- [Copyright 2002, From The Wilderness Publications, www.copvcia.com.
All Rights Reserved. May be copied, distributed or reposted for non-profit
purposes only]
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- [Ed. Note: The need for major oil companies to monetize
billions in investments in Central Asian oil fields has been cited frequently
by FTW as one of the major motivations for U.S. complicity in the attacks
of last September. Other motives have included economic control of an estimated
$200 billion in cash generated by the opium trade from the region, geopolitical
neutralization of potential threats to U.S. global dominance and, more
recently, an apparently frenzied and progressively less coordinated effort
to do whatever is necessary to sustain a failing U.S. economy.
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- We felt it important, 10 months after 9-11, to take a
close look at the status of the various pipeline projects in and around
Afghanistan. The results are surprising. There is no doubt that the removal
of Al Qaeda and the Taliban has added to the stability of the entire region
by removing their support for a number of Islamic terrorist groups in Central
Asia, Russia and the Caucasus -- all of which threatened any pipeline construction
projects from the Caspian Sea and Central Asia. Even though Unocal still
affirms that it has no interest in a trans-Afghani gas pipeline it abandoned
in 1998, credible sources are indicating that it has not written off participation
in an oil pipeline that will follow the same route. But Afghani stability
remains an apparently unachieved objective.
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- What is becoming more apparent is that an arrogant and
increasingly criminal administration is less and less effective in realizing
its foreign policy objectives and the resulting dangers of a global conflagration
are increasing. Is there an even larger agenda being pursued? Perhaps.
But what we know, 10 months after 9-11, is that there is less of the coveted
oil in the region than was thought, and that the political stability necessary
to complete the pipelines is apparently more elusive than the Bush Administration
has hoped it would be. Nonetheless, pipeline construction is still a high
priority.
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- In this context we note a July 6 story from the Moscow
Times reporting that the first-ever direct shipment of Russian oil to the
U.S. consisting of 200,000 metric tons arrived in Houston on July 3. --
Mchael C. Ruppert]
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- July 10, 2002
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- (FTW) -- Pipelines and oil deals seem to be spreading
out all over Central Asia. The players include all of the major oil companies,
especially those with close ties to the Bush Administration, along with
Russian oil companies, the World Bank, the Asian Development Bank, and
the Central Asian republics themselves. Only the Afghanistan pipeline seems
to be moving slowly.
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- Meanwhile, Caspian Sea oil reserves have been downgraded,
British Petroleum shows more signs of industry downsizing, and Matthew
Simmons is warning of a perfect energy storm.
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- Who Owns Caspian Sea Resources?
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- Following the collapse of the Soviet Union, the world
energy industry began drooling over the newly formed Central Asian republics
and the Caspian Sea. Exploration quickly found what appeared to be enormous,
untapped fields of oil and natural gas. Throughout the 1990s, deals were
made with various countries claiming ownership of energy reserves. Unfortunately,
according to the Department of Energy (DOE), the legal status of the Caspian
Sea has yet to be resolved.
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- Prior to 1991, the only countries bordering the sea were
the Soviet Union and Iran. These two countries were bound by the 1921 and
1940 bilateral treaties, which stated that Caspian resources were to be
owned jointly. Since the dissolution of the Soviet Union and emergence
of Kazakhstan, Turkmenistan and Azerbaijan, there have been numerous disputes
about resources in the Caspian Sea. Disputes came to a head in July 2001,
when Iranian gunboats confronted a British Petroleum research vessel and
ordered it out of waters to which Iran lays claim.
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- Negotiations among the littoral states have made very
slow progress in ironing out the disputes. A summit of the heads of state
from the various Caspian Sea countries was postponed several times in 2001,
as it became apparent that parties could reach no final agreement. For
this reason, while many deals have been proposed between various energy
consortiums and republics, none have materialized. Until the ownership
status of the Caspian Sea has been resolved, there will be no further development
of the Sea s oil and gas resources. (See source 1 below)
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- 'Pipelineistan'
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- Ownership disputes do not extend to continental reserves,
as international borders have been clearly delineated. Therefore, the development
of land-based resources has been met with a flurry of activity. Considering
that the countries of Central Asia are largely landlocked, there has been
enormous pipeline building activity to bring Central Asian energy resources
to the markets where they are needed.
