Pipelineistan

Pepe Escobar

History may judge it as one of the capital moves of the 21st century's New Great Game: May 25, the day high-quality Caspian light crude started flowing through the Caucasus toward the Mediterranean in Turkey. The Baku-Tbilisi-Ceyhan pipeline (BTC) - conceived by the US as the ultimate Western escape route from dependence on oil from the Persian Gulf - is finally in business.

This is what Pipelineistan is all about: a supreme law unto itself - untouchable by national sovereignty, serious environmental concerns (expressed both in the Caucasus and in Europe), labor legislation, protests against the World Bank, not to mention mountains 2,700 meters high and 1,500 small rivers. BTC took 10 years of hard work and at least US$4 billion - $3 billion of which is in bank loans. BTC is not merely a pipeline: it is a sovereign state.

This BTC state slices Azerbaijan in half from east to west, then slices Georgia in half almost from east to west, before taking a dip south, bypassing secessionist Ajaria and slicing Turkish Anatolia diagonally from the northeast toward the south. The founding stone is at British Petroleum's (BP's) gleaming terminal at Sangachal, half an hour along the Caspian south of Baku. The state is 44 meters wide, snaking 1,767 kilometers across three countries, two of those (Azerbaijan and Georgia) extremely volatile, and the other (Turkey) faces potential trouble from dispossessed Kurds.

Game not over
In terms of no-holds-barred power politics and oil geopolitics, BTC is the real deal - a key component in the US's overall strategy of wrestling the Caucasus and Central Asia away from Russia - and bypassing Iranian oil and gas routes. Kazakh President Nursultan Nazarbaev, for instance, has just announced that Kazakh crude will also flow through the BTC before 2010. He even proposed to add Aktau - the Kazakh Caspian oil Mecca - to a new acronym (ABTC?). It's interesting to remember that BP always denied that it needs Kazakh oil to fill its pipeline.

Everything related to BTC spells tremendous ambition. It will take a few months to fill the pipeline - and for the supertankers at Ceyhan to be loaded with Caspian crude, thus bypassing the highly congested Bosphorus. BTC is projected to reach 1 million barrels a day - roughly 1.2% of global production. Compare it with the 500,000 barrels of the Caspian Pipeline Consortium, which moves crude from Baku to the Russian port of Novorossiysk.

BTC makes little sense in economic terms. Oil experts know that the most cost-effective routes from the Caspian would be south through Iran or north through Russia. But BTC is a designer masterpiece of power politics - from the point of view of Washington and its corporate allies. US Vice President Dick Cheney, already in his previous incarnation as Halliburton chief, has always been a huge cheerleader for the "strategically significant" BTC. The verdict is open on whether this massive investment will be worth it. Instead of the dreams of a new Kuwait, the Caspian may hold only 32 billion barrels of oil - not much more than the reserves of Qatar, a small Gulf producer. The Caspian in fact may hold less than 10% of the total, known Middle East reserves.

Anyway, what really matters is positioning in the New Great Game. The Caucasus, the Caspian and Central Asia are up for grabs. European customers for Azeri (and Kazakh) oil and gas might rely on BTC for some of their supply. But the Russian counterpunch will come: President Vladimir Putin will not cease to seduce the European Union with loads of Russian, Caspian oil - plus strong protection - in return for loads of European Union investment. Ladies and gentlemen, place your bets.