Posted on 9-7-2002
Afghan
Pipe Dreams
By Pratap Chatterjee* Special to CorpWatch, www.corpwatch.org
A proposed natural gas pipeline that would traverse Afghanistan
has created
a power play in the region with governments jockeying for political
control
as well as a share in the billions of dollars that would accompany
such a
scheme. So far, however, international oil and gas corporations
are
sniffing around the region and the World Bank has hinted it
might give it's
blessing to the plan, but none has committed to a pipeline project.
Many political observers and critics of the US war in Afghanistan
have
voiced suspicions that the true aim of the fossil fuel friendly
Bush
administration's "war on terrorism" is to clear the way for
such a
pipeline. Others, like John Pike, Director of GlobalSecurity.org,
say that
while oil and gas are never far off US policy makers' radar
screen, they
also have other objectives. "Right now I think the US policy
is to keep a
new pipeline out of Iran at any costs." -- John Pike, GlobalSecurity.org
"The people who peddle fossil fuels are the most interested
and most active
in seeking to influence the United States government," notes
Pike. "But
right now I think the US policy is to keep a new pipeline out
of Iran at
any costs," adds the former military analyst for the Federation
of American
Scientists.
Meanwhile, human rights and environmental activists are keeping
an eye on a
potential pipeline in the volatile region. On May 30th President
Hamid
Karzai, then chairman of Afghanistan's interim administration,
Pakistan's
president General Pervez Musharraf, and Saparmurat Niyazov,
the president
of Turkmenistan, signed a memorandum of understanding, laying
out plans to
build a 900 mile pipeline that would snake across southern Afghanistan,
from Turkmenistan's Daulatabad gas fields to the Pakistani port
city of
Gwadar. Two weeks earlier, World Bank president James Wolfensohn
told
reporters in Kabul that the international lending institution
might be
interested in such a project. "We are not taking the entrepreneurial
role,
but were it to come up we would certainly take a look at it.
There are a
number of entrepreneurs already in the exercise so we will wait
and see,"
he said.
Western governments are also taking a keen interest. "The pipeline
is one
of those things out there in the future," a United States State
Department
official told the Far Eastern Economic Review estimating that
Afghanistan
could earn $100 million-$150 million a year in transit fees.
The region holds enough fossil fuels to service Europe's oil
needs for 11
years: a prize that has many oil companies salivating. Current
estimates of
natural gas reserves in four former Soviet republics: Azerbaijan,
Uzbekistan, Turkmenistan and Kazakhstan equaled more than 236
trillion
cubic feet while total oil reserves might reach more than 60
billion
barrels of oil. At current consumption levels, the region holds
enough
fossil fuels to service Europe's oil needs for 11 years: a prize
that has
many oil companies salivating, especially because labor costs
in the region
are low and environmental standards practically non-existent.
The high
stakes have generated strong interest in tapping these reserves
and piping
them south through Afghanistan over the last decade or so, especially
from
Unocal, a California-based oil corporation. Among the other
companies
sniffing around for partners is Gazprom, a Russian oil behemoth.
Despite the institutional backing from financiers and local
governments,
analysts say that pipeline is still years from being built and
the current
discussions are really just an attempt to consolidate power
in the region.
Julia Nanay, director of Caspian Services for the Petroleum
Finance
Corporation, an energy consulting group in Washington DC, told
CorpWatch:
"The United States is supporting this talk of a pipeline in
an effort to
isolate Iran and aggravate the situation. And the Russians want
to make
sure that oil and gas flows north not south." Indeed, the two
former
superpower rivals are more interested in making sure that they
have a place
at the table, says Nanay, than in actual funding for such a
pipeline. "What
we are talking about is an effort to control any future venture.
But right
now it would be pretty foolish to build a pipeline while the
various
warlords are still feuding with each other in Afghanistan."
Alastair
McKechnie, the Afghanistan country director for the World Bank,
says that
the Bank is also simply keeping tabs on the situation. "Any
revenue
whatsoever from apples to oil would be welcome in Afghanistan
today. But I
would not advise support for a pipeline right now because there
are far
more pressing needs. Even if someone were to approach us, we
would look
very hard at such a proposal," he told CorpWatch.
