The pipeline that will change the world

UK Independent, 25 May 2005
http://news.independent.co.uk/world/asia/story.jsp?story=641172

The pipeline that will change the world

It is 42 inches wide, 1,090 miles long and is intended to save the West
from relying on Middle Eastern oil. Nothing has been allowed to stand in
its way - and it finally opens today

By Daniel Howden and Philip Thornton

The first drops of crude will snake their way along a pipeline that
traverses some of the most unstable and war-ravaged countries on earth.
This is the oil flow that was meant to save the West, and this morning
the taps were turned on.

Only 42 inches wide, the Baku-Tbilisi-Ceyhan was supposed to alter
global oil markets forever. The 1,000-mile project has transformed the
geopolitics of the Caucasus and its impact is now being felt in the
vastness of central Asia.

Output is supposed to reach one million barrels a day - more than 1 per
cent of world production - from an underground reserve that could hold
as many as 220 billion barrels.

Its architects and investors claimed the pipeline would shore up energy
supplies in the US and Europe for 50 years, protecting our gas-guzzling
way of life and easing our reliance on the House of Saud.

The goal of the ambitious project, which makes its tortuous way from the
Caspian in Azerbaijan, through Georgia to the Mediterranean coast of
Turkey, is to ease the reliance of the West on the Organisation of
Petroleum Exporting Countries (Opec) and bring cheaper fuel to our
filling stations. The pipe threads its way through the region in a
seemingly modest private corridor only 50 yards wide but nothing has
been allowed to stand in its way. From forests to labour laws and
endangered species to democracy protesters: all have given way to the
costliest and most significant pipeline ever built.

The project, known as BTC, has driven a wedge between the US and Russia,
triggered political unrest in the countries it passes through and their
neighbours and sparked concern at extensive damage to the environment.

Since the 11 September 2001 terrorist attacks in the US, concern at the
West's dependence on Persian Gulf oil has intensified. For Washington,
the opening is a cause for celebration. "We view this as a significant
step forward in the energy security of that region," said Samuel Bodman,
the American energy secretary, who stood next to the three heads of
state at today's ceremony.

With him at the pumping station controls was the president of the tiny
former Soviet republic of Azerbaijan. The BTC has allowed Ilham Aliev to
become a firm friend of the West while overseeing a government condemned
for human rights abuses and sitting at the head of an administration
placed 140 out of 146 in Transparency International's global corruption
index.

The politics of the pipeline have also changed the face of Georgia,
where the battle for control with Russia saw immense US influence
deployed in support of the so-called "Rose Revolution". The popular
protest ushered the American-educated Mikhail Saakashvili into power two
years ago. Washington's new ties with Tbilisi were amply demonstrated
when George Bush became the first US president to visit the country
earlier this month.

In the long-term US ally Turkey, where the pipeline crucially delivers
its oil direct to the Mediterranean - bypassing the tanker-clogged
Bosphorus straits, it is no accident that it does so right next to the
American airbase at Incirlik.

When big oil companies turned their attentions to the potential Caspian
energy reserves released from behind the collapsing walls of the Soviet
Union, the region was billed as the "new Middle East". If only the
reserves could be securely transported from the landlocked sea to the
Mediterranean, the West would be gifted a vital alternative to the
volatile Persian Gulf and the region would be freed from the iron grip
of Russia, which had previously monopolised the export routes of their
former Soviet satellites.

Once the Soviet empire fell, the Caspian found itself surrounded by five
nation states - Azerbaijan, Iran, Kazakhstan, Russia and Turkmenistan.

The region's supply of cheap oil and key position on the historic border
between the West and the East meant that countries quickly moved into
position like pieces on a chessboard.

Three rival plans were drawn up - a northern route through Russia, a
southern alternative through Iran and the central option through the
Caucasus to the Mediterranean.

The winner could be in little doubt: the middle road was the only one
which guaranteed Washington and its corporate allies a corridor of
control.

The US Vice-President *** Cheney, who was then chief executive of oil
services giant Halliburton, was among the first to be swept away in the
excitement.

"I cannot think of a time when we have had a region emerge as suddenly
to become as strategically significant as the Caspian," he said in 1998.

Now, more than a decade and $4bn (#2.2bn) later, almost three quarters
of which came from bank loans which were underwritten by government
agencies and #320m in taxpayers' money, the pipeline is open. But this
chapter of what Rudyard Kipling called the "Great Game" - the secret
battle to dominate central Asia - has only reached the end of its first
phase.

The fanfare at the British oil giant BP's gleaming new terminal at
Sangachal in Azerbaijan may yet prove to be premature.

Stripped of the American hype of the 1990s, the crude that began a very
modest flow this morning is the first instalment of a reserve many
analysts are now convinced is actually only 32 billion barrels -
equivalent to that of a small Gulf player such as Qatar.

The game now moves to the transCaspian pipeline and to the immense
plains of Turkmenistan and the political cauldron of Uzbekistan,
Afghanistan and beyond.


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