Thread: Sen. Lindsey Graham: Put Permanent Bases in Afghanistan

Senator: Put Permanent Bases in Afghanistan

January 03, 2011
Associated Press

WASHINGTON -- A leading GOP lawmaker on U.S. military policy says he wants American officials to consider establishing permanent military bases in Afghanistan.

Sen. Lindsey Graham of South Carolina says that having a few U.S. air bases in Afghanistan would be a benefit to the region and would give Afghan security forces an edge against the Taliban.

Graham tells NBC's "Meet the Press" that he wants to see the U.S. have "an enduring relationship" with Afghanistan to ensure that it never falls back into the hands of terrorists.

http://www.military.com/news/article/se ... =army-a.nl

this is typical of a NEO-Con ... Nuts like this have to be fired so they can be put on trial for War Crimes

Afghanistan- A War For Gas And Oil Pipelines

Wednesday, 5 August 2009
19 Comments


Image – US army bases in Afghanistan


Image Oil and Gas pipeline routes


Image – oil and gas pipe line routes through Afghanistan


Is there anything dumber than a journalist who writes for the Times.
Take Bronwen Maddox and her article here ;

http://www.timesonline.co.uk/tol/comment/columnists/bronwen_maddox/article6739302.ece


Usually when a journalist idiot wants us to become entangled in another war / social work action using the British army / policing role / Oil Imperialism escapade then they either use the usual ‘Think of the children’ routine or now the ‘what about the women’ routine.
I cannot believe that such people are allowed to write for The Times, unless the Times is still ‘seeding public opinion with lies’ as Carol Quigley stated in his books was its main role.


We are not in Afghanistan for any of the following reasons ;

1) Helping the children
2) Helping the women
3) Stopping the heroin
4) Fighting terrorism
5) Stopping terrorism in the UK

There is in fact two reasons why we are in Afghanistan, and why British soldiers are dying, and that is for ;

1) Oil
2) Gas

The maps above show you the proposed Oil pipe line and gas pipe line planned for Afghanistan – The Eurasian Corridor.

http://en.wikipedia.org/wiki/Trans-Afghanistan_Pipeline

http://news.bbc.co.uk/1/hi/world/south_asia/2608713.stm


An agreement has been signed in the Turkmen capital, Ashgabat, paving the way for construction of a gas pipeline from the Central Asian republic through Afghanistan to Pakistan.


The Global research Group states that ;
The Eurasian Corridor
Since the 2001 invasion and occupation of Afghanistan, the US has a military presence on China’s Western frontier, in Afghanistan and Pakistan. The U.S. is intent upon establishing permanent military bases in Afghanistan, which occupies a strategic position bordering on the former Soviet republics, China and Iran.
Moreover, the US and NATO have also established since 1996, military ties with several former Soviet republics under GUUAM (Georgia, Ukraine, Uzbekistan, Azerbaijan and Moldava). In the post 9/11 era, Washington has used the pretext of the “global war against terrorism” to further develop a U.S. military presence in GUUAM countries. Uzbekistan withdrew from GUUAM in 2002.(The organization is now referred to as GUAM).
China has oil interests in Eurasia as well as in sub-Saharan Africa, which encroach upon Anglo-American oil interests.
What is at stake is the geopolitical control over the Eurasian corridor.
In March 1999, the U.S. Congress adopted the Silk Road Strategy Act, which defined America’s broad economic and strategic interests in a region extending from the Eastern Mediterranean to Central Asia. The Silk Road Strategy (SRS) outlines a framework for the development of America’s business empire along an extensive geographical corridor.
The successful implementation of the SRS requires the concurrent “militarization” of the entire Eurasian corridor as a means to securing control over extensive oil and gas reserves, as well as “protecting” pipeline routes and trading corridors. This militarization is largely directed against China, Russia and Iran.
Take a look at the maps above – then note how the army bases are in prime positions to protect the oil and gas pipelines.
That is what this ‘war’ is about.
The Afghanistan war is about securing the territory through which the oil and gas pipelines will have to pass through in order to ensure Russia, China and Iran are outmanouvered in the last great wars for the last of the global oil supplies on the planet.
Only yesterday the Independent reported that the Peak Oil process is even close than the ‘experts’ have been so far admitting.
http://www.independent.co.uk/news/science/warning-oil-supplies-are-running-out-fast-1766585.html
The world is heading for a catastrophic energy crunch that could cripple a global economic recovery because most of the major oil fields in the world have passed their peak production, a leading energy economist has warned.
Higher oil prices brought on by a rapid increase in demand and a stagnation, or even decline, in supply could blow any recovery off course, said Dr Fatih Birol, the chief economist at the respected International Energy Agency (IEA) in Paris, which is charged with the task of assessing future energy supplies by OECD countries.
This is what the Iraq War and Afghanistan War are about.
This is also why China is exporting millions of its people into Africa in order to colonise the African continent as Lebensraum for the Chinese state – and to steal its oil and resources from the indigenous African people.
British troops are being slaughtered in Afghanistan for gas and oil pipelines.
That is the truth behind the lies the government spin.
They lied to get us into Iraq and they are lieing now about why we went into Afghanistan.
The Taliban are not Al Qaeda.
The Taliban are mainly local Afghans who do not want to be occupied by any invading army, local Afghan nationalists resisting occupation, ISI pakistani agents fighting a proxy war against the US, drug smugglers and opium growers protecting their drug territories, foreign jihadists working with the pakistani ISI and the angry relatives of Afghans killed by coalition forces getting revenge.
The Taliban are not a threat to us – the fact we are over there means Islamists will attack us over there and over here.
We must withdraw and seal our own national borders, deport all islamists from the UK, execute all conviccted islamist terrorists in the UK, deport all those that fund, support and assist Islamist terrorism in the UK – and most important of all create a 100 % national energy production system that means we do not have to depend on any imports of energy from the Middle East oil, Russian gas or Eurasian oil and gas supplies.
We are at risk of being attacked here in Britain, because we are over there in Islamic nations stealing their gas and oil, or stealing their land to allow us to pump the gas and oil of other nations into our nations.
http://leejohnbarnes.blogspot.com/

http://centurean2.wordpress.com/2009...l-pipelines-2/

IT'S ALL ABOUT OIL!

1998 Unocal Statement:
Suspension of activities related to proposed
natural gas pipeline across Afghanistan

As a result of sharply deteriorating political conditions in the region, Unocal, which serves as the development manager for the Central Asia Gas (CentGas) pipeline consortium, has suspended all activities involving the proposed pipeline project in Afghanistan.

From the 1998 Congressional Record.
Emphasis added to text.

U.S. INTERESTS IN THE CENTRAL ASIAN REPUBLICS HEARING BEFORE THE SUBCOMMITTEE ON ASIA AND THE PACIFIC OF THE COMMITTEE ON INTERNATIONAL RELATIONS HOUSE OF REPRESENTATIVES

ONE HUNDRED FIFTH CONGRESS SECOND SESSION
FEBRUARY 12, 1998

Next we would like to hear from Mr. John J. Maresca, vice president of international relations, Unocal Corporation. You may proceed as you wish.

STATEMENT OF JOHN J. MARESCA, VICE
PRESIDENT OF INTERNATIONAL RELATIONS, UNOCAL CORPORATION

Mr. Maresca. Thank you, Mr. Chairman. It's nice to see you again. I am John Maresca, vice president for international relations of the Unocal Corporation. Unocal, as you know, is one of the world's leading energy resource and project development companies. I appreciate your invitation to speak here today. I believe these hearings are important and timely. I congratulate you for focusing on Central Asia oil and gas reserves and the role they play in shaping U.S. policy.

I would like to focus today on three issues. First, the need for multiple pipeline routes for Central Asian oil and gas resources. Second, the need for U.S. support for international and regional efforts to achieve balanced and lasting political settlements to the conflicts in the region, including Afghanistan. Third, the need for structured assistance to encourage economic reforms and the development of appropriate investment climates in the region. In this regard, we specifically support repeal or removal of section 907 of the Freedom Support Act.

Mr. Chairman, the Caspian region contains tremendous untapped hydrocarbon reserves. Just to give an idea of the scale, proven natural gas reserves equal more than 236 trillion cubic feet. The region's total oil reserves may well reach more than 60 billion barrels of oil. Some estimates are as high as 200 billion barrels. In 1995, the region was producing only 870,000 barrels per day. By 2010, western companies could increase production to about 4.5 million barrels a day, an increase of more than 500 percent in only 15 years. If this occurs, the region would represent about 5 percent of the world's total oil production.

One major problem has yet to be resolved: how to get the region's vast energy resources to the markets where they are needed. Central Asia is isolated. Their natural resources are land locked, both geographically and politically. Each of the countries in the Caucasus and Central Asia faces difficult political challenges. Some have unsettled wars or latent conflicts. Others have evolving systems where the laws and even the courts are dynamic and changing. In addition, a chief technical obstacle which we in the industry face in transporting oil is the region's existing pipeline infrastructure.

Because the region's pipelines were constructed during the Moscow-centered Soviet period, they tend to head north and west toward Russia. There are no connections to the south and east. But Russia is currently unlikely to absorb large new quantities of foreign oil. It's unlikely to be a significant market for new energy in the next decade. It lacks the capacity to deliver it to other markets.

Two major infrastructure projects are seeking to meet the need for additional export capacity. One, under the aegis of the Caspian Pipeline Consortium, plans to build a pipeline west from the northern Caspian to the Russian Black Sea port of Novorossiysk. Oil would then go by tanker through the Bosporus to the Mediterranean and world markets.

