In Conversation With Ambassador Kauzlarich: Peace, Energy And Global Order

By Orkhan Amashov

In an exclusive interview with Azernews, H. E. Richard Kauzlarich, former US Ambassador to Azerbaijan from 1993–97, who is also a renowned writer and intelligence analyst, shared his invaluable reflections on the current phase of the Azerbaijani-Armenian peace process, the obstacles on the thorny path to the emergence of a full-fledged bilateral format, the war in Ukraine and many other salient issues of our troubled times.

The conversation with the distinguished diplomat, which took place on 9 August, was immensely interesting and moved from the latest escalations in Karabakh to the realm of energy, Azerbaijan's foreign policy challenges, and then to more global issues.

Ambassador Kauzlarich is a strong believer that the majority, if not all, of the issues falling within the rubric of the Azerbaijani-Armenian peace process should be directly dealt with by Baku and Yerevan without external assistance. Far away from thinking that the issues pertaining to the Karabakh Armenians will disappear of their own volition, he is of the opinion that the current focus should be on border-related matters and the reopening of communications.

The diplomat believes that, once sufficient confidence between the populations is achieved, it will be much easier to address the rights and security of the Armenian population residing in Azerbaijan. He is also of the view that there is a direct correlation between progress in Turkish-Armenian normalisation and significantly moving forward in the Baku-Yerevan process.

Our interview also covered subjects related to the EU's role in mediating between Baku and Yerevan, US Foreign Policy, the difficulties faced by Armenian Prime Minister Pashinyan in his backyard, the future of the Russian 'peacekeepers' temporarily stationed in Karabakh, the Kremlin's promulgated design to revive its influence in the post-Soviet space and Azerbaijan's attitude towards the Iranian-Israeli confrontation. As to the latter, my interlocutor stressed that Baku should be very careful in maintaining neutrality, as the Iranian factor is not to be taken lightly.

Ambassador Kauzlarich defined Azerbaijan as a 'medium-size energy supplier' and praised the renewable energy provisions of the recently-inked Memorandum of Understanding (MoU) between Brussels and Baku of 18 July as a model for other deals that the EU may negotiate with different countries.

This brief introduction only provides a tantalising glimpse of the content of the interview. Below is the unexpurgated script of our conversation, with the video added at the end.

Recent flare-up in Karabakh

Q: Fantastic. I think that our conversation will be dedicated to many subjects, but there are two separate items that I can detect and discern as taking precedence. One subject is going to be energy, and another is the Azerbaijani-Armenian peace process. I was initially planning to start with energy, but it so happened that between the time I contacted you via email and now, regrettable events have happened in Karabakh. I would rather start with Karabakh as there has been some escalation. Russian peacekeepers are stationed there. However, there is considerable concern in Azerbaijan about the terms and expiration date of the contingent's presence. We are not entirely sure whether they will leave in 2025 or not. Their mandate is shrouded in obscurity. There are many subjects that are of concern to the Azerbaijani public. In April, there was the second EU-mediated trilateral meeting in Brussels. Back then, there was an overwhelming sensibility that momentum had been engendered. At that point, a bilateral format effectively emerged and there were two telephonic conversations between the Azerbaijani and Armenian foreign ministers for the first time in some considerable period. The current feeling is, as far as my experience and communications with different people are concerned, that momentum seems to have been slightly slackened. What is your take on this subject?

A: I will start by saying that I am very far removed from Azerbaijan, physically. I don't have the same sense of contact that you do. My impression is really along the lines that you described. We had this period of optimism. And I think you are right to point to the bilateral context as being really important and significant. I think we also had – I won't say at the same time, but going on separately in a parallel way - the talks between Turkiye and Armenia, which showed some degree of progress there. In my view, the more those talks progress, the better it is for Azerbaijan and Armenia to make their own progress.

When the November war ended with this statement - I don't call it an agreement, that was a statement issued by Putin, Aliyev, and Pashinyan – I was very concerned about the Russian-only peacekeeping force, precisely for the reason you have pointed out… This date… Would Russia honour that? So, I think it is right that Azerbaijan should be concerned about that.

I have a very strong feeling about the Russian behaviour as a result of their unjustified invasion of Ukraine. From my perspective, they have kind of lost standing to be able to go into another conflict, like the one in the South Caucasus, and somehow present themselves as neutral and unbiased and work with both parties.

