The Governance of Energy Megaprojects

The Governance of Energy Megaprojects

Politics, Hubris and Energy Security

Benjamin K. Sovacool and Christopher J. Cooper

Based on extensive original research, this book explores the technical, social, political, and economic dimensions of four Asian energy megaprojects: a regional natural gas pipeline network in Southeast Asia, a series of hydroelectric dams on the island of Borneo, an oil pipeline linking Europe with the Caspian Sea, and a very large solar energy array in the Gobi desert.

Chapter 4: The Baku–Tbilisi–Ceyhan (BTC) oil pipeline

Benjamin K. Sovacool and Christopher J. Cooper

Subjects: economics and finance, regional economics, environment, energy policy and regulation, environmental governance and regulation


The Caspian Sea is the largest inland body of water in the world. Its coastlines are shared by Azerbaijan, Iran, Kazakhstan, Russia and Turkmenistan. The area is rich in energy resources. As early as the sixteenth century, European traders had documented the region’s vast oil and gas deposits. In 1873, Caspian exploration and development of oil began in some of the largest fields known to exist in the world at that time—with Robert Nobel, who founded the Nobel Prize, even building an oil “distillery” there in 1876. By 1900, Baku had more than 3,000 oil wells, 2,000 of which were producing at industrial levels. At the turn of the century, Baku became known as the “black gold capital” and quickly became the center of the international oil industry. In 1920, when the Bolsheviks captured Azerbaijan, all private property—including oil wells and factories—was confiscated. Afterwards, the republic’s entire oil industry came under the control of the Soviet Union. By 1941, Azerbaijan was producing a record 23.5 million tons of oil, and the Baku region supplied nearly 72 percent of all oil extracted in the entire USSR.

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