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It's official now - the people of Port Au Prince have very little time left
01-21-2010, 11:19 PM,
RE: It's official now - the people of Port Au Prince have very little time left
here's pipeline-istan revisted:
BAKU, Azerbaijan - Tzaev Ilman, a friendly Shi'ite Azeri fond of Platin vodka and always caressing his proud possession - a Samsung mobile - may not know how important a player he is in the New Great Game. As a crew member of the "Azerbaijan" ferry, owned by the Caspian Shipping Co, this Caucasian, melancholic version of Samuel Taylor Coleridge's ancient mariner plies the waters of the Caspian - a 400,000 square kilometer expanse of water and a privileged source of oil and caviar, unrivalled wealth and explosive conflict - between Baku, Turkmenbashi in Turkmenistan and Aktau in Kazakhstan.

Last week though, even the ferries were silent in Baku's harbor. Heydar Aliyev, 80, Azerbaijan's "father" and president, had died in an American clinic of heart failure only a few hours before captive Saddam Hussein's images were transfixing the world.

Aliyev had ruled Azerbaijan since 1969 - as a general heading the local branch of the Soviet KGB, then as Communist Party secretary, and finally as president. Like Saddam and other Central Asian dictators, such as Turkmenistan's Saparmurat Niyazov, his image and his slogans were and still are splashed all over the country.

In a flash, more than a million mourners were crying for Aliyev in the streets of Baku. This was unseen since the death of Josef Stalin - Saddam's icon - 50 years ago. The mourners, from all corners of the Caucasian republic, streamed down avenues strewn with carnations towards the Palace of the Republic, where his body lay in state. His son, Ilham, 41, former playboy, casino owner and vice president of the state oil company SOCAR, is now president. In the first dynastic succession in the post-Soviet sphere, he inherited power last October in a rigged election.

The Paris of the Caspian
Tzaev does not see much during his ferry's pit stops. In Aktau, he hardly has any time to mingle with the local Russians, Kazakhs and Caucasians. Aktau, cornered between the Caspian and the desert, with its water coming from a nuclear-powered desalinization plant, has "attractions" like a huge Vladimir Lenin statue, a real MiG stuck on a pedestal, literally in the middle of nowhere.

Even the monster Tengiz oilfield - operated by the joint venture Tenghizchevroil - is 200 kilometers northeast. Aktau is not even Kazakhstan's oil city: this is Atyrau, in the Urals, 350 kilometers north of Tengiz: although Atyrau is not on the Caspian, the Caspian is coming to Atyrau, and the city may be under water by 2050. As for Aktau, it is certain to become a boom town when Caspian offshore oil exploration begins in earnest.

Tzaev is envious of Caspian waters in Turkmenbashi: they are a clear blue, compared to polluted Baku. For US$100 one can buy a kilogram of the finest beluga caviar, which would cost $260 in Baku. Very few Turkmen live in the port city: most people are Russian and Azeri. This was a key crossroads when Tzarist Russia built the Trans-Caspian railway. Then it was decadence, but now Turkmenbashi is the only port and sea link with Russia and - via the Volga and the Sea of Azov - the Black Sea and the Mediterranean. And this is where Turkmenistan's oil and gas reserves are.

Tzaev lives in a gritty Baku suburb, Surakhani, where families exchange their gloomy Soviet apartment blocks for extended promenades side by side with oil derricks. This Baku, smelling of oil, sulfur and sturgeon, is not the art deco Baku of old, smelling of saphron, enveloped by olive trees and vines, and greener than London. Now, destitute but dignified old ladies are forced to beg in the streets. Like most Azeris, Tzaev is very close to Anatolian Turks by language, physical traits and way of life. But in religion he is more like an Iranian, as he is Shi'ite. Yet ethnicity in Azerbaijan is more important than religion: the key references are Ankara and Istanbul in Turkey, from where they adopted the adapted the Latin alphabet, watch the movies - porno included - and follow politics closely.

A key question for the immediate future is the possibility of moderate Islam - now in power in Turkey - also seducing Azerbaijan. Azeris are fervent Muslims, even if the social facade is Soviet and somewhat Westernized, and there are fewer veiled women in Baku than in a Paris suburb. In hotel rooms, arrows pointing to Mecca coexist with condoms. Azerbaijan is already a member of the Council of Europe - and dreams of becoming, sooner or later, a full member of the European Union.