I think the real question will be now if the bilateral context could be resumed between Armenia and Azerbaijan. I think it would have to be very quick. The fighting that took place over the last week is not a good thing. It is a sign that there is no structured process that needs to take place in order for peace to result from it. That has to deal with border issues, transportation links, return of refugees and displaced people, demining and unexploded ordnance, which is the responsibility of both parties.

I will say, having served in Bosnia, I know exactly what happens when there is a war, military action, and weaponry ordinance that seem to have been implanted as mines.

My hope would have been that, by this point, we would have had a series of bilateral working groups on these very specific issues. At the top, Foreign Ministers talking to each other, the heads of state, and heads of government talking to each other on these issues are necessary. I think we are in a very dangerous time, quite frankly, as a result of these.

Bilateral format and obstacles

Q: In your judgement, what are the main obstacles on the way to developing a genuine bilateral format? Is it mistrust between the sides, or some external factors?

A: People always jump to the external factors first. Let me talk about the sides themselves. Because there are some issues about two parties talking to each other. I think the transportation links are important. For Azerbaijan, you are looking for a much more controlled environment for the link between Azerbaijan and Nakhichevan. And, certainly, for the Armenians, they are looking for a much more controlled link on and around Lachin.

You have got two different versions. On the other hand, I think on the boundary issue, this ought to be - I won't say it will be easy – negotiable. It is only between the two parties. The efforts to involve the Russians? The Russians assert themselves as having maps. The Soviet era maps are not helpful. The border issues, in particular, have to be dealt with directly. Azerbaijan has some very talented diplomats who worked on border issues on the Caspian Sea. I think it was the Deputy Foreign Minister. I have a great deal of respect for his diplomatic skills and abilities. You don't really need outside intervention to help.

The argument over the Minsk group… I don't find it helpful. You ended up with the tripartite structure; this is what the Minsk Group was designed to avoid. I think at this stage, if there must be some outside intervention, it is much better if it is the EU. As I have said, Russia has disqualified itself as an unbiased party. I think the EU does have some standing. I think it is good that the US is supporting what the EU is doing. Personally, I am not clear what the US role in this structure would be.

They seemed to be working within a bilateral format before the fighting. There is an EU piece added to it. Try to identify those areas wherein you can actually make some progress.

I think the 'demining and unexploded ordnance' part is critical. You do not need outside parties. It is more than exchanging maps. Some ordnance might have been planted. It is more than mines, it is artillery shells and other unexploded ordnance from both the First Karabakh War and later on. You are not going to be able to return refugees if you still have large amounts of unexploded ordnance.

Again, I go back to my experience in Bosnia and Herzegovina, it was exactly the problem and it took years. They are still doing it. This is not easy. 300 mines this week, so many in the future…This is really an ongoing difficult process.

If I were the Master of this process, I would work on these problems and get foreign ministers, heads of state involved. Now it is time for Aliyev and Pashinyan to work together.

Q: Now we have two separate formats. Moscow may have disqualified itself, but it is still there and playing an important role. So, we have two formats. If one looks at what they are doing, they are looking at two separate issues: one is delimitation and demarcation and the border issue, and the second is the opening of communications. You realise that Karabakh itself, and its current and future population has been downgraded to second grade. Can it be assumed that, as a result of Azerbaijan's victory in the Second Karabakh War, the subject itself has lost its primary significance, or is this a delusion?

A: That is really a question one has to ask Armenians and Azerbaijanis. For people outside, that is a very difficult issue. I think the reality is that there are Armenians living in what was called Nagorno-Karabakh and their status remains unsettled. I think the most important outcome of the last year or so has been the recognition that the parties to the conflict are Armenia and Azerbaijan. These two countries can address some of the issues that we have been talking about. It is going to be very hard to address the question as to what the status of the Armenians living in Karabakh is going to be.

I must say, in my mind, there is a question of the status of Azerbaijani citizens who were expelled either during the First Karabakh War, or later, and their right to return to that territory as well. I think we can look to the Balkan experience, in places like Bosnia and Kosovo, to a certain extent, Croatia, where people coming back home, some who left immediately after the fighting, have to be assured of their rights, their rights as individuals, their rights to property. Property claims can only be very important in this. Those are not always settled by the documents that people have in hand, it may be that documents have been destroyed as a result of the war or otherwise.

