This explains SO much...

relative to our Iran policy and how it's connected to Afghanistan. Please note that this is
from 1998, prior to our entrance into Afghanistan. If ever there was any question of our
incentives and goals in that region, this should go a long way to clearing it up.
This bill was updated in 2006. By then Unocal had, at least temporarily, backed out of the deal.
This is just an excerpt. I highly recommend reading the whole thing AND the 2006 update here >
http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=115&topic_id=171417

Apparently there is still strong support for fulfilling these plans...a supposed financial bonanaza.
And considering Shell's recent announcement of their oil/gas deals in Iraq/Syria, the price paid
in blood and money for potential economic development is simply the cost of doing business.



1998
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.


STATEMENT OF FREDERICK STARR, CHAIRMAN, CENTRAL ASIA INSTITUTE, NITZE SCHOOL OF ADVANCED INTERNATIONAL STUDIES, JOHNS HOPKINS UNIVERSITY

Mr. STARR - Thank you very much. Mr. Chairman, I welcome the opportunity to comment on H.R. 2867 and also on the question of exploitation of Central Asian and Caspian energy. I want to note parenthetically that it has taken a while for U.S. policy to recognize this part of the world as warranting the kind of attention that it is now getting in your Committee rather than treating it as a sub-issue of some other world region. This is a very welcome step indeed.

I would like to draw your attention here to several concerns in the application of the principles that govern our action with regard to pipeline development. First, much has been said about the ''East-West energy corridor''. This corridor places Azerbaijan at the hub. That country is in an absolutely crucial position for the transport of energy not only from Azerbaijan itself, but from across the Caspian. Yet the section 907 of the Freedom Support Act of 1992 prevents the United States from extending to Azerbaijan most of the assistance that other Newly Independent States are receiving in order to foster their development.

In other words, with one hand we are placing Azerbaijan in a position that calls for stable, free development, and internal security. Then with the other, we are undermining Azerbaijan's ability to achieve these ends. Meanwhile, the location of its neighboring State, Armenia, is problematic. Its border is a mere 4 miles from the pipeline that has been discussed here. Armenia has recently witnessed a seizure of power by a veiled military coup. This is the first and only military seizure of power to occur in any of the Newly Independent States. Prior to that, Armenia had a notoriously corrupt election. All this in a country that is receiving more support per capita from the United States under the Freedom Support Act than any other country. I would therefore propose that the Subcommittee consider removing the contradiction to U.S. principles and policy objectives in the region by striking section 499(F)(d)(3) from the proposed legislation.

The second issue that I want to raise here concerns the place of Iran in our policy toward Central Asian energy. Let me stress and stress several times if necessary, that I am not here to defend or to criticize our policy toward Iran. Under any circumstances I would not consider myself qualified to do so. My concern here is to point out the apparent conflict between our goals in Central Asia and the Caspian and our policies vis a vis Iran.

Now, I won't review the various legislative acts that are relevant here. I want simply to say that the heaviest burden of the measures we are taking toward Iran fall disproportionately on Azerbaijan, Kazakhstan and Turkmenistan, for it prevents them from exporting their gas and oil by one of the obvious alternative routes to Russia, namely Iran. The U.S. position has been to argue that this would not be in the Central Asians' own interest. None of our friends in the region agree.

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Meanwhile, French, Malaysian, Russian firms are already investing in the construction of facilities in Iran. Thus, a pipeline is being constructed across northern Iran from Turkmenistan. The United States has not objected to this, by the way. Turkmenistan and Kazakhstan are working out swap deals with Teheran to enable them, in effect, to export through Iran without really doing so. In short, the American quarantine of 1995–1996 is not holding.

The recent events within Iran exacerbate this situation. I won't review them for they are well known to you: The election of President Khatami, his New Year's statements, et cetera. The impact of these is to change the environment for investment in the Caspian east-west pipeline. Everyone is waiting. There is no money yet in hand to build this supposedly favored pipeline. People are correctly waiting to see what is going to happen because anything in Iran will change the economic coefficients with regard to this project, on which the United States has placed such emphasis.
It seems to me this leaves us with three options. First, the United States can seek to impose its sanctions against those investing in Iran with such severity as to cut off the flow of funds and projects. The problem with this is that events in Iran are making this approach more difficult to defend and are likely to make it even less sustainable in the future.

Second, the United States can acknowledge that its policies toward Armenia and Iran are adding to the risk and cost of the east-west pipeline and seek to neutralize that political cost through additional forms of subsidies that would, if you will, create a level playing field for market forces. I would imagine, however, that such subsidies would raise eyebrows among those who would see them as unwarranted support for one favored industry over others.

Third, the United States can adopt a wait-and-see posture toward Iran, one that would replace our current all-or-nothing approach. The objective of this wait-and-see approach would be to find a lot of nicely calibrated positions between all and nothing. I spell them out in the written statement. Suffice it to say that, by having such intermediate positions, we would be able to respond not only more effectively, but also more proactively to the evolving situation throughout the region as well as in Iran.

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On balance, it seems to me that the third of these alternatives holds the most promise for achieving a balance between U.S. objectives in Central Asia and the Caspian, on the one hand, and in Iran. But my point in raising them is not to champion one course of action or another. Rather, it is to suggest that it is no longer possible to treat U.S. policy toward Central Asia and toward Iran as totally separate from one another. Our Iranian policy, however just its goals, has a powerful and, for the most part, negative impact on our ability to achieve our stated objectives in Central Asia and the Caspian. Simply to acknowledge this reality would be to open a path to more sustainable effective policies toward both areas. Thank you, Mr. Chairman.

Mr. BEREUTER. Thank you very much, Mr. Starr.
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.