The Azeri military also collaborates with the Americans in Iraq. There was not a single peep from Washington on the new Azeri "republican dynasty" - a-la North Korea and Syria. Pentagon chief Donald Rumsfeld, in a recent visit to Baku, was mum. Azeris themselves also don't seem to mind. Their major wounds remain the Soviet past, the demented excesses of Stalinism and the fact that Karabakh Armenians joined Armenia and forced hundreds of thousands of Azeri refugees to come to Baku - in a sort of Caucasian replay of India and Pakistan during partition in 1947.

Baku's fond memories are from the golden age when it was "the Kuwait of the Tzarist empire" and "the Paris of the Caspian". The city now would like nothing more than to celebrate the return of the French branch of the Rothschild family - which once had a crucial financial role in the city. This is a city with a certified chic CV.

A crucial cast of characters
Baku's funereal mood lasted for a full week, during which state TV, adding a new totalitarian post-Soviet twist to Chinese torture - or information control - took over all terrestrial channels, including Turkish and Russian, broadcasting for a whole week only throngs of people mourning Alyev. Many Azeris weren't even aware that Saddam had been arrested.

Among the mourners at the funeral was a crucial cast of characters: Russian President Vladimir Putin, Georgia's former leader Eduard Shevardnadze, Kazakh President Nursultan Nazarbayev, George W Bush's special envoy - oil man Brent Scowcroft. Putin said in so many words that he "loved" Aliyev. Recep Erdogan, prime minister of Turkey, with which Azerbaijan is extremely close, said: "The Turkic world has lost an outstanding individual." Shevardnadze was unconsolable: Alyev had been his personal friend for more than three decades. Every project involving oil and power between the two countries was dependent on their friendship.

In May, during a solemn pipe-laying ceremony for the start of the Georgian stretch of the Baku-Tblisi-Ceyhan pipeline (BTC), Georgia oil executive Georgy Chantiurua said: "This was the start of the integration of Georgia into the NATO zone ... this pipeline will become an artery feeding energy to the US and European countries." The US$3.6 billion oilfield and pipeline development project involves a 1,767 kilometer pipeline, the world's longest, snaking from Baku through Georgia to a new terminal at Ceyhan on the Mediterranean coast of Turkey.

The elder Aliyev said that the relationship between Georgia and Azerbaijan was a model, and he hoped that "in 2005 the presidents of the two countries will take part in the ceremony to load the first tanker from Ceyhan with Caspian oil". Little did he know that he and his great friend Shevardnadze would miss it: one of them is now dead and the other has been toppled. And no one at the moment is even betting that the main actors at the 2005 ceremony will be the younger Alyev and "Misha" Saakashvili, now at the interim helm in Georgia.

BTC and the regional context
The New Silk Road - as far as Washington is concerned - could be summarized by one acronym: BTC. The pipeline will be a massive snake: 443 kilometers in Azerbaijan, 248 kilometers in Georgia and 1,076 kilometers in Turkey. Its projected capacity is 50 million tons per annum. The plan is to start exporting Azerbaijani oil from the Turkish port of Ceyhan to Western markets by the second quarter of 2005. BTC has become a true American obsession. According to the official version in Baku of the consortium building the pipeline, led by British oil giant BP, 25 percent of the construction is already finished. The Azerbaijani stretch should be finished by September 2004, the Georgian by October and the Turkish by December.

But this is Pipelineistan politics at its messiest. Nobody knows how stable the new post-Shevardnadze Georgian government - following January 4 elections - will be. Nobody knows how politically competent Ilham Aliyev is, although a Baku insider says that as long as oil wealth keeps flowing in, the elite from different clans may continue to support him.

David Woodward, BP's top employee in Baku, essentially says that both Georgia and Azerbaijan remain on board the project. Saakashvili says that BTC is "a matter of survival". Official lenders like the European Bank for Reconstruction and Development say that all's well with the pipeline, despite uncertainty in Georgia.

But the fact is the geopolitical armwrestling between Russians and Americans for control of these crucial Eurasian lands is nothing less than titanic. Rumsfeld visited Baku on December 3, met Ilham Aliyev and proposed the deployment of mobile US military forces. This was the swift response in the incendiary words of Nikolay Ryabov, Russia's ambassador to Azerbaijan: "There has not been and there will not be any kind of American presence in the Caspian. We will not allow it, they have nothing to guard here." Crucially, Colonel-General Safar Abiyev, the Azeri minister of defense, admitted that he and Rumsfeld had discussed the security of BTC.

