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Central Asia/Russia

Pipelineistan, Part 2: The games nations play

By Pepe Escobar
January 26, 2002
Asia Times Online

Part 1: The rules of the game

Two months ago, the White House was deliriously happy with the official opening of the first new pipeline of the Caspian Pipeline Consortium -- a joint venture including Russia, Kazakhstan, Oman, ChevronTexaco, ExxonMobil and a bunch of other minor players.

This $2.65 billion pipeline links the enormous Tengiz oilfield in northwestern Kazakhstan to the Russian port of Novorossiysk on the Black Sea: from there, the sky -- ie the world market -- is the limit. Bush II, according to the White House, is developing "a network of multiple Caspian pipelines that also include the Baku-Tbilisi-Ceyhan, Baku-Supsa, and Baku-Novorossiyisk oil pipelines, and the Baku-Tbilisi-Erzurum gas pipeline". So one of the key nodes in the American petrostrategy is composed by Azerbaijan, Georgia and Turkey.

The pipeline consortium for Baku-Ceyhan, led by British Petroleum, is represented by the law firm Baker & Botts. The principal attorney is none other than Texan superstar James Baker - secretary of state under Bush I and chief spokesman for the Bush II 2000 campaign when all gloves were off to shut down the Florida vote recount.

Texas-based, scandal-prone Enron, together with Amoco, Chevron, Mobil, UNOCAL and British Petroleum, were all spending billions of dollars to pump the reserves of Azerbaijan, Kazakhstan and Turkmenistan. Baker, Scowcroft, Sununu and Cheney have all closed major deals directly and indirectly on behalf of the oil companies. But now the Enron scandal has just exploded right in the face of the oil industry -- and Bush II's administration. It will be very enlightening to see what the American tradition of investigative journalism will make of all this.

Enron once had a market value of $70 billion. It filed for bankruptcy in December 2001 after admitting it ovestated its profits by almost $600 million. Paul Krugman wrote that "Enron helped Dick Cheney devise an energy plan that certainly looks as if it was written by and for the companies that advised his task force". The Enron big-time crooks -- close pals of Cheney and Bush II -- dwarf any Asian "crony capitalists" Americans were carping about before and after the Asian financial crisis.

There's no shortage of crooks in the oil industry. Turkmenistan and Azerbaijan have intimate relations with Israeli military intelligence. A so-called "former" Israeli intelligence agent, Yousef Maiman, president of the Mehrav Group of Israel, is nothing less than "Special Ambassador", official negotiatior and even policymaker responsible for developing the enormous energy resources of Turkmenistan.

Maiman is a citizen of the gas republic by presidential decree - signed by the Turkmenbashi himself, the fabulously megalomaniac Saparmurad Niazov, former member of the Soviet Politburo. Maiman, according to the Wall Street Journal, is actively involved in advancing the "geopolitical goals of both the US and Israel" in Central Asia. He certainly does not beat around the bush: "Controlling the transport route is controlling the product." Nobody knows where Mehrav's money comes from.

Mehrav's planned pipelines bypass both Iran and Russia. But after the conquest of Afghanistan, oil sources in Singapore say Mehrav may consider dealing with Iran. It's all to do with the importance of the Turkish market. Russia and Turkmenistan are fiercely competing to conquer the Turkish gas market. Considering the strategic relationship between Turkey and Israel, the Israeli game remains preventing Turkish strategic dependence on Iran. Turkey is a NATO member and a key US ally. The US and Britain routinely strike against Iraq from Turkish bases -- from which they patrol the unillateraly-declared Iraqi "no-fly zones". These "no-fly zones" are obviously not sanctioned by the UN.

Mehrav is also involved in a murderous project to reduce the flow of water to Iraq by diverting water from the Tigris and the Euphrates rivers to southeastern Turkey. And Magal Security Systems, an Israeli company, is also involved with Turkey: it will provide security for the 2,000 km-long oil pipeline from the Caspian Sea to the Turkish Mediterranean port of Ceyhan.

Crook-infested Enron -- the biggest donor to the Bush campaign of 2000 -- was ubiquitious: it conducted the feasibility study for the $2.5 billion trans-Caspian pipeline being built under a joint venture signed almost three years ago between Turkmenistan and Bechtel and General Electric. The go-between in the deal was none other than the Mehrav Group. Chairman Maiman spent a fortune hiring the Washington lobbying firm Cassidy and Associates to seduce official Washington with the trans-Caspian pipeline project.

The intrincate relationship between Israel, Turkey and the US means that as much as the trans-Caspian pipeline, the Baku-Ceyhan pipeline is also absolutely crucial. It could be extended to bring oil directly to thirsty Israel. During the Clinton years, oil giants were under tremendous pressure to build East-West pipelines. But all of them preferred to build North-South pipelines -- much cheaper, but with the inconvenience of crossing Iran, an absolute anathema for Washington.

Russia already has a contract with Turkmenistan to purchase 30 billion cubic meters of gas a year. This represents a big blow to the US field of dreams, the trans-Caspian gas pipeline. This also means that Russia will never let go of its sphere of influence without a tremendous fight. The Central Asian republics are on its borders, Russia has dominated them for centuries and they are home to millions of Russians. Russian is still the language they all use to do business with each other.

Thanks to master political chess player Vladimir Putin, Russia is now on the cosiest terms possible with Washington -- and US-Iran antipathy is apparently receding. Russia may eventually become a partner in at least some of Washington's petrostrategy games in Central Asia -- like the Caspian Pipeline Consortium. The regional map also reveals that Iran, besides holding important gas reserves, offers the best direct access from the Caspian Sea to the Persian Gulf, where oil and gas can be quickly exported to Asian markets.