When you say it has been downgraded, I guess I would prefer to say there are other issues that really have to be addressed first. You cannot address the status issue without addressing the boundary question and the rights of people who had lived in that region to return.

I am so far removed that I have kind of lost touch with the Lachin issue. That is kind of interesting. Historically, from what I know, there were very few Armenians who lived in that Lachin area before the First Karabakh War. Armenians were brought in there, quite frankly. We can debate where they came from. But Armenians with no historic ties to the region were brought there obviously to provide a sense of security for the transportation.

Well, it is complicated and I understand this issue will not go away. But it may not be the first issue that has to be addressed. That is my sense.

Q: The focus now is on the bilateral format and direct talks between Azerbaijan and Armenia. The OSCE Minsk Group is still technically alive and not abolished. I know your views on the OSCE Minsk Group. You believe that it failed, not because it aimed to do so, but because Azerbaijan and Armenia were not taking the correct decisions at the time. Now, we are in the post-Second Karabakh War age, the EU is playing an important role, and a bilateral format is emerging. Is this an institution of the past? Can we talk about it in the present sense?

A: I think you can talk about it in the present sense until somebody abolishes it in a formal sense. The OSCE has a right and role under the current conditions. It has a mechanism to proceed ahead. It does not have to be a particular Minsk Group format we knew before. I think that is a fair question to discuss. The advantage that the OSCE provides is a certain degree of experience in the area of peacekeeping operations in Europe.

Rather than having a simply Russian-only PKO, which is unhelpful on a number of levels, if you had other countries prepared to play that role, or to do in a way that, I won't say satisfying both Armenia and Azerbaijan, but in a way that would have ensured the ceasefire was maintained, contacts were taking place, things like demining and unexploded ordnance would be addressed, that would be better.

If there is going to be an international body that is going to address the issue, that would be the OSCE. I do not believe there can be a role for the UN. Potentially, the EU may do all of these things, but that would be much more difficult. And Russia...It would have to be done with some sort of acquiescence from Russia if that would be possible. As a formal structure, it is still there.

Q: When I had a chat with Paul Goble, former advisor to the US Secretary of State, he reiterated that Russian participation is necessary but will now be less determinative, whereas EU participation is welcome, but not decisive. What is about US participation? What is your take on the US role in the South Caucasus, in particular, on the Azerbaijani-Armenian peace process?

A: There are limits to the ability of the US to be involved in every conflict, even in important ones, like the conflict regarding Nagorno-Karabakh. This administration is going to be consumed with Ukraine and Russia and China, I guess.

It is going to be very hard to expect that the Secretary of State, for instance, is going to be directly involved in mending the relations between Baku and Yerevan and helping to negotiate a peace agreement.

I am encouraged that, at least, there have been a lot of contacts, including in these Covid days via zoom and via phone. I must say there have been more discussions that Secretary of State Blinken has had with the leaders in both countries than I would have expected, given his own challenges coming from Ukraine and China in particular.

I think there will be attention on the energy front. We can get to that later on. There is something that would define a more involved US role that might be on that side to encourage Azerbaijan to cooperate with the EU and to make sure Azerbaijani oil features in the international market. That is really important. That may be a distinctive aspect of the US engagement and diplomacy. It may not seem to have much directly to do with Karabakh, but, on the other hand, I think it would imply that the US cannot ignore the Karabakh conflict, because if there were more military actions, that would disrupt its interests in global markets.

Q: Could the fact that the Kremlin is preoccupied in Ukraine present Azerbaijan with a chance to curb Russian influence or presence in Karabakh? There have been some suggestions to that effect and could this be an opportune moment for Azerbaijan?

A: It is hard to answer that question without thinking about the Azerbaijani-Turkish relations, and the fact that Erdogan and Putin have been regularly engaging mainly about, as I understand, Syria. There are a lot of speculations about whether Erdogan is becoming closer to Russia, because of this relationship with Putin. So, what the Turks think is important. These visits of President Aliyev to Turkiye are of significance.

Turkiye may be encouraging Azerbaijan in Karabakh and Turkish-Armenian relations could provide an impetus. There is also a broader issue of Russia and Russia's role in the region. We have got this multidimensional game going on. We really cannot ignore the Turkish element in all of this, when we try to provide an answer for the question 'can Azerbaijan take advantage of Russia being so heavily involved in Ukraine?'. That would be a difficult strategy for Azerbaijan, at least, under current circumstances. That is for people closer to decision-makers in Baku to answer.

