions will continue to influence the way global mineral deposits, widening the gap between and regional actors perceive the eastern Cas- urban centres on the coast and the rural hin- pian region in the coming decade. Political terland. The rapid development of urban cen- stability and security in the larger basin will be tres is often unplanned, creating stark differ- of paramount importance for further signifi- ences within the urban centres themselves, cant development of the region. To minimize between areas served by recent municipal in- real or perceived security threats, Caspian frastructure, and those lacking such services Sea states should further develop trust and or depending on decaying infrastructure. confidence – building measures that ultimate- ly lead to greater regional cooperation and in- These developments are also reflected in tegration. This in turn would enable states to changes in the wage structure of the east- respond more effectively to new challenges ern Caspian region. Despite an overall rise in such as the impacts of climate change. salaries, substantial wage differences persist between the oil-and-gas sector and other The transition from a planned to a market sectors, particularly agriculture and fisher- economy has been largely based on the ies. Furthermore, with the decline of fishing extraction and exportation of hydrocarbon and agriculture, employment opportunities resources. This situation is changing the are becomingly increasingly scarce in the structure of national economies, the overall construction industry and sectors other than importance of coastal areas and the live- energy. Such a situation further increases lihoods of people living in the region. Al- the differences in living conditions between though both countries have benefited from urban centres and rural areas, where making energy-sector revenue, the development of a living is increasingly difficult. oil and gas resources also challenges the distribution of associated wealth and ben- Intensive fishing since 1950s and other efits and strengthens the dependence of factors such as damage to the spawning the local economy and job markets on this grounds in the Volga and Ural deltas, dam sector. The Kazakh and Turkmen provinces construction, over-fishing, and increasing on the Caspian Sea shores all show signs of poaching and pollution, have caused rapid economic overspecialization. Further Gross depletion of fish stocks. Other factors have Regional Product growth depends largely on further contributed to the dramatic drop the energy sector as agriculture is declining. in fish stocks: invasive species have been Fisheries, a traditional source of revenues for competing with the Caspian Sea’s marine riverside and coastal communities, have also fauna leading to a decrease in the avail- been in constant decline since the 1990s. ability of food. The catch of sturgeon, the Caspian Sea’s main commercial fish, has Urban centres have become strategic nodes steadily declined in recent decades from 16 for services to the energy sector (financial 800 tonnes in 1981, through 8 000 tonnes in services, transportation, housing, etc.), at- 1991, to less than 200 in 2007 leading to a tracting people from rural areas, other parts temporary ban on caviar exports imposed of the country and abroad. More than half in 2001 by the Convention on International of the region’s population is currently living Trade in Endangered Species of Wild Fau- 70 Environment and Security

na and Flora (CITES)70. This depletion has ern Caspian region. This is certainly an ob- caused huge economic and environmental stacle to further development of this part of losses. Unfortunately, the measures taken the basin. Poor quality water affects public by littoral states and the international com- health. Again there are important inequali- munity have not succeeded in curbing ille- ties in the access to quality water between gal fishing, still the only source of revenue rural and urban areas, with the former at a for many impoverished communities. clear disadvantage. With the rapid growth of urban areas, water consumption by Although the development of energy resourc- city dwellers is expected to increase sig- es brings new opportunities to local econo- nificantly. The question of access to fresh- mies and communities, it can also imperil the water resources will be essential for the region’s delicate environmental balance. Lo- sustainable development of the eastern cal communities are in the front line in their Caspian’s urban areas over the coming exposure to the risks and consequences of decade. Water is also used in oil produc- pollution. Marine pollution is caused by in- tion, exacerbating the problem of water dustrial development of the coastal region, availability for other purposes and contrib- exploration and exploitation of off-shore uting to the desertification of large areas of energy resources and by rivers transporting hinterland due to lower groundwater levels pollutants. The region has already witnessed and soil humidity, as in Uzen-Senek, Ka- cases of pollution-related mass deaths of zakhstan. The main river systems of the birds, fish and seals. Marine pollution from eastern Caspian – the Atrek in Turkmeni- extraction and transportation of hydrocar- stan-Iran and the Ural in Kazakhstan-Rus- bons is particularly important in the shallow sia – require further international attention northern Caspian Sea, an area of rich biologi- and improved cooperation. cal diversity that is vulnerable to pollution. The Cheleken peninsula in Turkmenistan is an- The eastern Caspian region has inherited other area that demands particular attention from its Soviet past a number of military- for the environment. Abandoned oil wells and industrial facilities and weapons testing oil spills on land are a major pollution hazard, sites, including nuclear arms – primary ele- due to the risk of flooding in the event of ris- ments of the former military and industrial ing sea level and storm surges. This situation security system. Activities in the region’s has already occurred leading to the pollution military ranges had numerous impacts on of land and sea in several areas. the environment, on public health among the civilian population and their livelihoods. Finally, in large-scale on-shore oil extraction, Most of all these activities reduced scope the use of outdated technology and short- for using the land safely for farming. Extrac- sighted planning in the past have had sig- tion of uranium ore has left a large stock- nificant negative environmental effects in the pile of radioactive waste. Remediation of areas around the oilfields: soil contamination, the Koshkar–Ata tailing pond and the safety increased radioactivity and air pollution. of the MAEK nuclear plant should both be given priority. Plans to build a new nuclear Another major issue is the quality and power plant on the Caspian Sea coast as a quantity of freshwater available in the east- replacement require further attention. Eastern Caspian Environment and Security 71

