arch/ive/ief (2000 - 2005)

The World Trade Center attack.....Caspian Oil and Gas and the Afghanistan Pipeline Connection

By Jon Flanders

In the sound and fury of media coverage following the World Trade Center attack, I have yet to see any serious examination of the economic forces working behind the scenes in the Middle East and specifically South Asia and Afghanistan. This in the United States, where every up and down of the stock market makes headlines every day, and we have TV channels devoted exclusively to economic activity.

Most of us know that the Middle East is a center of activity for world oil production. Some of us have heard about the Caspian Sea, and the touted possibilities for great oil resources there. But few would think that rocky, war torn Afghanistan might be part of this energy production picture.Yet it most certainly is. And the information about Afghanistan's role is readily available on the World Wide Web to anyone who wants to investigate. Indeed, much of
the information comes from US government sources like the Voice of America.

Michael Klare, author of the book "Resource Wars", which has a major focus on the Caspian region, was interviewed by Radio Free Europe / Radio Liberty, Inc.,http://www.rferl.org on May 28, 2001. Klare is the Director of the Five College Program in Peace and World Security Studies based at Hampshire College in Amherst, Massachusetts. In his
book, Klare argues that it is not only the United States that is preparing for resource conflicts. He contends that all regional powers are focusing increasingly on how to protect or enlarge their access to vital resources over the next generation.

Klare tells RFE/RL that vast energy reserves in Central Asia and the Caucasus have made the region a priority for the United States despite the area's generally poor progress in post-communist reforms. "I think in this case this is a national security consideration that's driving all of this. The United States has to get that oil from that region [Central Asia] and will make a deal with whatever
governments are there in place that are willing to work with us [that is, the US], like the government[s] in Azerbaijan and Kazakhstan and Turkmenistan that are far from ideal with respect to human rights and democratic procedure. And I think that's a reflection of the view that I write about in my book -- we [the US] view oil as a security consideration and we have to protect it by any means necessary, regardless of other considerations, other values." I will argue that
the current US government focus on Afghanistan is part of the oil security consideration. The following is my attempt to make sense of the Afghan energy connection.

The US government Energy Information fact sheet on Afghanistan dated December 2000 says that.."Afghanistan's significance from an energy standpoint stems from its geographic position as a potential transit route for oil and natural gas exports from Central Asia to the Arabian Sea. This potential includes proposed multi-billion dollar oil and gas export pipelines through Afghanistan, although these
plans have now been thrown into serious question........"

These pipelines would begin in the former Soviet Republic of
Turkemenistan, which may have one of the largest gas deposits in the world. The Washington Post reported in a 1998 article that "In August 1997, in a bold move that conjured up memories of 19th-century Turkmen khans staving off would-be Russian conquerors, President(of Turkemenistan) Saparmurad Niyazov halted gas deliveries to the Russian-controlled pipeline system that was built during the Soviet era."

The Post goes on to say that " Turkmenistan's potential was enormous. Just inland from the Caspian shore were some of the world's oldest oil fields, and Soviet-era geological surveys indicated that the prospect for offshore finds was good. In the trackless Garagum Desert, away from a thin line of irrigated valleys, geologists had discovered one gas field after another beginning in the 1960s. By 1990, Dauletabad and the adjoining Sovietabad field were producing
1.6 trillion cubic feet a year, rivaling the gigantic gas fields of Siberia.

Almost all of this gas was pumped north across Uzbekistan and Kazakhstan into a Russian pipeline and on to markets in Europe and the former Soviet republics. Niyazov said he "smelled old Soviet ambitions" in Russia's use of its pipeline monopoly to keep Turkmenistan's gas from competing with Russian gas in European markets."

Advising Niayzov during the early nineties? None other than former NATO commander and US Secretary of State Alexander Haig. In 1993 Haig actually formed a consortium to build a pipeline from Turkmenistan through Iran. Haig's project did not involve U.S. companies; Haig's pipeline enterprise was registered in the British Virgin Islands. The idea foundered on the opposition of the Clinton administration. But the idea of new routes for the Turkemenistan oil and gas did not end with the Haig plan. In an article dated 11/25/97, Voice of America reporter Joan Beecher writes that top government officials and oil company executives from the United States, Turkey, Great Britain, Russia, Azerbaijan, and Central Asia met to discuss an issue of great mutual concern: Pipeline routes for Caspian oil and gas.

