THE WISDOM FUND: News & Views
May 25, 2005
The Independent (UK)

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 Baku-Tbilisi-Ceyhan was supposed to alter global oil markets forever. . . .

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. . . .

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.

. . . 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. . . .

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 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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Lutz Kleveman, "The New Great Game," Guardian, October 20, 2003

Kenneth S. Deffeyes, "Beyond Oil: The View from Hubbert's Peak," Hill and Wang, March 15, 2005

Candace Rondeaux, "A pipeline to promise, or a pipeline to peril," St. Petersburg Times, May 15, 2005

Michael T Klare, "Energizing new wars," Asia Times, May 18, 2005

[Exxon Mobil Corporation, one of the world's largest publicly owned petroleum companies, has quietly joined the ranks of those who are predicting an impending plateau in non-OPEC oil production. Their report, The Outlook for Energy: A 2030 View, forecasts a peak in just five years. . . .

"After 2010, the call on OPEC increases quickly, requiring OPEC to add more than 1 MBD [million barrels per day] of capacity every year," notes the Outlook.

. . . such production increases are only possible from Iraq, Saudi Arabia, Kuwait, and the United Arab Emirates.--Alfred J. Cavallo, "Oil: Caveat empty," Bulletin of the Atomic Scientists, May/June 2005]

Caroline Daniel, "Kissinger warns of energy conflict," Financial Times, June 2, 2005

[America's entire energy strategy, with its commitment to an increased reliance on petroleum as the major source of our energy, rests on the unproven claims of Saudi oil producers that they can, in fact, continuously increase Saudi output in accordance with the DoE's predictions. . . .

Essentially, Simmons' argument boils down to four major points:

Most of Saudi Arabia's oil output is generated by a few giant fields, of which Ghawar - the world's largest - is the most prolific.

These giant fields were first developed 40 to 50 years ago, and have since given up much of their easily extracted petroleum.

To maintain high levels of production in these fields, the Saudis have come to rely increasingly on the use of water injection and other secondary recovery methods to compensate for the drop in natural field pressure.

As time goes on, the ratio of water to oil in these underground fields rises to the point where further oil extraction becomes difficult, if not impossible. To top it all off, there is very little reason to assume that future Saudi exploration will result in the discovery of new fields to replace those now in decline.--Michael T Klare, "The Saudi oil bombshell," Tom Dispatch, June 29, 2005]

[ . . . Organisation of the Petroleum Exporting Countries will be unable to meet projected western demand in 10 to 15 years.--Carola Hoyos and Neil Dennis, " Saudis warn of shortfalls as oil hits $61 ," Financial Times, July 6, 2005]

Daniel Yergin, "It's Not the End Of the Oil Age," Washington Post, July 31, 2005

"India, Pak share 'total commitment' on Iran pipeline," Indo-Asian News Service, September 14, 2005

Ian MacWilliam, "Kazakh-China oil pipeline opens," BBC News, December 15, 2005

[China National Petroleum Corporation (CNPC) and India's Oil and Natural Gas Corporation (ONGC), the two largest oil companies in the respective countries, announced on December 20 that they had jointly won a bid to acquire 37% of Petro-Canada's stake in Syrian oilfields--Indrajit Basu, "India, China pin down $573m Syria deal," Asia Times, December 22, 2005]

[Michael Klare concludes, "the US military is being converted into a global oil-protection service."--Jeremy Leggett, "What they don't want you to know about the coming oil crisis," Independent, January 20, 2006]

Carl Mortished, "World 'cannot meet oil demand'," Times Online (UK), April 8, 2006

Dan Dimancescu, "Oil Empires: Romania at the Crossroads," roconsulboston.com, 2006

[But the biggest puzzle he has left behind was no doubt his chance remark shortly before his death in a conversation with visiting German Foreign Minister Frank-Walter Steinmeier in Ashgabat that Turkmenistan recently discovered a super-giant gas field, South Iolotansk, with proven reserves of 7 trillion cubic meters of gas.--M K Bhadrakumar, "The Great Game on a razor's edge," Asia Times, December 23, 2006]

[The countries along the 3,300 kilometer pipeline route - Turkey, Bulgaria, Romania, Hungary, and Austria - formed a consortium in 2006 with strong EU encouragement, in an effort to diversify gas supplies to the EU away from overdependence on Russia's Gazprom.--Vladimir Socor, "HUNGARY AND THE NABUCCO PROJECT: TIME TO END THE AMBIGUITY," roconsulboston.com, January 16, 2007]

[The BBC's Natalia Antelava says the agreement is a huge blow to Washington, Brussels and Beijing, who have all been vying for direct access to Turkmenistan's gas.--"Russia clinches gas pipeline deal," BBC News, May 12, 2007]

[The hospitality continued in London, where prostitutes were hired on the BP credit card to entertain visiting Azerbaijanis.--Glen Owen, "Hookers, spies, cases full of dollars...how BP spent 45m to win 'Wild East' oil rights," Mail, May 13, 2007]

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