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6). Afghanistan, Turkmenistan Oil and Gas, and the Projected Pipeline(10/21/01; updated 5/16/02)

UPDATE, 5/13/02: Karzai to hold talks with neighbors on proposed gas pipeline.

On May 13, the BBC announced that: `Afghanistan hopes to strike a deal later this month to build a $2bn pipeline through the country to take gas from energy-rich Turkmenistan to Pakistan and India. Afghan interim ruler Hamid Karzai is to hold talks with his Pakistani and Turkmenistan counterparts later this month on Afghanistan's biggest foreign investment project, said Mohammad Alim Razim, minister for Mines and Industries told Reuters.'

`Mr Razim said US energy company Unocal was the "lead company" among those that would build the pipeline, which would bring 30bn cubic meters of Turkmen gas to market annually. Unocal - which led a consortium of companies from Saudi Arabia, Pakistan, Turkmenistan, Japan and South Korea - has maintained the project is both economically and technically feasible once Afghan stability was secured. "Unocal is not involved in any projects (including pipelines) in Afghanistan, nor do we have any plans to become involved, nor are we discussing any such projects," a spokesman told BBC News Online.'

This announcement comes at a time when the US, according to Stratfor on 5/15/02, is debating whether or not to help quell the dispute between the Karzai central government and the dissenting warlord Padsha Khan in Paktia Province. Obviously the prospects for the viability of a pipeline are intimately linked to the prospects for peace and security in Afghanistan, which are poor unless the US becomes more engaged.

As Ahmed Rashid quotes in Taliban (169), "peace can bring a piepline, but a pipeline cannot bring peace."

For a somewhat expanded version of this update go to FLASH 33.

Click here for more info about the book I have finished for Rowman and Littlefield, entitled DRUGS, OIL, AND WAR: THE DEEP POLITICS OF U.S. INTERVENTIONS IN VIETNAM, COLOMBIA, AND AFGHANISTAN.

FLASH: US-Russian Tensions over Central Asian Oil(12/01/01)

Eric Margolis argues in the Los Angeles Times on 11/28/01 that "The Russians have regained influence over Afghanistan, avenged their defeat by the U.S. in the 1980s war and neatly checkmated the Bush administration, which, for all its high-tech military power, understands little about Afghanistan.

"The U.S. ouster of the Taliban regime also means Pakistan has lost its former influence over Afghanistan and is now cut off from Central Asia's resources. So long as the alliance holds power, the U.S. is equally denied access to the much-coveted Caspian Basin. Russia has regained control of the best potential pipeline routes. The new Silk Road is destined to become a Russian energy superhighway."

Since Margolis' warning last November, the power balance has shifted back in the US direction. The US now has troops positioned in Georgia, Uzbekistan, Tajikistan, and Kyrgyzstan, effectively balancing the presence of Russian troops and pipelines in Central Asia. It would appear that, so far, cooler heads in both Moscow and Washington have moved to avoid a head-on conflict in either Afghanistan or the Caspian basin.

* * * * *

Afghanistan has only limited oil or gas reserves. But it straddles the most direct route for exporting oil and natural gas out of Turkmenistan, where the gas reserves alone are estimated at over 100 trillion cubic feet, or the fourth largest proven natural gas reserves in the world.

Undoubtedly US strategic planning has to consider the importance of oil and gas in the region of the Caspian and Central Asia. As Frank Viviano pointed out on 9/26/01 in the San Francisco Chronicle

"The combined total of proven and estimated reserves in the region stands at more than 800 billion barrels of crude petroleum and its equivalent in natural gas. By contrast, the combined total of oil reserves in the Americas and Europe is less than 160 billion barrels, most of which, energy experts say, will have been exhausted in the next 25 years."

US interest in the oil and gas reserves of Central Asia is both economic and strategic. Part of the "Great Game" played for a century in the area between Britain and Russia was not just to gain control of these huge resources for oneself, but also to deny them to others. America's world dominance is based in large part on its hegemonic influence over the world oil economy. As noted below, an NSC official told Congress in 1997 that US policy in Central Asia was "to in essence break Russia's monopoly control over the transportation of oil [and gas] from that region, and frankly, to promote Western energy security through diversification of supply" (quoted in Rashid, Taliban, 174).

The 1990 Gulf War with Iraq was motivated in part by Saddam Hussein's moves to challenge that influence. The US can be counted on to resist challenges to the status quo, in which oil sales the world over are denominated in US dollars (thus creating a demand for our currency which helps compensate for our recurring trade deficits). U.S. involvement in Southeast Asia in the 1960s, and again in Colombia in the last decade, also have to be seen as part of a global strategy of dominating oil development.