The Washington Post in 1998 reported that "The initial enthusiast for the Afghan route was not an American, however, but Carlos Bulgheroni, the short, workaholic chairman of the Bridas Group, an Argentine company. In 1993, a Bridas joint venture with Turkmenistan had begun laying more than 2,000 miles of seismic lines to map the geology of a potential gas field in eastern Turkmenistan. Two test wells confirmed a huge gas deposit 150 miles from the Afghan border.

In the spring of 1995, Turkmenistan and Pakistan commissioned Bulgheroni's company to study the Afghan route. But that summer, a rival entered the game. John Imle, president of California-based Unocal Corp., wooed Niyazov and Benazir Bhutto, then prime minister of Pakistan, throughout July with a vision of a Unocal pipeline following roughly the same route as the one proposed by Bridas."

By early 1998 a Unocal led consortium had made a deal with the Taliban to construct an Afghanistan pipeline from Turkmenistan to Pakistan.

On the question of the Afghanistan route VOA's Beecher says
that........ "the most obvious drawback of a proposed pipeline from Turkmenistan, through Afghanistan, to Pakistan and down to the Arabian Sea is that there is still a civil war going on in Afghanistan.

Nevertheless, all factions in the civil war have signed agreements supporting the proposed pipeline, according to Bob Todor, executive vice president of Unocal, the company that is leading an international consortium to construct the central Asian pipeline through Afghanistan.

Speaking to the international conference, Mr. Todor argued that the basic problem with the existing and proposed western routes, across northern Russia, or to ports on the Black Sea, or under the Caspian and down to Turkey, is that they all lead to European markets:

"Western Europe is a tough market. It is characterized by high prices for oil products, an aging population, and increasing competition from natural gas. Furthermore, the region is fiercely competitive. It is now being serviced by fields of course in the Middle East, the North Sea, Scandinavia, and Russia... Although there is room for
Central Asia's oil, on the whole, it [western Europe] is not a very attractive market, because substantial infrastructure will have to be developed to bring that oil from the Caspian to the Western European market, and that market is very competitive."

Much the same is true of Eastern Europe and the countries of the former Soviet Union, according to Mr. Todor. But Asia is a completely different story. Many speakers, not just Mr. Todor, argued that Asia will be the fastest growing market for Caspian oil, even if the region's present financial crisis should lead to a prolonged economic slowdown. Three routes to Asian markets have been proposed: Through
China, through Iran, and through Afghanistan to Pakistan. In Mr. Todor's view, the proposed China route is too long, and will probably prove to be prohibitively expensive. The major argument against the Iran route is, quite simply, that the US government opposes it. Among the many advantages of the Afghanistan route, according to Mr. Todor, is that it would terminate in the Arabian Sea, which is much closer than the Persian Gulf or northern China to key Asian markets:

"There is tremendous international and regional political will behind the pipeline. The pipeline is beneficial to Central Asian countries because it would allow them to sell their oil in expanding and highly prospective Asian markets. The pipeline is beneficial to Afghanistan, which would receive revenues from transport tariffs.... On a regional
level, the pipeline will promote stability and encourage trade and economic development between South Asia and Central Asia. Finally, because of the combination of short pipeline distance and the relatively low cost of tankerage, this southern route will result in the most competitive export route to the Asia/ Pacific market." Yet construction of this promising route can only begin if and when an
internationally recognized government is formed in
Afghanistan......."

Todor's arguement for the Afghanistan pipeline was also made before the US Congress in 1998, by John J. Maresca, Vice President, International Relations of the Unocal Corporation in testimony to the House Subcommittee on Asia and the Pacific, February 12, 1998.

Maresca concluded his Congressional testimony with this peroration. "Developing cost-effective, profitable and efficient export routes for Central Asia resources is a formidable, but not impossible, task. It has been accomplished before. A commercial corridor, a "new" Silk Road, can link the Central Asia supply with the demand -- once again making Central Asia the crossroads between Europe and Asia."

The Unocal led Centgas consortium consisted of the following
companies.