The other project is sponsored by the Azerbaijan International Operating Company, a consortium of 11 foreign oil companies, including four American companies, Unocal, Amoco, Exxon and Pennzoil. This consortium conceives of two possible routes, one line would angle north and cross the north Caucasus to Novorossiysk. The other route would cross Georgia to a shipping terminal on the Black Sea. This second route could be extended west and south across Turkey to the Mediterranean port of Ceyhan.

But even if both pipelines were built, they would not have enough total capacity to transport all the oil expected to flow from the region in the future. Nor would they have the capability to move it to the right markets. Other export pipelines must be built.

At Unocal, we believe that the central factor in planning these pipelines should be the location of the future energy markets that are most likely to need these new supplies. Western Europe, Central and Eastern Europe, and the Newly Independent States of the former Soviet Union are all slow growth markets where demand will grow at only a half a percent to perhaps 1.2 percent per year during the period 1995 to 2010.

Asia is a different story all together. It will have a rapidly increasing energy consumption need. Prior to the recent turbulence in the Asian Pacific economies, we at Unocal anticipated that this region's demand for oil would almost double by 2010. Although the short-term increase in demand will probably not meet these expectations, we stand behind our long-term estimates.

I should note that it is in everyone's interest that there be adequate supplies for Asia's increasing energy requirements. If Asia's energy needs are not satisfied, they will simply put pressure on all world markets, driving prices upwards everywhere.

The key question then is how the energy resources of Central Asia can be made available to nearby Asian markets. There are two possible solutions, with several variations. One option is to go east across China, but this would mean constructing a pipeline of more than 3,000 kilometers just to reach Central China. In addition, there would have to be a 2,000-kilometer connection to reach the main population centers along the coast. The question then is what will be the cost of transporting oil through this pipeline, and what would be the netback which the producers would receive.

For those who are not familiar with the terminology, the netback is the price which the producer receives for his oil or gas at the well head after all the transportation costs have been deducted. So it's the price he receives for the oil he produces at the well head.

The second option is to build a pipeline south from Central Asia to the Indian Ocean. One obvious route south would cross Iran, but this is foreclosed for American companies because of U.S. sanctions legislation. The only other possible route is across Afghanistan, which has of course its own unique challenges. The country has been involved in bitter warfare for almost two decades, and is still divided by civil war. From the outset, we have made it clear that construction of the pipeline we have proposed across Afghanistan could not begin until a recognized government is in place that has the confidence of governments, lenders, and our company.

Mr. Chairman, as you know, we have worked very closely with the University of Nebraska at Omaha in developing a training program for Afghanistan which will be open to both men and women, and which will operate in both parts of the country, the north and south.

Unocal foresees a pipeline which would become part of a regional system that will gather oil from existing pipeline infrastructure in Turkmenistan, Uzbekistan, Kazakhstan and Russia. The 1,040-mile long oil pipeline would extend south through Afghanistan to an export terminal that would be constructed on the Pakistan coast. This 42-inch diameter pipeline will have a shipping capacity of one million barrels of oil per day. The estimated cost of the project, which is similar in scope to the trans-Alaska pipeline, is about $2.5 billion.

Given the plentiful natural gas supplies of Central Asia, our aim is to link gas resources with the nearest viable markets. This is basic for the commercial viability of any gas project. But these projects also face geopolitical challenges. Unocal and the Turkish company Koc Holding are interested in bringing competitive gas supplies to Turkey. The proposed Eurasia natural gas pipeline would transport gas from Turkmenistan directly across the Caspian Sea through Azerbaijan and Georgia to Turkey. Of course the demarcation of the Caspian remains an issue.

Last October, the Central Asia Gas Pipeline Consortium, called CentGas, in which Unocal holds an interest, was formed to develop a gas pipeline which will link Turkmenistan's vast Dauletabad gas field with markets in Pakistan and possibly India. The proposed 790-mile pipeline will open up new markets for this gas, traveling from Turkmenistan through Afghanistan to Multan in Pakistan. The proposed extension would move gas on to New Delhi, where it would connect with an existing pipeline. As with the proposed Central Asia oil pipeline, CentGas can not begin construction until an internationally recognized Afghanistan Government is in place.

The Central Asia and Caspian region is blessed with abundant oil and gas that can enhance the lives of the region's residents, and provide energy for growth in both Europe and Asia. The impact of these resources on U.S. commercial interests and U.S. foreign policy is also significant. Without peaceful settlement of the conflicts in the region, cross-border oil and gas pipelines are not likely to be built. We urge the Administration and the Congress to give strong support to the U.N.-led peace process in Afghanistan. The U.S. Government should use its influence to help find solutions to all of the region's conflicts.

U.S. assistance in developing these new economies will be crucial to business success. We thus also encourage strong technical assistance programs throughout the region. Specifically, we urge repeal or removal of section 907 of the Freedom Support Act. This section unfairly restricts U.S. Government assistance to the government of Azerbaijan and limits U.S. influence in the region.

Developing cost-effective export routes for Central Asian resources is a formidable task, but not an impossible one. Unocal and other American companies like it are fully prepared to undertake the job and to make Central Asia once again into the crossroads it has been in the past. Thank you, Mr. Chairman.

US Policy On Taliban Influenced By Oil Deal Negotiations

The two claim that the US government's main objective in Afghanistan was to consolidate the position of the Taliban regime to obtain access to the oil and gas reserves in Central Asia.

They affirm that until August [2001], the US government saw the Taliban regime "as a source of stability in Central Asia that would enable the construction of an oil pipeline across Central Asia" from the rich oilfields in Turkmenistan, Uzbekistan, and Kazakhstan, through Afghanistan and Pakistan, to the Indian Ocean. Until now, says the book, "the oil and gas reserves of Central Asia have been controlled by Russia. The Bush government wanted to change all that."



But, confronted with Taliban's refusal to accept US conditions, "this rationale of energy security changed into a military one", the authors claim.

"At one moment during the negotiations, the US representatives told the Taliban, 'either you accept our offer of a carpet of gold, or we bury you under a carpet of bombs,'" Brisard said in an interview in Paris.

The US government informed other nations of it's plan to invade Afghanistan months before the 9/11 attacks http://whatreallyhappened.com/preplanned.html

9 September 2001: Bush given Afghanistan invasion plan http://ist-socrates.berkeley.edu/~pdscott/qf911.html

7 October 2001: Bush announces opening of Afghanistan attacks http://www.cnn.com/2001/US/10/07/ret.attack.bush/

13 June 2002: Hamid Karzai Elected as New Afghan Leader http://news.bbc.co.uk/1/hi/world/south_asia/2042040.stm

(Former Unocal Consultant) http://www.rense.com/general18/ine.htm

27 December 2002: Afghanistan Pipeline Deal signed http://news.bbc.co.uk/2/hi/south_asia/2608713.stm



An agreement has been signed in the Turkmen capital, Ashgabat, paving the way for construction of a gas pipeline from the Central Asian republic through Afghanistan to Pakistan.

The building of the trans-Afghanistan pipeline has been under discussion for some years but plans have been held up by Afghanistan's unstable political situation.

http://whatreallyhappened.com/WRHARTICLES/oil.html

Russia/China oil pipeline half ready

Afghanistan News.Net
Sunday 29th August, 2010

Vladimir Putin, Russia's prime minister, has opened the Russian side of an oil pipeline that will provide Russian crude to China.

Prime Minister Putin on Sunday turned the lever on the project, which has opened the Russian section of the long-awaited oil pipeline that will allow Russia to expand its oil exports away from Europe.

Putin explained at the opening ceremony in Skovorodino, in the Far Eastern Amur region, that the pipeline would ultimately transport crude oil from Siberia to refineries in the northeastern Chinese city of Daqing.

He said: "For us this is an important project because we are beginning to diversify the supply of our energy resources."

Also at the opening ceremony was the head of China's National Energy Administration, Zhang Guobao.

http://www.afghanistannews.net/story/678496

Gas, Oil and Afghanistan

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."

Klare's view is seconded by Ahmed Rashid, Pakistani journalist and author of "Taliban: Militant Islam, Oil and Fundamentalism in Central Asia." In an interview with Steve Curwood published on the web site "Living On Earth" he says ".... in the last ten years, since the collapse of the Soviet Union, there has been what I call a new great game between Russia, the United States, China, Iran, the European companies, for control of the new oil and gas resources that have been discovered in the Caspian Sea and in the Caucuses and Central Asia. Now, this, you know, it's a two-pronged game, basically, between trying to buy up oil fields and gas fields and also, of course, deciding on what routes this energy can be exported. Because Central Asia is totally landlocked, distances are huge, and the U.S. strategy has been essentially to keep, new oil pipelines should not be built through Russia and they should not be built through Iran.

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. (It should be carefully noted that according to the Pakistan Ministry of Petroleum Pakistan is one of the most gas dependent economies in the world.) 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."

Alexander's Gas and Oil Connections reported in Dec. 8, 1997 that three Taliban ministers went to Texas to hear what Unocal had to offer if they agreed to let a gas pipeline be built from Turkmenistan through Afghan territory to Pakistan.
"They are just going to Texas to talk. They are not supposed to sign any agreements on the gas pipeline,'' Mutta Wakil, a Taliban spokesman said from the Taliban headquarters in southern Kandahar. "If any agreements are reached they will be signed in Afghanistan.''

By early 1998 a Unocal led consortium had made a deal with the Taliban to construct an Afghanistan pipeline from Turkmenistan to Pakistan. The Bridas Group cried foul and launched legal action against Unocal, to no avail.

