Oil Pipeline
Completed
By Peter Symonds
01 May 2005
World
Socialist Web
Last
weeks ceremony in the Central Asian republic of Azerbaijan to
open the Baku-Tbilisi-Ceyhan oil pipeline received scant coverage in
the international press. Nevertheless the completion of the US-backed
pipeline, which has taken a decade to construct, will inevitably accelerate
the scramble for oil and gas in the Caspian Basin region and heighten
the potential for conflict among rival major powers.
From the outset,
planning for the oil pipeline was guided not by immediate economic considerations
but long-term US strategic goals. Since the early 1990s, Washington
has been determined to exploit the unprecedented opportunity opened
up by the collapse of the Soviet Union to establish its hegemony in
the key resource-rich region of Central Asia.
The 1,770 km pipeline,
simply known by the acronym BTC, is one of the worlds longest
and cost $4 billion to build. It snakes its way from the Sangachal oil
and gas terminal south of the Azeri capital of Baku on the Caspian Sea
through neighbouring Georgia and some of the most mountainous regions
of the Caucasus to finally reach the Turkish port of Ceyhan on the Mediterranean.
As far as Washington
was concerned, the chief consideration in plotting this tortuous path
was to undercut the existing pipeline system in Russia and to avoid
Iran, which offers the shortest and cheapest pipeline route from landlocked
Central Asia to a coastline. The US has maintained an economic blockade
of Iran since 1979.
The resulting pipeline
route through Azerbaijan, Georgia and Turkey not only created engineering
problems but produced a decade of political intrigue as the White House,
first under Clinton then Bush, sought to strengthen the US position
in each of these countries. In 2003, the Bush administration backed
the so-called Rose Revolution that ousted former Georgian President
Eduard Shevardnadze and installed openly pro-US Mikhael Saakashvili
in his place.
The BTCs significance
was underscored by the presence at the opening of US Energy Secretary
Samuel Bodman, who read out a letter from US President Bush, along with
the presidents of the three countries involved and also of the Central
Asian republic of Kazakhstan. Just prior to the ceremony, Kazakhstans
President Nursultan Nazarbeyev signed a declaration committing his country
to transport some of its huge oil reserves through the pipelinea
move that will create tension with Moscow.
Lord Browne, chief
executive of British Petroleum (BP), was also present. BP with a 30.1
percent in the pipeline is the leading partner in the controlling consortium,
which also includes the Azerbaijani state oil company SOCAR (25 percent),
Unocal (US, 8.9 percent), Statoil (Norway, 8.71 percent) and Turkish
Petroleum (6.53 percent) as well as French, Italian, Japanese and other
US corporations.
Georgian President
Saakashvili highlighted the strategic rivalry involved in the BTCs
construction when he baldly referred to its completion as a geopolitical
victory for the Caspian Basin nations. The obvious question is:
victory over whom? The answer is just as clear: it is a
win for Washington and US-aligned Central Asian regimes over Moscow,
which is seeking to retain its economic and strategic dominance in a
region that has been part of Russia then the Soviet Union for well over
a century.
Azerbaijans
President Ilham Aliyev commented at ceremony: The realisation
of this project would not have been possible without constant political
support from the US. American backing for the pipeline to pass
through Georgia has assisted Azerbaijan in isolating its rival Armeniaalso
a potential route for a pipeline to Turkey. In April, the US signed
an agreement to provide a further $110 million in aid to impoverished
Georgia. Earlier this month, Bush included Georgia on his European tour,
hailing the Rose Revolution and declaring Saakashvili as
a freedom fighter.
In his letter read
out at the opening ceremony, Bush declared the pipeline to be a
monumental achievement. This pipeline can help generate
balanced economic growth, and provide a foundation for a prosperous
and just society that advances the cause of freedom, he stated.
In fact, the pipeline will only reinforce the subordination of the Central
Asian republics to the US, heighten social inequality and buttress the
anti-democratic rule of the current regimes.
State within a state
The 50-metre wide
corridor, through which the pipeline runs, is a virtual state within
a state. It is governed by the Inter-Governmental Agreement signed by
the participating countries. The agreement largely exempts BP and its
partners from any laws in the three countries by allowing the consortium
to demand compensation should any legislation (including environmental,
social and human rights laws) make the pipeline less profitable. The
pipeline passes through a national park in Georgia and several other
environmentally sensitive sites. Critics claim that land has been taken
from local farmers without proper compensation.
BP has invested
at least $15 billion in Azerbaijan. An article on the Asia Times website
last week commented: According to Bakus street wisdom, the
man who really rules Azerbaijan is David Woodward, BPs chairman,
known as the viceroy, a walking oil atlas with more than
three decades working for the company from Scotland to Abu Dhabi and
from Alaska to Siberia. Woodward and BP mercilessly spin that BTC is
the cleanest and safest pipeline ever built. Georgian peasants and English
non-governmental organisations beg to differ.