Unocal Corporation (US), 46.5 percent Delta Oil Company Limited (Saudi Arabia), 15 percent The Government of Turkmenistan, 7 percent Indonesia Petroleum, LTD. (INPEX) (Japan), 6.5 percent ITOCHU Oil Exploration Co., Ltd. (CIECO) (Japan), 6.5 percent Hyundai Engineering & Construction Co., Ltd. (Korea), 5 percent The Crescent Group (Pakistan), 3.5 percent

The 48-inch diameter pipeline was to extend 790 miles (1,271
kilometers) from the Afghanistan-Turkmenistan border, generally follow the Herat-to-Kandahar Road through Afghanistan, cross the Pakistan border in the vicinity of Quetta, and terminate in Multan, Pakistan, where it would tie into an existing pipeline system. Turkmenistan was to construct a pipeline that will link with the
CentGas line at the border and stretch approximately 105 miles (169 kilometers) to the Dauletabad Field. A potential 400-mile (644-kilometer) extension from Multan to New Delhi also was under consideration. (source, Hazara.net)

The Unocal-led initiative foundered in 1998, after the US cruise missile retaliation against Bin Laden's Afghan camps for the bombings of its African embassies. Brown University's William O. Beeman wrote in 1998 that ... " From the US standpoint, the only way to deny Iran everything is for the anti-Iranian Taliban to win in Afghanistan and
to agree to the pipeline through their territory. The Pakistanis, who would also benefit from this arrangement, are willing to defy the Iranians for a share of the pot."

Beeman continues, "Enter Osama bin Laden, a sworn enemy of the United States living in Afghanistan. His forces could see that the Taliban would eventually end up in the American camp if things proceeded as they had been. His(Bin Laden) bombing of US embassies in East Africa (since there were none in Afghanistan) was accompanied by a message
for Americans to get out of ``Islamic countries.'' By this, he meant specifically Afghanistan.The American response was to bomb bin Laden's outposts while carefully noting that his forces were ``not supported by any state.'' This latter statement was an attempt to rescue the Taliban relationship, while at the same time giving the Taliban leaders the message that they must ditch bin Laden. For good measure, American missiles also took out a factory in Sudan - a
smokescreen for the real target of their action...."(William O. Beeman is a Brown University anthropologist specializing in the Middle East. The piece first ran in The Providence Journal and was distributed by Knight Ridder/Tribune Information Services. Aug 1998.)

At the same time Unocal came under fire from international women's organizations for its courting of the Taliban, despite their notorious repression of women's rights. The women's rights issue, more than the embassy bombings, were used as an excuse to end the Unocal led consortium's deal with the Taliban. UNOCAL had entered a one million dollar contract with the University of Nebraska to train workers in Afghanistan specifically for pipeline construction. Women's organizations focused on this arrangement for protests.

Unocal's defection did not end pipeline plans. According to the VOA's Sarah Horner "But the pipeline dreams have surfaced again. In May 2000 there were reports of discussions of the issue involving Afghanistan, India, Pakistan, Iran and Turkmenistan. And the Taliban newspaper, the Kabul Times, recently reported that the mine and industries minister, Mullah Mohammed Isa Akhond, met representatives of the Central Asia-based US company, Central Asia Oil and Gas Industry. The newspaper quoted company representative, Rafiq Yadgar as saying: "Central Asia Oil and Gas Industry is ready to invest in Afghanistan in the field of oil and gas extraction and meanwhile is
willing to build an gas and oil refinery in Afghanistan." He added that Turkmen authorities are ready to cooperate with his company."

But any plans still ran afoul of the civil war in Afghanistan. According to Horner, "Should any pipeline actually get off the ground it will be a prime target for sabotage the United Front whose leader, Ahmad Shah Massoud, excels at guerrilla tactics." A few days before the WTC attack, Massoud was killed by suicide bombers posing as journalists.

So as matters stood before the "election" of George W. Bush, plans for Afghanistan's role in world energy production were at an impasse. As most of us know, the Bush-Cheney team that took control of the US Government in January, 2001, was heavily influenced by the oil industry. Bush himself is a veteran of a number of mostly failed oil enterprises. Cheney was the CEO of Halliburton, a major player in the downstream oil industry.

Cheney described Halliburton's role in a 1998 speech at the aptly named "Collateral Damage Conference" of the Cato Institute, a conservative Washington think tank. According to Cato "This all-day conference explored the current and potential conflicts between US foreign policy and the liberty and well-being of American citizens. The conference focused on the ways that US foreign policy infringes on the freedom of Americans to trade, invest and communicate with the rest of the world."