Recent US moves in Afghanistan have had more immediate and pressing concerns, but oil has always been one of the things on Washington's mind. Powerful oil development interests in Texas have had their eyes on Central Asian oil reserves for over two decades, and this may have been a factor in the Reagan-Bush strategy (otherwise questionable from the point of view of world stability) of helping to break up the former Soviet Union.

The wake of that break-up has seen a frenzied oil boom in the Caspian and trans-Caspian republics -- the biggest such oil boom in forty years. American oil companies such as Chevron have played a dominant role in this development. The increased interest in the oil and gas has naturally led to increased planning on how to get the resources out.

For the West, two major alternatives have presented themselves: the so-called Western Pipeline (to the Black Sea or even across the Balkans), and the Eastern Pipeline, via either Iran (the easier route, geographically speaking) or Afghanistan.

The Taliban's rise to power in Afghanistan can be linked to the same "single, golden theme" which Michael Griffin (Reaping the Whirlwind, 115) has discerned in the conflicts in Nagorno-Karabakh, Abkhazia, Turkish Kurdistan and Chechnya: "each represented a distinct, tactical move, crucial at the time, in discerning which power would ultimately become master of the pipelines which, some time in this century, will transport the oil and gas from the Caspian basin to an energy-avid world."

Long-time observer William Beeman claimed in 1998 that the desire to build an Afghan pipeline before an Iranian one could be built motivated the US in the 1990s to back the Taliban against its domestic opponents, the Iran-backed Northern Alliance. As he wrote in an important article for Pacific News Service "From the U.S. standpoint, the way to deny Iran everything is for the anti-Iranian Taliban to win in Afghanistan and agree to the pipeline through their territory. The Pakistanis would also benefit from this arrangement -- which is why they are willing to defy the Iranians." And Iran at the the time was anathema to the US, not just because it supported Shi'ite terrorists, but because it supported Russian plans for continuing to dominate Central Asian oil.

But what was at stake was more than a choice of countries: it was also a choice of pipelines within Afghanistan. An Argentine company, Bridas, had been the first to secure local approval for a pipeline through Afghanistan: first in March 1995 from Turkmenistan President Niyazov and Pakistani Prime Minister Benazir Bhutto, and then in February 1996 with Burhanuddin Rabbani, still recognized as the Afghan President in Kabul. But then the US (and later the Taliban) stepped in to back an alternative pipeline project with the US company Unocal.

For a complete timeline on the competing Bridas and Unocal pipelines, go to Worldpress.org. The only weakness in this chronology is the failure to note that Unocal had an oil pipeline project as well as the much-discussed gas pipeline (see Rashid, 160).

The Bridas plan was nullified by the Taliban's capture of Kabul in September 1996, after a campaign clearly financed from overseas. (Pakistan's aid to the Taliban under Bhutto was mostly non-financial; as Michael Griffin has written, the funds -- estimated at the time to run to millions a month -- "had to have come from elsewhere;" Reaping the Whirlwind, 75, 76).

At the time Iran, acutely concerned for the future of its Shia allies in Afghanistan, charged that the money for the Taliban was coming from Saudi petrodollars and the CIA (Griffin, Reaping the Whirlwind, 78; Rashid, Taliban, 166). Unquestionably, after a visit by Prince Turki to Islamabad and Kandahar, the Saudis funded and equipped the Taliban march on Kabul (Rashid, 201). After the capture of Kabul, the London Guardian speculated about CIA support, noting that Republican Senator Hank Brown had invited two senior Taliban leaders to a Washington conference with members of Congress in May. But observers like Michael Griffin have found no evidence of CIA funding. The overt US policy aim at this time was for order and stability in Afghanistan, and in May 1996 Assistant Secretary of State Robin Raphel publicly doubted that the Taliban was cohesive enough to capture Kabul (Griffin, 82).

The respected French observer Olivier Roy has charged instead that "When the Taleban took power in Afghanistan (1996), it was largely orchestrated by the Pakistani secret service [ISI] and the oil company Unocal, with its Saudi ally Delta [a company with links to Saudi Crown Prince Abdullah, as we shall see]" (Olivier Roy, quoted in Richard Labeviere, Dollars for Terror, 280). Unocal executive John Maresca testified on 2/12/98 to the House Committee on International Relations on the benefits of a proposed Afghan oil pipeline to the Central Asian countries, to Afghanistan, and to Asian importers of crude such as Japan.

