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World Council for the Cedars Revolution

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Analysis: energy pipeline that supplies West threatened by war Georgia conflict PDF Print E-mail
Written by Robin Pagnamenta, Times Online   
Tuesday, 12 August 2008

A section of the Baku-Tbilisi-Ceyhan pipeline 30 miles south Tbilisi, Georgia, under construction in 2003
A section of the Baku-Tbilisi-Ceyhan pipeline 30 miles south Tbilisi, Georgia, under construction in 2003

The conflict that has erupted in the Caucasus has set alarm bells ringing because of Georgia's pivotal role in the global energy market.

Georgia has no significant oil or gas reserves of its own but it is a key transit point for oil from the Caspian and central Asia destined for Europe and the US.

Crucially, it is the only practical route from this increasingly important producer region that avoids both Russia and Iran.

The 1,770km (1,100 miles) Baku-Tbilisi-Ceyhan pipeline, which entered service only last year, pumps up to 1 million barrels of oil per day from Baku in Azerbaijan to Yumurtalik, Turkey, where it is loaded on to supertankers for delivery to Europe and the US. Around 249km of the route passes through Georgia, with parts running only 55km from South Ossetia.

The security of the BTC pipeline, depicted in the James Bond film The World is Not Enough, has been a primary concern since before its construction.

The first major attack on the pipeline took place only last week - not in Georgia but in Turkey where part of it was destroyed by PKK separatist rebels.

Output from the pipeline, which is 30 per cent owned by BP and carries more than 1 per cent of the world's supply, is likely to be on hold for several weeks while the fire is extinguished and the damage repaired.

But the threat of another attack by separatists in Georgia itself is very real.

Only a few days before the Turkish explosion, Georgian separatists threatened to sabotage the pipeline if hostilities continued.

The latest eruption of violence could easily spur fresh attacks. The BTC pipeline, which is buried throughout most of its length to make sabotage more difficult, was a politically highly charged project. It was firmly opposed by Russia, which views the Caucasus as its own sphere of influence and wants central Asian oil to be exported via its own territory.

Russia also backs the South Ossetian and Abkhazian separatists in Georgia and relations between Moscow and Tbilisi have curdled into outright hostility in recent months.

The BTC pipeline, which cost $3 billion to build, is a key plank of US foreign policy because it reduces Western reliance on oil from both the Middle East and Russia.

 

Have your say

The BTC pipeline will be connected to the TAP pipeline through a pipeline through the Caspian Sea to Turkmenistan. That much is patently obvious.

James, Woodward, USA

What doesn't make sense to me about it, though, is if the US is trying to cut out Russia, why does Russia's pipeline run into the SAME place that the BTC pipeline runs. Also, why did Georgia attack Russia knowing it would lose? It doesn't make sense.

James, Woodward, USA

That's all provided that Georgia was the one that attacked first. The more reasonable answer is that Russia attacked Georgia to destroy the BTC pipeline and push America out of Georgia knowing the US wouldn't want to be in a direct war with Russia so close to their nation.

James, Woodward, USA

This is yet another example of why it's urgently important for the United States get a serious energy policy in place, and start a relentless effort to get the heck off of fossil fuels as much as possible and as soon as possible. The so-called "energy bubble" will be reinflated starting Monday.

Latega Powell, Raleigh, USA

Indeed Mark, a new world order in which Russia and China wil be the princpal commanders, not EU and US anymore....

Mark, London,

Perfect! Just what is needed right now... watch the oil prices fly off the scale again brother. Welcome to the New World Order 2008.

Mark, London,

South Ossetia was taken over by Russia militarily during the summer of the Beslan massacre. South Ossetians don't care for independence. The threats from the "separatists" are pure Kremlin. Russia wants the pipeline to strangle Central Asia with, and to raise the price of oil.

David Thompson, Chicago, USA

Alexey, the first is between two nations, the second is between separatists and the nation of Georgia. Significant difference.

This all plays to the goals of the Kremlin which wants to punish Georgia for braking rank with Russia and also to control the flow of energy throughout the area.

J. Russell, Houston, USA

So what's the difference then between Iran who's threatened to bombard Israel an Georgia shooting rockets to Ossetia? Both control oil transit and demonstrating aggressive politics.

Alexey L.N., Novosibirsk, Russia

http://www.timesonline.co.uk/tol/news/world/europe/article4484849.ece

Analysis: BTC pipeline explosion
By JOHN C.K. DALY, UPI International Correspondent
Published: Aug. 6, 2008 at 6:46 PM

WASHINGTON, Aug. 6 (UPI) -- Following the implosion of the Soviet Union in 1991, a new "Great Game" began, this time between Russia and the United States, which replaced Britain in a protracted, covert struggle for the Caucasus and Central Asia, the ultimate prize being the region's vast energy reserves, particularly those of the Caspian. A decade ago Vice President Dick Cheney, then Halliburton CEO, remarked, "I can't think of a time when we've had a region emerge as suddenly to become as strategically significant as the Caspian."