Cheney said in his speech that "Halliburton was founded some 70 years ago in Duncan, Oklahoma, by one man and a truck, cementing oil wells and casings inside oil wells. Over the years we developed the capacity to do everything downhole that is necessary to produce oil and gas: we drill wells, we do completions on wells, we cement, we stimulate, and we undertake a host of other activities involved in the production of oil and gas. We also own Brown & Root Engineering, a company that began about 70 years ago with two brothers with a road grader in Austin, Texas. Brown & Root is in the business of building off-shore platforms, undersea pipelines, refineries, and other down-stream facilities. Brown & Root is also heavily involved in the operations and maintenance business. They currently have the logistics contract for the U.S. Army in Bosnia under which they build and operate all the camps for the US Army deployed there. As a measure of the company's diversity, I should also mention that we are building the new baseball stadium in Houston.

Halliburton employs about 70,000 people. We are currently a Fortune 200 company, but are in the process of merging with Dresser Industries. Once we do that, part of Haliburton will not only include Brown & Root, but also M. W. Kellogg, one of the world's premiere engineering and design companies. In addition, Dresser also is heavily involved in manufacturing pumps, compressors, and all kinds of complex mechanical equipment that services the energy industry. Overall, once we complete the merger, we will have about 100,000 employees. Our sales in 1999 should put us among the top 100 companies in America in terms of revenue. We'll be the largest private employer in Texas and operate in over 130 countries all over the globe. About 70 to 75 percent of our business is energy related, serving customers like Unocal, Exxon, Shell, Chevron, and many other major oil companies around the world. As a result, we oftentimes find ourselves operating in some very difficult places. The good Lord didn't see fit to put oil and gas only where there are democratically elected regimes friendly to the United States. Occasionally we have to operate in places where, all things considered, one would not normally choose to go. But, we go where the business is."

Where the business is, indeed. In an article by Kenny Bruno and Jim Valette in Multinational Monitor magazine, dated May 2001 the authors report that "...During Cheney's tenure, Halliburton created or continued partnerships with some of the world's most notorious governments-in countries such as Azerbaijan, Indonesia, Iran, Iraq, Libya and Nigeria.

In order to do business with dictators and despots, Halliburton has skirted US sanctions and made considerable efforts to eliminate those sanctions. Halliburton's pattern of doing business with US enemies and dictators started before Dick Cheney joined the company, and may well continue after his tenure as CEO.

Halliburton's dealings in six countries -Azerbaijan, Indonesia, Iran, Iraq, Libya and Nigeria-show that the company's willingness to do business where human rights are not respected is a pattern that goes beyond its involvement in Burma:

* Azerbaijan. Dick Cheney lobbied to remove Congressional sanctions against aid to Azerbaijan, sanctions imposed because of concerns about ethnic cleansing. Cheney said the sanctions were the result only of groundless campaigning by the Armenian-American lobby. In 1997, Halliburton subsidiary Brown & Root bid on a major Caspian project from the Azerbaijan International Operating Company.

* Indonesia. Halliburton had extensive investments and contracts in Suharto's Indonesia. One of its contracts was canceled by the post-Suharto government during a purging of corruptly awarded contracts. Indonesia Corruption Watch named Kellogg Brown & Root (Halliburton's engineering division) among 59 companies using collusive, corruptive and nepotistic practices in deals involving former President Suharto's family.

* Iran. Dick Cheney has lobbied against the Iran-Libya Sanctions Act. Even with the Act in place, Halliburton has continued to operate in Iran. It settled with the Department of Commerce in 1997, before Cheney became CEO, over allegations relating to Iran for $15,000, without admitting any wrongdoing.

* Iraq. Dick Cheney cites multilateral sanctions against Iraq as an example of sanctions he supports. Yet since the war, Halliburton-related companies helped to reconstruct Iraq's oil industry. In July 2000, the International Herald Tribune reported, "Dresser-Rand and Ingersoll-Dresser Pump Co., joint ventures that Halliburton has sold within the past year, have done work in Iraq on contracts for the reconstruction of Iraq's oil industry, under the United Nations' Oil for Food Program." A Halliburton spokesman acknowledged to the Tribune that the Dresser subsidiaries did sell oil-pumping equipment to Iraq via European agents.

