It's the Same Old Shit, Stupid

About 8 years ago it was estimated, according to Giandomenico Picco (another "peace" and executive consultant), that Western oil companies had pumped $50 billion into oil and gas exploration in the Caspian Sea region. American oil companies invested in Azerbaijan, Kazakhstan and Turkmenistan, countries who were producing oil in the Caspian Sea area at the time. The 5 nations bordering the Caspian Sea are Azerbaijan, Kasakhstan, Turkmenistan, Russia, and Iran. Obviously this should piss Russia off but the Russian response has been so unmeasureable it's irritating (unless Putin nationalizing Yukos was a warning). Around this same time, according to Mr. Picco 48 non-American oil companies from 29 countries were signing contracts with Iraq. Presumably betting the sanctions would end . But not one American oil company signed a contract. Why? Were there PNACky rumors in the world of oil that it would soon be unnecessary to deal with Saddam?

Washington during the '90s wanted a pipeline from Azerbaijan through Georgia to Turkey's Ceyhan seaport with a pipeline under the Caspian connecting Turkmenistan with Azerbaijan. Russia did not as they would lose their dominance and control of the Caspian oil. Russia wanted the pipeline from Azerbaijan to a Russian seaport in the Black Sea.

Amoco, Mobile, and other companies (like Frontera) at the time were betting on the UN and US not lifting sanctions on Iraq and sent their money into the Caspian oil region. Transportation cost for Caspian oil is 4 times higher than oil from the Persian Gulf and getting it to end users much harder. The oil also is not as good a quality having a higher sulfur content. The biggest market for Caspian oil was to be economies of Southeast Asia, which fell on economic hard times in the '90s, but still economists predicted the region to bounce back with continued growth, barring any SARS, tsunamis, etc.

All that investment sitting in the Caspian region. If sanctions were lifted on Iraq the Caspian Sea oil wouldn't be able to compete with Iraq's higher quality and cheaper oil in the Persian Gulf. In 1998 Azerbaijan, Kasakhstan, and Turkmenistan's were producing 608,000 bpd to Iraq's 2 million bpd. Sanctions were going to be lifted, the international community was coming to that. A lot of American oilmen invested in the Caspian pipeline route wouldn't want to see Iraq oil flowing too quickly. In 2000 the reality was the Caspian pipeline was feasible only if oil prices rose. Some experts estimated crude would have to double (this was when it was approximately $22 a barrel). (Enter SCOTUS appointed resident and bin Laden.)

Surprise surprise. Coalition of the Killing, Willing, & Drilling aka Operation Infinite Justice aka Operation Enduring Freedom aka Operation Iraqi Freedom aka the Global War on Terror Forever. The Caspian Baku-Ceyhan route today is nearing completion, last I read it was to begin operation this year, 2005. But shouldn't the pump price be reasonable now or soon? Is that laughter I hear?

By now oil from Iraq should be competing with oil from the Caspian Sea, but it's not. Someone holding up Iraq oil production? Oh, yes, the "insurgents", the disgruntled ragtag leftovers from Saddam, those Jihadists aligned with OBL, those foreign troublemakers, those – who is it this quarter?

In short time the pertinent countries in the ME are under our thumb, our gun, or in our pocket. Egypt, Jordan, Pakistan. We have Iraq and Afghanistan (or at least their oil and opium). Saudi and UAE of course. We have Turkey. Lebanon. Syria appears to have backed down. Georgia and Ukraine have pro-West leaders (after contested elections). Iran is the only obstacle. Iran has always been the only country in the region that economically and logistically made sense for transporting Caspian crude. After the easy and successful selling of Operation Iraq, Operation Iran will be another cakewalk, right?

Many believe the 2 wars in the ME were to get bin Laden dead or alive, fight the war on terror – smoke 'em out, liberate Iraq, remove the dictator Saddam, bring democracy and peace to the region. Many will laud how great our conquest will be for the economies and standard of living for the people of these countries (we can point to Mexico, Central and South America as our success stories). But I'll say it's greed and power, as usual. The ruling elite no longer publicly behead, draw & quarter, or disembowel one another over trade routes and crowns but it may feel that painful to a few of them, and deadly for the rest of us.