Azerbaijan says 'God-given' oil and gas will help it go green

Flames soar into the air from a sandstone outcrop on a hillside on the Absheron peninsula near Baku, the capital of Azerbaijan, as it prepares to host the COP29 climate conference next week.

The "burning mountain"--Yanardag in Azerbaijani--is fed by underground gas rising to the surface and igniting upon contact with oxygen.

The abundance of naturally occurring fires from the energy-rich nation's huge gas deposits has earned it the nickname "The Land of Fire".

Azerbaijan's vast oil and gas resources "have shaped the history, culture, politics and the economy" of the Caspian nation, said energy expert Kamalya Mustafayeva.

Its oil deposits--seven billion barrels of proven reserves--were discovered in the mid-19th century, making what was then part of the Russian Empire one of the first places in the world to start commercial oil production.

"The world's first industrial onshore oil well was drilled in Azerbaijan, and also the first offshore one," Ashraf Shikhaliyev, the director of the energy ministry's international cooperation department, told AFP.

'Born of an oil boom'

Since gaining independence from the Soviet Union in 1991, Azerbaijan has produced 1.05 billion tonnes of oil and is set to increase its natural gas production by more than a third in the next decade.

Revenues from oil and gas production make up about 35% of the country's GDP and nearly half of the state budget.

"Azerbaijan's oil revenues--up to $200 billion to date since 1991--gave the country an opportunity to make a huge leap forward," said Sabit Bagirov, who headed the State Oil Company of Azerbaijan (Socar) in the 1990s.

Energy expert Ilham Shaban said "Baku, once a small fishermen's hamlet of some 4,000 people, was born of an oil boom," which led to massive population growth--at a faster rate from the 1890s than London, Paris or New York.

Modern Baku is a bustling metropolis dotted with skyscrapers, seaside promenades and futuristic buildings designed by world-renowned architects.

The Azerbaijani capital has become a venue for major international events, such as the 2012 Eurovision Song Contest, matches in the Euro 2020 football championship and the Formula 1 motor racing Grand Prix.

The manna of petrodollars helped Azerbaijan to arm itself against arch-foe Armenia, and last year Baku recaptured its breakaway Karabakh region from Armenian separatists who had controlled it for decades.

'Europe's energy security'

About 75 percent of Azerbaijan's energy exports go to European markets.

In 2022, the European Commission--keen to reduce Europe's dependence on Russian gas--signed a deal with Baku to double gas imports from the country.

While Azerbaijan's share of gas supplies to Europe might only reach five percent by 2033, the country can meet all the gas needs of Bulgaria, Greece, Serbia, Albania and the south of Italy, said Mr. Bagirov.

"Azerbaijan has become an important factor in ensuring Europe's energy security," said expert Ms. Mustafayeva.

But its fossil fuel reserves, which President Ilham Aliyev has called "a gift of God", are expected to be exhausted within several decades.

"Azerbaijan's oil wells will run dry within 20 years; the natural gas reserves will last for 50 years," Mr. Bagirov said.

"Economic dependence on hydrocarbons is a concern for the Azerbaijani government, which is making serious efforts to develop other economic sectors," including technology, agriculture and tourism, he said.

Expert Shaban said "Azerbaijan's goal is to get the maximum money from its hydrocarbon resources before Europe reaches its decarbonisation objective," which will lead to a significant drop in the continent's demand for fossil fuels.

Insufficient green agenda

This prospect has prompted criticism from environmentalists ahead of COP29.

"COP hosts have a responsibility to deliver progress and the answer is not found at the bottom of an oil well or a gas pipeline," said Jasper Inventor, Greenpeace International's head of delegation for COP29.

With all the exported gas and oil, the emissions are tallied in the CO2 production of the countries that buy and burn it, and not in those of Azerbaijan.

Yet Azerbaijani officials said the country is making significant strides in setting its own green agenda on its land.

The country aims to increase its renewable energy capacity to 30 percent by 2030 and reduce greenhouse gas emissions by 40 percent by 2050.

Shikhaliyev listed "clean energy mega projects" such as transforming the recaptured Karabakh region into a "green energy zone" fully reliant on solar, wind and hydro power.

But experts are adamant that Azerbaijan does not have a climate plan in line with the Paris Agreement.

In September, the Climate Action Tracker group estimated that by 2030, Baku's greenhouse gas emissions will have increased between 23 to 40 percent compared to 2020.

Published - November 05, 2024 04:15 pm IST