The Bush administration
has not hesitated in supporting the corrupt Azerbaijan dictatorship.
Heydar Aliyev, a long-time Stalinist party boss, ruled the republic
as his personal fiefdom from 1969 as part of the Soviet Union, then
in the 1990s as a separate country. After his death in 2003, his son
Ilham, notorious as a playboy, casino owner and vice-president of the
state oil company SOCAR, took over the reins. According to Transparency
Internationals global corruption index, Azerbaijan ranks 140 out
of 146 countries.
On May 21, Azeri
riot police waded into an opposition protest of some 500 people with
batons, arresting at least 45 people. The demonstration was called to
demand amendments to the countrys electoral laws, the creation
of an independent public broadcaster and the prosecution of the killer
of journalist Elmar Guseinov, a critic of the regime shot dead in early
March outside his apartment. The government banned the protest, declaring
that the timing was inappropriate just days before the pipelines
opening.
A report by Human
Rights Watch last month criticised neighbouring Georgia, hailed this
month by Bush as a beacon of liberty, for failing to guarantee
the end of torture and duress to extract confessions from prisoners.
The new government... has taken some steps to address abusive
practices, but these efforts have proven inadequate to stem them. Moreover,
some of the governments new law enforcement policies appeared
to trigger new allegations of due process violations, torture and ill-treatment,
it stated.
All three participating
countries are desperate for income. The pipeline will take six months
to fill and is projected to reach a flow of one million barrels a day
by 2008. Once fully operational Azerbaijan is expected to accrue $29
billion a year in oil revenues and Georgia and Turkey $600 million and
$1.5 billion in annual transit fees respectively.
Since the collapse
of the Soviet Union, the standard of living in both Georgia and Azerbaijan
has plummetted, with the annual average per capita income currently
at just $730 and $710 respectively. Little or none of the projected
pipeline income will be used to end the social crisis in these countries.
One measure of the indifference to the plight of ordinary people is
the consortiums token spending on community and environmental
investmentestimated to be just $30 million compared to construction
costs of $4 billion.
As far as Washington
is concerned, the pipelines projected economic benefits are just
one element of a more far-reaching plan. The BTC is a convenient lever
for the US to extend its political influence and to buttress its military
presence in Central Asia to the detriment of its rivalsparticularly
Russia and China. The Bush administration has already used its war
on terrorism to establish military bases for the first time in
Tajikistan and Uzbekistan. Now the US is using pipeline security
as the pretext for forging closer military ties with Georgia and Azerbaijan.
Speculation that
the US is seeking to base troops in Azerbaijan was heightened by last
months visit to Baku by US Defence Secretary Donald Rumsfeld.
In congressional testimony earlier this year, US commander in Europe
General James Jones declared that the US was interested in creating
a special Caspian guard to protect the BTC. The Wall Street
Journal reported in April that the US plans to spend $100 million on
such a force, including the establishment of a command centre in Baku.
Concerned over Russian opposition, Azerbaijan has to date been reluctant
to commit itself.
Russian hostility
to Washingtons growing intrusion into Central Asia was spelled
out by Mikhail Margelov, head of the international affairs committee
of the countrys parliamentary upper house. Russias
attitude to proposals made by some politicians that this task [pipeline
security] should actually be delegated to the United States, is firmly
negative. Russia will always oppose the presence of any foreign military
contingents within the countries of the CIS [Commonwealth of Independent
States], he commented.
Konstantin Kosachyov,
a State Duma parliamentarian, pointed to Washingtons geopolitical
ambitions, stating: It is absolutely obvious that this project
was born for political rather than economic reasons in order to create
a stable alternative for transferring Caspian energy resources to the
West bypassing Russia and some other states, such as Iran. Russian
President Vladimir Putins special representative for international
energy cooperation, Igor Yusufov, was due to attend the BTC opening
ceremony but excused himself at the last minute on the grounds of illness.
The completion of
the pipeline is just the first stage in what will certainly be sharpening
rivalry in Central Asia for control of the regions largely untapped
resources. The Caspian Sea basin is currently estimated to contain eight
percent of the worlds oil reserves as well as having huge natural
gas reserves. A gas pipeline following the same route is due to be completed
next year. An agreement was signed in March 2005 between Azerbaijan
and Kazakhstan to build a pipeline across the Caspian Sea connecting
the Kashagan offshore oil field in Kazakhstan to Baku and thus the BTC.
This latter deal
highlights the logic of the newly completed BTC pipeline. Unable to
fully utilise the BTCs capacity simply from oilfields in Azerbaijan,
the BP consortium, with the backing of Washington, is compelled to seek
oil from Kazakhstan and other Central Asian sources, intensifying competition
and potentially leading to political and military conflict.