An interview with Mr Richard Morningstar, US Ambassador to Azerbaijan.

AT: Mr Morningstar, first of all, it would be interesting to know your opinion about US-Azerbaijani political relations.What is the state of the relations between the two countries under changing geopolitical processes?

The situation in Ukraine once again emphasizes the importance of the current relations between the USA and Azerbaijan. I would like to ask such a question now – at the current situation, which country, including the EU states, supports Azerbaijan’s state sovereignty and independence and attaches it such an amount of significance? I want to draw your attention to the fact that the unfolding events in Ukraine highlight the importance of resolving the Nagornyy Karabakh problem. The solution of this conflict will remove instability in the South Caucasus and minimize the risk of Russian interference in this region.

AT: In 2009, you were the Secretary of State’s Special Envoy for Eurasian Energy. Prior to this, you served as Special Advisor to the President and Secretary of State for Caspian Basin Energy Diplomacy. That is, you are familiar with the former Soviet space quite well. When the former Soviet republics gained their independence, if one of the bases for them to strengthen their independence was energy resources, another factor was to diversify their economies. However, as time passed, we observed that none of these factors can now be a guarantor of the independence of CIS countries. We wonder where should these countries seek their future security?

I want to start first by saying that over the passed period, the majority of the former Soviet countries have preserved their independence. I believe that the most important way of preserving independence is the statehood based on strong democratic principles and the development of the market economy. You see, the states that develop these two factors and are based on these fundamental bases are well protected from external interferences. The energy independence is a very important factor. Azerbaijan’s rich energy resources are its destiny that play special role in the restoration of its independence and ensuring its security.

As for countries, like Ukraine, that is, we bear in mind countries without energy resources, we stress that their energy independence on Russia should be decreased as much as possible. With an eye to this, we have proposed Ukraine to beneficially use its energy resources. This includes both developments of traditional oil and gas projects as well as the development of alternative energy resources. We have always stressed that in order to reach these objectives, it is also necessary to improve the investment climate in the country. By supporting Ukraine’s independence, I believe those, which are being talked about, will be gradually realized. We believe that it is important for countries, like Azerbaijan – rich in oil resources – to diversify their economies. At the same time, it is very important to reform taxes and customs policies. This will provide opportunities for the development of new competitive businesses. And naturally, the issue of membership of the World Trade Organization should be added there. We are always ready to help Azerbaijan to diversify its economy and try that Azerbaijan to create and make significant investment climate available for companies involved in the non-oil sector.

AT:Since its independence, Azerbaijan has been interesting country for the West for its Caspian offshore oil deposits. This year Azerbaijan will mark the 20th anniversary of the signing of the first oil contract with western as well as US companies. In your opinion, what Azerbaijan will from now on stimulate the West with and will this interest be long-lasting?

 I suppose that Azerbaijan has opportunities to stimulate foreign investment in a number of other sectors apart from energy. Among these potential sectors, I can name agriculture. Also I have to say that fruits and vegetables I eat in Azerbaijan are the tastiest that I have ever tasted. Nowhere else I have ever come across such tasty fruits and vegetables, Azerbaijan should take advantage of this opportunity. Moreover, Azerbaijan can also stimulate foreign investments in the information technologies sector. The transport sector has also sufficient potentials. It is also possible to look for multipurpose cooperation opportunities in Azerbaijan’s construction sector. Of course, tourism. This is naturally not limited to the opportunities that I have mentioned. The key issue as I have already mentioned is how companies assess the investment climate in the non-oil sector of the country. Free enterprise is capable of even creating non-existing ones.

AT: The USA has played a special role in the realization of the Baku-Tbilisi-Ceyhan main export oil pipeline. We wonder, what is Washington’s official position on Azerbaijan’s gas export projects?

First of all, I want to underline that the energy cooperation, relations between the USA and Azerbaijan are at a high level. We have been in good cooperation at this level for many years and see eye to eye on it. Official Washington is a strong supporter of the Southern Gas Corridor. We supported official Baku on the final investment decision (FID) for the Stage 2 development of the Shah Daniz gas field in the Caspian Sea. I should say that prior to my arrival in Baku as ambassador; I spent five years on the Southern Gas Corridor project. Personally, I and the USA are very glad for the realization of the project to deliver Shah Daniz gas to Turkey and en route to Europe from Turkey.

AT: What tangible steps can the United States take in the next few years to reduce Europe’s dependence on Russian gas and oil?

I would like to slightly rephrase my question. That is, what can Europe do to minimize dependence on Russian gas and oil? It would be more interesting to reply to this question.

We are ready to help Europe to this end, that is, make it available for them to benefit from our opportunities. However, the key issue depends on Europe itself. We cooperate with the European Union and European countries separately; however, the responsibility for a final decision lies with them.

I am confident that the Southern Gas Corridor will be an incomparable project as an energy resource from an alternative source for Europe. However, Europe is also realizing other measures. From this standpoint, Europe attaches great significance to the construction of the liquefied gas terminals. At the same time, the development of the alternative energy sources is of crucial importance for the EU, in particular, the development of the wind energy.

As well as the application of the solar energy is growing. The networks of the gas pipeline systems are being established among countries, underground gas storages are being built, and the nuclear energy is also developing. At the same time, shale gas is not either forgotten which has played a significant role in increasing gas yield in the USA.

As it transpires from my words, Europe is not simply waiting but it has made strides in this issue within a short time. Out of the alternative energy sources, Europe also keeps gas imports on the agenda and one of them is the Southern Gas Corridor. We also back Europe on this issue.

AT: Recently there has been observed intensification around the Trans-Caspian gas pipeline though the pipelines are not built with political statements. They are realized when the businesses are interested in it. In your opinion, will this gas pipeline be realized?

First, I would like to say that the USA fully backs the idea of the Trans-Caspian pipeline. I have been engaged in this project since 1998. For a number of objective and subjective reasons, the realization of the Trans-Caspian gas pipeline has not been possible yet. I should note that the European Union is keen on purchasing Turkmen gas and is serious about the Trans-Caspian gas pipeline project. And the US supports it. We think the European Union, Azerbaijan, and Turkmenistan should discuss this issue. We also believe that the Trans-Caspian gas pipeline can be realized if interests of Georgia and Turkey as transit countries are met. I believe there will be no need for other gas pipeline aside from the Trans-Caspian gas pipeline. However, there are a number of problems as well as political ones.

Azerbaijan Today Magazine, 2014