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March 2002
http://www.wrmea.com/archives/march2002/0203016.html
Special Report

The Great Caspian Sea Oil Pipeline  Game—Part II

By Andrew I. Killgore

As Sir Arthur Conan-Doyle’s fictional  detective Sherlock Holmes might have  
said
to his amiable if rather literal- minded close friend, “It’s  elementary, my 
dear
Watson, the oil pipeline is the clue  to everything. But there are  several; 
you
must take care to pick out the right  one.”

The Baku (Azerbaijan)-Supsa (Georgia)  pipeline is small potatoes. Recently

expanded, it carries Azerbaijan’s  disappointingly low oil production  to
Georgia’s Black Sea coast. The Turks  oppose the shipping of petroleum via  the
Black Sea because tankers might be  wrecked at Istanbul, their mega-  city on 
the
Bosporus, or in the Dardanelles  Strait.

The Caspian Pipeline Consortium’s  (CPC) pipeline carries oil from  
Kazakhstan’s
huge onshore Tengiz field to  Novorossiysk on Russia’s Black Sea  coast. The
Turks don’t like Tengiz-Novorossiysk,  either, for environmental and other
reasons. The Russians want to move  more Caspian oil through their own  country
to Primorsk, their new port on the  Baltic Sea’s Gulf of Finland. The  Russians
have another option, however, which  is to send Caspian oil through the  
southern
leg of its Druzhba pipeline, to exit  on Croatia’s Adriatic coast.

Moscow talks of avoiding the Bosporus  choke point with a possible new  
pipeline
that would run from Burgas, Bulgaria,  to Alexandropolous on Greece’s  Aegean
coast. This would be relatively short  and cheap. It is not a new idea, but  
oil
consultants tell the Washington  Report that Athens has never picked  up on it,
perhaps because the line would run  very close to the border with  Turkey, with
which Greece’s relations are  traditionally tense.

When Secretary of State Colin Powell  was recently in Astara, Kazakhstan’s  new
capital, he was told by President  Nursultan Nazarbayef that his  country 
favored
an oil pipeline south through Iran to  salt water in the Persian Gulf.  Powell
sidestepped Nazarbayef by saying the  U.S. preferred Turkish and Russian  
routes.

A year ago Washington opposed Caspian  oil going to Russia on the presumed
grounds that the Russian route would  detract from the Israeli- favored  
Turkish
route. However, President George W.  Bush’s rapport with President  Vladimir
Putin, plus Russia’s recent  helpfulness in America’s war on  terror, has put
Moscow at least temporarily in  Washington’s good graces.  Consultants at
Washington’s Petroleum Finance  Company, in discussing the Caspian- oil-
pipelines
issue, recently rhetorically asked  this writer, “In the future, would  America
rather depend on Russia or the Arabs  for its oil?”

Losing the important Baku-Ceyhan  fight might trigger a decline in  Israel’s
power in Washington.

Depending on just how much oil and  gas are in the Caspian region, a  pipeline
could go south via Afghanistan to  Pakistan and India. In present  
circumstances
such a pipeline is no longer a wild  idea. Alternatively, oil and gas  
pipelines
might run across Kazakhstan’s broad  expanses to neighboring China.

Kazakhstan’s offshore (Caspian)  Kashagan oil field seems—repeat,  seems —to be
larger than Tengiz. The Phillips  Petroleum Company, which has an  interest in
Kashagan, declines to speculate on  the field’s recoverable potential,  and
corroborated to the Washington Report  a recent article in London’s  Financial
Times that a public announcement can  be expected at the end of this year.

“However, it is clear by now, Watson,  that more pipeline will be needed to  
get
the Caspian region’s oil and gas to  salt water,” Holmes might continue.
“Nazarbayef’s favoring the Iran route  has a profound effect on ‘the’  
pipeline.
Whether he reiterated his desire to  President Bush in Washington last  month, 
is
not known. But it seems reasonable he  did. The Washington Post didn’t  mention
it, but that may mean nothing except  that the Post would want to avoid
mentioning an Iranian oil pipeline  route that Israel opposes.”

Israel tricked President Bush in his  first months in office last year.  The 
new
president had wanted only a two-year  extension of the Iran-Libya  Sanctions 
Act
(ILSA), the 1996 Israel-inspired law  calling for U.S. sanctions against
companies spending as much as $20  million on Iran/Libya’s oil and gas  
industry.
Bush seems to have been ready to dump  ILSA when the two years expired.  When 
the
president’s attention was diverted  elsewhere, however, the  congressional
component of the Israel-First cabal  pushed through the five-year  extension.

Nevertheless, a new pipeline now  brings natural gas from Turkmenistan  into
northern Iran. The U.S. tried, in  line with ILSA, to lean on  Turkmenistan not
to build the line, but Washington’s  “leaning” was ignored. The existence  of
that pipeline, however, now has  dropped down English novelist and  essayist
George Orwell’s “memory hole,” an  American repository for embarrassing  facts
about U.S. relations with Israel.

“But ‘the’ pipeline to keep your eye  on, Watson,” Holmes would suggest,  “is
Baku-Ceyhan, the one Israel simply  must have to prove to Turkey that  Ankara’s
alliance with Tel Aviv pays big  dividends in Washington. But the  stars are
perversely refusing to line up for  Israel.”

The oil companies—American and others —involved in the Caspian oppose Baku
(Azerbaijan)-Ceyhan (Turkey) because  it is too long, too expensive and  will
have to traverse dissident Kurdish  areas, at an extra cost of $1  billion to 
$2
billion more than a route through  Iran. The Turks say they will pay  the
additional cost. All that means,  however, is that the U.S. will have  to pick 
up
the extra tab, since everybody knows  it’s the Israel-First cabal that  pushes
Washington to finance Israeli  ventures that conflict with U.S.  interests.
Another rhetorical question asked by  Washington Petroleum Finance Company  oil
consultants was, “Who runs American  foreign policy?”

“Where’s the Oil?”

So the stars keep asking, “Where is  the extra oil coming from?”  Azerbaijan
itself still has “disappointing”  amounts of oil, a recurring word in  reports 
on
Caspian region oil. Despite apparent  oil riches in the northern portion  of 
the
Sea itself, the southern part seems,  so far, to have little.

These two physical realities—not much  oil in Azerbaijan and not much in  the
Caspian’s southern reaches—have major  negative implications for Baku-  Ceyhan.
To get Kazakh oil over to the Baku  “oil head,” an onshore pipeline  would have
to be built from the Tengiz-Kashagan  area down to Aktau, an ice-free town  on
the Caspian western shore of  Kazakhstan. From Aktau an undersea  line then 
would
have to be constructed to carry oil  to Baku.

Looking south from Aktau to a mainly  onshore pipeline to Iran obviously  looks
better than Baku-Ceyhan in Astara’s  eyes, and that’s what Kazakhstan has

decided it wants. Arrayed against the  physical realities and Kazakhstan’s
wishes are the cabal’s forces in  Congress, the media and inside the  Bush
administration itself, especially in  the Pentagon. They are determined to  see
Baku-Ceyhan realized, both to prove  Israel’s worth to Turkey, and out of  fear
that losing the important Baku-Ceyhan  fight might trigger a decline in  
Israel’s
power in Washington.

“So you see, Watson,” our hero would  conclude, “Baku-Ceyhan is the  central 
clue
in this era’s Great Caspian Sea Oil  Pipeline Game. It’s elementary,  really.”

Andrew I. Killgore is the publisher  of the Washington Report on Middle  East
Affairs.