Russian Defense Minister Igor Ivanov was also alarmed. But Vafa Guluzade, head of the pro-American Caspian Political Studies Foundation, is sure that "the issue of the location of NATO bases in Azerbaijan has already been agreed upon between the Azerbaijani and the US governments". Guluzade says that Russia may not be happy - a splendid euphemism - with NATO knocking on its doors, but it doesn't have the power to prevent it. Guluzade has been in favor of NATO in Azerbaijan since the late 1990s, when he was a foreign affairs advisor to the elder Aliyev. Before the rigged Azeri presidential election last October, Aliyev junior went to Russia and stressed the "strategic character" of the bilateral relationship. He will be back to Moscow in mid-February, when he will certainly be forcefully reminded of his words by Putin.

American moves in the Caspian are directed against both Russia and Iran. So Iran also had to react against the militarization of the Caspian. The commander of the Iranian navy, Abbas Mohtaj, called all five Caspian countries "to unite efforts to prevent foreign military interference in the Caspian".

The Georgia factor
Relations between Georgia and Russia have been extremely tense for years. Tbilisi accuses Moscow of supporting the separatist Abkhazia and South Ossetia provinces, and of ordering assassination attempts against Shevardnadze in 1996 and 1998. Georgians are overwhelmingly against a Russian presence in the tiny republic. Moscow for its part is fiercely against BTC, and also accuses Tbilisi of supporting Chechen guerrillas. In 2001, Moscow even slapped visas on Georgian visitors.

Russia's man in Georgia is definitely Aslan Abashidze, the flamboyant governor of the Black Sea province of Ajaria. He regarded Shevardnadze's ouster as "a coup". Ajaria, the biggest Georgian seaport, is also the site of Russia's largest military base in the country. Abashidze strongly denies he wants to secede from Georgia, like Abkhazia and South Ossetia. Georgian journalist Khatuna Kviralashvili says that Abashidze will secede only if he is sure to have support from the local people and from Russia: "But it's very unlikely that Ajaria's people will support his secessionist sentiments."

Georgia and Azerbaijan are joined by their security fears. Avtandil Iioseliani, head of Georgian intelligence - echoing Azerbaijan's security minister Namig Abasov - says there's credible information of possible sabotage against BTC by "some Arab countries". Geydar Jemal, chairman of the Russian Islamic Committee, says that there will be no holds barred: Russia may slap visas on Azeris as retaliation - like it did with Georgians in 2001 - if Azerbaijan welcomes NATO mobile military bases. This will be an enormous problem: at least 2 million Azeris live in Russia and send money every month to their families, a vital source of Baku's foreign exchange. According to Jemal: "It's obvious the US are interested in Azerbaijani territory for strengthening military pressure on Iran. But this would not serve the real interests of Azerbaijan."

The Chechen factor
Freelance Russian journalist Andrei Smirnov managed to meet and get a stunning interview from Amir Ramzan, the commander of one of the Chechen groups operating against the Russian military in the Northern Caucasus. Ramzan says that "not only do we carry out raids to various areas in the Caucasus, but we also form local jama'ats [groups], militant sabotage groups, locally. We are joined by a lot of Kabardinians, Dagestanis, Karachaevans, Ingushetians and even Ossetians."

In the interview, Ramzan issues a chilling warning: in 2004 "the war will seize the entire Caucasus from the Caspian Sea to the Black Sea. Apart from Ossetia and Ingushetia, this year another guerrilla war has already started in two areas of Dagestan bordering Chechnya. I swear by Allah, this is only the beginning."

Significantly, Ramzan suspects that "Western governments and their security services also secretly finance us through different Islamic funds and organizations. I am convinced that there are Western powers in whose interests it is to keep Russia permanently involved in such a slow-burning conflict as the war in the Caucasus."

Chechen President Akhmad Kadirov, in a recent press conference in Grozny, said that Russia's anti-terrorism operations in Chechnya will be over after the "elimination" of master guerrilla commander Shamil Basayev, accused by the president of being supported by foreigners and hiring foreign mercenaries. The majority of Chechens consider Kadirov a Russian puppet.

The big picture
There is little doubt that al-Qaeda was incubated by the Central Intelligence Agency (CIA) in the 1980s in Pakistan. Peter Schweizer, in Victory - The Reagan Administration's Secret Strategy that Hastened the Collapse of the Soviet Union (Atlantic Monthly Press), describes how "twenty thousand mujahideen were being pumped out every year by these schools dubbed 'CIA U' by some wags". A few hundred of these Arab-Afghans may now have joined the Iraqi resistance.