EU-Azerbaijan Memorandum of Understanding (Mo)

Q: On 18 July, Azerbaijan and the EU signed a Memorandum of Understanding (MoU) regarding gas supplies. Azerbaijan has a role to play, in particular, for South-Eastern Europe, but Europe is not going to replace Russian gas with Baku's supplies – as the volumes are completely dissimilar. Is the emphasis on Azerbaijan, in terms of energy, more of a political nature or is it connected with genuine economic necessities?

A: There were plans to modestly expand Azerbaijan's exports into Europe in any event. This fits in, even before the Ukrainian War, with the strategy of Azerbaijan finding different markets for its gas.

What has changed a bit here is the importance of oil. Oil is a different commodity than gas. Oil is more of a global commodity. It is vital to make sure that Azerbaijani oil is not disrupted, in particular, given the vulnerabilities that the Kazakh CPC pipeline is facing in moving its oil to the Black Sea.

Oil is part of that as well. If I were sort of looking at the approach of the US government, it is to look at where the sources of gas are, even though, as you point out, it may not be enough themselves, enough to compensate the Russian gas in Europe, but taken together and phased in terms of the ability to get gas to market, you end up with a coalition of gas suppliers that can play a role.

The US is the biggest gas producer in the world. The amount of LNG that the US is sending to Europe, taken with the supplies provided by Azerbaijan, Oman, Algeria, and Norway, is serious. This combination is very serious.

The concern with me is whether Russia can find a way to disrupt those flows in some fashion, either by interfering with the way the markets function or by taking actions against the infrastructure that is necessary for the gas and oil to get to Europe.

I think Azerbaijan is an important energy producer. It is a medium-sized energy producer. Without additional investment in both production and conceivably in pipelines, Azerbaijan is not going to be able to produce much more gas than originally planned before the Ukrainian War.

But, again, taken together it is significant. That is the reason why Secretary of State Blinken and others have emphasised that.

Q: In line with the newly-inked MoU, the current 10 bcm that Baku sends to Europe could be doubled to 20 bcm, but even that is not massive.

A: Yes. But it may be significant depending on where the gas goes to. If it goes to smaller markets in the Balkans, for example, that could make the difference. It may be significant for those countries in terms of having access to non-Russian gas.

Baku-Moscow dimension

Q: Azerbaijan and Russia signed the Moscow Declaration a day or two before the invasion of Ukraine. Azerbaijan also signed the Shusha Declaration with Turkiye. As you know, Turkiye is referred to as Turkiye, not Turkey.

A: Yes, I am sorry. I have not gotten into the habit. I should.

Q: It was ratified two days before the incursion into Ukraine. How critical was the moment? What was the rationale behind the timing, if any?

A: That is the question I have. I see no reason objectively why President Aliyev would have had to make this visit to Moscow on the very eve of the invasion. Everyone knew about Russian military activity. Visits are delayed all the time. People have colds or some other things that keep them from travelling. I think that was an impossible situation for President Aliyev to be with President Putin. Because Putin could dictate or make it appear that the US and others were going to try to stop him, he still had allies around, including Azerbaijan. I have read the document. I am not sure what formally it is called. Strategic Understanding or…

Q: It was called the Declaration on Allied Interaction.

A: Yes, Allied Interaction. I was very concerned with what seemed to be a veto right Russia was given to object to any agreement that Azerbaijan might have with third parties that Russia was not satisfied with. I think that still hangs out there as something to be concerned about.

I don't have an explanation as to why the visit took place at the time it did. And I am concerned about some of the provisions that are public and I have read on the agreement and what it may mean for the freedom of Azerbaijan to operate. I am not as familiar with the Shusha Declaration signed with Turkiye, but I think there too is a risk.

Azerbaijan's freedom of action, both vis-a-vis Moscow and Ankara, could be constrained by these agreements. Totally, different frameworks for each one.

Q: The view is that the Shusha Declaration embraces a deeper form of integration, whereas the Moscow Declaration is more of an arrangement between allies, wherein they agree to behave in a certain fashion. The wording is similar, but one may notice nuanced differences.

A: That is the reason I have admitted that I am not as familiar with the Shusha Declaration as I am with the Moscow Declaration. Just the impression I have is that, for good or ill, there are constraints on Azerbaijan's ability to interact with third parties under both of them.

