Posted on 05/25/2005 6:51:53 AM PDT by Destro
from the May 25, 2005 edition
Pipeline politics give Turkey an edge
A pipeline that brings Caspian oil to Turkey's coast opens Wednesday.
By Yigal Schleifer | Correspondent of The Christian Science Monitor
ISTANBUL – Turkey's heartland of Anatolia - the massive plateau that serves as a land bridge between Asia and Europe - is dotted with the remains of 13th-century inns, reminders of the merchant caravans that traveled the fabled east-west Silk Road.
Some 800 years later, Turkey is again trying to take advantage of its strategic location. Today, instead of caravansaries it is building pipelines, and instead of silk and spices the products are less romantic: oil and natural gas.
A major part of this plan becomes a reality Wednesday, when the new Baku-Tbilisi-Ceyhan (BTC) pipeline, a $4 billion, 1,093-mile project that brings Caspian Sea oil to Turkey's Mediterranean coast will be inaugurated. It should be fully operational by the end of 2005.
The pipeline - built by a consortium of 11 companies, including British Petroleum, the American firm Unocal, and Turkey's national oil corporation - is designed to bring a non-Middle Eastern source of oil to the West. This would loosen Russia's and Iran's grip on the transport of Caspian and Central Asian oil by creating a new route that is friendlier to the United States and Europe.
For Turkey, which has few energy supplies of its own, the pipeline is the initial step in its effort to become a major energy player, not as a producer but as a transit point. In an era when countries are increasingly looking to diversify their energy sources, Turkey hopes to establish itself as a kind of energy supermarket, betting that controlling oil routes will turn out to be as strategically valuable as producing the stuff.
"Geographically, Turkey is endowed with advantages, so we would like to use those advantages to give Turkey a role as a supplier of energy resources," says a senior Turkish foreign ministry official involved in energy issues. "It gives Turkey relevance."
The Department of Energy estimates that by 2025, 68 percent of oil consumed by the US will have to be imported, up from 58 percent today. A similar trend is expected in Europe.
"That means that the West will be more dependent on energy transportation corridors," says the Turkish official. "Our American friends are very keen on guaranteeing the flow and enhancing energy supply security."
But growing political dissent across the Caucasus and central Asia - encouraged by President Bush in his visit to Georgia this month - is complicating matters ahead of Wednesday's event.
On Saturday, Azerbaijani police beat protesters, some reportedly holding portraits of Mr. Bush, who rallied in Baku, shouting "Freedom!" and "Free elections!" Washington wants greater democracy across the region, but it also wants stability, and it counts Azerbaijan, a mostly Muslim country of 8 million, as an ally in the war on terror.
Turkish planners envision a country crisscrossed by pipelines, carrying oil, gas, and natural gas. Turkish officials say they plan to spend some $80 billion over the next two decades to develop the country's energy infrastructure.
The BTC is initially expected to carry close to 1 million barrels of oil per day, most of it ending up in the Turkish port of Ceyhan, where it will be loaded onto tankers. By most measures, it's a drop in the oil bucket - Saudi Arabia alone pumps 7 million barrels per day - but Brenda Shaffer, research director of the Caspian Studies Program at Harvard University in Cambridge, Mass., says in today's energy markets, even a small amount can have a big impact on prices.
"On a world level, every development of oil that's outside of OPEC changes the dynamic of the market in a number of ways," says Ms. Shaffer. "The more sources that are outside of OPEC, the less it can control world oil prices.
The pipeline has had a wider regional impact even before the oil has begun to flow, Shaffer says. "A lot of the positive benefits have already started happening," she says. "The money that has arrived in the region is allowing for economic growth in Azerbaijan and Georgia, and is helping with stability. The security relationships [between the three BTC countries] have become more crystallized because of the cooperation."
Construction of the BTC was accompanied by vocal security and environmental concerns. The pipeline is built underground to deter terrorist attacks and minimize the possibility of rupture, but it still snakes through areas prone to earthquakes and political unrest.
Critics also question whether the BTC and Turkey's other pipeline dreams will yield the dividends it hopes for.