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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 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. 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.

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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 wellhead after all the transportation costs have been deducted. So it's the price he receives for the oil he produces at the wellhead.

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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,...cont'd

http://commdocs.house.gov/committees/intlrel/hfa48119.000/hfa48119_0f.htm

:boring:

Eurasia + pipelines/gas/oil/water projects = $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

...oh and lets not forget 'democracy' (ie American dominance and hegemony):patriot:

I've always kept it in the back of my mind as I see things progress. It's good to keep your eyes open. Too bad one has to dig for it or "stumble" on it on some discussion board on the internet. The average person just doesn't have the time or the interest to read such things. I, on the other hand, like to dig for information! lol

relative to the Caspian region since the story about Unocal broke. What is news to me is the
proposed pipeline through northern Iran and how that really messed with our plans.

Perhaps an invasion of Iraq was determined to be an easier and quicker means to the same ends,
while also placing us at Iran's doorstep. And despite their protests, our Congress critters
signed on and are culpable. And they are still on board for phase two in Afghanistan.

I've probably read everything there is to know about oil (or lack thereof) in the last 4 years....and every issue surrounding it which includes almost everything!! lol

While syntactically it could go either way, the latter doesn't make nearly as much sense in context.

and that (b) that semantic fact is interestingly suggested by the syntax.

So it was somewhat interesting for me.

somewhere down through Turkey and possibly Syria. I think I also remember reading about some under-the-sea pipeline coming down from one of those "stan" countries that would come out near Israel from Turkey to Israel or something. I remember vaguely Condi Rice having talks with these countries and companies. That explained some of the more friendly attitude towards Syria to me--and why the U.S. tries not to upset Turkey too much when dealing with the Kurds in Iraq.

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=103&topic_id=376945

And here >

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=103&topic_id=393820

and here >

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=103&topic_id=396630

Seems like anywhere we get militarily engaged, oil/gas and pipelines are central to the incentives.
Would love to see a map of pipelines around the world and military engagements overlaid on it.

With all that money to be made, what incentives are there for investing in 'alternatives'?

:grr:

It's been the other way around for some time now! lol

War on Pipes: Transport corridors as core of US-Russia confrontation
Published September 9, 2008 BalkanBlog 0 Comments
Tags: Balkans, Caucasus, Energy policy, European perspective, GUUAM, Oil, SRS, Transport corridor

GUUAM

When speaking about interests of West I would like to make a difference between US – or Anglo-American -interests and EU interests. After “Cold War” US has all the while expanded its influence post-Soviet territory with aim to guide those region’s natural resources under US companies. GUUAM (Georgia, Ukraine, Uzbekistan, Azerbaijan and Moldova) Group was founded 1999 with help of US to foster favorable conditions conducive to economic growth through development of an Europe-Caucasus-Asia transport corridor.

As pointed out by Michel Chossudovsky in his book America’s ‘War on Terrorism,’ (presentation of Anglo-American war policy from the 1990s Balkans to the present), GUUAM has been “dominated by Anglo-American oil interests, ultimately purports to exclude Russia from oil and gas deposits in the Caspian area, as well as isolating Moscow politically.”

More specifically, the US-led military invasion - in close liaison with Britain-responds to the interests of the Anglo - American oil giants, in alliance with weapons producers, private security organizations and service providers (like Halliburton). One could say that the “Anglo-American axis” in defense, foreign policy and especially corporate capital is the driving force behind the military operations in Balkans, Central Asia and Middle East.

SRS

Just five days before the bombing of Yugoslavia (19 March 1999), the US Congress adopted the Silk Road Strategy Act, which defined America’s broad economic and strategic interests in a region extending from the Mediterranean to Central Asia. The Silk Road Strategy (SRS) outlines a framework for the development of America’s business empire through development of an Europe-Caucasus-Asia transport corridor.

The stakes involved with the current conflict are identical to those of the previous war: control over the oil of the Caspian Sea/Black Sea/Caucasus basin, and the control of multiple key oil pipelines criss-crossing the region. The most critical pipeline, the infamous Baku-Ceyhan pipeline supported by the US government and a consortium of US-allied transnational oil interests (including Royal Dutch Shell, Unocal, and BP) takes oil from the Caspian Sea across Azerbaijan (another US-supported regime), whereby it crosses Georgia (bypassing Iran and Russia), then on to the Black Sea, where the oil is carried to Western Europe, and the rest of the world.

The Baku-Ceyhan pipeline has been viewed by the Bush/Cheney administration as one of its brightest geostrategic successes. All of the Anglo-American empire’s pipelines and oil facilities, including Baku-Ceyhan, are threatened, if the conflict escalates. Same time the successful implementation of the SRS requires the concurrent “militarization” of the Eurasian corridor as a means to securing control over extensive oil and gas reserves, as well as “protecting” the pipeline routes on behalf of the Anglo-American oil companies.

Power play and EU

The effect of Nato enlargement is to swing the Iron Curtain to the east. Russia’’s opposition to NATO expansion has only increased in recent years. On economical field Russia’s “South Stream” looks more successful so far than Nabucco while the leverage of the United States government over Russian foreign policy has decreased dramatically during last years. US policy is turning into a zero-sum competition with Russia for influence in the post-Soviet regions.

For EU the situation brings few questions such as

Is there a difference between EU and Anglo-American interests related to SRS?
How to balance aims of energy and security (military) strategies?
Is there a difference between EU’s energy policy and interests of corporate capital?
I am not sure if EU would like to answer to these questions, however my point is that this background may have some influence – more than official concern about human rights, rule & law etc. - to EU policy in Balkans and Caucasus.

http://arirusila.wordpress.com/2008/09/