Iran assumes, not entirely without reason, that it is the rightful guardian of Central Asia because of centuries of ethnic, historical, linguistic and religious ties. And Iran is very conscious that American military links and now physical presence in Central Asia are part of a strategy to encircle it. But even amid so many geopolitical and ideological pitfalls, the fact remains that as long as the US is militarily involved in Afghanistan, there will be some sort of US-Iranian diplomatic engagement.

Under the control of the China National Petroleum Corporation (CNPC), pipelines from Central Asia will also reach China's Xinjiang. Oil sources in Singapore stress that this will certainly spell a slump for the sea routes across the Indian Ocean and the Pacific. Washington is more than aware through its think tanks of the consequences: an extremely likely strategic realignment between China, Japan and Korea.

The Chinese have their sights on only one terrifying prospect: the encirclement of China by the US. UNOCAL is dreaming about profits. Washington is thinking about the robust Chinese economy. Whatever "war against terror" distractions, China remains the key strategic competitor to the US in the 21st century. With Afghanistan in the bag, UNOCAL dreams of monster profits in the Asian market -- much higher than in Europe -- while Washington closely monitors the Chinese economy: growth of 8 percent in 2000, 7 percent in 2001, and needing all the oil and gas it can get. Chinese strategists are working around the clock to develop local forms of energy production.

What happens next will be closely linked to the deliberations of the Shanghai Five, now Shanghai Six, or more burocratically, the Shangahi Cooperation Organization (SCO): China and Russia, plus four Central Asian republics (Kazakhstan, Kyrgyzstan, Takijistan and Uzbekistan). Manouvering with extreme care, China is using the SCO to align Russia economically and politically towards China and northeast Asia. At the same time, Russia is using the SCO to maintain its traditional hegemony in Central Asia. The name of the game for solidifying the alliance is Russian export of its enormous reserves of oil and gas.

Since the NATO war against Yugoslavia and the de facto occupation of Kosovo -- where America built its largest military base since the Vietnam War -- China and Russia have their minds set on Chechnya and Muslim Xinjiang. For the moment, at least, America has absolutely no way of interfering in these domestic problems, since China and especially Russia are endorsing the war against terrorism.

The Taliban were never a target in the "war against terrorism". They were just a scapegoat -- rather, a horde of medieval warrior scapegoats who simply did not fulfill their contract: to insert Aghanistan into Pipelineistan. All the regional players now know America is in Central Asia to stay, as Washington itself has been stridently repeating these last few weeks, and it will be influencing or disturbing the economy and geopolitics of the region. The wider world is absolutely oblivious to these real stakes in the New Great Game.

The US at the time of the Gulf War did not show any interest in replacing "Satan" Hussein. That would seriously compromise the American design to establish bases on the Arabian peninsula on the convenient pretext of helping poor Arab sheikhs against the Iraqi Evil Monster.

More than a decade later, Satan Hussein is still there, Bush I is now Bush II, and assorted Pentagon hawks are still fuming, trying to fabricate any excuse to blow Saddam back to Mesopotamian ashes. But Saddam will not be attacked, because Saddam is the ultimate reason for American military bases in the Gulf -- a splendid affair because on top of it all it is a free ride, the expenses being paid by the ultra-flush sheikdoms. Now, after the (also unfinished) New Afghan War, American forces are already establishing themselves in Central and South Asia to once again "protect the interests of the free world".

It is never enough to remember that after the end of the communist regime in Afghanistan, the American strategy was to deliberately let Islamic extremism go wild -- a perfect way to scare the unstable regimes in the Central Asian neo-republics. Islamic fundamentalism has always been a key card in the American strategic design since the Cold War days when the CIA subcontracted to the Pakistani ISI the arm-them-to-their-teeth policy regarding the mujahideen. It is always easy to forget that the good-guys-turned-bad-guys were once were hailed by Ronnie Reagan himself at the Oval Office as "the moral equivalent of the founding fathers".

America has been trying hard to "get" Afghanistan -- the heart of Asia in Antiquity, the Pipelineistan crossroads of Asia nowadays - for more than 20 years. In the process, the mujahideen transformed Afghanistan, with CIA blessing, into the world's leading producer of heroin, opening the crucial and ultra-profitable drug pipeline Afghanistan-Turkey-Balkans-Western Europe. More than a martini, oil-arms-drugs is the classic CIA cocktail. This "Drugistan" road has just been spetacularly reopened after the fall of the Taliban.

Pipelineistan is not an end in itself. Oil and gas by themselves are not the US's ultimate aim. It's all about control. In Monopoly, Belgian writer Michel Collon wrote: "If you want to rule the world, you need to control oil. All the oil. Anywhere." If the US controls the sources of energy of its rivals -- Europe, Japan, China and other nations aspiring to be more independent -- they win. This explains why pipelines from the Caucasus to the West have to be America-friendly -- ie Turkish or Macedonian -- and not "unreliable", meaning Russian-controled. Washington, always, has to control everything: that's what Brzezinski and Henry Kissinger always said. The same goes for the military bases in Saudi Arabia, and now in Pakistan and Afghanistan.

There's no business like war business. Thanks to war against Iraq, the US has its military bases in the Persian Gulf. Thanks to war against Yugoslavia, the US has its military bases in Bosnia, Kosovo and Macedonia. Thanks to war against the Taliban, the US is now in Turkmenistan, Uzbekistan, Pakistan and Afghanistan. Not to mention the base in Incirlik, Turkey. The US is also in the Caucasus -- in Georgia and Azerbaijan. Iran, China and Russia are practically encircled. There's no business like show business. Raise the curtains. Enter Pipelineistan. (Applause).

Part 1: The rules of the game

© 2002 Asia Times Online Co, Ltd. All rights reserved.
Reprinted for fair use only.

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