Human activities have taken a heavy toll on ological resources, freshwater reserves and the biodiversity of the region. One indicator agricultural land are the main sources of con- of the growing impact on the marine environ- cern from an environment and security per- ment is the dramatic drop in the number of spective. Greater dependence on the energy Caspian seals from over 1 million a century sector also makes the region more vulner- ago, to 350–400 000 in the 1970s and less able to any major changes in that quarter. than 110 000 at present. Thousands of seals have perished in mass die-offs. These events The Caspian Sea region must also strike a attract considerable attention at a local and balance between the economic gains from international level. Initially excessive poach- rapid development of energy resources, ing caused the reduction in the seal popula- and the risk of over-exploitation and envi- tion, but today the prime causes of extinction ronmental degradation, particularly in shore are thought to be environmental pollution, and sea zones. Depletion of vital ecosystem shortage of food, changes in the ecosystem, products would impact negatively on hu- climate warming and epidemics. man development. Urban areas must deal with very fast growth and increasing de- The level of the Caspian Sea has fallen and pendency on the energy sector to fund such risen, often rapidly, many times in the past. development. At the same time rural areas The main factor affecting the fluctuating sea are facing deepening poverty and a deterio- level is thought to be changing climatic con- rating environment. These changes under- ditions, particularly in the Volga river basin, mine the region’s resilience and heighten its the source of 80% of the water in the sea. vulnerability to powerful social tensions. Rising sea levels and natural hazards such as storm surges affect vast areas, flooding oil Overuse of resources will have long-term wells and infrastructure, which increases pol- consequences that will affect the region long lution and damages already scarce farmland. after oil and gas resources have been used Earthquakes are also a potential hazard for up. There is a concern that once its energy the region and its energy infrastructure, with resources have gone, the region will have to devastating consequences for the popula- cope with the legacy of several decades of oil tion and the environment. Finally, other fac- and gas extraction (a polluted environment, tors such as climate change will affect the re- depleted biodiversity, etc.), but without the gion, for example by reducing sea-ice in the financial resources to repair the damage. winter, impacting on the breeding habits and living conditions of Caspian seals and, more The signature of the Tehran Convention by broadly, the ecological system as a whole. all the Caspian states was a major step towards enhanced protection of the Caspian The eastern Caspian region has experienced basin. However the littoral states still need rapid change since independence in the ear- to develop a unified approach to sustainable ly 1990s. The booming energy sector holds management of the economic and natural many opportunities but also considerable resources of the Caspian region, opening challenges and risks. The region’s increasing the way for less dependence on the energy specialization in the extraction of fossil fuels, sector and better protection of its popula- combined with the degradation of marine bi- tion’s livelihoods. 72 Environment and Security