The problem for Washington was how to export rising volumes of Azeri oil without using the traditional network of Soviet-era pipelines, which transited northward to Russia's Black Sea Novorossiisk port, or constructing export facilities southward through Iran, subject to U.S. sanctions. The solution was the construction by an international consortium of the $3.6 billion, 1 million barrel per day, 1,092-mile Baku-Tbilisi-Ceyhan pipeline, which began operations in May 2005. Now a mysterious fire on a portion of the BTC transiting Turkey has caused BTC operator British Petroleum to declare force majeure, and if the investigation reveals possible sabotage by the separatist Partiya Karkeren Kurdistan (Kurdistan Workers' Party, or PKK), as indicated in initial sketchy Turkish media reports, then the West's most expensive post-Soviet energy success has become a new front line in the nearly 30-year war between the PKK and Ankara.

The BTC transits high-quality crude from Azerbaijan's offshore Azeri-Chirag-Guneshli fields to Turkey's deepwater Mediterranean terminus at Ceyhan.

Initial Turkish media reports stated an explosion occurred in the Refahiye BTC section, which resulted in a conflagration sending flames 160 feet into the air and halting oil flow. According to the reports, investigators are attempting to determine whether the explosion was an industrial accident or, more ominously, the result of PKK sabotage.

As Turkey, stung by PKK attacks across the border into its territory, last autumn deployed troops along the frontier, the PKK, well aware of the vulnerabilities of Turkey's energy imports, upped the ante last October, threatening, in the event of a Turkish military action, not only to strike Iraq's Kirkuk-Ceyhan oil export pipeline, but even to attack tankers heading for Turkey's Mediterranean port.

The same month the PKK's Abd-al-Rahman Chadarchi stated that if PKK forces in northern Iraq were attacked, his group would assault Turkish oil targets, "since they bring huge amounts of money to Turkey," adding, "The military regime in the country will use this (energy revenues) to develop its war machine to utilize it against the Kurdish people in Turkish Kurdistan," while Iraqi Parliament Speaker Mahmoud al-Mashhadani said, "Northern Iraq cannot be pressured. Iraq is a rich country, and if there are economic pressures, we will cut off the (Kirkuk-) Ceyhan pipeline." Turkey subsequently launched a limited incursion against PKK forces ensconced in northern Iraq in February.

The 600-mile, 40-inch Kirkuk-Ceyhan (Dortyol -- "four roads" or "crossroads") dual export pipeline terminates at Turkey's Dortyol port on the Turkish Mediterranean coast near the BTC terminus at Ceyhan. Dating from Saddam's time, the Kirkuk-Ceyhan pipeline had a pre-invasion capacity of about 1.5 million to 1.6 million bpd but shipped around 800,000 bpd. Kirkuk-Ceyhan is Iraq's largest operable crude export pipeline, but repeated insurgent attacks have lowered its current output to around 600,000 bpd. In contrast to the frequently assaulted Iraqi pipeline network, however, a BTC attack would represent a quantum leap in PKK abilities and objectives.

The explosion occurred about 11 p.m. on Aug. 5 on the BTC pipeline segment at Yurtbasi village; after Ankara was notified, valves 29 and 31 were closed as officials waited for the oil contained in the 4-mile segment of No. 30 terminal to burn out.

The significance of a PKK attack against BTC would extend far beyond Turkey. British Petroleum heads the BTC consortium and, besides operating the pipeline, has a 30.1-percent share of the project, exceeding that of the State Oil Co. of Azerbaijan, which owns 25 percent. Other Western investors include Chevron (8.9 percent), Norway's StatoilHydro (8.71 percent), Turkey's Turkiye Petrolleri Anonim Ortakligi (6.53 percent), Italy's Eni/Agip group and France's Total (5 percent apiece), Japan's Itochu (3.4 percent), the Japanese Inpex Corp. (2.5 percent) and the American Hess Corp. (2.36 percent). Western concerns receive 75 percent of BTC's revenues.

For Turkey, BTC's transit revenues are payback for supporting Western sanctions since 1991's Operation Desert Storm, as Ankara subsequently estimated in March 2003 that in supporting sanctions against Saddam's regime it had lost $80 billion in transit fees.

Security was a prime consideration in the BTC's design, and the consortium subsequently buried the entire pipeline to thwart possible attacks. BTC's eight pumping stations (two in Azerbaijan, two in Georgia and four in Turkey), however, are above ground, as are their electrical power grids. More than half of BTC traverses 669 miles of Turkish territory, nearly all of which contains significant Kurdish populations, as does the Kirkuk-Ceyhan pipeline.