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. Condolezza Rice, Bush's assistant to the president for national security affairs, was on the board of Chevron. Vice President Dick 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."

After the breakdown of the Unocal plan, Turkmenistan resumed a relationship with the Russians. Niazarov also carried out discussions with the Chinese. In July of 2000, Turkmenistan agreed to conduct a feasibility study on the construction of a natural gas pipeline linking Turkmenistan with China.

Indeed, with the assumption of the Russian Presidency by Vladimir Putin, the Russian government went on a sustained diplomatic, economic and military offensive in the Caspian and Central Asian region. This offensive seriously threatened US and Western European interests in the region, as Russia courted Iran, Turkmenistan, Uzbekistan and the other oil and gas states in the area.

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."

A note on the importance of gas. Newspaper headlines always focus on oil, and oil prices. But the world demand for gas is increasing exponentially. According to www.naturalgas.org "Natural gas, within recent years, has become an international commodity. Current world reserves of natural gas, depicted in Figure 10, are estimated at about 4,900 trillion cubic feet, the equivalent of about 47% of total world petroleum energy reserves. Roughly 40% of these reserves are located in the remote regions of the former U.S.S.R., now the Commonwealth of Independent States (CIS) and about 37% in the Arabian Gulf countries of the middle East (Figure 10).

The location of these reserves, far from the major populations of consuming countries, suggests that the world natural gas industry is in a stage of development very similar to that of the U.S. in the late 1930's. Natural gas consumption, shown in Figure 11, is increasing dramatically, and promises continued aggressive growth in the immediate future.

World gas processing, of course, mirrors the growth of natural gas production and consumption. Current world-wide production of natural gas liquids (Figure 12) is about 4.9 million barrels per day, or about 8% of total world production of liquid petroleum. Combined, the gaseous fuels natural gas and natural gas liquids currently provide about 42% of total world petroleum energy production."

The Business Recorder of Pakistan reported in March, 2000, that Unocal had once again resumed talks with the Taliban on the Afghanistan route. According to the BR, "The long term economic attractions have been so strong of these gas pipeline projects that no multinational can help taking risks, an observer said. On the condition of anonymity, he said that in the coming years it would be of 'decisive importance, if an infrastructure link-up is established in the form of a network between South East Asia, South Asia and Central Asia. In this connection a key role is to be played by Pakistan as railroads, oil and gas pipelines to India and to ports of the Arabian Sea (Karachi and Gwadar), must pass through its territory. At the same time, this is a big and perhaps the 'only' chance of development for Pakistan, he remarked."Business Recorder (www.brecorder.com)

In an article by Franz Schurmann entitled "Conflict Building Up in Oil-Rich Caspian,dated September 6, 2001,(NCM Online), Schurmann says "The Caspian is a body of water that could either be called a "great lake" or an "inland sea." According to international law if it is a lake then none of the littoral countries has sovereign rights over the waters. That means they cannot carve out an "economic zone" for themselves. If that's the case then the only way they can lift oil from the waters is by cooperating with each other. (Editor: China and Taiwan have just agreed to jointly lift oil in the Spratley Islands because they claim identical sovereignty rights.) But if some or all the countries call it a sea then they can carve out national economic zones. And that could lead to wars between them. There are growing signs that the clashing semantics is creating tensions in the Caspian that could lead to big disputes or worse."

Only a month after the date of Schurmann's article, war has broken out in Central Asia.

In WWS Case Study dated 1/99, entitled "Pipeline Diplomacy: The Clinton Administration's Fight for Baku-Ceyhan" by Jofi Joseph, he makes the following criticism of the Clinton team's approach toward Caspian energy policy. "While understandable from a perspective of political feasibility, Washington's firm refusal to consider any direct U.S. assistance to reduce the costs of the Baku-Ceyhan route strongly undermined its prospects for success. Amoco, Mobil, and British Oil hold no concern for U.S. geopolitical interests or the Western orientation of Central Asian republics; their only priority lies in their bottom line." We need fear no such scruples concerning aid for big oil companies by the G.W. Bush administration. It has not been in office a year, and the bombs are falling on Afghanistan, while troops maneuver for position in Central Asia.

Let's remember Unocal's Maresca's statement to the US Congress in 1998. "From the outset, we have made it clear that construction of the pipeline we have proposed across Afghanistan could not begin until a recognized government is in place that has the confidence of governments, lenders, and our company." Within a week of the commencement of war with the Taliban, the Bush adminstration discussed the shape of a post-war Afghan government.

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 WTC hijackers hailed predominately from Egypt and Saudi Arabia. Afghan citizens were not included. The right wingers of William Buckley's National Review fulminate for war to the finish against Iraq's Saddam Hussein. Others mention Iran.

But Osma 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, and this is a big if, the way might be cleared for the Afghanistan pipeline project, and the basis for further penetration into the oil rich former Soviet republics established, as part of a general rollback of Russian influence in the Caspian and Central Asia.

Send comments to jonathan.flanders(nospam)@verizon.net

http://members.localnet.com/~jeflan/jfafghanpipe.htm

Afghanistan : The need for multiple pipeline routes for Caspian Sea oil and gas.

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TESTIMONY

BY

JOHN J. MARESCA

VICE PRESIDENT, INTERNATIONAL RELATIONS

UNOCAL CORPORATION

TO

HOUSE COMMITTEE ON INTERNATIONAL RELATIONS

SUBCOMMITTEE ON ASIA AND THE PACIFIC

FEBRUARY 12, 1998

WASHINGTON, D.C.

Mr. Chairman, I am John Maresca, Vice President, International Relations, of Unocal Corporation. Unocal is one of the world's leading energy resource and project development companies. Our activities are focused on three major regions -- Asia, Latin America and the U.S. Gulf of Mexico. In Asia and the U.S. Gulf of Mexico, we are a major oil and gas producer. I appreciate your invitation to speak here today. I believe these hearings are important and timely, and I congratulate you for focusing on Central Asia oil and gas reserves and the role they play in shaping U.S. policy.

Today we would like to focus on three issues concerning this region, its resources and U.S. policy:

The need for multiple pipeline routes for Central Asian oil and gas.

The need for U.S. support for international and regional efforts to achieve balanced and lasting political settlements within Russia, other newly independent states and in Afghanistan.

The need for structured assistance to encourage economic reforms and the development of appropriate investment climates in the region. In this regard, we specifically support repeal or removal of Section 907 of the Freedom Support Act.

For more than 2,000 years, Central Asia has been a meeting ground between Europe and Asia, the site of ancient east-west trade routes collectively called the Silk Road and, at various points in history, a cradle of scholarship, culture and power. It is also a region of truly enormous natural resources, which are revitalizing cross-border trade, creating positive political interaction and stimulating regional cooperation. These resources have the potential to recharge the economies of neighboring countries and put entire regions on the road to prosperity.

About 100 years ago, the international oil industry was born in the Caspian/Central Asian region with the discovery of oil. In the intervening years, under Soviet rule, the existence

of the region's oil and gas resources was generally known, but only partially or poorly developed.

As we near the end of the 20th century, history brings us full circle. With political barriers falling, Central Asia and the Caspian are once again attracting people from around the globe who are seeking ways to develop and deliver its bountiful energy resources to the markets of the world.

The Caspian region contains tremendous untapped hydrocarbon reserves, much of them located in the Caspian Sea basin itself. Proven natural gas reserves within Azerbaijan, Uzbekistan, Turkmenistan and Kazakhstan equal more than 236 trillion cubic feet. The region's total oil reserves may reach more than 60 billion barrels of oil -- enough to service Europe's oil needs for 11 years. Some estimates are as high as 200 billion barrels. In 1995, the region was producing only 870,000 barrels per day (44 million tons per year [Mt/y]).

By 2010, Western companies could increase production to about 4.5 million barrels a day (Mb/d) -- an increase of more than 500 percent in only 15 years. If this occurs, the region would represent about five percent of the world's total oil production, and almost 20 percent of oil produced among non-OPEC countries.

One major problem has yet to be resolved: how to get the region's vast energy resources to the markets where they are needed. There are few, if any, other areas of the world where there can be such a dramatic increase in the supply of oil and gas to the world market. The solution seems simple: build a "new" Silk Road. Implementing this solution, however, is far from simple. The risks are high, but so are the rewards.

Finding and Building Routes to World Markets

One of the main problems is that Central Asia is isolated. The region is bounded on the north by the Arctic Circle, on the east and west by vast land distances, and on the south by a series of natural obstacles -- mountains and seas -- as well as political obstacles, such as conflict zones or sanctioned countries.

This means that the area's natural resources are landlocked, both geographically and politically. Each of the countries in the Caucasus and Central Asia faces difficult political challenges. Some have unsettled wars or latent conflicts. Others have evolving systems where the laws -- and even the courts -- are dynamic and changing. Business commitments can be rescinded without warning, or they can be displaced by new geopolitical realities.

In addition, a chief technical obstacle we face in transporting oil is the region's existing pipeline infrastructure. Because the region's pipelines were constructed during the Moscow-centered Soviet period, they tend to head north and west toward Russia. There are no connections to the south and east.

Depending wholly on this infrastructure to export Central Asia oil is not practical. Russia currently is unlikely to absorb large new quantities of "foreign" oil, is unlikely to be a significant market for energy in the next decade, and lacks the capacity to deliver it to other markets.

Certainly there is no easy way out of Central Asia. If there are to be other routes, in other directions, they must be built.