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- Projects are underway to ship energy north through modified
Russian pipelines. The largest of these projects is a 980-mile pipeline
from Kazakhstan s Caspian Sea oil fields across Kazakhstan and Russia to
the Black Sea port of Novorossiisk. Construction began in 1999, and this
pipeline is the largest single American investment in the region. As reported
by Alexander s Gas and Oil Connections website, the main client for this
pipeline will be TengizChevrOil, half of which is owned by Chevron, a quarter
by ExxonMobil and a quarter by Russian and Kazakh partners. (See source
2)
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- There are also several projects to either truck or pipe
energy through Georgian territory, according to the DOE. Chevron has a
strong interest in this option, along with Conoco. The U.S. Trade and Development
Agency funded a $750,000 feasibility study by Enron for a natural gas pipeline
from Turkmenistan, through Azerbaijan and Georgia, to Turkey. Another feasibility
study was completed by Unocal. There have been negotiating problems among
the various countries, and PSO (co-operator with Royal Dutch/Shell) closed
its Turkmenistan office in 2000. Talks about the project have resumed,
but the legal issues of Caspian Sea ownership complicate the project. (See
source 3)
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- Chevron's involvement throughout the region is quite
ubiquitous. Alexander s Gas and Oil Connections reported the company has
invested more than $20 billion in Kazakhstan alone. From 1989 to 1992 National
Security Adviser Condoleezza Rice was on the board of directors of Chevron,
and was its main expert on Kazakhstan.
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- Other projects are also underway, most of them ending
with energy in Turkey, where it would be transported through the Bosporus
Straits to markets in Europe. There is a great deal of concern about Bosporus
Straits traffic, which has already become a major bottleneck for oil tankers.
There are environmental concerns about possible collision, and for this
reason, options are being considered for oil transiting the Black Sea to
bypass the Bosporus Straits.
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- As for the market, the big question has been: should
the pipelines flow east or west? The western route would be easier, as
much of the infrastructure is already in place. There are several projects
underway or completed for bringing energy resources to the west. However,
European oil demand over the next 10 to 15 years is expected to grow by
only 1 million bbl/d, while Asian demand is expected to grow by at least
10 million bbl/d over the same period. Therefore, greater profit is seen
in piping these resources to the east.
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- Unfortunately, an eastward route would require the longest
pipelines in the world. Formidable mountains would require long detours
to the north, or a shorter route to the south through either Iran or Afghanistan
and Pakistan. The Iranian route is prohibited under the Iran and Libya
Sanctions Act. Therefore, Afghanistan and Pakistan are the choice for energy
flowing eastward.
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- The Trans-Afghanistan Pipeline
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- Efforts to revive the trans-Afghanistan pipeline began
soon after the U.S. incursion into that country. The pipeline from Turkmenistan
to Pakistan was first discussed in the late-1990s, with a consortium led
by Unocal pushing the project. Unocal backed out in 1998 after international
financial institutions refused to help cover the cost of the project so
long as Afghanistan was racked by armed conflict. (See source 5)
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- As reported by the Asia Times, in July 2001 a strategy
to topple the Taliban and replace it with a broad-based government, was
discussed during the G-8 summit in Genoa, Italy. (This subject was first
broached in Geneva at a May 2001 meeting between the U.S. State Department,
Iran, Germany, and Italy.) Following within days of the G-8 summit, secret
negotiations were conducted in a Berlin hotel between American, Russian,
German and Pakistani officials. Pipelineistan was the central topic of
these negotiations, and a plan was set up for military strikes against
the Taliban from bases in Tajikistan to be launched before mid-October
2001. (See source 6)
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- Soon after the invasion began in October, the pipeline
project was discussed in Islamabad between Pakistani Petroleum Minister
Usman Aminuddin and American Ambassador Wendy Chamberlain. Subsequently,
during a visit to Ashgabat, Turkmenistan on January 31, Deputy Secretary
of State Elizabeth Jones told Turkmeni President Saparmurat Niyazov that
Washington would support such pipeline projects so long as they were commercially
viable. (See source 7)
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- In April Niyazov called for the UN to support a plan
to build a gas pipeline linking Turkmenistan to Pakistan, reported EurasiaNet.