Q: Azerbaijani foreign policy design seems to prioritise good relations with all its big three neighbours – Turkiye, Russia, and Iran. With Ankara, relations have been top-notch. With Moscow, the relations have been managed. With Iran, relations have been problematic. How careful should Azerbaijan be regarding the Iranian factor?

A: I think you have to be very careful about Iran. I see Russia as a threat to Azerbaijan. I see Iran as a threat. Which is greater? I think right now given the state of Israeli-Iranian relations, the recent visit of President Biden to Israel, where he was very clear about the Iranian nuclear programme, it is a risk, I call it a risk, if Azerbaijan could be brought into either the bilateral conflict between Iran and Israel or a broader conflict involving the US, Israel, and Iran.

Iran, as you know, is quite capable of reaching across the border into Azerbaijan. It is a reasonable concern. I do not think it can be managed through diplomacy. Obviously, there is a place for that. The Iranian dimension to this is the one that does not get as much attention as it probably should in the US.

We can't simply assume that because Azerbaijan and Israel have close relations, this is necessarily going to result in Azerbaijani support for things that we and Israel decide as necessary regarding the nuclear programme.

Zangazur Corridor

Q: There is a new subject in Azerbaijani discourse. This is the Zangazur Corridor. What is your perspective?

A: As to the corridor, I think Iranians have a lot of stake in this. Over the years, they have enjoyed economic benefits and political influence because of the connection to Nakhichevan, which, by and large, had to go through Iran.

If you end up with the corridor that avoids that there are economic losses for Iran. More significantly, a level of political influence is no longer there. So, that is another reason to watch Iran.

Q: Back to the Zangazur Corridor. Azerbaijan has an ambition, stemming from the trilateral declaration, to develop an overland passage, providing unobstructed and unimpeded connection between its main territory and Nakhichevan, with Russian forces providing security along the commensurate border. Armenia has extraterritoriality concerns. Can Baku and Yerevan develop a compromise construct, by means of which the former will get what it desires and the latter's sovereignty concerns will be placated?

A: One point to bear in mind too is that I am not sure Russia has got enough troops. They are having a problem taking care of where they are now - that area around Lachin. They are not very successful now. Under the circumstances of the war in Ukraine, it is not clear whether they will come up with another 5000 troops to police that corridor. Let us just set that piece aside as an important point.

This is my reading of the way that the media I am able to follow treat this issue. It seems that at times Azerbaijan is insisting on physical control of the corridor. I think that would be a problem unless you are going to make this issue in border talks. My ideal would be that there is enough confidence between Armenia and Azerbaijan that it would not be a question of physical control of the corridor, but access to a corridor that would have allowed a free movement of people as well as trade between Nakhichevan and Azerbaijan.

You also need to - whether this is in the process now or not - figure out what you are going to do about Lachin. Can the Armenians have enough confidence in what I believe is legitimately Azerbaijani territory? There is no question about that. For Azerbaijan to provide the same sense of freedom of movement and access between Armenia and what remains of Nagorno-Karabakh. There is a fundamental issue of 'guaranteed access vs physical control of the territory that is outside the boundaries of both countries.

Here, quite frankly, Turkiye could be very helpful if the process of normalisation between Turkiye and Armenia continues.

Q: I will ask you separately about the impact of prospective Turkish-Armenian normalisation on the Azerbaijani-Armenian process.

A: Right. If there is confidence there, there ought to be confident in the other direction. That is the way I see it. I have not deeply followed the technicalities, whether this will be road or rail, ideally both. At some point, I hope it will involve the trade between Azerbaijan and Armenia as well. That is not the immediate objective, nor should it be. But if it works, it should work in the dimension as well.

Turkish-Armenian rapprochement

Q: We now come to Turkish-Armenian normalisation. We remember 2009, which was a critical juncture. Back then, it did not go through, as there were obstacles. Now, the situation has drastically changed in the South Caucasus. There are thus two questions. What are the current prospects for rapprochement and what would be its impact on relations between Baku and Yerevan?

A: The earlier process was basically halted because Azerbaijan wanted to link the political settlement regarding Nagorno-Karabakh to the improved relations between Armenia and Turkiye. At the time, I thought that was not a wise position for Azerbaijan to take. Because I think Azerbaijan gains more from good relations between Armenia and Turkiye than it does otherwise.