Conclusions Possible actions under the Environment and Security Initiative

Analysis of the interaction between the en- Based on the present analytical report and vironment and security factors presented in consultations with the experts and gov- this report suggests that their background ernments of the countries concerned, the and scale in the eastern Caspian region dif- ENVSEC Initiative has defined the scope fer a great deal from the “classic” models for implementation of further activities. The of the Ferghana valley, southern Caucasus ENVSEC work programme for the eastern and the Balkans. The ecological problems Caspian Sea region complements and ex- and socio-economic trends that may result tends the measures being implemented by in grievances and conflicts are concealed the countries and the Caspian Environment by low population density and development Programme. In the matrix below we present of the region’s hydrocarbon reserves. Other the outlook for possible follow-up actions problems are being addressed by the Tehran developed by the various national, local Convention, and by local and national gov- and international stakeholders taking part in ernment under the Caspian Environmental the consultations held as part of the report’s Programme or other specific initiatives. production. Recognizing the achievements Some issues, such as the transboundary of the Caspian Environmental Programme management of the waters of the Atrek river and national actors, the present report fo- (Iran-Turkmenistan) are currently beyond cuses on the areas that are not yet covered the scope of the ENVSEC Initiative. in the current or planned initiatives.

Assess- Capacity Policy for- Risk re- Priority areas ment building mulation duction

Assessment and mapping of environmental sensitivity and risks in the northern Caspian Sea in view of energy development and climate change

Supporting good practices in remediation of historical pollution and promoting cleaner production technologies in the energy sector

Increasing transparency and accessibility of environmental information to the general public (including Cas- pian Aarhus centres)

Enhancing national policies in environmental security and industrial safety in the Caspian region

Confidence-building measures and demonstration inter- ventions in managing transboundary water resources

Integrated coastal zone management to protect the Caspian region ecosystems and livelihoods of people

Actual activities will take place at the request of the host countries given enough financial resources are raised and following the mandates of the ENVSEC partners. Eastern Caspian Environment and Security 73 Annex

74 Bibliography and references 82 Endnotes 74 Environment and Security

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Endnotes

1. The ten thematic centres stopped operating with the 46296; “Caspian gas to run within Central Asia-Center cessation of the TACIS. corridor”, 11.05.2007, source Itar-Tass (www.itar-tass. com). 2. Quoted from the speech given by Professor Ole Dan- bolt Mjøs, Chairman of the Norwegian Nobel Commit- 13. “Russia seals Central Asian gas pipeline deal”, ac- tee at the occasion of the 2007 Peace Prize; accessed cessed at http://www.msnbc.msn.com/id/22345096. at http://nobelprize.org/nobel_prizes/peace/laureates/ 2007/presentation-speech.html. 14. The case of the BTC pipeline is rather controversial as the US$4 billion project may not be economically vi- 3. The next phase of implementation of the Caspian able unless Kazakh oil can be added to the Azerbaijani Environmental Programme in 2008-2011 will primarily oil transported by the pipeline (Ebel and Menon, 2000). focus on aquatic bioresources and fisheries, invasive The controversy stems from the fact that many think the species management, marine protected areas and project was politically motivated, some foreign policy- spawning grounds, improving coastal communities makers being keen to support east-west energy trans- livelihoods. port routes that bypass the territory of Iran and Russia.

4. The original version of the new Kazak Ecological 15. The Memorandum was signed by the participant Code can be accessed at http://base.zakon.kz/doc/ companies in the Tengiz-Chevroil consortium, those in lawyer/?uid=5CC242A5-B708-4A51-B52D-1BE3EC93 the KCO consortium, and Kazakhstan’s national oil and F26F&language=rus&doc_id=30085593&page=0. gas company KazMunayGaz (Interfax, 24 January).