And there is also little doubt that September 11 provided the ultimate excuse for the US to install its military bases in Central Asia and the Trans-Caucasus - a former Soviet sphere. So the "war on terror" is not about a clash of civilizations between Islam and the West, and not even solely about "terrorism". The name of the game is basically Pipelineistan: monster oil corporate profits to be made by controlling Central Asia-Caspian Sea oil and gas, bypassing both Russia and Iran, and exerting extra pressure on China. As countless watchdogs have stressed, this is a ruthless "do or die" corporate war. As From the Wilderness puts it, it will be carried out "at any cost, no matter the suffering it may bring to human beings or the devastation it unleashes upon the environment. Such are the characteristics of today's imperialism, the source of war and terrorism."

"Grand chessboard" theoretician Zbigniew Brzezinski, former US national security advisor, defines Persian Gulf/Central Asia as the "global zone of percolating violence": it will become "a major battlefield, both for wars among nation-states and, more likely, for protracted ethnic and religious violence". Pentagon officials talk of an "arc of instability" running from the Andes in South America through North Africa, the Middle East and into Southeast Asia. American military intervention is making sure this is a self-fulfilling prophecy.

The US energy strategy is being guided by the Baker report - commissioned by Vice President Dick Cheney in 2001. The report stresses "the concentration of resources in the Middle East Gulf region and the vulnerability of the global economy to domestic conditions in the key producer countries". So the big picture as far as Washington is concerned is to mould these "domestic conditions" by carrots and by the biggest sticks to be found anywhere. As Larry Everest analyzes it in his book Oil, Power and Empire (Common Courage Press), the Baker report says, for instance, that "more than 90 percent of the world's proven oil reserves are owned by countries, national oil companies and the Russian oil companies" - a substantial majority closed to foreign direct investment. So it comes as no surprise that the road map for what will happen in the next few years is Cheney's May 2001 energy report: the strategy is to to gain access, leverage and control of oil and gas from Colombia and Venezuela in South America to Iraq in the Middle East and the Caspian. Thus the American demonization of Hugo Chavez in Venezuela, the fight against FARC in Colombia, the war against Iraq, the push for BTC in the Caspian, the courtship of Uzbek dictator Islam Karimov, etc.

Europe's thirst for oil until 2015 is expected to grow by only 1 million barrels a day. But Asia's is expected to grow by at least 10 million barrels a day. So the logic of the game dictates Pipelineistan should preferentially go East. The problem is this new golden oil road requires the longest pipelines in the world. The Hindu Kush and the Tian Shan mountains, for example, have to be bypassed. The shorter southern route has to go via either Iran or Afghanistan and Pakistan. Iran is anathema in Washington. So as Azerbaijan, Georgia and Turkey became the chosen ones for Pipelineistan going west, Afghanistan and Pakistan are the chosen ones for Pipelineistan going east.
BAKU, Azerbaijan - At an Eurasian economic summit in Almaty, Kazakhstan, Gian Maria Gros-Pietro, chairman of Italy's ENI, said that the Caspian held 7.8 billion barrels of oil. Estimates from other sources run from 13 billion tons to 22 billion tons to even 50 billion tons. For Kazakhstan, officially they stand at 27.5 billion tons: "If the forecasts are proved, in the nearest future the oil of the Caspian region could make one fifth of the world oil reserves and balance with the reserves of Iraq and Kuwait together,"Gros-Pietro said.

Kazakhs estimate that the Caspian already yields 4.7 million barrels of oil a day. Saudi Arabia recovers 8.1 million barrels a day and Russia 6.3 million. So the Caspian would already be positioned in third place, ahead of Iran at 3.4 million barrels and China at 2.8 million barrels. New Azeri President Ilham Alyev, a former oil executive, thinks that the Caspian could soon be in second place, due to the combined reserves of Azerbaijan, Turkmenistan and Kazakhstan .

Kazakhs are sure that the Caspian will become the biggest source of oil, not only in the Commonwealth of Independent States, the CIS, countries but in the whole world. But many more pipelines are necessary to fulfill the dream. For the moment, Caspian oil reaches world markets via only five routes: Baku-Novorossiysk,Baku-Supsa, Tengiz-Novorossiysk, Atyrau-Samara and Neka-Tehran. The aggregate carrying capacity of these pipelines in 2015 will be 122 million tons - not counting the Baku-Tblisi-Ceyhan pipeline (BTC) still under construction. But production in 2015 will be around 250 million to 300 million tons. Pipelineistan has to grow exponentially.