The project was being touted for bringing stability to Afghanistan. Support
from the UN would boost the status of the project and clear the way for
guarantees >from international institutions like the UN Development
Program. (See source 8) Also in April as reported by Agence France-Presse,
World Bank chief James Wolfensohn said he had held talks about financing
the Trans-Afghanistan gas pipeline. Wolfensohn, during a visit to the Afghanistan
capital, Kabul, stated that a number of companies had already expressed
interest in the project. (See source 9)
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- So far, no corporations have been named as firmly signing
on to the project. Several sources have stated that Unocal will likely
come forward again to join in the project, according to the DAWN Group
of Newspapers. (See source 10) Most notably, Afghan minister for mines
and industries Mohammad Alim Reza has stated that Unocal was still in the
lead attempting to win the $2 billion trans-Afghanistan pipeline. (See
source 11) According to NewsBase, Unocal followed this announcement with
a statement that it has no intention of reviving the Central Asia Gas Pipeline
(CentGas) project. (See source 12) However, Unocal has made no statement
contradicting reports that it has a project to build the Central Asian
oil pipeline, linking Turkmenistan both to Russia s existing Siberian oil
pipelines and to the Pakistani coast. This oil pipeline will run parallel
to the proposed gas pipeline route through Afghanistan, reported the Asia
Times. (See source 13) It is possible that Unocal s denial of interest
in the gas pipeline could just be for public consumption. Prior to stepping
down from the CentGas project, Unocal was targeted by human rights groups
for its dealings with the Taliban.
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- Energy experts have indicated that companies owned or
formerly managed by Bush senior and Vice President Dick Cheney are showing
a keen interest in Caspian Sea reserves, the DAWN Group reported. (See
source 14) And the U.S. is expecting investment from U.S.-based energy
conglomerates through Overseas Private Investment Corporation (OPIC) to
resuscitate the Afghan pipeline project. (See source 15) It has been noted
that despite assurances from Afghani and Pakistani leaders, continued volatility
in the region is deterring energy corporations from offering to help build
the pipeline. It is suggested that it may take several years of political
stability before the project could be seriously revived. However, the Asian
Development Bank (ADB) is also keenly interested in the project. ADB loans
will likely be used to cover part of the cost of building the gas transport
system, with funds from donor countries for the reconstruction of Afghanistan
covering the rest, according to the BBC and NewsBase. (See sources 16 and
17) It will be interesting to see what role Halliburton, formerly chaired
by Cheney, plays in the pipeline construction.
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- On May 30 Afghanistan s interim leader, Hamid Karzai,
Turkmenistan s President Niyazov, and Pakistani President Pervez Musharraf
met in Islamabad to sign a memorandum of understanding on the trans-Afghanistan
pipeline project. As a first step, the three countries will begin work
on a feasibility study. A preliminary assessment will be issued in late-September
and the three leaders will meet for more talks on the project in October,
reported NewsBase. (See source 18) The Turkmen-Afghan-Pakistani gas pipeline
accord has been published and can be viewed at the following website:
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- http://www.gasandoil.com/goc/news/nts22622.htm.
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- Caspian Oil Estimate Revised Down
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- Early estimates of Caspian Sea oil reserves ranged from
115 billion to 200 billion barrels. These estimates have been rightfully
viewed with scepticism as they were based on a 10 percent probability of
recovery -- that is, they were considering oil that could not be recovered.
Now this assessment has been severely downgraded by oil industry insiders.