5. The annual mean precipitation in the region is 150- 16. “Russia, Kazakhstan agree to double CPC through- 200 mm of rain. put capacity”. RFE/RL NEWSLINE Vol. 12, No. 87, Part I, 9 May 2008. 6. Atyrau province: 390 000 people for 166 000 sq km; Mangystau province: 480 000 people for 119 000 17. On 26 July Turkey, Italy and Greece signed an inter- sq km. governmental agreement to build a US$1.36 billion natural gas pipeline that will connect Azerbaijan’s Shah 7. Sources: Great Soviet Encyclopaedia, Agency of the Deniz gas field to Italy via Turkey and the Adriatic (Cor- Republic of Kazakhstan on statistics. riere Della Sera, 26 July). The Turkey-Greece-Italy (TGI) pipeline has a projected annual capacity of 11.5 billion 8. 569 000 people as of 1 January 2006 with an increase cu m of natural gas. The pipeline should be completed of 15% on 2002. in 2012. (Eurasia Daily Monitor, volume 4, issue 151 accessed at http://www.jamestown.org/edm/article.php? 9. Khan Imran, “Central Asia: Energy pipelines or eco- article_id=2372345). nomic lifelines?” Alexander Gas & Oil Connections, 11(1), January 12 2006; Knight Robin, “Is the Caspian 18. The European Union currently imports 45% of an oil El Dorado? “Time Magazine, International edition, its oil from the Middle East and 40% of its gas from 151(26):28, 29 June 1998; Bruce Nelan, “Caspian black Russia (30% Algeria, 25% Norway). By 2030, the EU gold”, Time Magazine, International edition, 26(26), 29 estimates that 90% of its oil consumption will have June 1998. to be covered by imports, with over 60% of EU gas imports expected to come from Russia with overall 10. In the 19th century the region was associated with external gas dependence expected to reach 80%. the Nobel brothers, the Rothschilds, Henri Deterding of Source http://ec.europa.eu/external_relations/energy/ Royal Dutch, and Marcus Samuel of Shell who were in- index.htm. volved in the start of the oil industry in the region. 19. Turkey and Ukraine play such a role on the Western 11. By 1940 Baku was delivering over 70% of Soviet routes. See for example the articles published by Eura- oil, continuing throughout World War II. As production sianet: Igor Torbakov, “Turkey stands to benefit from in the onshore fields declined, offshore extraction was Caspian basin energy competition”, published on 17 developed. Most of Azerbaijan’s oil is now extracted February 2006. offshore. 20. For a detailed discussion on the issue of militariza- 12. “Modernization of the gas pipeline Central Asia – tion of the Caspian Sea see Katlik M. (2004), “Militarisa- Centre”, source http://www.caspionet.kz/index.cfm?id= tion of the Caspian Sea”, in Akiner, (2004). Eastern Caspian Environment and Security 83

