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To: Black Jade
Merry Christmass Black Jade!!!

I think you are making two mistakes here. First you are taking Pena's comments out of context and secondly you are being too trusting of the honesty of a Clinton administration official.
Pipelines compete with each other when they are both delivering the same product from the same source to the same market. They complement each other only if they are serving different sources or different markets. The Baku to Ceyhan pipeline is in direct competition with the Baku to Novorosiisk pipeline and both Turkey and Russia are aware of this. The Baku to Novorosiisk pipeline is more cost effective because the Black Sea is closer to Azerbaijan than the Mediteranean Sea. However Turkey controls the choke point for all ships leaving the Black Sea at the Bosporus. Turkey cannot deny passage to tankers completely because of the Montreux Convention of 1936 but they can increase transit fees and regulate the size of the ships. The Russians have considered bypassing this choke point by building pipelines in Bulgaria or Romania. The Clinton Administration had been openly supportive of the Baku to Ceyhan route. Pena had just attended an economic meeting where undoubtedly the Russians indicated their displeasure with this. For the sake of diplomacy and maintaining good relations with Russia, secretary Pena had to make a statement giving an impression of neutrality. He was lying.

The Cato Institute did a paper explaining why this sort of involvement in pipeline competition is dangerous foreign policy. The Centgas/CAOPP pipeline is in direct competition with Iran. Unlike the case of Russia where we have to at least try to seem friendly, Iran already has a sanctions regime in place against it. There had been some speculation that when ILSA expired in August the U.S. would resume trade since Iran had just elected a pro-western President, Khatami, and Libya had allowed a trial of at least some of the terrorists responsible for Pan Am 103 to take place. Unfortunately for Iran, President Bush signed the ILSA extension act on August 3, 2001 which provides for a 5 year extension of ILSA. This act not only prevents the U.S. from doing buisness with Iran but also provides for third party sanctions on any foreign company that helps to develop Iran's oil and gas industry if they spend more than a certain amount. That threshold was originally 40 million dollars but Clinton lowered it to 20 million dollars.

Unless you are in the trade of selling guns and ammo, peace and stability are better for buisness than war and chaos. Since Unocal wanted to build a pipeline across Afghanistan it would not make sense for them to foment conflict there. Multinational corporations will almost always accomodate the existing regime if they are serious about doing buisness somewhere.

131 posted on 12/25/2001 1:38:03 AM PST by ganesha
[ Post Reply | Private Reply | To 130 | View Replies ]

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