Most oil experts agree that the Caspian holds less than 10 percent of Middle East reserves. In fact, added together, the rest of the world holds only around 53 percent of the proven reserves of the Middle East. But according to a basket of energy forecasts, by 2050 the Persian Gulf/Caspian Sea will account for more than 80 percent of world oil and natural gas production. Together, the Persian Gulf and the Caspian may have something like 800 billion barrels of oil and an energy equivalent amount in natural gas. Compare this figure with oil reserves in the Americas and in Europe: less than 160 billion barrels. And they will be exhausted before 2030.

Who owns what?
Iran insists on an equal division of the Caspian sea - a formula that would leave each of the five Caspian countries with a 20 percent share. Azerbaijan, Kazakhstan and Russia favor another mechanism in which Iran would end up with roughly 13 percent. Nobody knows exactly what Turkmenistan wants, given the total unpredictability of President Saparmurat Niyazov.

Sharing the Caspian territory has been a nightmare. But since last May, Azerbaijan, Kazakhstan and Russia have in fact divided the northern Caspian. Kazakhstan will control 29 percent, and Azerbaijan and Russia 19 percent each. Iran and Azerbaijan still haven't come to an agreement: they are wrangling over a yet-to-be developed oilfield known as Alborz in Iran and Alov in Azerbaijan. And both Iran and Turkmenistan are disputing Azerbaijan's possession of three offshore oilfields.

Andar Shukputov, the Kazakh ambassador in Baku, says that both countries "share the same position and are cooperating closely ... We believe that every littoral state has sovereign rights to the Caspian basin." He expects an "intelligent compromise", and a "step-by-step approach to resolving the problems of the Caspian's legal status after the seabed is divided into national sectors".

Deals with Turkmenistan are a huge problem because of the impossible-to-fathom Nyazov. But Kazakh first vice minister of foreign affairs Abuseitov Khuatovich says that "Kazakhstan's proposal was completely supported by Niyazov, president of Turkmenistan." Nevertheless, it's still "necessary to determine the junction point of the delimitation line of the Caspian floor's contiguous parts, which is impossible without the participation of Azerbaijan".

As for Azerbaijan-Russian problems, they are intensifying even before the Baku-Tblisi-Ceyhan pipeline, BTC, hits the market. A great BTC incentive for Azeris is that the country will make more money. Russia wants to double the volume of transit oil on the Baku-Novorossiysk pipeline. Azerbaijan is against this because it already stands to lose US$50 million in 2003-2004. Officials at Azerbaijan's state oil company SOCAR in Baku say that the country produces 9 million tons of oil a year: it exports only 2.5 million tons, via Baku-Novorossiysk.

Compare this with the so-called western pipeline - Baku-Supsa, in the Black Sea, in Georgia. Tariffs of Baku-Novorossiysk, at $15.67 per ton, are five times more expensive than Baku-Supsa ($3 per ton). On top of it, high quality Azeri light oil loses its price and value by being mixed with low-quality Russian oil. Azeri officials say that if that same high-quality oil was exported to the West, the country would make an extra $50 to $100 million a year.

Russia plays rough. It has prevented LukOil - the second-largest Russian oil firm - from participating in the BTC. Azeri officials insist it is Russia which "creates instability" in Georgia, through which the pipeline will pass. They also say that when the BTC starts operating, tariffs will also be around $3 per ton. So the bulk of Azeri oil will be exported via BTC. Russians are alarmed, and trying to secure a 10-year guarantee that Baku oil will be exported through Russian territory.

Russia's economy is heavily dependent on oil and gas. This is an economy that "will grow 7 percent in 2003, or perhaps even more", according to Russian Central Bank executive Oleg Vyugin. Yukos is still in the lead among the Russian oil giants - in spite of its mammoth legal, political and corporate mess in 2003. The merger with rival Sibneft has collapsed. Rates of production growth - for both Yukos and Sibneft - are falling, while growing for LukOil. The key point is that Russia cannot export more oil because its own pipelines are technically in a sorry state. And there's also great uncertainty about future oil prices.