Rashid notes that Hank Brown, who visited Afghanistan in March, was a supporter of the Unocal project, and welcomed the fall of Kabul as a chance for stable government (Rashid, 45, 166). (Unocal had helped fund Brown's Washington conference which received the Taliban leaders; Rashid, 178; cf Washington Post, 7/1/96).

Others have noted that it would have been unlikely for Unocal to advance its own funds for the conquest; to have done so would have been to violate US law. No such restraints inhibited Unocal's Saudi partner in its consortium, Delta-Nimir. Nimir Petroleum certainly had the assets; it was dominated by the bin-Mahfouz family which owned the National Commercial Bank patronized by the Saudi royal family. Delta-Nimir was already a major investor with Unocal in the oilfields of Azerbaijan, and may have been a factor in the October 1995 decision of Turkmenistan to sign a new pipeline contract in competition with Bridas (Griffin, 124).

Michael Griffin has pointed to a fourth source of funding for the Taliban ("at least in the early days"), the Afghan and Pakistan traders and smugglers who were being extorted by competing bands of mujahedin on their transit routes. And he adds, "parallel backing might have been furnished by heroin cartels to seize control of its supply sources" (Griffin, 152). Without naming the Pakistani ISI, by then deeply implicated in the drug traffic, he comments that the possible deflection of the drug trade north "into the hands of the Russian `Mafia',...threatened the very existence of the Pakistani economy, according to CIA accounts."

Finally a fifth source of funds for the Taliban in this period has been cited: Osama bin Laden. Newsweek on 10/13/97 reported that Osama bin Laden "gave the Taliban $3 million to buy the defections which opened the road to Kabul in September 1996" (Michael Griffin, Reaping the Whirlwind, 134).

The sources of the Taliban's funding remain unclear. But it would seem that at this time the ISI support for the Taliban would or could have drawn approval from a remarkably diverse spectrum: Saudi authorities, both public and private, the CIA, Unocal, the drug-trafficking cartels, and bin Laden. (Labeviere claims that when bin Laden returned to Afghanistan in mid-1996, before the fall of Kabul, it was on a Pakistani Hercules C130 (Labeviere, 115). He first reached Jalalabad, at that time not under Taliban control, and was introduced to the Taliban by ISI; Barnett Rubin, Asia Source, 11/1/01).

It is such startling synergies at a deeper level that has led me to write of "The Deep Politics of Drugs and Oil".

It is clear that in the same six months of 1996 the US weighed in heavily on behalf of both Unocal and the Taliban. In March 1996 the US Ambassador to Pakistan gravely offended Benazir Bhutto by asking her "to switch support from Bridas to Unocal" (Rashid, 165). US Assistant Secretary of State Robin Raphel spoke in favor of the Unocal project in two visits to the Pakistan capital, in April and August 1996 (Rashid, 166). Raphel has since said that "We worked hard to make all the Afghan factions understand the potential, because the Unocal pipeline offered development opportunities that no aid program nor any Afghan government could" (Washington Post, 11/5/01).

Soon after the Taliban capture of Kabul in September 1996, a Unocal executive, Chris Taggart, told wire agencies that the pipeline project would be easier to complete now that the Taliban had captured Kabul (Rashid, 166). The State Department also announced within hours that it would send a diplomatic representative to Kabul to make contact with the Taliban (Washington Post, 9/28/96). Both statements were quickly retracted, but not before they had convinced Iran, Russia, and the anti-Taliban alliance that the US-Unocal partnership was backing the Taliban and wanted an all-out Taliban victory (Rashid, 166).

In November 1996 Raphel told a closed meeting of UN diplomats to work with the Taliban: "It is not in the interests of Afghanistan or any of us here that the Taliban be isolated" (Rashid, 178). A US diplomat told Ahmed Rashid two months later that "The Taliban will probably develop like the Saudis did. There will be Aramco, pipelines, an emir, no parliament and lots of Sharia law. We can live with that" (Rashid, 179).

US news stories corroborated the interest of present and former diplomats (including Henry Kissinger) in encouraging a US-Taliban agreement for a pipeline across Afghanistan, partly to preempt alternative plans for a pipeline out of Turkmenistan via Iran.

Despite the interest of some in a Unocal pipeline, US official interest in contacting the Taliban swiftly waned. A major factor was the women's movement, offended by the treatment meted to their sisters in Afghanistan. As a result the Clinton administration remained aloof, especially after Madeleine Albright, on 1/1/97, became America's first female Secretary of State (Griffin, 175-80). Unocal, in contrast, pressed ahead, announcing the formation of its Centgas consortium for an $8 billion energy pipeline system in October 1997.