21. The positions staked out reflected the interests of with an Iranian military vessel firing at BP geological the states: Azerbaijan, with many offshore oilrigs, fa- exploration ships operating on the Alov-Araz-Sharg voured the territorial division model based on a roughly concession for the Azerbaijani government. Since this north-south median line, along with Kazakhstan and incident the countries have been able to downplay ten- Turkmenistan. Significantly Russia changed its position sion and reached bilateral or trilateral agreements al- in 2000 to favour territorial division, after it emerged that lowing continuing exploration and exploitation of the the promising North Kashagan oil field would be in its resources. sector. As territorial division seemed inevitable, Iran re- quested that the sea be divided into 5 equal shares, a 26. Turkmenistan received US$130 per thousand cu- claim disproportionate to its 15 % share of the coastline bic metres for the first six months of 2008, and will get and targeting hydrocarbon fields in the sectors claimed US$150 per tcm for the last half of the year. Just half a by Azerbaijan and Turkmenistan. decade ago Central Asian states were offered US$25 It is worth pointing out that the disputes over under- per tcm. The price for Turkmenistan’s natural gas may water areas between East Caspian states are not be- well increase to US$300 per tcm in the coming years. tween Kazakhstan and Turkmenistan, where the border (See: “Price manoeuvring begins for Uzbek and Turk- provides a demarcation line on which both seem to men Natural Gas Exports to Russia”, Eurasianet, 21 agree, but with the other neighbouring states. At present April 2008). The question of the terms of payment for Kazakhstan seems to have settled its undersea claim Central Asian gas is a sensitive political issue. In De- (the trilateral agreement of May 2003) with Russia and cember 2007 Turkmenistan stopped gas supply to Iran Azerbaijan. The most serious disputes all pertain to oil allegedly for technical reasons but probably in a move to fields located in the southern Caspian Sea and involve increase gas tariffs. Competition among energy-thirsty Azerbaijan. The Turkmen-Azeri dispute concerns Hazar economies has caused an unprecedented increase in (Azeri), Osman (Chirag), Altyn Asyr (Sharg), and Serdar prices for oil and gas. In this situation, energy giants (Kyapaz), the Iranian-Azeri dispute revolves around the such as Gazprom had to renegotiate prices with pro- Alov-Araz-Sharq (Alborz in Farsi) oil field (Haghayeghy, ducers in Central Asia. In 2009 Gazprom will be paying 2003). In this respect Turkmenistan has disagreed with average market prices for Central Asian gas. A decision the median line proposed by Azerbaijan that would give that may have far reaching consequences on the eco- the Kyapa/Serdar field to Baku. nomic viability of other energy export projects such as Nabucco or the pipelines to China. See: “Domestic gas 22. Azerbaijan made arrangements to start exporting oil monopoly declares the inevitable rise in energy prices”, to Iran, since the BTC stopped functioning for several Nezavisimaya gazeta, 2008-06-11, http://www.ng.ru/ weeks and another westward oil route via Georgia to economics/2008-06-11/1_gazprom.html?mthree=1. the Black Sea was constrained by military action. 27. The NFRK, which had accumulated US$5 bil- 23. In parallel, foreign military aid to the Caspian coun- lion in late 2004 (or approximately 17 % of GDP). For tries has also increased. Not only the US has provided details see, Kalyuzhnova and Kaser (2005) and IMF aid but also Russia and China. (2004:19). For 2007 data see IMF Country Report No 07/235 of July 2007 and factsheet of the National Bank 24. On 19 September 2007 the Kazakh Defence Minis- of Kazakhstan (http://www.nationalbank.kz/cont/pub- ter, Daniyal Akhmetov, discussed plans to bolster Ka- lish621708_4142.pdf). zakhstan’s naval force in the Caspian Sea. The planned build-up, laid out in a new strategic planning document 28. In 2006 the Kazyna Sustainable Development Fund outlining the development of the Kazakh navy through was established to provide long-term funding for infra- 2015, includes the planned procurement of several large structure and projects in new industries in non-extrac- naval vessels, the modernization and expansion of the tive sectors. The fund is the managing company and Zenit shipbuilding facility in Uralsk and the training of sole shareholder in the Kazakh Development Institutions naval specialists. Minister Akhmetov explained that the (comprising the Development Bank, Investment Fund, build-up reflects the recognition that “the Caspian region National Innovation Fund, Small Business Development is of great significance for the economy of Kazakhstan,” Fund, Marketing and Analytical Research Centre, Kaza- and the “need to create a modern navy to ensure” security khstani Centre for Investment Promotion, State Insur- in the Caspian Sea (RFE/RL NEWSLINE Vol. 11, No. 175, ance Corporation for Export Credits and Investments). Part I, 20 September 2007). According to media reports, In 2007 the total authorized stock of the Development the Kazakh Ministry of Defence has set March 2008 as Institutions amounted to US$1.8 billion (as of 1 June the target time to launch the new Kazakh navy (RFE/RL 2007). (Source: http://www.inform.kz). Newsline Vol.12, No. 25, Part I, 6 February 2008). 29. Tengiz is the largest oil production area in Atyrau, 25. The disputed area between Iran and Azerbaijan led while Zhana-Ozen is an important oil and gas produc- in July 2001 to an armed confrontation in the Caspian, tion area in Mangystau. 84 Environment and Security

30. Kazakhstan plans to increase gas production in the 40. For more detailed analysis read: Kurmanova A., Caspian Sea region from today’s 29.6 billion cu m in and Disenova M. (2007). “Kazakhstan: The wealth for 2007 to 114 billion cu m in 2020 (KazMunaiGaz). the few. Problems of equitable distribution of oil resources”. Economic Strategy Institute - Central Asia 31. Both provinces have large marine terminals; Man- 2007. Available on-line: www.inesnet.kz/file.php?file_ gystau is investing in modernizing its existing ports and id=73&article_id=73. building large new ports. 41. Associated Press (AP). 22 July 2007. Energy-rich 32. In certain cases, the existence of valuable natural Turkmenistan wants foreign investment for Caspian Sea resources can encourage political entrepreneurs to resort. On-line: http://www.iht.com/articles/ap/2007/07/ secede or seize areas as a means of controlling their 22/asia/AS-GEN-Turkmenistan-Tourism.php. revenue streams, which is sometimes called the “honey pot” effect (de Soysa, 2000). 42. Quoted from the article “On the coast of grey Hazar” http://www.tourism-sport.gov.tm/en/avaza. 33. Sources: UNICEF 2004; CEP 2006 a; Turkmenmillii- hasabat - National statistics of Turkmenistan: data for 43. The levelling of household income across the re- 1991-2005. gions is reflected in the narrowing gap between the highest and lowest incomes – from 60% in 1998 to 34. Sources: Chulanova, 2007 and Ministry of Natural 17.5% in 2003 (UNICEF 2004). Resources and Environment Protection of the Republic of Kazakhstan 2001; Agency of the Republic of Kaza- 44. Resolution of the Council of Ministers of the Kazakh khstan on statistics. Online data: http://www.stat.kz/ SSR “On declaring protected zone in the northern part RU/Pages/default.aspx). of the Caspian Sea”, 30 April 1974 - 252 (amended by the Decision of the Cabinet of Ministers of the Republic 35. Sources: Chulanova, 2007 and Ministry of Natural of Kazakhstan 23 September 1993 - 936). Decision of Resources and Environment Protection of the Republic the Cabinet of Ministers of the Republic of Kazakhstan of Kazakhstan 2001; Agency of the Republic of Kaza- “On the formation and development of hydrocarbon khstan on statistics. (Online data: http://www.stat.kz/ deposits in the Kazakh part of the Caspian Sea”, 13 RU/Pages/default.aspx). February 1993, 97.