The BTC bomb
The Baku-Tblisi-Ceyhan pipeline, BTC, is being planned and built by the BTC Pipeline Company (BTC Co), a huge consortium led and operated by British oil giant British Petroleum, BP. The major shareholders are BP (30.1 percent) and Azerbaijan's state oil company SOCAR ( 25 percent). The others are Unocal (US. Union Oil compay of California, 8.9 percent), Statoil (Norway, 8.71 percent), Turkish Petroleum (6.53 percent), ENI (Italy, 5 percent), TotalFinaElf (France, 5 percent), Itochu (Japan, 3.4 percent), ConocoPhillips (US, 2.5 percent), Inpex (Japan, 2.5 percent) and Delta Hess (a joint venture of Saudi Delta Oil with American Amerada, 2.36 percent). A related South Caucasus gas pipeline (which would run alongside the BTC), three oilfields (Azeri-Chirag-Guneshli) and the Shah Deniz gasfield which would feed the pipelines are also being planned by the same consortium.

The three countries through which the 1,767 kilometer pipeline will pass - Azerbaijan, Georgia and Turkey - are all desperate to finish the BTC on time. Turkey owes a fortune to the International Monetary Fund. Georgia survives thanks to American handouts. Azerbaijan courted international lenders by setting up a state oil fund to use oil revenues to the benefit of future generations. Officially, the BTC will cost $2.95 billion, 30 percent financed by the consortium and 70 percent borrowed. It has already spiraled upwards to $3.7 billion, and counting.

A British-based BTC campaign is extremely concerned with the high stakes game around BTC. It has stressed how BP extracted an international treaty to back its investment. BTC is subject to an Inter-Governmental Agreement (IGA) between Azerbaijan, Georgia and Turkey - "but drafted by BP's lawyers", as well as an individual Host Government Agreement (HGA) between each of the three governments and the BP-led consortium: "These agreements have largely exempted BP and its partners from any laws in the three countries - present or future - which conflict with the company's project plans. The agreements allow BP to demand compensation from the governments should any law (including environmental, social or human rights law) make the pipeline less profitable." The agreements have for these reasons been described by non-governmental organizations as "colonialist".

BTC's design is a masterpiece of power politics, although it makes no sense, as the most cost-effective route would be via Iran. BTC slices Azerbaijan in half from east to west, then slices Georgia in half almost from east to west before taking a dip south, bypassing probably secessionist Ajaria and slicing Anatolia diagonally from the northeast towards the south. The BTC campaign points out that "in the case of Turkey, the country would be effectively divided into three: the area where Turkish law applies; the Kurdish areas under official or de facto military rule; and a strip running the entire length of the country from north to south, where BP is the effective government". These issues obviously do not concern cheerful British BP employees downing their pints at the Britannia pub at the Baku Hyatt.

The International Finance Corporation (IFC) - the private sector arm of the World Bank - is the key for financing BTC. It is now fully on board. But opposition to BTC is also fully on board - from Kurdish guerrillas in northeast Turkey to Georgia's Ministry of Environmental Protection. Ankara has used emergency powers to expropriate peasant land without decent compensation. BTC may contain many potential breaches of international law. And workers in Georgia are even complaining that in the past few months their paychecks have been sliced. During winter the salary of workers in Georgia will be raised by only $2. About 3,000 Georgians and 500 foreigners work on the BTC's Georgian stretch.

Executives of SOCAR, the Azeri state oil company, in Baku say that an altered pipeline route through Georgia would mean a new design, an extra 15-month delay and costs spiraling to as much as $5 billion. It doesn't matter that Georgian scientists have warned that excavations for the pipeline construction could result in the spread of acute infectious diseases in Georgia. Some corporate assurances are frankly Kafkaesque: among other justifications, BP in Baku says that even in the case of an oil leakage in the Borjomi area, there will be no damage to the source of the famous local mineral water because the pipeline will be 15 kilometers away.

With Azerbaijan - and also Kazakhstan - becoming important new energy suppliers for the US, they are expected to be under heavy scrutiny. A report by George Soros' Open Society Institute has called for "accountability, transparency, and public oversight in the oil and natural gas industries of Azerbaijan and Kazakhstan". The report's opening comments by Joseph Siglitz, Nobel laureate in economics and former World Bank stalwart, may be just common sense: "There is no issue of greater importance than ensuring the long-run prosperity and stability of resource-rich countries by developing ways to use these resources and the wealth they generate well." These words may not necessarily make corporate sense.

Chevron country
Kazakhstan is Chevron country: the oil giant has invested more than $20 billion in these steppes. US National Security Adviser Condoleezza Rice is Chevron's lady: from 1989 to 1992 she was on the board of directors as the resident Kazakhstan expert.

