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WASHINGTON – Eurasia is part of a vast region of instabilities whose evolution will greatly affect whether or not the 21st century is reasonably peaceful, and energy issues are crucial for the global economy, former US Ambassador to Azerbaijan Ross Wilson has told a congressional panel, says the website of the Atlantic Council, a Washington-based NGO.

In a testimony Thursday before the US House of Representatives Foreign Affairs Committee, Wilson said that for nearly twenty years, the United States has pursued a Eurasian energy strategy based on four sets of interests and objectives.

"First, given the dependence of our economy and the economies of most of our allies on imported energy, we have attached importance to the development of new sources of oil and gas," said Wilson, director of the Atlantic Council's Dinu Patriciu Eurasia Center. "The political changes that came after the Cold War made available to world markets Caspian and Central Asian resources that were previously inaccessible. Beginning with talks that Secretary of State James Baker and U.S. Ambassador to the Soviet Union Robert Strauss had in Almaty with Kazakhstan leader Nursultan Nazarbayev even before the collapse of the USSR, American officials and business leaders have engaged intensively to support Eurasian energy development."

In the testimony on the subject "European and Eurasian Energy: Developing Capabilities for Security and Prosperity", Wilson continues that secondly, "we have regarded the success of the new independent states of the former Soviet Union to be in America’s interests".

"For over four decades, the principal threat to our way of life came from a Eurasian landmass dominated by a hostile Kremlin. More recently, new threats came from al-Qaeda, a network based in Afghanistan, but with offshoots in Central Asia. These post-Soviet countries’ ability to govern effectively, secure their borders and provide better lives for their citizens matters to U.S. national security. Energy is a potential ‘get out of poverty’ card – an asset that resource and transit countries can use on behalf of a better future."

Thirdly, Wilson notes, the U.S. has supported multiple pipelines. "Our policy recognized that economies depending on a single set of pipelines that go through one country, Russia, will be neither strong nor independent, and their relationships with Russia won’t be healthy either. To express this positively, multiple routes, especially those like Baku-Tbilisi-Ceyhan (BTC) that lead directly to international markets, are the deliverers of real economic independence. They represent greater energy security for our European allies, too, and multiple pipelines are themselves spurs for further exploration and development."

According to Wilson, a fourth set of U.S. interests in Caspian energy could be ungrammatically summed up as "not Iran." He said that it has long been U.S. policy, reflected in legislation that the House Foreign Affairs Committee has been associated with, to oppose the development of Iran’s oil and gas industries.

"Caspian energy, especially gas, has been a positive complement to the threat of sanctions – an alternative to Iran for U.S. friends and allies desperate to augment and diversify their energy supplies," Wilson said. "By helping develop pipelines to the Black and Mediterranean Seas, we have ensured that Iran could not become a principal export route for Caspian energy. Energy development and effective market-democratic policies in Eurasia have been and are ways to counter Iranian influence in Eurasia."

Wilson went on to say that the next phase of Caspian energy development is natural gas, and it needs American support. He said the operator of Azerbaijan’s offshore Shahdaniz project expects to decide in coming months on fully developing this giant gas field and on an export route to Europe for its gas. Negotiations among producers, potential consumers and transit countries on the details – and bickering over how to divide the spoils – have made progress slow. Patient U.S. diplomacy led by Ambassador Richard Morningstar has proven very helpful, the former ambassador said.

He said that the realization of a major new Southern Corridor gas export route and the successful exploitation of Shahdaniz as a supplier to Europe will significantly advance American interests.

"Among other things, this progress opens the door to further progress on Eurasian energy, including to connect Turkmen and northern Iraqi gas with European and other markets. However, there is a serious possibility that well-intentioned new Iran sanctions legislation now under discussion may imperil this future. We risk undermining, if not standing on its head, a remarkably successful energy strategy that has helped our friends and allies and hurt Iran. Surely this is unintentional."

Wilson said further that in the mid-1990s, Azerbaijan’s president and a friend of the United States, Heydar Aliyev, decided on Western firms to lead the development of his country’s large, offshore oil deposits at Azeri-Chirag-Gunashli (ACG), the BTC main oil pipeline, and Shahdaniz and its associated gas pipeline infrastructure.

"He made sure the planned pipeline routes would avoid Russia and Iran. He also thought it politic to give modest and non-controlling shares in ACG and Shahdaniz to Russia and Iran. One can argue from the vantage point of hindsight about whether this was wise policy. At the time, Azerbaijan felt its security interests could be directly threatened by both and so needed to placate them at a time when no other option for doing so was available. As I understand it, Iran sanctions language now under discussion might require BP and other Western firms with a stake in Shahdaniz to divest themselves of their investments and walk away from the project.

"What will be the effect of this? Shahdaniz might not get developed. That will deprive our European friends and allies of needed gas and increase pressure on them to turn to Russia and Iran for alternative supplies. Or Azerbaijan might go ahead with the project, but to make money it would likely have to export the gas to Russia or to Iran – unhelpful for U.S. policy on Eurasian energy or for punishing Iran," the testimony reads.

Wilson said that without Shahdaniz, other Caspian gas will not get developed.

"No new, larger volume gas pipelines from the Caspian to Europe will be built. No Turkmen gas will flow west, little or no gas from Iraq will flow north, and the energy security of America’s allies in Europe will remain more uncertain than is wise or necessary. U.S. relations with Azerbaijan, a close partner on regional energy issues for nearly two decades, will suffer, with ill effects for that country’s cooperation with us on Northern Distribution Network supplies for Coalition forces in Afghanistan."

Wilson urged Congress and the US administration to work with interested parties on Iranian sanctions legislation that will be strong and effective, but that also will not sacrifice important and longstanding U.S. objectives and interests with respect to Shahdaniz and Eurasian energy.