36. This is especially the case when perceived differences 45. Ak Zhayk Newspaper Atyrau, 15 January 2008. of treatment and salary between local and foreign work- “Kazakhstan once again forced foreigners to share ers can foster discontent and even spark clashes. Some Kashagan”. Available at: http://azh.kz/2008/01/15/ka- observers consider the incidents in October 2006 at the zakhstan-vnov-zastavil-inostrancev.html Official infor- Tengiz oilfield where clashes erupted between Kazakh and mation is available from Kazmunaigaz (http://www.kmg. foreign oil workers (mostly Turks and Filipino) an example kz). of this situation. See Joanna Lillis, “Oilfield Brawl Dents Kazakhstan’s Image”, Eurasianet article accessed on 21 46. Ak Zhayk Newspaper Atyrau, 22 November 2007. November 2006. In June 2008 nearly 600 workers of the “How to use sulphur milliards?” Available at: http://azh. Italian ENI oil company operating in the Balkan velayat of kz/2007/11/22/kak-ispolzovat-sernye-milliardy.html. Turkmenistan went on strike when salaries suddenly lost 50% of their value after the levelling of the official and 47. Ak Zhayk Newspaper Atyrau, 22 November 2007. market exchange rates for the local currency (the Manat) “Sulphur storage at Tengiz is unsafe”. Available at: to the foreign currency. Sixty-two workers were arrested http://azh.kz/2007/11/22/sernye-karty-na-tengize-neb- when troops from the Ministry of Interior intervened to ezopasny.html. end the strike. Source: http://www.dw-world.de. 48. Discussions during the regional ENVSEC consul- 37. Chulanova (2007: 15) reports also that in the Atyrau tations held in Ashgabad, Turkmenistan, September province, there is a ninefold wage gap between the oil-ex- 2007. tracting region of Zhylyojskiy and the rural Mahambetskiy. 49. In April 2007 Turkmenistan’s President announced 38. Compared to the 18% of the average poverty level in plans to invest US$1 billion to build a major tourist re- Kazakhstan in 2007; 9,608 KZ Tenge was the average per sort on the Caspian Sea (at Avaza). capita subsistence minimum in Kazakhstan in July 2007. 50. The declaration by the Kazakh President Nursultan 39. Data for 2002. Nazarbayev concerning the construction of a transport Eastern Caspian Environment and Security 85