Bulent Aliriza, a researcher at the Center for Strategic and International Studies in Washington points out that a much larger pipeline runs from Iraq to Turkey, but it gave Ankara little influence over Saddam Hussein during the time he was in power.
"There are limits to the political leverage that a pipeline gives," he says.
What may ultimately make the difference in Turkey's long-range energy plan are the changing needs of the European Union (EU), which it hopes to join. An EU paper on energy policy issued in 2000 designated Turkey as an "energy corridor" that should be developed.
"It was originally a US strategic thing, to get around Iran and Russia," says Gareth Winrow, an energy and foreign policy expert at Istanbul Bilgi University. "Now there is the EU wanting to diversify its resources and build new pipelines.
"These things are coming together - US interests, EU interests, and Turkish interests, and it's something Turkish officials know they can play on."
• Material from the Associated Press was used in this report.
Want to get conspiracy minded? Some thing the price of crude has been kept artificially high even with peak oil productions by "Western interests" that for political reasons want to make this BTC pipeline econmically viable.
It seems that Chechenya region is now with less value for Russia as the BTC pipeline opens southward taking away the market from Russia, and maybe with a cheaper price.
It would be fun if there would also be a Bosporus bypass pipeline that would flow oil from the Black Sea through Bulgaria-Montenegro-Albania allowing oil to be exported from the Ionian Sea at the port of Albania. that would avoid tankers to pass through Bosporus strait under control of Islamist Turkey.
As I know the Turks don’t want these tankers at all. They don’t have any profits because of that and there is a risk of the ecological catastrophe.
It's not about the oil pipeline, it's about the fact Chechnya is 1. an integral portion of Russia and 2. it had independence and turned instantly into a cess pool for Islamic radicals, the same ones killing Americans in Afghanistan and Iraq. If Chechnya was independent, Al Quida would have its training bases back and how many more of our boys would die in Iraq?
Russia just signed a Bulgarian-Greek pipeline deal.
Isn't most of Russia's oil not anywhere near the Caspian Sea?
Kazakhstan has enormous oil reserves (said to equal or surpass Saudi Arabia's), the major oil companies have been operating there for a decade.
The problem is not getting the oil out of the ground - it is getting it out of Kazakhstan. This is a first step.
Some of these people are not too bright. If you try to use a pipeline for political leverage, you just guarantee that people will look for ways to get around you, and you will ultimately pay a price for it.
The purpose of a pipeline is to transmit energy. The byproduct for Turkey is that it generates income, employment, development in remote areas of the country.
The advantage to the rest of us is simple. Energy independence does not rest on obtaining all of your energy from within your own country, although that would be nice, it is achievable by having multiple sources. Every new source is a step in the right direction.
You are correct but look at the map of the route. It was picked for political purposes - avoidance of Armenia for one. This was done under the supervision of the Clinton admin.
>>Kazakhstan has enormous oil reserves (said to equal or
>>surpass Saudi Arabia's)
That's interesting- can you provide a link for that. The information that I have
http://www.eia.doe.gov/emeu/cabs/kazak.html#oil
indicates reserves between 9 and 17.6 billion barrels, far short of Saudi Arabia's reserves of 261.9 billion barrels.
http://www.eia.doe.gov/emeu/cabs/saudi.html#oil
I'm not surprised the pipeline bypasses Armenia, since it starts in Azerbaijan. It would have only added more political complexity, and unnecessarily so.
At the time the pipeline was proposed, there were several wars on-going, the Azeris versus the Armenians being one of several.
I noticed that there has never been a peace treaty between them, but the war stopped overnight when the oilmen arrived and told Baku that they would not invest while they were at war. Its a good lesson, wars don't stop because of the skill of negotiators, they stop when the folks driving the war want to stop fighting.
Turkey had to end the war with the Kurds in order to make it possible, and they have done that.
I envy the guys on this project, I would love to be sitting at the table during their morning meetings. Your construction super is dealing with multiple governments, military and police issues, a thousand local municipalities (all of them with a hand out). There are bandit gangs sniffing around the edges, and a work force from a dozen countries. This project is one for the books.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.