Two major energy infrastructure projects are seeking to meet this challenge. One, under the aegis of the Caspian Pipeline Consortium, or CPC, plans to build a pipeline west from the Northern Caspian to the Russian Black Sea port of Novorossisk. From Novorossisk, oil from this line would be transported by tanker through the Bosphorus to the Mediterranean and world markets.

The other project is sponsored by the Azerbaijan International Operating Company (AIOC), a consortium of 11 foreign oil companies including four American companies -- Unocal, Amoco, Exxon and Pennzoil. It will follow one or both of two routes west from Baku. One line will angle north and cross the North Caucasus to Novorossisk. The other route would cross Georgia and extend to a shipping terminal on the Black Sea port of Supsa. This second route may be extended west and south across Turkey to the Mediterranean port of Ceyhan.

But even if both pipelines were built, they would not have enough total capacity to transport all the oil expected to flow from the region in the future; nor would they have the capability to move it to the right markets. Other export pipelines must be built.

Unocal believes that the central factor in planning these pipelines should be the location of the future energy markets that are most likely to need these new supplies. Just as Central Asia was the meeting ground between Europe and Asia in centuries past, it is again in a unique position to potentially service markets in both of these regions -- if export routes to these markets can be built. Let's take a look at some of the potential markets.

Western Europe

Western Europe is a tough market. It is characterized by high prices for oil products, an aging population, and increasing competition from natural gas. Between 1995 and 2010, we estimate that demand for oil will increase from 14.1 Mb/d (705 Mt/y) to 15.0 Mb/d (750 Mt/y), an average growth rate of only 0.5 percent annually. Furthermore, the region is already amply supplied from fields in the Middle East, North Sea, Scandinavia and Russia. Although there is perhaps room for some of Central Asia's oil, the Western European market is unlikely to be able to absorb all of the production from the Caspian region.

Central and Eastern Europe

Central and Eastern Europe markets do not look any better. Although there is increased demand for oil in the region's transport sector, natural gas is gaining strength as a competitor. Between 1995 and 2010, demand for oil is expected to increase by only half a million barrels per day, from 1.3 Mb/d (67 Mt/y) to 1.8 Mb/d (91.5 Mt/y). Like Western Europe, this market is also very competitive. In addition to supplies of oil from the North Sea, Africa and the Middle East, Russia supplies the majority of the oil to this region.

The Domestic NIS Market

The growth in demand for oil also will be weak in the Newly Independent States (NIS). We expect Russian and other NIS markets to increase demand by only 1.2 percent annually between 1997 and 2010.

Asia/Pacific

In stark contrast to the other three markets, the Asia/Pacific region has a rapidly increasing demand for oil and an expected significant increase in population. Prior to the recent turbulence in the various Asian/Pacific economies, we anticipated that this region's demand for oil would almost double by 2010. Although the short-term increase in demand will probably not meet these expectations, Unocal stands behind its long-term estimates.

Energy demand growth will remain strong for one key reason: the region's population is expected to grow by 700 million people by 2010.

It is in everyone's interests that there be adequate supplies for Asia's increasing energy requirements. If Asia's energy needs are not satisfied, they will simply put pressure on all world markets, driving prices upwards everywhere.

The key question is how the energy resources of Central Asia can be made available to satisfy the energy needs of nearby Asian markets. There are two possible solutions -- with several variations.

Export Routes

East to China: Prohibitively Long?

One option is to go east across China. But this would mean constructing a pipeline of more than 3,000 kilometers to central China -- as well as a 2,000-kilometer connection to reach the main population centers along the coast. Even with these formidable challenges, China National Petroleum Corporation is considering building a pipeline east from Kazakhstan to Chinese markets.

Unocal had a team in Beijing just last week for consultations with the Chinese. Given China's long-range outlook and its ability to concentrate resources to meet its own needs, China is almost certain to build such a line. The question is what will the costs of transporting oil through this pipeline be and what netback will the producers receive.

South to the Indian Ocean: A Shorter Distance to Growing Markets

A second option is to build a pipeline south from Central Asia to the Indian Ocean.

One obvious potential route south would be across Iran. However, this option is foreclosed for American companies because of U.S. sanctions legislation. The only other possible route option is across Afghanistan, which has its own unique challenges.

The country has been involved in bitter warfare for almost two decades. The territory across which the pipeline would extend is controlled by the Taliban, an Islamic movement that is not recognized as a government by most other nations. From the outset, we have made it clear that construction of our proposed pipeline cannot begin until a recognized government is in place that has the confidence of governments, lenders and our company.

In spite of this, a route through Afghanistan appears to be the best option with the fewest technical obstacles. It is the shortest route to the sea and has relatively favorable terrain for a pipeline. The route through Afghanistan is the one that would bring Central Asian oil closest to Asian markets and thus would be the cheapest in terms of transporting the oil.

Unocal envisions the creation of a Central Asian Oil Pipeline Consortium. The pipeline would become an integral part of a regional oil pipeline system that will utilize and gather oil from existing pipeline infrastructure in Turkmenistan, Uzbekistan, Kazakhstan and Russia.

The 1,040-mile-long oil pipeline would begin near the town of Chardzhou, in northern Turkmenistan, and extend southeasterly through Afghanistan to an export terminal that would be constructed on the Pakistan coast on the Arabian Sea. Only about 440 miles of the pipeline would be in Afghanistan.

This 42-inch-diameter pipeline will have a shipping capacity of one million barrels of oil per day. Estimated cost of the project -- which is similar in scope to the Trans Alaska Pipeline -- is about US$2.5 billion.

There is considerable international and regional political interest in this pipeline. Asian crude oil importers, particularly from Japan, are looking to Central Asia and the Caspian as a new strategic source of supply to satisfy their desire for resource diversity. The pipeline benefits Central Asian countries because it would allow them to sell their oil in expanding and highly prospective hard currency markets. The pipeline would benefit Afghanistan, which would receive revenues from transport tariffs, and would promote stability and encourage trade and economic development. Although Unocal has not negotiated with any one group, and does not favor any group, we have had contacts with and briefings for all of them. We know that the different factions in Afghanistan understand the importance of the pipeline project for their country, and have expressed their support of it.

A recent study for the World Bank states that the proposed pipeline from Central Asia across Afghanistan and Pakistan to the Arabian Sea would provide more favorable netbacks to oil producers through access to higher value markets than those currently being accessed through the traditional Baltic and Black Sea export routes.

This is evidenced by the netback values producers will receive as determined by the World Bank study. For West Siberian crude, the netback value will increase by nearly $2.00 per barrel by going south to Asia. For a producer in western Kazakhstan, the netback value will increase by more than $1 per barrel by going south to Asia as compared to west to the Mediterranean via the Black Sea.

Natural Gas Export

Given the plentiful natural gas supplies of Central Asia, our aim is to link a specific natural resource with the nearest viable market. This is basic for the commercial viability of any gas project. As with all projects being considered in this region, the following projects face geo-political challenges, as well as market issues.

Unocal and the Turkish company, Koc Holding A.S., are interested in bringing competitive gas supplies to the Turkey market. The proposed Eurasia Natural Gas Pipeline would transport gas from Turkmenistan directly across the Caspian Sea through Azerbaijan and Georgia to Turkey. Sixty percent of this proposed gas pipeline would follow the same route as the oil pipeline proposed to run from Baku to Ceyhan. Of course, the demarcation of the Caspian remains an issue.

Last October, the Central Asia Pipeline, Ltd. (CentGas) consortium, in which Unocal holds an interest, was formed to develop a gas pipeline that will link Turkmenistan's vast natural gas reserves in the Dauletabad Field with markets in Pakistan and possibly India. An independent evaluation shows that the field's resources are adequate for the project's needs, assuming production rates rising over time to 2 billion cubic feet of gas per day for 30 years or more.

In production since 1983, the Dauletabad Field's natural gas has been delivered north via Uzbekistan, Kazakhstan and Russia to markets in the Caspian and Black Sea areas. The proposed 790-mile pipeline will open up new markets for this gas, travelling from Turkmenistan through Afghanistan to Multan, Pakistan. A proposed extension would link with the existing Sui pipeline system, moving gas to near New Delhi, where it would connect with the existing HBJ pipeline. By serving these additional volumes, the extension would enhance the economics of the project, leading to overall reductions in delivered natural gas costs for all users and better margins. As currently planned, the CentGas pipeline would cost approximately $2 billion. A 400-mile extension into India could add $600 million to the overall project cost.

As with the proposed Central Asia Oil Pipeline, CentGas cannot begin construction until an internationally recognized Afghanistan government is in place. For the project to advance, it must have international financing, government-to-government agreements and government-to-consortium agreements.

Conclusion

The Central Asia and Caspian region is blessed with abundant oil and gas that can enhance the lives of the region's residents and provide energy for growth for Europe and Asia.

The impact of these resources on U.S. commercial interests and U.S. foreign policy is also significant and intertwined. Without peaceful settlement of conflicts within the region, cross-border oil and gas pipelines are not likely to be built. We urge the Administration and the Congress to give strong support to the United Nations-led peace process in Afghanistan.

U.S. assistance in developing these new economies will be crucial to business' success. We encourage strong technical assistance programs throughout the region. We also urge repeal or removal of Section 907 of the Freedom Support Act. This section unfairly restricts U.S. government assistance to the government of Azerbaijan and limits U.S. influence in the region.

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.

Thank you.

http://911review.org/brad.com/archives/ ... spian.html

Russia, China, Iran redraw energy map

By M K Bhadrakumar

The inauguration of the Dauletabad-Sarakhs-Khangiran pipeline on Wednesday connecting Iran's northern Caspian region with Turkmenistan's vast gas field may go unnoticed amid the Western media cacophony that it is "apocalypse now" for the Islamic regime in Tehran.