link between the Caspian and the Black Sea reaffirms 61. In fact, the water from the Amu Darya reaches the this necessity. Caspian Sea via the final 150-km section of the Kara- kum Canal and then flows down a pipeline built in 1983 51. Nearly 80% of Atyrau people (1,000 respondents to Balkanabat (formerly Nebit Dag) and Turkmenbashy. took part) are against the construction of Kashagan oil processing plant according to NGO Kaspi Tabigaty 62. Eurasianet reports that in 2006-2008 Turkmen- (Caspian Environment). http://azh.kz/2007/06/14/884_ bashi city was left without water supply for several atyraucev_protiv_stroitelstva_zavodov_adzhipa_v_ka- weeks. rabatane.html. 63. Water use in the Balkan province in 2005: 1 180 mil- 52. These protocols deal with: i) Regional Prepared- lion cu m, 6% of national total. ness, Response and Cooperation in Combating Oil Pol- lution Incidents, ii) Environmental Impact Assessment 64. Average annual flow of Atrek is estimated at 292 in Transboudary Context (EIA protocol), iii) Biodiver- million cu m (8.37 cu m per sec to a maximum flow of sity Conservation, and iv) Pollution from Land-Based 120 cu m per sec). The watershed area is in Iran (20,000 Sources and [Activities]. sq km) and Turkmenistan (7 000 sq km). Rain and snow are the main sources of the river’s waters. (Ballyev and 53. Environmental penalties and fines in the region Esenov, 2005). amounted to almost 1 billion KZT in 2005. They were paid into the republic’s budget. 65. Researchers expect a 10-20% increase in the flow of water in the Volga and Ural (Shiklomanov 2007). On 54. The Aktau uranium production complex is reported the other hand according to several global scenarios for to have had annual capacity in excess of 1 300 tonnes of the 21st century, the increased water loss of the Cas- U3O8. Uranium production declined in the early 1990s, pian Sea due to evaporation could exceed Volga runoff from 1 100 tonnes of U3O8 in 1990 to 370 tonnes in and the sea level could consequently drop by as much 1993. Mining and milling operations were suspended as 4 m by 2100 (Renssen et al, 2007). in February 1994. 66. During the last decade of the Soviet Union, fears of 55. As of 1994 the total uranium resources of mines flooding due to the rapidly rising level of the Caspian Sea around Aktau operated by the processing plant were level, coupled with increasing awareness of the growing estimated at 64 400 tonnes of uranium (NTI (2007). After Aral Sea disaster, promoted the idea of developing a mas- 1994 uranium extraction moved to other sites in Kaza- sive water transfer project from one sea to another. This khstan with in-situ leaching. implied the construction of a 500 km long canal elevating water by almost 100 metres between the Caspian and the 56. Kazakhstanskaya Pravda Newspaper published on Aral Sea at a cost of roughly 15 billion Soviet rubles. Ironi- 5 January 2008. “MAEK - Kazatomprom: development cally, at the same time Soviet water planners were also prospects”, available at http://www.kazpravda.kz. considering an opposite plan to collect irrigation drainage water from the Amu Darya and divert it into the Cas- 57. State as of 2007. pian Sea. After independence this plan was modified by Turkmenistan to divert irrigation drainage water from ag- 58. Sources: Ministry of Environment Protection of ricultural fields supplied by the waters of the Amu Darya the Republic of Kazakhstan 2005 b; Mehanobr 2005; to the so-called “Golden Century Lake”, an artificial lake UNEP/GRID-Arendal 2006; Akhmetov 2006. under construction 300 km east of the Caspian Sea.

59. The total length of the Ural river is 2 428 km, of 67. Sources: CEP 2006 b; CEP 2002; CEP 2007. which 1 082 km are in Kazakhstan (catchment area within Kazakhstan is 147 800 sq km, 64% of the total). 68. Average for 1930-85. About 72% of its total runoff forms in the Russian part of the basin, average flow is 9.8 cu km a year. In the last 69. In 2006 the H5N1 strain of bird flu was discovered in 30 years the Ural’s flow in Atyrau varied from a low point a dead swan in Mangystau (IRIN, 23 February 2007). at 2.54 cu km in 1977 to 17 cu km in 1994. 70. The ban was lifted in 2002. Before 2007 the CITES 60. A network of torrents frequently appears in the foot- Secretariat didn’t publish data on the caviar quotas for hills. An ancient riverbed of Uzboy (a former bed of the the Caspian Sea’s fisheries because the five concerned Amudarya river flowing into the Caspian Sea 300 years states did not provide sufficient information about their ago) is also located here. sturgeon catch. 86 Environment and Security

Abbreviations and units

BTC Baku-Tbilisi-Ceyhan pipeline CEP Caspian Environmental Programme DDT Dichloro-Diphenyl-Trichloroethane (pesticide) EBRD European Bank for Reconstruction and Development FDI Foreign Direct Investment GDP Gross Domestic Product GRP Gross Regional Product OSCE Organization for Security and Co-operation in Europe PSA Production Sharing Agreement TDA Trans-diagnostic Analysis UNDP UN Development Programme UNEP UN Environment Programme

bbl billion barrels bcm billion cubic metres ha hectare sq km square kilometres Eastern Caspian Environment and Security 87 88 Environment and Security