The good thing I have noticed in the current process is that there have been supportive statements from Baku about what is going on between Turkiye and Armenia.

I don't know certain details about economic and transportation links, in particular. I do not know what the recent fighting has done to influence this. It would be interesting to see if this topic comes up in the meetings that President Aliyev has in Ankara with President Erdogan.

Our best hope for this is that Azerbaijan supports the way the process has evolved up to this point and to see more. Hopefully, this will have good results in terms of encouraging direct contacts between Baku and Yerevan.

Q: I recall the interview given by former Armenian President Robert Kocharyan in which he opined that normalisation with Turkiye constituted a danger to Armenian nationhood. He said that he did not want Armenia to be another Ajaria subjugated to Ankara. There is an evident fear within Armenia that, if normalisaton goes ahead, whilst interacting with much bigger neighbours – Turkiye and Azerbaijan – Armenia may lose its independence. How justified is this fear and how can its concerns be placated?

A: Whether it is justified or not, I do understand the fear. Armenia is not the first small country that changes its relationship with its larger neighbours. We can go back to Europe and World War II. There are examples when small countries, in fact, have prospered because of peace, not because they have to give up something else.

That may go back to your very first observation about where the question of the status of the Armenians in Karabakh stands. If you can create confidence that Armenian nationals living in what is Azerbaijan will have their rights protected, their language protected, their right to free movement protected, then all of these become less of a concern about being absorbed by larger neighbours. That has always been the risk when a war breaks out, whether it is a direct or indirect conflict, countries lose parts of their territory. As I say, whether it is justified or not, it is understandable. I think there is a need to be careful about the words that everyone uses to talk about the process and the importance of sovereignty and territorial integrity.

You go back to the history of the OSCE, what was stressed from the very beginning after the breakup of the Soviet Union was that the sovereignty and territorial integrity of all the states must be maintained and protected. So, again, I think it will take, in this case, maybe a role for the OSCE to provide that kind of security, not in a physical sense, but in a diplomatic sense, security on the future of Armenia's independent statehood. I am not familiar with the interview that Kocharyan gave. What you described is typical for him.

Q: It is clear that Prime Minister Pashinyan is under huge and unenviable pressure. When he takes steps that are diplomatically sound, he is always under attack from his own opposition, which is linked to the former regime. In his December 2021 interview, he stated that even the old OSCE Minsk Group process would not have led to the separation of Karabakh from Azerbaijan, blaming his predecessors. In April this year, he suggested that Armenian status expectations must be lowered. On the other hand, he has stated many other opinions which have been utterly different. He is under the pressure from the Armenian Church, the opposition, and the expatriate diaspora, which is very militant. What are his chances of overcoming the pressure?

A: The pressure will not go away. For me, at least, the message is that the sooner that political progress is made between Armenia and Azerbaijan that should begin to address the issues we have been talking about earlier, the better it is. In other words, the longer this is going on, the more pressure he is going to be under. And I think to the extent that he is now a leader of Armenia and as long as he is there, there are going to be different views coming out.

He is the person that Aliyev needs to develop a relationship with, of confidence, so that we can both, as outside interested parties but also the parties of Armenia and Azerbaijan, see substantial progress. People can see that there is a benefit. That would be the most important element here that the people of Armenia see this not as something they are giving up but as something they are actually benefiting from because of the normalisation, both economic and political life, and also protecting Armenian nationals' rights within Azerbaijan. I think if there is anything we need to do now that is to make progress soon and not string this out again.

Turkmen gas

Q: I want to return to energy-related subjects. What are the prospects for Turkmen gas being brought to Europe? The discussions on this subject have usually met with scepticism. The mega Trans-Caspian Gas pipeline seems to have been shelved. The swap arrangement between Iran, Turkmenistan and Azerbaijan is interesting, but the volumes do not seem to go beyond 3bcm per annum. The alternative shorter pipeline suggested by US-based Trans-Caspian Resources is interesting, as it suggests 10bcm per annum being exported via Azerbaijan. The financial aspect of the proposal remains problematic. How optimistic are you on the prospects for Turkmen gas being exported to Europe?

A: I am not optimistic at all. You are correct to point out that there have been some discussions about the Trans-Caspian Pipeline. It goes back to my time when I was Ambassador. The American Oil company was talking about the Trans-Caspian Pipeline. I really think there are several factors. I think the unresolved demarcation of the Caspian between Turkmenistan and Azerbaijan. That can be overcome, I am sure, but that is still a factor.