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- Speaking on April 8 in Almaty, Kazakhstan at the Eurasian
Economic Summit, Gian Maria Gros-Pietro, chairman of Italy's Eni oil company,
said the Caspian contains 7.8 billion barrels of oil, the Interfax news
agency reported. This is confirmed by Agip s statement in Energy Day of
May 30 that the recoverable reserve potential of Kashagan is only 1.2 billion
barrels. With these revisions, it is questionable whether the Caspian Sea
region will ever approach the importance of the Middle East with regard
to energy reserves, according to the Association for the Study of Peak
Oil s (APSO) June newsletter. (See source 19)
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- Finally, in reference to the table below of world energy
reserves, note that the Caspian Sea region is included in the Former Soviet
Union, amounting to less than one tenth of Middle East reserves. In fact,
added together, the rest of the world only contains 364.5 thousand million
barrels in proven reserves, or 53 percent of the proven reserves of the
Middle East.
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- Source: BP Statistical Review of World Energy 2002;
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- http://www.bp.com/centres/energy2002/index.asp
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- More Evidence of Oil Company Downsizing
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- Also from the June APSO newsletter, we find more evidence
of oil company downsizing. The newsletter cites World Oil articles stating
first that British Petroleum has decided to completely curtail political
contributions in the U.S. BP spent $834,000 in such contributions in 2001.
The APSO observes that this decision says more about reduced activity than
anything else. [Ed. Note: Although it may say something about BP s grand
jury exposure for bribery allegations in the U.S. and its 2000 campaign
donations to Attorney General John Ashcroft. -- MCR] Likewise, BP is replacing
staff with consultants. The aim is to downsize the staff of various drilling
operations by between 30 percent and 40 percent. This does not speak well
for future drilling activity. (See source 20)
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- The Perfect Energy Storm
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- Finally, >from a presentation at the June 21 Energen
Corporation Board Retreat, Matthew R. Simmons, president of Simmons &
Company International (an investment banker for the energy industry) spoke
about a looming natural gas crisis.
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- Toward the end of his presentation, Simmons listed the
following ingredients for a perfect energy storm:
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- · Third quarter of 2002 sees the arrival
of a material supply drop · A hot, muggy summer turns on a
record level of gas turbines (100,000 MW+) · One hurricane
roams through the Gulf of Mexico · Suddenly, the gas storage
cushion is gone.
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- "We might be passing through the eye of a hurricane,"
Simmons warned. (See source 21)
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- Dale Allen Pfeiffer is a Geologist and published author
of several books. He may be reached at: elizdale0416@earthlink.net
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- Sources
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- 1) http://www.eia.doe.gov/cabs/caspian.ht ml
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- 2) http://www.gasandoil.com/goc/new s/ntc20665.htm
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- 3) http://www.eia.doe.gov/cabs/caspian.ht ml
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- 4) http://www.gasandoil.com/goc /features/fex20867.htm
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- 5) http://www.gasandoil.com/goc/new s/nts22628.htm
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- 6) http://www.gasandoil.com/goc /features/fex20867.htm
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- 7) http://www.gasandoil.com/goc/new s/ntr20811.htm
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- 8) http://www.gasandoil.com/goc/new s/ntc22240.htm
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- 9) http://www.gasandoil.com/goc/new s/nts22408.htm
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- 10) http://www.gasandoil.com/goc/new s/nts22268.htm
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- 11) http://www.gasandoil.com/goc/new s/nts22404.htm
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- 12) http://www.gasandoil.com/goc/ company/cns22416.htm
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- 13) http://www.gasandoil.com/goc /features/fex20867.htm
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- 14) http://www.gasandoil.com/goc/new s/nts22404.htm
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- 15) http://www.gasandoil.com/goc/fea tures/fex20867.htm
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- 16) http://www.gasandoil.com/goc/new s/nts22628.htm
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- 17) http://www.gasandoil.com/goc/ company/cnr22210.htm
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- 18) http://www.gasandoil.com/goc/new s/nts22628.htm
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- 19) http://www.isv.uu.se/ iwood2002/Newsletter/Newsletter.html
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- 20) http://www.isv.uu.se/ iwood2002/Newsletter/Newsletter.html
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- 21) http://www.simmonsco-intl.com/domino/htm
- l/research.nsf/DocId/B5EB40172B26ABE586256BEA00673746/$File/energenprinter.pdf
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