Kazakhstan hopes to be producing up to 250 million tons of oil by 2015. The country has only two export routes: Tengiz-Novorossiysk - 67 million tons maximum capacity - and Atyrau-Samara - 25 million tons maximum capacity after reconstruction - both via Russia. Kazakhstan is now engaged in exporting oil via modified Russian pipelines. A huge, 1,500 kilometer pipeline from the Caspian Sea to the Black Sea port of Novorossyisk is the single largest American investment in the Caspian. The main client will inevitably be TengizChevroil, owned by Chevron (50 percent), ExxonMobil (25 percent) and Russian and Kazakh partners (25 percent).

Kazakhstan's only outlet to the Russian Transneft system is the Atyrau-Samara pipeline. It's not enough. Kazakhstan desperately needs new pipelines - because crumbling Russian infrastructure restricts Kazakhstan producing and exporting more oil. Kazakhstan also wants to export its oil to Europe through the Odessa-Brody-Gdansk-Plock pipeline. Now it's chasing the financing.

Russian executives recognize the country has a capacity deficit of 40 million tons, which should drop to only 10 million tons after a second Baltic Pipeline System (BPS) is in place. So after carefully gaining Russia's "non-resistance", Kazakhstan was finally able to sign a contract to link Aktau to Baku and so join BTC. Russian companies could even export their oil to the west via Aktau-Baku. Kazakh President Nursultan Nazarbayev considers BTC an absolute priority.

The feasibility project for a Kazakhstan-Turkmenistan-Iran pipeline is also being prepared, by French oil giant TotalFinaElf. And there's the pipeline from Aktau to China, which should be launched around 2010: it will only be justifiable in case it delivers 20 million tons per annum. There have been endless delays after a 1997 agreement between the China National Petroleum Company (CNPC) and the Kazakh energy ministry, but the political will is there and both parties definitely want to do it.

Russia and 'gas OPEC'
Turkmenistan holds 20 percent of the world's natural gas reserves. But since April 2003, 90 percent of Turkmen gas exports are in fact under control of Russian giant Gazprom. According to a 25-year sweet deal, Gazprom pays $44 for every tonne, half in cash and half in Russian goods, and then re-sells the gas to Turkey for $150, and to Europe for $120. Under another contract with Uzbekistan, Gazprom is getting double the volume of Uzbek gas exports in exchange for updating the local gas network. Russia is effectively on its way to creating a "gas OPEC".

Trans-Afghan pipeline woes
The US is also very much implicated in the resuscitation of the Trans-Afghan gas pipeline, TAP - despite the endless political mess in Afghanistan. Halliburton - after making a killing in Iraq - would be expected to be on board in Afghanistan. The Japanese-dominated Asian Development Bank (ADB) is also very much interested. Unocal still officially maintains that it has lost interest in the Trans-Afghan gas pipeline it abandoned in 1998. But it wouldn't say no to an oil pipeline following the same route.

In a predictable move, the Bush administration appointed its pet Afghan, oil man Zalmay Khalilzad, as Washington's ambassador to Kabul. Khalilzad, born in Mazar-i-Sharif in northern Afghanistan but also pure University of Chicago right-wing material, has already worked with grand chess board master Zbigniew Brzezinski, former US national security advisor, and under Pentagon number two Paul Wolfowitz. It was Khalilzad - when he was a huge Taliban fan - who conducted the risk analysis for Unocal (Union Oil Company of California) for the infamous proposed $2 billion, 1,500 kilometer-long Turkmenistan-Afghanistan-Pakistan,TAP, gas pipeline.

While Russian President Vladimir Putin has demonstrated keen interest in an Eurasian gas alliance, Turkmenistan's main concern is to free itself from dependence on the Center Trunkline which connects the whole Central Asian gas network to the Russian system. Afghanistan's Hamid Karzai, for his part, needs money from gas transit, and Pakistan President General Pervez Musharraf needs to keep strategic ties with Afghanistan. Once again, this is Pipelineistan as power politics. But TAP may reveal itself to be a hugely impractical proposition - basically because Afghanistan remains a country at war. Nobody for the moment wants to invest in TAP. Niyazov, Turkmenistan's unpredictable president, even had to court Russian gas giant Gazprom, which showed no interest. To top it all, nobody trusts Niyazov. Gazprom calculated that importing Turkmen gas is cheaper than developing remote Arctic and Siberian fields. So it looks for the moment that Russia's gas OPEC may be emerging as the winner.

