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A tale of two pipelines

Published Jun 10, 2005 11:29 PM

President George W. Bush calls it a “monumental achievement.”

The Wall Street Journal says it’s “the project of the century.”

The State Department hails it as a “magnificent achievement of engineering and international cooperation.”

The object of their praise: the Baku-Tbilisi-Ceyhan Pipeline or BTC, which began operating May 25.

The thousand-mile-long, $4 billion project will bring 1 million barrels of oil a day from Azerbaijan’s Caspian Sea oil fields across Georgia to the Mediterranean port of Ceyhan in Turkey.

The opening ceremony was attended by British Petroleum Chief Executive Officer John Browne, U.S. Energy Secretary Samuel Bodman, and Presidents Ilham Aliyev of Azerbaijan, Michel Saakashvili of Georgia, Ahmet Necdet Sezer of Turkey and Nursultan Nazarbaev of Kazahkstan. Azerbaijan, Georgia and Kazakhstan are all former republics of the Soviet Union.

Bodman read a letter from Bush that said: “The United States has consistently supported BTC because we believe in the project’s ability to bolster global energy security, strengthen participating countries’ energy diversity, enhance regional cooperation and expand international investment opportunities. We look forward to working closely with the people of Azerbaijan to advance prosperity, justice, and peace.”

The Wall Street Journal praised the pipeline for “providing an alternative to Middle East oil.” The biggest stake in BTC belongs to British Petroleum, the world’s biggest oil company. The State Oil Company of Azerbaijan holds 25 percent. Turkey’s State Oil Company holds 7 percent. U.S. firms Unocal and Hess have 9 percent each.

Unocal was recently acquired by oil giant ChevronTexaco, Secretary of State Condoleezza Rice’s old employer. Citigroup is among the underwriters of the project.

BP is the biggest company in Britain. But much of its capital comes from the United States. The Bush family and Karl Rove are minor stockholders. Major ones include Morgan Stanley, Citigroup, Bank of America, Fidelity Management and a Boston-based hedge fund called State Street Corporation.

BP is the lead company in Bush’s plan to drill in Alaska’s Arctic National Wildlife Reserve.

ExxonMobil, the biggest U.S. oil firm, is not directly involved in BTC. But it may use BTC to transport the output of its oil fields in Kazakhstan.

Imperialist monopolies restrict supply

Are “energy diversity” and “regional cooperation” really priorities in the White House and in oil company boardrooms?

The history of the energy industry is a history of conspiracies to rig prices by restricting supply. That’s what monopoly is all about.

That was true when Rockefeller Standard Oil agents dynamited competitors’ refineries in the 1870s Pennsylvania oil wars. It’s true in the oil wars in the Middle East today.

In the 1980s, Western Europe tried to diversify its energy supply by buying natural gas from the Soviet Union. The result was a stupendous feat of engineering called “Urengoi 6,” a 3,600-mile pipeline across Eurasia. The Wall Street Journal called it “the largest commercial transaction ever between East and West.”

How did Washington react to this attempt at peaceful cooperation in the field of energy? The Reagan-Bush regime worked night and day to block the project.

Washington imposed sanctions on companies working on the pipeline. According to some accounts, the CIA tried to destroy it by sabotage. Former U.S. Air Force Secretary Thomas Reed and Reaganite Peter Schweitzer bragged about this in their respective books “At the Abyss” and “Victory.”

In spite of Reagan’s efforts, some 120,000 Soviet and Eastern European workers completed the pipeline. But the cost was many times higher than projected.

There are clear differences between BTC and Urengoi 6. The Soviet state no longer exists. The new pipeline’s revenues will not help provide the free health care, housing and higher education the Soviet people once enjoyed. The money will not go to aid struggling countries like Nicaragua, Vietnam, Cuba or Angola, or to help freedom fighters in southern Africa or Palestine or El Salvador.

The revenues will go into the pockets of Western bankers and investors. And, unlike Urengoi 6, BTC will not loosen the U.S. and British oil monopolies’ grip on Western Europe’s economy. It will strengthen that grip.

Next: Cold War ends, Oil Wars continue