However, entrepreneurs are already setting up shop. Earlier
this year
Robert Mojave and Fariborz Shafei, two Iranian born businessmen,
traveled
to Kabul and Mazar-i-Sharif, to look into the possibility of
setting up a
Afghan branch office for Los Angeles-based Dynatek Corporation,
a small
supplier of industrial pumps. Their potential customers are
the oil
multinationals looking to build a pipeline from Central Asia
through
Afghanistan to the Indian Ocean. "We want to be the first American
company
to set up an office in Kabul and we want to get the exclusive
right to
supply industrial pumps to whoever wants to build a pipeline,"
Mojave says.
Over the course of last few months, the two men have traveled
to Dubai in
the United Arab Emirates, Baku in Azerbaijan and Teheran in
Iran, to seek
out potential partners. In April Mojave was back in Kabul setting
up his
office. "We are not betting on a company, we are betting on
a strategy.
Remember all that American aid money has to be spent on American
companies
and there aren't any other American companies there. We are
the first," he
told Corpwatch just before returning to Afghanistan.
But US interest in a pipeline is not new. In 1997 a consortium
led by
Unocal drew up plans to build a four foot wide pipeline that
would snake
875 miles from the Dauletabad Field in southeastern Turkmenistan,
passing
near the cities of Herat and Kandahar in Afghanistan, crossing
into
Pakistan near Quetta and linking with existing pipelines at
Multan. An
additional $600 million extension to India was also under consideration.
But in August 1998 Unocal halted development of the project
after U.S.
forces fired missiles at guerrilla camps in Afghanistan in the
wake of bomb
attacks on two U.S. embassies in Africa. One of their consultants
in the
company's 1997 conversations with the Taliban was Afghan-born
Zalmay
Khalilzad, who was appointed special envoy from President George
Bush to
Afghanistan on December 31, 2001. As an adviser for Unocal,
Khalilzad drew
up a risk analysis of a proposed gas pipeline from Turkmenistan
across
Afghanistan and Pakistan to the Indian Ocean. Today Unocal says
it has no
more interest in a Central Asian pipeline through Afghanistan
and has
closed its offices in Kazakhstan, Pakistan, Turkmenistan and
Uzbekistan
retaining operations only in Azerbaijan. "We have exited the
region because
we have long term commitments on other places and our plate
is full," says
Teresa Covington, a spokeswoman for the company.
Covington noted that other members of the original consortium
such as
Crescent of Pakistan and Delta of Saudia Arabia were still pondering
their
role in future joint ventures. The biggest player still in the
game is
Gazprom, the world's largest natural gas company, which is 38%
owned by the
Russian government.
A few years ago the yellow bumper sticker on the car of Elizabeth
Jones,
then United States ambassador to Kazakhstan, read, "Happiness
is Multiple
Pipelines." In reality the billion dollar pipeline investments
have brought
great wealth to the Central Asian political bosses, all former
senior
Communist party leaders from Soviet days, but not to their citizenry
whose
average monthly wage is around $20. Recently Kazakhstan's foreign
minister
Kasymzhomart Tokayev acknowledged that in 1996 President Nursultan
Nazarbayev moved $1 billion of oil funds into a secret Swiss
bank account
without telling his parliament. "Pipelines have only brought
misery to
local people in countries such as Colombia and Nigeria." --
Gopal Dayaneni,
Project Underground
And although substantial oil money has yet to flow into Turkmenistan's
coffers, President Niyazov has spent millions building marble
hotels to
attract the multinationals to the region in addition to a gold
statue of
himself in the center of town that rotates to reflect the sun.
Others say
that the venture will not help the common people. Keith Griffin,
an
economics professor at the University of California, expressed
skepticism
that the money will ever flow to the local people. "We cannot
expect to
re-float society on a pool of oil," he told a conference in
Kazakhstan's
financial center.
Environmental and human rights activists say that the oil pipelines
have
often brought more poverty and environmental destruction than
wealth. "Look
at Nigeria and Colombia. Pipelines have only brought misery
to local people
in those countries such as massive pollution of rivers and farmland
from
spills and gas flaring and major human rights abuses by the
military that
guards these operations" explains Gopal Dayaneni, oil campaigner
for
Project Underground, a California-based activist group. Indeed
if Gazprom,
the current front-runner for building the pipeline succeeds,
the Afghan
population does not have much of a track record to draw comfort
from --
every month the company is reported to spill one million gallons
of oil, 25
times the amount of oil that Exxon spilled in Valdez, Alaska.
Activists
like Dayaneni say they will keep a watchful eye on developments
in the region.
* Pratap Chatterjee is a freelance journalist based in Berkeley,
California. Earlier this year he was on assignment in Afghanistan,
Turkmenistan and Uzbekistan.
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