The Iranian factor
Iran is trading its own Persian Gulf crude in return for Caspian oil from Russia and Central Asia. The 300 kilometer-long Neka-Tehran pipeline is raising Iran's swap capacity to 150,000 barrels a day. Swaps are attractive to both Iran and Central Asia because transport costs are minimal. Iran is feverishly working to position Neka-Tehran as a very attractive and cheap route compared to BTC. A major potential source of exports for Neka-Tehran is Kazakhstan's huge Kashagan field, which is expected to start pumping oil in 2007.

China in the Caspian
China imports nearly 50 percent of its oil, mostly from the Middle East. So inevitably, Central Asia is becoming more crucial by the day. According to China's Ministry of Finance, by 2010 the Middle Kingdom will be importing 120 million tons of oil per year, double what it imported in 2002. A pipeline from Kazakhstan to western China is crucial, especially if tapping from both Turkmenistan and Azerbaijan as well. China will build a huge refinery in Urumqi, Xinjiang, to import oil from Kazakhstan. Kazakh crude is crucial in Beijing's strategy to pump oil from Western China to the industrialized east coast.

No wonder the highlight of Chinese President Hu Jintao's first foreign trip as chief of state was a stop in Kazakhstan. China National Petroleum Corp (CNPC) bought 25 percent of CNPC-Aktobenumaygaz and discussions are in an advanced stage concerning the China-Atasu-Alashankou oil pipeline, as well as a gas link to Turkmenistan via Kazakhstan.

As far as the Chinese are concerned, the New Silk Road is already under way with the route Urumqi-Alashankou-Druzhba-Aktau-Baku-Poti and further down the road to the Caucasus, Eastern and Western Europe. This is in fact the Traceca corridor, of which Azerbaijan, Armenia, Bulgaria, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Romania, Tajikistan, Turkey, Uzbekistan and Ukraine are members. The Azeri ferry from Aktau to Baku, filled with railroad cars, is part of that route, which speeds up cargo transport by 12 days compared to Chinese cargo travelling via the Pacific Ocean.

More than two years after September 11, the Iraqi war has convinced quite a few Central Asian governments that American economic and strategic plans for the Caspian may not be in their best interest. China is now also a major player - and adding leverage to Central Asia in its relationship with the Americans. China is already the biggest trading partner for most of Central Asia. And Beijing is doing its best to tie regional security to its Shanghai Cooperation Organization.

The West is bound to be supplied in the near future by plenty of Caspian oil and gas. Hopefully the Caspian seal will not be extinct by then, and the seven kinds of Caspian sturgeon - victims of indiscriminate poaching, illegal production and export of caviar, pollution and the rising level of the Caspian - will be finally protected by the Convention on International Trade of Endangered Species.

Is the BTC the New Silk Road? By 2005 it may well have succeeded in bypassing both Russia and Iran - but it will not isolate them. The intersection of Pipelineistan and the "war on terror" will continue to reverberate as progressive militarization of ultra-repressive regimes. Full democracy and human rights are bound to remain low on the agenda. Russia won't relinquish the Caucasus and Central Asia as its area of influence. The strategy - now that Putin's "militocracy" controls all levers of power - is to bring back the "near abroad" under its bear hug, and at the same time expunge all traces of radical Islam - with or without American military presence and collaboration.

The BTC is not the only American weapon in Pipelineistan. American firms will build the AMBO Trans-Balkan pipeline from the Black Sea cutting across Bulgaria through Macedonia and Albania and to the Adriatic coast. One section of the pipeline runs north toward Central Europe. US corporations will control this oil flow.

Washington has never made any secret of its agenda to wrestle the Caucasus, the Caspian and Central Asia away from Russia. European customers for Russian oil and gas might be forced to rely on American giants for their supply, but the Russian counterpunch is already on: Putin has offered the European Union plenty of oil and nuclear protection in return for European investment - an offer Brussels simply cannot refuse.

A dreamer would see harmony between Russia, the US and China all engaged in a sensible exploitation of Central Asia's oil and gas and minerals. This would lead to economic development everywhere, and eventually more political freedom. It doesn't look like it's going to be this way. The perception in Islam, in the Chinese universe and also the Russian sphere is that America is using the "war on terror" to exclusively advance its own strategic oil and gas interests. This is a recipe for disaster - and ultimately war.

(Copyright 2003 Asia Times Online Ltd. All rights reserved. Please contact for information on our sales and syndication policies.)
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Messages In This Thread
RE: It's official now - the people of Port Au Prince have very little time left - h3rm35 - 01-21-2010, 11:19 PM

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