CENTRAL ASIA: The Pipeline that Will Change the World

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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

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

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

The US Vice-President Dick 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.

25 May 2005 11:57

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AMP Section Name:Energy
  • 183 Environment