Of course the US enthusiasm for the Taliban vanished after the attacks on the US Embassies in Africa on August 7, 1998. On 12/5/98, the New York Times reported that the Unocal Corporation had withdrawn from the Centgas consortium. Unocal revealed that it was closing three of its offices in the four Caspian republics where it operated. One month earlier Unocal withdrew from another consortium proposing a $2.9 billion pipeline to ship natural gas produced in Turkmenistan to Turkey.

The reason Unocal gave was simple: oil prices were then $12 a barrel. The Times added that before the 1997 Asian economic crisis, the company projected annual revenue of $2 billion, or enough to recover the cost of the project in five years. (Today, after the WTC attacks, the price is $22 a barrel, easily enough to make the project viable again.)

But the New York Times also pointed out the political context of the decision. When the US attacked the bin Laden base in Afghanistan on 8/20/98 with missiles, Unocal the next day suspended the pipeline project until the Afghan Government was recognized by the United States. Before that Unocal, to help negotiate the deal, had hired former US diplomats like Henry Kissinger and Robert Oakley.

The article stated that the idea of the pipeline "was to pre-empt other companies trying to...transport oil and natural gas from Turkmenistan across Afghanistan to Pakistan." (The competitor was the consortium headed by the Argentine firm Bridas, which had been frozen out after the Clinton Administration intervened on behalf of Unocal with Pakistan's Benazir Bhutto.)

The details, authoritatively described by Ahmed Rashid in Taliban, pp. 157-69, have also been reported by Jon Flanders.) This article is cited in a strong critique of the US war in the 10/13/01 edition of The Hindu, India's national newspaper, which quotes Cheney and others to support the case that the war cloaks US desire to control Central Asian oil and gas.

Unocal had taken domestic political heat for its decision to continue planning the pipeline with the anti-feminist Taliban. The Feminist Majority Foundation, a Los Angeles group, petitioned the California State government to revoke Unocal's charter.

More recently the Boston Globe, on 9/20/01, reported that the US Ambassador to the UN, Bill Richardson, met Taliban officials in Kabul in early 1998. It would appear that the State Department officials at that time endorsed the pipeline project as a "fabulous opportunity" to solve regional problems by the prospect of economic prosperity.

To quote the Globe, "US officials say the project could have contributed millions of dollars to Afghanistan, whose war-wrecked economy relies largely on the thriving opium trade and international aid. More compelling for policy makers was the prospect of circumventing Iran, which offered another route for the pipeline." (Pakistan, where the pipeline would terminate, is another weakened economy that would stand to gain.)

One indication of the level of intrigue concerning competing plans for multi-billion dollar pipelines is that Bridas, the Argentine company, set up a 50-50 partnership "with the Saudi company Ningarcho, which was extremely close to Prince Turki." Meanwhile Unocal's Saudi partner, Delta Oil, was close to Saudi Crown Prince Abdullah, who in August 2001 forced Prince Turki to resign. "Thus the competition within Unocal and Bridas also reflected competition within the Saudi Royal Family" (Rashid, Taliban, 167-68).

Since about 1995 US oil companies, entranced by the oil and gas prospects in Central Asia, have been lobbying Washington for a greater say in US policy-making. To this end they formed a private Foreign Oil Companies lobbying group in Washington (including Unocal), just as the next year oil companies formed a similar group (the U.S.-Colombia Business Partnership) to lobby successfully for an increased US military commitment to Colombia.

In September 1997 NSC energy expert Sheila Heslin made it clear that US policy in the Central Asian region was affected by energy considerations: "US policy was to promote the rapid development of Caspian energy....We did so...to in essence break Russia's monopoly control over the transportation of oil [and gas] from that region, and frankly, to promote Western energy security through diversification of supply" (quoted in Rashid, Taliban, 174; cf. 162).

As for Heslin's relationship to the Foreign Oil Companies Group, let us listen to the complaint of a former CIA officer:

`Heslin's sole job, it seemed, was to carry water for an exclusive club known as the Foreign Oil Companies Group, a cover for a cartel of major petroleum companies doing business in the Caspian.... Another thing I learned was that Heslin wasn't soloing. Her boss, Deputy National Security Adviser Sandy Berger, headed the inter-agency committee on Caspian oil policy, which made him in effect the government's ambassador to the cartel, and Berger wasn't a disinterested player. He held $90,000 worth of stock in Amoco, probably the most influential member of the cartel.... The deeper I got, the more Caspian oil money I found sloshing around Washington' (Robert Baer, See No Evil: The True Story of a Ground Soldier in the CIA's War on Terrorism [New York: Crown, 2002], 243-44.)

See also "Oil Wars: The Balkans as an Example", and Bibliography for the Study of Oil and War

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