The event sends strong messages for regional security. Within the space of three weeks, Turkmenistan has committed its entire gas exports to China, Russia and Iran. It has no urgent need of the pipelines that the United States and the European Union have been advancing. Are we hearing the faint notes of a Russia-China-Iran symphony?

The 182-kilometer Turkmen-Iranian pipeline starts modestly with the pumping of 8 billion cubic meters (bcm) of Turkmen gas. But its annual capacity is 20bcm, and that would meet the energy requirements of Iran's Caspian region and enable Tehran to free its own gas production in the southern fields for export. The mutual interest is perfect: Ashgabat gets an assured market next door; northern Iran can consume without fear of winter shortages; Tehran can generate more surplus for exports; Turkmenistan can seek transportation routes to the world market via Iran; and Iran can aspire to take advantage of its excellent geographical location as a hub for the Turkmen exports.

We are witnessing a new pattern of energy cooperation at the regional level that dispenses with Big Oil. Russia traditionally takes the lead. China and Iran follow the example. Russia, Iran and Turkmenistan hold respectively the world's largest, second-largest and fourth-largest gas reserves. And China will be consumer par excellence in this century. The matter is of profound consequence to the US global strategy.



The Turkmen-Iranian pipeline mocks the US's Iran policy. The US is threatening Iran with new sanctions and claims Tehran is "increasingly isolated". But Mahmud Ahmadinejad's presidential jet winds its way through a Central Asian tour and lands in Ashgabat for a red-carpet welcome by his Turkmen counterpart, Gurbanguly Berdymukhammedov, and a new economic axis emerges. Washington's coercive diplomacy hasn't worked. Turkmenistan, with a gross domestic product of US$18.3 billion, defied the sole superpower (GDP of $14.2 trillion) - and, worse still, made it look routine.

There are subplots, too. Tehran claims to have a deal with Ankara to transport Turkmen gas to Turkey via the existing 2,577km pipeline connecting Tabriz in northwestern Iran with Ankara. Indeed, Turkish diplomacy has an independent foreign-policy orientation. Turkey also aspires to be a hub for Europe's energy supplies. Europe may be losing the battle for establishing direct access to the Caspian.

Second, Russia does not seem perturbed by China tapping into Central Asian energy. Europe's need for Russian energy imports has dropped and Central Asian energy-producing countries are tapping China's market. From the Russian point of view, China's imports should not deprive it of energy (for its domestic consumption or exports). Russia has established deep enough presence in the Central Asian and Caspian energy sector to ensure it faces no energy shortage.

What matters most to Russia is that its dominant role as Europe's No 1 energy provider is not eroded. So long as the Central Asian countries have no pressing need for new US-backed trans-Caspian pipelines, Russia is satisfied.

During his recent visit to Ashgabat, Russian President Dmitry Medvedev normalized Russian-Turkmen energy ties. The restoration of ties with Turkmenistan is a major breakthrough for both countries. One, a frozen relationship is being resumed substantially, whereby Turkmenistan will maintain an annual supply of 30bcm to Russia. Two, to quote Medvedev, "For the first time in the history of Russian-Turkmen relations, gas supplies will be carried out based on a price formula that is absolutely in line with European gas market conditions." Russian commentators say Gazprom will find it unprofitable to buy Turkmen gas and if Moscow has chosen to pay a high price, that is primarily because of its resolve not to leave gas that could be used in alternative pipelines, above all in the US-backed Nabucco project.



Third, contrary to Western propaganda, Ashgabat does not see the Chinese pipeline as a substitute for Gazprom. Russia's pricing policy ensures that Ashgabat views Gazprom as an irreplaceable customer. The export price of the Turkmen gas to be sold to China is still under negotiation and the agreed price simply cannot match the Russian offer.

Fourth, Russia and Turkmenistan reiterated their commitment to the Caspian Coastal Pipeline (which will run along the Caspian's east coast toward Russia) with a capacity of 30bcm. Evidently, Russia hopes to cluster additional Central Asian gas from Turkmenistan (and Kazakhstan).

Fifth, Moscow and Ashgabat agreed to build jointly an east-west pipeline connecting all Turkmen gas fields to a single network so that the pipelines leading toward Russia, Iran and China can draw from any of the fields.

Indeed, against the backdrop of the intensification of the US push toward Central Asia, Medvedev's visit to Ashgabat impacted on regional security. At the joint press conference with Medvedev, Berdymukhammedov said the views of Turkmenistan and Russia on the regional processes, particularly in Central Asia and the Caspian region, were generally the same. He underlined that the two countries were of the view that the security of one cannot be achieved at the expense of the other. Medvedev agreed that there was similarity or unanimity between the two countries on issues related to security and confirmed their readiness to work together.

The United States' pipeline diplomacy in the Caspian, which strove to bypass Russia, elbow out China and isolate Iran, has foundered. Russia is now planning to double its intake of Azerbaijani gas, which further cuts into the Western efforts to engage Baku as a supplier for Nabucco. In tandem with Russia, Iran is also emerging as a consumer of Azerbaijani gas. In December, Azerbaijan inked an agreement to deliver gas to Iran through the 1,400km Kazi-Magomed-Astara pipeline.

The "big picture" is that Russia's South Stream and North Stream, which will supply gas to northern and southern Europe, have gained irreversible momentum. The stumbling blocks for North Stream have been cleared as Denmark (in October), Finland and Sweden (in November) and Germany (in December) approved the project from the environmental angle. The pipeline's construction will commence in the spring.

The $12-billion pipeline built jointly by Gazprom, Germany's E.ON Ruhrgas and BASF-Wintershall, and the Dutch gas transportation firm Gasunie bypasses the Soviet-era transit routes via Ukraine, Poland and Belarus and runs from the northwestern Russian port of Vyborg to the German port of Greifswald along a 1,220km route under the Baltic Sea. The first leg of the project with a carrying capacity of 27.5bcm annually will be completed next year and the capacity will double by 2012. North Stream will profoundly affect the geopolitics of Eurasia, trans-Atlantic equations and Russia's ties with Europe.

To be sure, 2009 proved to be a momentous year for the "energy war". The Chinese pipeline inaugurated by President Hu Jintao on December 14; the oil terminal near the port city of Nakhodka in Russia's far east inaugurated by Prime Minister Vladimir Putin on December 27 (which will be served by the mammoth $22-billion oil pipeline from the new fields in eastern Siberia leading to China and the Asia-Pacific markets); and the Iranian pipeline inaugurated by Ahmadinejad on January 6 - the energy map of Eurasia and the Caspian has been virtually redrawn.

The year 2010 begins on a fascinating new note: will Russia, China and Iran coordinate future moves or at least harmonize their competing interests?

Ambassador M K Bhadrakumar was a career diplomat in the Indian Foreign Service. His assignments included the Soviet Union, South Korea, Sri Lanka, Germany, Afghanistan, Pakistan, Uzbekistan, Kuwait and Turkey.

http://www.atimes.com/atimes/Central_Asia/LA08Ag01.html

Central Asia/Russia

THE ROVING EYE

Pipelineistan, Part 1: The rules of the game

By Pepe Escobar

War against terrorism? Not really. Reminder: it's all about oil.

A quick look at the map is all it takes. It's no coincidence that the map of terror in the Middle East and Central Asia is practically interchangeable with the map of oil. There's Infinite Justice, Enduring Freedom - and Everlasting Profits to be made: not only by the American industrial-military complex, but especially by American and European oil giants.

Where is the realm these days of former US secretary of state James Baker, former national security adviser Brent Scowcroft, former White House chief of staff John Sununu and former defense secretary and current Invisible Man Dick Cheney? They are all happily dreaming of, and working for, the establishment of Pipelineistan.

Pipelineistan is the golden future: a paradise of opportunity in the form of US$5 trillion of oil and gas in the Caspian basin and the former Soviet republics of Central Asia. In Washington's global petrostrategy, this is supposed to be the end of America's oil dependence on the Organization of Petroleum Exporting Countries (OPEC). This is of course the heart of the matter in the New Great Game - compared to which the original 19th-century Great Game between czarist Russia and the British Empire was a childish tin soldier's diversion.

Afghanistan itself has some natural gas in the north of the country, near Turkmenistan. But above all it is ultra-strategic: positioned between the Middle East, Central Asia and South Asia, between Turkmenistan and the avid markets of the Indian subcontinent, China and Japan. Afghanistan is at the core of Pipelineistan.

MORE AT THE PAGE LINK

http://atimes.com/c-asia/DA25Ag01.html

Profits: The Prize of Intervention

27/10/01

"I cannot think of a time when we have had a region emerge as suddenly to become as strategically significant as the Caspian"
&endash; Dick Cheney in 1998, Then CEO of a supplier to the oil industry, Haliburton, Inc.. Now vice-president of America Inc..
(Quoted in the Guardian 23/10/01)

Counter-Productive Means or Different Goals?

I have already explored how the current NATO offensive in Afghanistan rather than creating increased security for the populations of the West will in fact, and has in fact, resulted in the opposite. (see Hatred: The Price of Intervention)
Furthermore a considerable amount of antiwar writing is devoted to how that offensive is a very blunt, indeed counter-productive, way of getting to those responsible for the S11 atrocity.
If, that is, there were more people behind it than those who died in a kamikaze attack.
To re-cap:

No effort was made to negotiate the hand over for trial of Bin Laden.
A Human Rights Watch study into the Afghan civil war maintains that the Pakistani government held considerable influence over the Taliban, so it does not seem unreasonable that the possibility of negotiation could have been explored. The excuse for not doing so was that to do so would be to expose sensitive sources of information.