The second one has to do with Iran, Russia, and the Caspian Treaty from 2018 which has a lot of defects in it. What seems to be clear is that signatories can object on environmental grounds for projects that would be through under the Caspian Sea. The third element is whether Turkmenistan has enough gas. I know they have got a lot of gas. They have a very strong commitment to China and whether they would be enough to supply remains unknown.

As to other ideas that have recently come up, you are right to point out that amounts of gas would be relatively small. And, I don't think we are going to overlook the fact that there are still sanctions against Iran which could get into play when you discuss how you are going to finance either some of the big mega projects and some of the smaller ones. I think the less ambitious this is, the Iranian dimension can be dealt with; it might work but it is not going to result in huge amounts of Turkmen gas going as far as Europe, certainly could go to Azerbaijan and Turkiye ultimately.

Azerbaijan's renewables potential

Q: The recent EU-Azerbaijan MoU contains a provision on 'commercial viability and market demand'. Does this point indicate that the actual exports will be curtailed and curbed?

A: I think it is a protection for the Europeans to basically say “look, if all this makes commercial sense, we will act, but the EU may not put its money into the pipelines and gas development if it does not see it”. I am sure Azerbaijan, too, is not in the position to make a commitment today in terms of investment, including both production and pipelines. It provides a kind of escape provision for both parties. I think the more interesting parts of this agreement really relate to renewable energy. I have said that this agreement could be a model for Europe to negotiate with other gas-producing countries if they wanted to do that. This MoU recognises that climate change is an important issue. Europe has priorities in terms of global aspects of climate change. It is in the interests of both parties to do what they can to develop alternatives to traditional oil and gas exports. At the same time, they are increasing amounts of, in this case, gas going to Europe. I think that part is a really interesting piece of this agreement, although it is not directly politically tied to Russia or Ukraine.

Q: It is not the most widely discussed part of the MoU, but a very important one, nonetheless.

A: Yes, it is important. Because if you can free up through renewable energy, looking at Azerbaijan producing electricity you do not have to burn oil and natural gas, which becomes available for export.

War in Ukraine

Q: Prior to the signing of the MoU, there had been some reports by EU Observer and Reuters suggesting that there would be three linchpins, namely 'risk sharing' in terms of investments, combined with an increase in export volumes and attainment of climate objectives. Still, the first element does not seem to be crystal clear.

I now want to move to the war in Ukraine which is impacting all of us. If five or six years ago, someone had suggested that Russia might try to resurrect the Soviet Union in one guise or another, that person would not have been taken seriously. Now, the Russian officials talk about this candidly. Dmitri Medvedev, former Russian President, has posted something to this effect. What is your take on the Russian ambition to revive this former superpower and the resources at the Kremlin's disposal to implement this policy?

A: I agree with you that if you would have looked five years ago, not many people would have thought of that. I can recall being at an event that the Atlantic Council, a think-tank here in Washington, hosted, with former Russian Foreign Minister Andrei Kozyrev. I think it is still in the archives of the Atlantic Council. If you want to look for it, it was five or six years ago.

Kozyrev said a very important thing that – as you say people did not pay attention to – for Putin, the collapse of the Soviet Union was a geopolitical disaster and he has never got over it. For him, the reconstruction of the Soviet Union is important. I think we tended not to pay attention to that. I am not sure that Russia needs that many resources available to, if not to recreate the Soviet Union, certainly to deconstruct some of the security arrangements that have existed.

Look at what is going on in the Balkans - in Kosovo and Bosnia and Herzegovina and Kosovo. There the Russians with a very little amount of financial resources, except in the case of Serbia, with no basis for military operations, are able to potentially upset the processes that the EU, the US, and NATO were involved in to bring peace to that region. There is a capacity to be disruptive. We have to watch Kazakhstan as well. That may not require divisions and divisions, but strategic involvement in both hybrid kinds of warfare and political influence can be significant. I think other countries in Central Asia are equally vulnerable.

So, I think we have to take this possibility seriously. It is not just one person talking about it. I think there are clearly steps underway and with everyone focused on Ukraine as they must, we cannot overlook what is going on everywhere from the Baltics, from the periphery of Russia to Central Asia and beyond.