If the rupture proves to be sabotage, it will savage Azerbaijan's economy, now one of the world's fastest-growing, which projects revenues from BTC as high as $230 billion over the next two decades. The economic fallout will not be limited to Turkey and Azerbaijan either; besides the massive revenue loss to Western BTC consortium investors, BTC now supplies an estimated 1 percent of global daily energy needs.

BP spokesman Murat Lecompte downplayed the reports of the conflagration, as did the market. Depending on what the investigation uncovers and how long BP decides to maintain its force majeure stance, it is a decision that complacent investors may yet come to rue.

--

(e-mail: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it ) © 2008 United Press International, Inc.

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Analysis: roots of the conflict between Georgia, South Ossetia and Russia
Anatol Lieven

Many factors are involved in the present conflict but the central one is straightforward: the majority of the Ossetes living south of the main Caucasus range in Georgia wish to unite with the Ossetes living to the north, in an autonomous republic of the Russian Federation; and the Georgians, regarding South Ossetia as both a legal and an historic part of their national territory, refuse to accept this.

Twice in the past century, when the empire to the north weakened and Georgia declared its independence, the southern Ossetes revolted against Georgian rule. It happened in 1918-20, between the collapse of the Russian empire and the Soviet Union’s conquest of Georgia in 1921; and it happened again in our own time with the fall of the Soviet Union.

In 1918-20, between 5,000 and 15,000 people died, depending on whose figures you believe. For the conflicts since 1990, the figure is about 4,000 and rising.

As the Soviet Union began to crumble in 1989, and Georgian nationalist moves for independence gathered pace, so too did Ossete nationalism and demands for separation from Georgia.

The Ossete national movement was encouraged by the Soviet Government in an effort to exert pressure against Georgian independence.

In November 1989 the Soviet assembly of the South Ossetian autonomous region passed a motion calling for union with North Ossetia. Thousands of Georgian nationalists marched on Tskhinvali, the South Ossetian capital, in protest but were blocked by Soviet forces.

A year later, after the election in Georgia of a pro-independence government led by the extreme nationalist Zviad Gamsakhurdia, the same assembly declared South Ossetia a Soviet republic separate from Georgia. The Gamsakhurdia Government then sent thousands of Georgian armed police and nationalist militia into the region. These were fought to a standstill by local Ossete militia backed by Soviet Interior Ministry troops.

I was in Georgia at the time, reporting for The Times, and could hardly have imagined that this obscure conflict would one day create a major international crisis. Tskhinvali was a typical grey Soviet Caucasian Nowheresville, of bleak, crumbling concrete offices, potholed roads and faceless compounds. The only colour I remember was on the uniforms of the Georgian fighters: one was wearing a blue and white bobble hat, another had made for himself the uniform of an officer in the Georgian forces of 1918-21.

The Russian conscripts by contrast were not colourful at all: drab, demoralised and loathing the whole situation. They were, however, much better armed than the Georgians – and still are today.

The conflict rumbled on for several years, with peaks of fighting interspersed with truces. When in 1991 the Soviet Union collapsed and Georgian independence (within the borders of the Georgian Soviet Republic, and therefore including South Ossetia and Abkhazia) was recognised by the international community, South Ossetia rejected this and continued to assert its independence. Georgia declared the South Ossete autonomous republic abolished.

Russia has not recognised this, but Russian forces have remained as the de facto defenders of the South Ossetian separatist region.

In 1996 the Organisation for Security and Cooperation in Europe (OSCE) brokered an agreement whereby Russian and Georgian peacekeepers would patrol different sectors of the region.

The OSCE remained until the Georgian Government of Eduard Shevardnadze, the former Communist leader, was overthrown in the Rose Revolution and replaced by the radical nationalist administration of Mikhail Saakashvili.

Russia’s policy is driven by a mixture of emotion and calculation. The Russian security establishment likes the Ossetes, who have been Russian allies for more than 250 years. They loathe the Georgians for their antiRussian nationalism and alliance with the US. For a long time they hoped to use South Ossetia initially to keep Georgia within the Soviet Union and later in a Russian sphere of influence.

That Russian ambition has been abandoned largely in the face of the Georgians’ determination to escape from this influence.

What remains is an absolute determination not to be defeated by Georgia and not to suffer the humiliation of having to abandon Russia’s South Ossete client state, with everything that this would mean for Russian prestige in other areas. Vladimir Putin’s Kremlin made it clear again and again that if Georgia attacked South Ossetia, Russia would fight. Georgian advocates in the West claimed that Moscow was only bluffing. It wasn’t.

Anatol Lieven is a professor at King’s College London and a senior Fellow of the New America Foundation in Washington DC. In 1990-96 he was a correspondent for The Times in the former Soviet Union, including Georgia

http://www.timesonline.co.uk/tol/news/world/europe/article4498709.ece



Last Updated ( Tuesday, 12 August 2008 )
 
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