Which is a peculiar logic to use after such a monumental failure of intelligence agencies as S-11. In other words, if these sensitive sources of information exist today, where were they prior to S-11?
Furthermore investigation into a wider conspiracy, if indeed a wider conspiracy exists, is dependant on the co-operation of Arab/Muslim states and individuals. Surely that is something which is imperiled by the anti-Western backlash launched by the bombing. For instance, M.I.5 have been posting advertisements appealing for information onto dissident websites which they imagine are likely to be being accessed by people "on the edge of extremist communities who are sufficiently shocked to want to contact the agency." (Quoted in The Guardian 26/10/01)
Do you fancy their chances while bombs are raining down on the heads of Afghans?
Also we have yet to encounter any explanation of the role played by Afghanistan's "terrorist training camps" in the S11 attacks? The people thought responsible were resident in the U.S. and Germany, came from Saudi Arabia and Egypt, and hardly needed to be trained in scissors wielding in a camp in Afghanistan.
F.B.I. investigations point in a different direction: "FBI agents are sure the majority of the men were from Saudi Arabia. They also claim some of the recruiting, planning and financing of the attacks occurred in the country." (Quoted in The Guardian 26/10/01)
In short the military campaign will increase the "terrorist threat" and will hamper efforts to find a wider conspiracy behind S-11, furthermore it may be aimed in the wrong direction entirely.
So why is it happening?
A Second Lusitania?

The sinking of the Lusitania, with the loss of almost 1,200 lives (over 100 of them American), by a U-Boat in May 1915 was one of the stated reasons for America's entry into World War One (the others were so superficial we need not concern ourselves with them) . After this Imperial Germany suspended unlimited submarine warfare, only to re-introduce it in January 1917. This decision of the German state was followed by the ending of diplomatic relations by the United States and then in April 1917 by the U.S. entry to the war.
However it is now widely recognised that influential sections of the American public, namely Big Business, stood to gain from a Allied victory and would suffer from a Central Powers victory. So widely recognised it is even mentioned in school textbooks -

"The interests of Big Business: The war needs of the Allies gave a tremendous boost to American industry. Trade with the Allies soared from $825 million in 1914 to $3 214 million in 1916 which lifted America out of a deep depression. Before the war America was a debtor nation, owing money to Europe. By 1917 America was a creditor nation, having lent the Allies huge sums to finance their growing purchases of vital war materials.
By 1917 European debts to America totalled $2 700 000."
('An Outline of Modern European History 1870-1951',page 120, Frank O hUallachain)

Of course collecting that money would be a lot easier if the Central Powers were not victorious , and a triumph for them was still on the cards as late as the summer of 1918.
The sinking of the Lusitania provided an excuse for a course of action which was more concerned with the interests of Big Business than "freedom of the seas" (it managed to ignore the British blockade on Germany).
It is possible today that the S-11 attacks may have provided an excuse for a course of action which is more concerned with furthering the interests of Big Business than providing security for the citizens of Western states or getting those responsible for S-11.
Certainly the proposals of a wider war against "rouge states which sponsor terrorism" (and the selectivity of that term has been discussed earlier see Crusade Versus Jihad, Six Questions About The War) which had no alleged involvement in S-11 does not seem to be in keeping with those two goals. That wider war would only give greater incentive to carry out acts of violence against the West for which no great resources or state backing is needed, and obviously it would not get those responsible for S-11 (if indeed there was a wider conspiracy involved in S-11).
Nor does Secretary for Defence Rumsfeld's assertion that they may never get Bin Laden and even if they did it wouldn't make any difference, remember he's speaking about the supposed mastermind behind S-11:

"He's got a lot of money, he's got a lot of people who support him and I just don't know whether we'll be successful,"
"If he were gone tomorrow, the same problem would exist,"
(Quoted on BBC News Online Thursday, 25 October, 2001)

It is also important to remember that there were plans to attack Afghanistan prior to S-11.
According to former Pakistani diplomat Niaz Naik, at a meeting in Berlin in July:

"The Americans indicated to us that in case the Taliban does not behave and in case Pakistan also doesn't help us to influence the Taliban, then the United States would be left with no option but to take an overt action against Afghanistan," "I told the Pakistani government, who informed the Taliban via our foreign office and the Taliban ambassador here."
(quoted in the Guardian 22/9/01 )

After the September 11th attack there was a necessity for a dramatic American response purely for prestige reasons, as we have seen that response has little to do with security or criminal justice, but as well as prestige reasons there are other motivations behind the current intervention.
To explore those motivations we will have to turn to that long forgotten part of the world where Afghanistan is to be found.
Central Asia: Economic Resources.

According to the trade magazine 'The Oil and Gas Journal':

"Central Asia today represents one of the world's last great frontiers for geological survey and analysis, offering opportunities for investment in the discovery, production, transportation, and refining of enormous quantities of oil and gas resources.
Central Asia is rich in hydrocarbons, with gas being the predominant energy fuel. Turkmenistan and Uzbekistan, especially, are noted for gas resources, while Kazakhstan is the primary oil producer."

Significantly the report goes onto to note that:

"the only existing viable export routes from the area lead into and out of Russia. These nations will not be free from Russia's economic stranglehold until their lucrative energy resources can be developed and transported to Europe --- while avoiding Russian territory&emdash;and, ultimately, to Asia, the world's fastest growing region.".
The Oil and Gas Journal September 10th 2001

There are three directions in which this gas and oil can be exported, west to the currently saturated European market, where there is too much competition, east to China and Japan, but exporting via pipeline that way would seem cost-prohibitive or south to India., which has according to another report in The Oil and Gas Journal a "huge market" "of more than 100 billion cum.". (The Oil and Gas Journal May 28, 2001)
Pipelines

A number of these pipeline export routes are being developed.
In 1997 the BBC reported that:

"The Presidents of Iran and the Central Asian republic of Turkmenistan have opened a gas pipeline between their two countries -- the first out of the Caspian region not to go through Russian territory. The pipeline links the Korpedzhe gas field in south-western Turkmenistan to the village of Kord-Kuy in northern Iran."
(BBC Online News Monday, December 29, 1997)

Then there is the eastward route, The Oil and Gas Journal reports "cost estimates for the pipeline are astounding -- $11.8 &endash; 22.6 billion (depending on the route) &endash; Mitsubisbi Corp., China National Petroleum Corp. (CNPC), and other interests continue to plan and design what would be one of the largest infrastructure projects in the world."
(The Oil and Gas Journal September 10th 2001)
The Guardian reported in March 2001 on another plan:

"backed by Washington and American oil companies, including Chevron, is for a pipeline taking Turkmenistan and Kazakh oil to Baku, the Azerbaijani capital, through Tbilisi, the Georgian capital, and through eastern Turkey to the Mediterranean port of Ceyhan."

As well as yet another:

"There is also a plan, backed by the US, for a pipeline running from the Bulgarian Black sea port of Burgas through Macedonia to the Albanian Adriatic port of Vlore. The idea is for Caspian oil to be shipped to Burgas by tanker from the Black sea ports of Novorossiysk in Russia and Supsa in Georgia.
A feasibility study for this ambitious project - due to be operational by 2005 - is being undertaken by Ambo, a company registered in the US, with, say the Bulgarians, the support of Texaco, Chevron, Exxon Mobil, BP Amoco, Agip and TotalElfFina."
(The Guardian March 5, 2001)

You might note that this particular pipeline will seemingly be going through and certainly near to areas where in 1999 NATO fought a war, and where they currently have troops stationed (they have them in Macedonia, Kosovo and Albania).
Those would be routes to feed the European market, a more attractive prospect would be a route to feed the South Asian market.
South of the former "Soviet" republic of Central Asia we find two states &endash; Iran, and Afghanistan.
In the mid-90ies the CentGas consortium began to plan a natural gas pipeline through Afghanistan. The participants included Unocal, a Californian based energy corporation with a 54.11% share in the project.
"Turkmenistan's government holds 7%. Other CentGas participants include Saudi Arabia's Delta Oil 15%, Japan's Itochu Corp. and Inpex 7.22% each, South Korea's Hyundai Engineering & Construction Co. 5.54%, and Pakistan's Crescent Group 3.89%." (The Oil and Gas Journal June 21, 1999)
Unocal also had plans for "a 1,000-mile, 1-million barrel-per-day (bbl/d) capacity oil pipeline that would link Chardzou, Turkmenistan to Pakistan's Arabian Sea Coast via Afghanistan. Since the Chardzou refinery is already linked to Russia's Western Siberian oil fields, this line could provide a possible alternative export route for regional oil production from the Caspian Sea. The $2.5-billion pipeline is known as the Central Asian Oil Pipeline Project."
(United States Government website: http://www.eia.doe.gov/emeu/cabs/afghan2.html)
John J. Maresca, Vice President of International Relations for the Unocal corporation testified to a house sub-committee (i.e. section of the U.S. government) in February 1998 on the advantages of the Afghan pipeline route.

