"U.S. Policy on Caspian Energy Development and Exports: Mini-Case and Paradigm"
April 30, 2001
Author: Graham Allison, Director, Belfer Center for Science and International Affairs; Douglas Dillon Professor of Government, Harvard Kennedy School
Belfer Center Programs or Projects: Caspian Studies
Drawing on the Caspian Studies Program's ongoing research, my colleague Emily Van Buskirk and I prepared a case on U.S. policy on Caspian energy development and exports for a Kennedy School course I teach with Ambassador Robert Blackwill. Using the case, our sixty students examined central questions including: What is the most effective way to promote the development of Caspian energy resources? What is the proper role of government in large-scale capital projects? Where does the Caspian Basin rank in the hierarchy of U.S. national interests?
A mini-case like the one attached requires students to write a strategic options memo for the president identifying alternatives, pros and cons, and making a recommendation. The attached case starts with the real world today, accelerates developments to a fork in the road, and requires students to analyze and recommend. Specifically, in this hypothetical, the oil companies have completed their detailed engineering study of the Baku-Tbilisi-Ceyhan pipeline route and concluded that the price for construction will be $3 billion. Pledges from the companies and investors raise $2.5 billion, leaving the project $500 million short on the financing. Given U.S. government affirmations about the Baku-Tbilisi-Ceyhan pipeline as a U.S. priority, the companies seek assistance from the U.S. government. The question is: what to do?
If you know the answer, send us a note (Graham_Allison@harvard.edu or Emily_Vanbuskirk@harvard.edu). For purposes of comparison you may be interested in the students' answers, as well as our illustrative paradigm.
— Graham Allison
For Academic Citation: