Azerbaijani road trip

About half the world’s mud volcanoes are in Azerbaijan, and some good ones are about an hour’s drive from the edge of Baku.

I saw a Koch Industries truck parked about ten miles down the road.

The Zoroastrian Fire Temple attracts scores of Indian tourists, unlike anything in Baku.  It dates mostly from the 18th century.  And:

Yanar Dag (Azerbaijani: Yanar Dağ, meaning “burning mountain”) is a natural gas fire which blazes continuously on a hillside on the Absheron Peninsula on the Caspian Sea near Baku, the capital of Azerbaijan (a country which itself is known as “the Land of Fire“). Flames jet into the air 3 metres (9.8 ft) from a thin, porous sandstone layer.

Here are photos from somebody else’s Azerbaijan road trip.


This is the first I've ever heard of mud volcanoes. Amazing what you can learn on an economics blog.

We had some Azerbaijan customers visiting the Texas plant last week. Buying API oilfield lab equipment. The young guys went shopping. Older one wanted to rent machine gun at local range. They learn English watching reruns of Friends.

Baku shows well during F1 race. Races through new and old town.

Georgia and NATO was the geopolitical topic of choice.

Thinking about American exports to the region: oilfield product, Koch petro products, sitcoms, movies, anti Shi’a pro Wahhabi foreign policy, NATO expansion to Russia doorstep.

Tyler, man up and visit the Armenian mountain men in Artsakh.

Agreed. Armenia is much more underrated and a friendlier country than Azerbaijan. Plus they don’t have the occasional genocidal tendencies. Azerbaijan has consistently destroyed Armenian cultural ruins and historical sites that remain in their country.

Azerbaijan sounds like another country Trump would love to handover to Putin.

Nope - America is extremely jealous when it comes to oil producing nations slipping out of Western oil company orbits.

Just ask the Iranians.

Or the Iraqis, for a considerably more concrete example of what happened after the invasion of Kuwait.

15 years ago, you might be right, but ironically, US Energy Independence has greatly reduced the strategic value of having Oil Producing countries in your orbit. I don't think the US gives too much value to oil at the moment. I don't think much US value is attached to Venezuela, Indonesia, Iran, Qatar, or Norway just because they have oil. Other factors explain the variance in policy neatly enough.

This is one reason why the Saudi's are a bit cut loose: the US is not answering the phone anymore and they're becoming way more paranoid and "self-reliant" (joke).

'ironically, US Energy Independence' remains a mirage.

Here are some EIA figures, and currently, the U.S. imports a net 2.7 million barrels of oil a day -">

Further, the U.S. definition of 'petroleum' includes American produced fuel ethanol, which is currently running at 1 million barrels a day. However, that is basically double counting (though reasonable people may differ on how much oil is required to produce a barrel of ethanol), and being reasonable, the U.S. uses 750,000 BOE a day to produce that 1 million barrels of ethanol. (Though the U.S. also exports ethanol, in 2017 about 10% of domestic production.)

Basically, the U.S. produces about 10.8 million barrels a day of crude, and imports 3 million barrels (roughing out the ethanol double counting in a generous way and recognizing that a good amount of corn's need for hydrocarbons is related to fertilized/pesticides), Next year, the U.S. is projected to produce 11.70 million barrels a day.

Though condensates should certainly not be ignored, when it comes to U.S. energy independence, we still have a couple of million barrels a day of crude to go.

'the strategic value of having Oil Producing countries in your orbit'

I talked about in the orbit of Western oil companies, not the U.S. - think Shell or BP, or if one wishes to be a bit more inclusive, Total. The U.S. continues to patrol the Straights of Hormuz, and it is not because the Islamic Republic is an obnoxious theocracy that thumbs its nose at the U.S.

As for Venezuela? As of May 2018, it is the fifth largest exporter of oil to the U.S., on roughly the same scale as Mexico and Iraq. And the Saudis? Though a distant second to Canada in terms of U.S. imports, they still have their calls answered promptly.

'I don't think the US gives too much value to oil at the moment.'

Tell that to the U.S. military (particularly the Navy), with its complete dominance of every major maritime oil transit route.

What, do you think the U.S. only thinks about oil for itself, compared to being able to instantly deny oil to others in the event of major conflict? Though I do not quite agree with this book's framing, it fits in well with the sort of fundamental strategic thinking that the U.S. has exhibited since the importance of petroleum to modern warfare became clear after WWI - 'Oil and War: How the Deadly Struggle for Fuel in WWII Meant Victory or Defeat' A much better book, though with a considerably narrower focus and historical background in terms of U.S. strategic thinking in the 1930s and actions in WWII is 'Ploesti: The Great Ground-Air Battle of 1 August 1943.'

Mmm. I think you have a point. I think I overstated trends.

Just like he let Putin take Crimea and the eastern half of Ukraine!

If you like burning things, check our Darvaza, an enormous gas crater in Turkmenistan. I once camped next to it. It's about 100 miles from anything, but worth the sight.

"I saw a Koch Industries truck parked about ten miles down the road."

Fire? Check. Mud? Check. Volcano? Check. This is obviously their Evil Lair.

Thread winner.

Tyler, given the high level of inequality in Azerbaijan, a sexy selfie in front of the mud volcano might help with the marketing of your new book.

In a prior post Cowen indicated that Azerbaijan is a secular country, which he attributes to the many years of Soviet dominance. I would point out that Azerbaijan is mostly Muslim, not surprising, but what may be surprising is that it's majority Shia Muslim. There aren't that many majority Shia countries, given that over 85% of Muslims worldwide are Sunni. Of course, the leading Shia majority country is Iran, which is Azerbaijan's next door neighbor. It's not surprising that Azerbaijan has been accused of collaboration with Iran. I have pointed out that Trump was in partnership with the Mammadov family in the Trump International Hotel and Tower (Baku). The Mammadov family is classic oligarch, having collected billions in oil revenues from government-owned reserves in the Caspian Sea (that Koch Industries truck). Well, it seems that Trump terminated his partnership with the Mammadov family, after Trump was elected president but before taking office. That would be the prudent thing to do, perhaps avoiding someone (spies?) snooping around Trump's business relationships in Baku but waiting for the election outcome to cut what was a rewarding venture (about $2.5 million in fees collected by Trump). No, I'm not slinging any of that mud in the photo. One may recall that Trump recently offered to meet with the Iranians without any preconditions, something that must have upset John Bolton given that Bolton has been fomenting the case for war against Iran for over several decades. I understand that Manafort has many friends in Azerbaijan. Maybe he even has friends in Iran. Politics makes for strange bedfellows.

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