"The key question is how the energy resources of Central Asia can be made available to satisfy the energy needs of nearby Asian markets. There are two possible solutions -- with several variations.
Export Routes
East to China: Prohibitively Long?
One option is to go east across China. But this would mean constructing a pipeline of more than 3,000 kilometers to central China -- as well as a 2,000-kilometer connection to reach the main population centers along the coast.
Even with these formidable challenges, China National Petroleum Corporation is considering building a pipeline east from Kazakhstan to Chinese markets.
Unocal had a team in Beijing just last week for consultations with the Chinese.
Given China's long-range outlook and its ability to concentrate resources to meet its own needs, China is almost certain to build such a line. The question is what will the costs of transporting oil through this pipeline be and what netback will the producers receive.
South to the Indian Ocean:
A Shorter Distance to Growing Markets
A second option is to build a pipeline south from Central Asia to the Indian Ocean.
One obvious potential route south would be across Iran. However, this option is foreclosed for American companies because of U.S. sanctions legislation.
The only other possible route option is across Afghanistan, which has its own unique challenges.
The country has been involved in bitter warfare for almost two decades. The territory across which the pipeline would extend is controlled by the Taliban, an Islamic movement that is not recognized as a government by most other nations.
From the outset, we have made it clear that construction of our proposed pipeline cannot begin until a recognized government is in place that has the confidence of governments, lenders and our company.
In spite of this, a route through Afghanistan appears to be the best option with the fewest technical obstacles. It is the shortest route to the sea and has relatively favorable terrain for a pipeline.
The route through Afghanistan is the one that would bring Central Asian oil closest to Asian markets and thus would be the cheapest in terms of transporting the oil."
"A recent study for the World Bank states that the proposed pipeline from Central Asia across Afghanistan and Pakistan to the Arabian Sea would provide more favorable netbacks to oil producers through access to higher value markets than those currently being accessed through the traditional Baltic and Black Sea export routes.
This is evidenced by the netback values producers will receive as determined by the World Bank study. For West Siberian crude, the netback value will increase by nearly $2.00 per barrel by going south to Asia. For a producer in western Kazakhstan, the netback value will increase by more than $1 per barrel by going south to Asia as compared to west to the Mediterranean via the Black Sea."
(http://www.house.gov/international_r...wsap212982.htm)

Unocal later withdrew from these pipeline projects giving their reason as instability in Afghanistan. Nonetheless everything John J. Maresca says still applies.
To avoid Russian or Chinese control you must go south or east.
The most attractive market is not Europe but South Asia.
Iran is a political impossibility &endash; subject to U.S. trade sanctions and the target, along with Iraq, of the American government's dual containment policy in the Middle East.
Which leaves Afghanistan.
The pronouncements of Western governments on the Afghan situation are full of references to re-construction and stable government. I don't think their lying and the first thing being re-constructed, or rather constructed, will be the pipelines. If they get that far.

http://flag.blackened.net/revolt/fre...ofitOCT01.html

Afghanistan in Chinese Strategy Toward South and Central Asia


Publication: China Brief Volume: 8 Issue: 10

May 13, 2008 06:05 PM Age: 4 yrs
By: Tariq Mahmud Ashraf


The resurgence of great powers' interests in Central Asia in recent years is reminiscent of the “Great Game” that ensued in the region in the 19th century between Czarist Russia and Imperial Great Britain. Afghanistan’s geographic location has made it a much coveted strategic pivot in the current Great Game. Notwithstanding the similarities between the two periods, some stark differences stand out prominently: one, there are now significantly more stakeholders in Afghanistan’s security (United States, Russia, Europe, Japan, India and China); two, while the first Great Game was precipitated primarily by Russia’s quest for access to the warm waters and the creation of a buffer between British India and Czarist Russia, the stakes now include oil, hydropower sources, strategic metals, pipelines, transit routes and access to markets. These significantly higher stakes have led to Central Asia assuming military, geo-political, geo-economic and geo-strategic significance for two major blocs—one led by the United States (NATO) and the other by China (Shanghai Cooperation Organization)—vying for influence in the region with seemingly dissimilar interests. “China needs them, Russia wants to control their distribution, and Western powers want to ensure they are not monopolized by Moscow or Beijing” (USA Today, December 15, 2007).

Afghanistan’s strategic location between Central and South Asia is of immense geo-strategic significance for the landlocked countries of Central Asia and its prosperity is inextricably linked to the security situation in Central and South Asia. Immense energy resources and strategic location on China’s western frontier have led to Central Asia being referred to as China’s Dingwei (Lebensraum) [1].

China’s Interests in Afghanistan

The present regional order prevailing in Afghanistan and Central Asia is similar in some ways to what transpired in Europe after the end of the Second World War. The United States and Western European powers, under the NATO umbrella, desire strengthening their presence in the region to counter the growing power and regional influence of both China and Russia while China, like the erstwhile Soviet Union, is aspiring to extend its security perimeter westward by developing close links with the countries in the region and ensuring unhindered access to the energy resources therein.

Some Indian analysts are convinced that China is engaged in a “creeping encirclement” of their country [2]. They see Pakistan, Afghanistan and Iran forming the right or western pincer of this move, Bangladesh and Burma (also known as Myanmar) making up the left or eastern pincer with Sri Lanka acting as the southern anchor and completing the encirclement (refer to Figure-1 in PDF). India’s recent overtures toward Afghanistan, Iran and Central Asia and the development of close ties with these countries appear to be aimed at weakening China’s right pincer and denying Pakistan a secure western frontier (The Hindu, November 7, 2001). Afghanistan figures prominently, therefore, in Chinese and Indian foreign policies. In fact, the decision to establish the first ever Indian military outpost on foreign soil at the Farkhor Air Base in Tajikistan, just 2 kilometers from the Tajik–Afghan border, could well be perceived as an attempt to reduce the impact of the Chinese encirclement (Indian Express, February 25, 2007). According to a Chinese military journal, India’s forays into Afghanistan and the Central Asian arena are “designed to achieve four objectives: contain Pakistan; enhance energy security; combat terrorism; and pin down China’s development” [3]. As in the past, Afghanistan has once again emerged as the “strategic knot” for the region’s security.

Afghanistan’s significance for China is also due to the latter’s imperative of ensuring Pakistan’s security. Pakistan, which is China’s foremost ally in South Asia and has been instrumental in China’s emergence on the global scene, has been constrained by its lack of geographic depth. Often referred to as Pakistan’s lack of strategic depth, this has been touted as a major weakness in Pakistan’s military confrontation with India. Pakistan’s military considers that a friendly Afghanistan bestows additional strategic depth to the country—this was one of the factors that led to Pakistan supporting the emergence of a “friendly” Taliban regime in Kabul. An adversarial regime in Afghanistan is perceived to be denuding Pakistan of this strategic depth’ and could also impinge on Pakistan’s security by making it contend with two simultaneous threats. Since ensuring Pakistan’s security is an imperative for China, it would view any Indian ingress into the country with wariness, concern and caution.

China, like Czarist Russia, yearns for access to the Indian Ocean and the plan to build a major port in Gwadar on Pakistan’s Mekran Coast is a step in this direction (China Brief, February 28, 2005). This port would enable China to project its military presence in proximity of the strategic global petroleum shipping routes as well as the oil-rich Middle East. The economic feasibility of Gwadar as a shipping hub would be significantly enhanced were it to be linked to Central Asia and China by road and rail links. Once again, since all such transportation links between Gwadar and Central Asia have to traverse through Afghanistan, the focal importance of the latter cannot be understated. According to the U.S. Energy Information Administration (EIA), “Afghanistan’s strategic location could make the country an important pipeline transit route” [4].

The vast expanse of the Chinese province of Xinjiang, which is inhabited by the Uyghur Muslim minority, poses a security predicament for China. Since the Uyghurs have strong religious and ethnic traditional links with the natives of Afghanistan and the neighboring Central Asian Republics (CARs), China is very keen that the militant Islamic ideology of extremist elements such as the Taliban be prevented from spilling over into Xinjiang (China Brief, April 14). Additionally, the presence of sizeable Western military forces in Afghanistan is also a source of major concern for China [5]. China was a major actor in the Afghan civil war and a key supplier of small arms to the insurgents in the combined U.S.-Pakistan effort to force a Soviet withdrawal from the country. “Current Chinese interest in Afghanistan, given its continuing civil war and virtual statelessness, is low and relations are weak” [6]. This interest, however, would certainly grow once the situation stabilizes since China’s security imperatives directly translate into its interest in a stable and moderate Afghanistan that is also free of Western military presence. In line with its earlier practices, China is exhibiting a policy of patience toward Afghanistan and simultaneously making imperceptible inroads into the country through growing economic relations and investment. These overtures would place China in an influential position in Afghanistan once the Western militaries eventually withdraw from the country. In an indicator of China’s growing involvement in Afghanistan, Pakistani President Pervez Musharraf, during his visit last month to China, indicated a desire for China, Russia and the SCO to play a more positive role in bringing stability to Afghanistan, but without getting into a conflict with the United States and NATO (AFP, April 14).

China’s booming demand for energy and mineral resources, plus its growing dependence on imported petroleum, has made Beijing increasingly concerned with ensuring supplies of reserves and the uninterrupted flow of oil at reasonable prices [7]. The resource-rich CARs, having estimated oil and gas reserves of 23 billion tons of oil and 3,000 billion cubic meters of gas respectively [8], have great geo-economic significance for China as a source of fossil fuel. While Afghanistan has no proven fuel deposits, it nevertheless offers the easiest transportation route for the exploitation of the energy resources of the CARs and is predicted to have substantial non-fuel mineral resources essential for China’s industrialization [9]. This geo-economic significance of Afghanistan for China should not be understated considering the latter’s serious interest in the Caspian Sea hydrocarbon resources and the growing Sino-Afghan trade which reached $317 million in 2005-06. China has also evinced an interest in a pipeline to the Arabian Sea, with a view to importing gas and oil by supertankers from Gwadar, but it should be noted that the Gwadar port project is still severely debilitated by the absence of links to access the hinterland from the port [10]. As another option, China is considering transporting its energy shipments from Central Asia and the Middle East via tanker to Gwadar and then by pipe or truck to western China through the Karakoram Highway (KKH) [11].

Pakistan as a Trade and Energy Corridor for China
The second option falls in line with what the Pakistani leadership has been harping upon for the past few years—their vision of exploiting Pakistan’s geography as a Trade and Energy Corridor (TEC) for China and other neighboring countries including India. Just last month, President Musharraf told a student audience at Beijing’s Tsinghua University, “Pakistan is very much in favor of a pipeline between the Gulf and China through Pakistan and I have been speaking with your leadership about this. I am very sure in the future—it will happen” (The Associated Press, April 14).
President Musharraf further elaborated that he envisioned improved road linkages between the two countries as well as a rail link, a fiber optic communications link and energy pipelines. He also suggested the possibility of extending the proposed Iran-Pakistan-India (IPI) gas pipeline to China (Daily Dawn, April 15). Interestingly, on the same date that President Musharraf made this speech, the Indian government announced the visit of its petroleum minister to Islamabad to negotiate the possible extension of the proposed Turkmenistan-Afghanistan-Pakistan (TAP) gas pipeline to India and renaming it as the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline (Rediff.com, April 14).

Although senior Pakistani leaders have repeatedly alluded to the proposal for the construction of an oil and gas pipeline connecting Pakistan and China, there has been no official response or statement yet on this suggestion from the Chinese leadership. Despite the evident potential of the TEC that Pakistan has to offer to China, the latter has, at the declaratory level, shown only marginal interest in the idea till very recently when China has started evincing a strong interest (Steelguru.com, May 5).
Notwithstanding China’s reticent and non-committal position on this specific proposal, it is continuing support and participation in the major infrastructure projects in Pakistan that could be construed to be components of the TEC. China’s commitment to the construction of Phase II of Gwadar port, the new international airport at Gwadar, the upgrading of the KKH and interest in investing in an oil refinery and storage facilities are examples that substantiate the Chinese interest [12]. This involvement of China in major infrastructure development in Pakistan leads to the assumption that while there is no categorical commitment on the TEC by China, it can be said with some confidence that it will support Pakistan’s initiative, while maintaining a low profile, because of political and strategic considerations. For ease of analysis, the proposed TEC could be split into two distinct sectors for development: a Trade Corridor and an Energy Corridor.

The Trade Corridor’s starting point is the existing Karakoram Highway. A decision to upgrade the 335 kilometer KKH was taken during President Musharraf’s visit to China in February 2006. The envisaged upgrade would widen the KKH from 10 to 30 meters, make it suitable for long vehicles and allow it to remain functional the entire year (The Hindu, July 11, 2006). In parallel with the KKH upgrade, China is also involved in the construction of a new rail line linking Gwadar to the main Iran-Pakistan rail line and is working with Pakistan to expedite customs over the Sino-Pakistani highway with a view to creating a stronger regional trade system. On the Chinese side, a new extension of the Xinjiang railway up to Kashgar (about 500 kilometers via the KKH from the Sino-Pakistani border) has been completed while Pakistan has reciprocated by building a dry port at Sust on the KKH, which was inaugurated by President Musharraf on July 4, 2006 [13]. In another related development, Iran has offered Pakistan land access through its territory to Central Asia and Afghanistan for trade in return for similar access to China through the KKH [14].

A railway line along the KKH is also being considered as an integral part of the TEC Project. This would be used not only for trade purposes but also to transport energy, in case a pipeline is not a viable option. This rail track will be linked to Gwadar, where oil-refining and storage facilities are planned to be constructed by the Chinese. Pakistan has shortlisted a Chinese and a European firm to conduct the feasibility study for this 1,000 kilometer rail-track. In Pakistan, the 750 kilometer track starts from Havelian and passes through the Karakoram mountains up to the Pak–China border at Khunjerab with the second part, consisting of a 250 kilometer track being constructed inside the Chinese province of Xinjiang (The Nation, November 16, 2006). Experts estimate that this project could take 10 years to complete and cost around $5 billion [15].

While the envisaged Trade Corridor comprising of road and rail links could also be utilized for the transportation of oil and gas, a more efficient means of transporting these commodities would be through pipelines. These would make up the Energy Corridor component of the TEC. In an address in Islamabad on May 23, 2006, former Pakistani Prime Minister Shaukat Aziz said, “Pakistan and China are considering a feasibility study for an oil pipeline from Gwadar port to western China to transport China’s oil imports from the Gulf. An oil pipeline from Gwadar to western China would greatly reduce the time and distance for oil transport from the Gulf to China. A major oil refinery at Gwadar would further facilitate China’s oil imports” (Daily Times, May 24, 2006).
The Pakistani government presented a blueprint of the 3,300 kilometer Karakoram oil pipeline during the first meeting of the Sino-Pak Energy Forum held at Islamabad from April 25-27, 2006. This proposal entails the construction of a 30-inch diameter pipeline from Gwadar till the Khunjerab Pass capable of handling 12 million tons of oil per year with an estimated construction cost of between $4.5 and 5 billion [16].

China has also recently shown interest in reviving the dormant UNOCAL pipeline project to pump natural gas from Turkmenistan to India through Afghanistan and Pakistan. This could also then be extended to China just like the Iran-Pakistan-India (IPI) gas pipeline. Additionally, China’s Ex-Im Bank is financing an oil pipeline from Port Qasim in Pakistan’s south to the country’s north. This pipeline would cater for 75 percent of Pakistan’s future oil needs and it has been under construction by China’s Petroleum Engineering and Construction Company since June 2006 [17].

Conclusion

China’s strategic interests in Afghanistan are multi-dimensional, but in its view any substantial advancement in Sino-Afghan ties is contingent upon stability returning to this war-ravaged country and foreign forces withdrawing from its soil. Energy-hungry China is also keen on capitalizing on the convenience that Afghanistan and Pakistan offer for the exploitation of energy resources of Central Asia and the Middle East, and is working in this direction. As regards the utilization of Pakistan as a TEC, it appears that while the Trade Corridor could be expected to be established in the near future, the activation of an Energy Corridor would take an appreciable amount of time and could only be considered a long-term possibility because of the enormous costs involved. For China, therefore, the stability of Afghanistan emerges as a priority while the prospects of Pakistan becoming a trade corridor are more promising than it becoming an energy corridor in the short and medium terms. Since the chances of China using Pakistan as an energy corridor are remote in the short term, it can be concluded that Pakistan should place equal if not greater importance on providing TEC facilities to its South Asian, Central Asian, and West Asian neighbors, who are eager to tap Pakistan’s TEC potential.

Notes

1. Tarique Niazi, “The Ecology of Strategic Interests: China’s Quest for Energy Security from the Indian Ocean and the South China Sea to the Caspian Sea Basin,” China and Eurasia Forum Quarterly, Volume 4, No. 4 (2006) p. 97-116. http://www.silkroadstudies.org/new/d...2006/Niazi.pdf
2. John W. Garver, “China’s South Asian Interests and Policies,” Sam Nunn School of International Affairs, Georgia Institute of Technology, Prepared for panel on “China's Approaches to South Asia and the Former Soviet States.” U.S.-China Economic and Security Review Commission, 22 July 2005. www.uscc.gov/hearings/2005hearings/written_testimonies/05_07_21_22wrts/garver_john_wrts.pdf
3. Srikanth Kondapalli, “The Chinese Military Eyes South Asia,” chapter in Andrew Scobell and Larry M. Wortzel, Eds. “Shaping China’s security environment: The role of the People’s Liberation Army,” US Army Strategic Studies Institute, October 2006. The author has cited this information from the editorial titled “India Participates in Central Asia” which appeared in Bingqi Zhishi, Issue 197, No. 3, 2004, p. 6.
4. www.eia.doe.gov/emeu/cabs/Afghanistan/EnergyTransit.html
5. “America’s War on Terrorism and Chinese Strategy,” Published in China Brief, Volume 2, Issue 5, February 28, 2002 by the Jamestown Foundation.
6. Sujit Dutta, “China’s Emerging Power and Military Role: Implications for South Asia,” Chapter in “In China’s Shadow: Regional Perspectives on Chinese Foreign Policy and Military Development,” Edited by: Jonathan D. Pollack and Richard H. Yang.
7. John W. Garver, op cit.
8. Asma Shakir Khawaja, “Pakistan and the ‘New Great Game’,” Islamabad Policy Research Institute Paper No. 5, Published by Asia Printers, Islamabad, April 2003.
9. Significant Potential for Undiscovered Resources in Afghanistan. United States Geological Survey Report, www.usgs.gov/newsroom/article.asp)
10. Tarique Niazi, op cit.
11. Fazal-ur-Rahman, “Prospects of Pakistan becoming a Trade and Energy corridor for China,” www.issi.org.pk/journal/2007_files/no_2/article/a3.htm
12. John W. Garver, op cit.
13. Fazal-ur-Rehman, op cit.
14. Naqi Akbar, “Railways shortlist two companies for China rail link study,” The Nation, 16 November, 2006.
15. Fazal-ur-Rehman, op cit.
16. Ibid.
17. Stephen Blank, “China’s recent energy gains in Central Asia: What do they portend?” CACI Analyst, October 31, 2007. www.cacianalyst.org

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