* Libya. Before Cheney's arrival, Halliburton was deeply involved in Libya, earning $44.7 million there in 1993. After sanctions on Libya were imposed, earnings dropped to $12.4 million in 1994. Halliburton continued doing business in Libya throughout Cheney's tenure. One Member of Congress accused the company "of undermining American foreign policy to the full extent allowed by law."

* Nigeria. Local villagers have accused Halliburton of complicity in the shooting of a protester by Nigeria's Mobile Police Unit, playing a similar role to Shell and Chevron in the mobilization of this 'kill and go" unit to protect company property. Dick Cheney has been a strong advocate for preventing or eliminating federal laws that place limits on Halliburton's ability to do business in these countries."

The current hot spot for "where the business is" happens to be the Caspian. In a column dated Thursday, August 10, 2000 in the Chicago Tribune , Marjorie Cohn, a professor at Thomas Jefferson School of Law in San Diego writes.....

"Because of the instability in the Persian Gulf, Cheney and his fellow oilmen have zeroed in on the world's other major source of oil--the Caspian Sea. Its rich oil and gas resources are estimated at $4 trillion by US News and World Report. The Washington-based American Petroleum Institute, voice of the major US oil companies, called the Caspian region, "the area of greatest resource potential outside of the Middle East." Cheney told a gaggle of oil industry executives in 1998, "I can't think of a time when we've had a region emerge as suddenly to become as strategically significant as the Caspian." ..."

Halliburton's Caspian investments include Turkmenistan.

On October 27, 1997, the same time period in which the Unocal pipeline plan was in the works, a Halliburton press release announced that "Halliburton has received a Letter of Intent from Petronas Carigali (Turkmenistan) SDN. BHD. to provide integrated drilling services for an exploration and appraisal program in the Caspian Sea beginning in late 1997. Halliburton, in conjunction with alliance partners, Dresser Industries and Western Atlas, will provide a combination of 10 services. Halliburton will be the lead contractor and project manager in addition to providing technical services. The value of the award is estimated to be U.S. $30 million for the total project. "This major new award will expand and solidify the HES presence in the Eastern Caspian and position the company well for both upstream and downstream projects which are rapidly developing in this emerging market," said Zeke Zeringue, president, Halliburton Energy Services. Halliburton Energy Services has been providing a variety of services in Turkmenistan for the past five years."

P.V. Vivekanand, chief editor of The Gulf Today in the United Arab Emirates sums up the pipeline picture in the Caspian/Central Asia region in this way..."There are dozens of oil and gas pipeline projects in Central Asia, some estimated to cost billions of dollars and almost all sparking transborder disputes and controversies. Most of the projects have been discussed for decades as the oil giants wait for the right political conditions to move in. Because pipelines are the best method to transport oil and gas over land, the efficiency of such a delivery system is too tempting for energy exporters and importers to let go of plans in a hurry. And for many potential exporters and pipeline hosts, the realization of such projects can mean economic survival."

So where are we in the post WTC disaster period? The Bush-Cheney administration has taken full advantage of the shock and horror aroused in the US populace by this disastrous attack. On every front they are moving to implement a draconian conservative agenda. Whether passing anti-democratic domestic laws in the name of fighting terrorism, or to mobilizing the military to fight "terrorism" abroad, they move full speed ahead with their political program.

The focus on Afghanistan compels our notice. After all, the Middle East is full of people and governments that have no love for the US. The right wingers of William Buckley's National Review call for war to the finish against Iraq's Saddam Hussein. Others mention Iran.

But Bin Laden and the Taliban get the scapegoat's tail. Is this based on a real case, with hard evidence? Or is it simply because Bin Laden et al open the way for the full military might of the US armed forces to be committed to make the Caspian and Central Asian region safe for the US led oil and gas pipelines?

I think the evidence is overwhelming. The Bush administration plans to use the WTC attack as an opportunity to use the US military as pipeline police, with the current goal of splitting the government of Pakistan and the Taliban from the Islamic militants led by Bin Laden.
If they can accomplish this, the way might be cleared for the Afghanistan pipeline project, and the basis for further penetration into the oil rich former Soviet republics established.