The open question for me is what China's approach is going to be. If the Chinese unhappiness with the US grows, they may be prepared to 'help' Russia, in particular, in the areas where it seems to be in conflict with the US and US interests.

It is the resources that the Chinese can bring to help Russia. The Russian economy is in trouble, whatever they are saying. And, they can generate oil and gas exports and continue to do so, although the US and the West are having some success. I just think they do not need a tremendous amount of resources to create conditions for, if not the return for the Soviet Union, certainly the return to the confrontation that characterised that period between Moscow and Washington, and, potentially, Moscow and Europe.

Q: We are therefore not talking about the replication of the Soviet Union as it was, but some consolidation through security arrangements and economic alliances. This economic war between Russia and Europe is very damaging to both. Both are suffering. Who is going to be the winner at the end of the war and what will define the winner?

A: I am not sure whether this war is going to have clear winners and clear losers. I think the obvious losers are the poor people of Ukraine who have been killed, imprisoned, and forced to be refugees. They are the losers. If the fight stops, I can't see it as quickly going back to the situation that applied on 22 February, whether they are going to be normal economic relations involving Russia and the rest of the world. I think we would see a period of extended sanctions. There will be adjustments in the energy market. Russia will lose some share. If the move in Europe towards renewable energy continues, there will not be this greater market whenever we are talking about peace between Russia and Ukraine, as there is today or as there was before the war.

There are a lot of forces taking place that will be very difficult, I say, to unwind to get back to that. What Russia will be left with is few meaningful supporters and the uncertain role of China. It is going to depend on how much Russia wants to develop relations with China that may cause Russia some problems in the longer term. I do not think the US will win. I think if we can support Ukraine in the war and if they can return to control of their territory, that would be a plus. But it is not a case of winners and losers the way we normally think about it.

Q: Do you subscribe to the pessimistic view regarding the future of Ukraine, where it will lose effective control over its Eastern provinces and be truncated? Some people believe the rest of Ukraine will be more Western-inclined, perhaps becoming a member of the EU and even NATO, but the country will ultimately be truncated territorially.

A: I do not have a good sense of how the war is going for the Ukrainians in the East. I have seen reports on the slow progress of the return of territories to Ukrainian control. I don't know whether they could maintain that or not. I would imagine that after we get to the point of the end of the military conflict there will be uncertain control of Ukraine over many parts of it, whether they will have physical control or not.

I expect that Ukraine will become a member of the EU. I see that as being natural progress. I do not see Ukraine becoming a member of NATO, that is not to say NATO won't support Ukraine. I just do not see it as likely as Ukraine becoming a member of the EU.

So, as a possible outcome, I see the return of the territory, which is clearly Ukrainian territory, to their sovereign control and the return of refugees and displaced people. Ukrainian sovereignty is to be determined in Kyiv, along the lines of closer relations with Europe and membership in the EU.

Q: My last question is about Ukraine and Azerbaijan. Have you had a chance to follow the steps taken by Baku, which needed to be very careful to balance conflicting considerations, at the outset of the war? How do you evaluate them?

A: It is hard to evaluate them, to be quite honest. I see the rhetoric about supporting Ukraine and providing economic and humanitarian assistance to Ukraine, but I also see that recently in the Caspian there have been joint naval maneuvers, with Russian vessels coming to Baku. Probably, some of the same Russian vessels were launching missiles from the Caspian region toward Ukraine.

People say Azerbaijan has to be careful about dealing with Russia. I think there comes a time when the news of atrocities that Russia has committed in Ukraine grows every day during the war, the countries have to really decide who they support. I do not know where Azerbaijan will ultimately come out on this. I hope when the war is over there will be stronger relations between Azerbaijan and Ukraine.

Q: Thank you very much, Ambassador Kauzlarich. Very grateful to you. It is early morning in Washington DC. I hope you have had a good morning with us. I wish you a good day. Hopefully, in the fullness of time, we will have some other opportunities to discuss relevant subjects and the realities of the Armenian–Azerbaijani peace treaty. Hopefully, at the time of our next conversation, the situation will improve in Ukraine. There will be more positive aspects that we will dwell on.

A: Thank you very much for the opportunity and for thoughtful questions, not easy ones either for me or for you to answer. But we have covered the complex picture facing Azerbaijan and the people of Azerbaijan.

Q: Thanks. We are very grateful to you. Have a good day.

A: You too. Thank you.