Pipe Dreams in the War on Terror                  NOV 2, 2001
   by Ro BB

        While the current U.S. military action in Afghanistan is popular and perhaps necessary to ensure our own security, I believe it is important to point that regardless of the tragic events of September 11, this campaign was inevitable, and it will result in the creation of enormous amounts of new wealth.  This is significant because U.S. companies will be among the largest beneficiaries.
        To understand why, a little geography lesson is needed.  Afghanistan shares borders with a half dozen countries, but most remarkable among them is the nation of Turkmenistan.  Turkmenistan has estimated oil reserves of nearly 1.7 billion barrels, and that is interesting.
        They also have proven natural gas reserves of more than 100  trillion cubic feet, and that is very, very interesting.
        In the past, Turkmenistan has been forced to deal with the problem of getting its vast stores of natural gas to market in unsatisfactory ways. Historically they have had to rely almost exclusively on the Russian pipeline network and a pipe link to neighboring Iran to get any of their gas to lucrative foreign markets.  These limitations have caused serious trouble for Turkmenistan, especially with the collapse of the Soviet Union;  former Soviet states such as Azerbaijan, Kazakhstan,
and Ukraine often have been delinquent in payment, or could not pay fully in cash for the gas they received.
        In the late 1990s an ambitious idea was proposed by a new corporate consortium, the Central Asian Gas Pipeline group, known as CentGas. Smaller players in this group initially included South Korea's Hyundai and Russia's Gazprom;  the two biggest were U.S.-based Unocal and Saudi Arabia's Delta Nimir Oil.  The plan revolved around a pipeline which would move Turkmenistan's valuable natural gas to Pakistan's pipeline grid, from which point it could be sold to the West.  The line would run from the Turkmen field near Dauletabad through the Afghanistan towns of Herat and Kandahar, down to Quetta in Pakistan and then on to the grid in Sui.  The project was estimated to have a cost of around $2 billion, a tiny sum compared to the money to be made.
        The only problem was the fear that various tribal factions in Afghanistan would sabotage the pipeline, mostly because U.S. or Russian companies were involved.  It was for this reason that the stabilizing effects of the new Taliban rule were embraced;
in early 1998 the Taliban signed an agreement with CentGas which would net the ruling party $50 to $100 million each year as "transit fees".
        As the largest investor in CentGas, Unocal arranged for a Taliban delegation to visit Texas.  To help push the project in Washington, they hired former secretary of state Henry Kissinger and former U.S. ambassador to Pakistan Robert Oakley.
        But by August, U.S. public sentiment would no longer permit an American company to do business with the Taliban.  The effects of the BBC special "Behind the Veil", a documentary showing the human rights abuses in Afghanistan, had combined with a U.S. missile strike south of Kabul to create a public relations nightmare for Unocal.  As a result, they withdrew from CentGas and issued numerous press releases indicating they would have no business dealings with the Taliban.
        However, the CentGas consortium has not disappeared.  Delta Nimir Oil retains its controlling interest, and the energy minister of Turkmenistan maintains a belief that the project could be revived if the stability of Afghanistan could be assured.  Delta is currently partnered with several U.S. oil companies in projects throughout the world, most notably with Amerada Hess to develop the nearby Caspian region. According to the U.S. embassy in Turkmenistan, there are more that 50 U.S. companies "resident and conducting business" in that country.  Among the more notable is oil industry giant ExxonMobil corporation, who holds a majority stake in Turkmenistan's best-producing oil and gas fields.
        Direct involvement with the Taliban is no longer necessary for U.S. corporations who wish to benefit from the natural resources of Central Asia.  The U.S. government has made it clear that stability in Afghanistan is one of its central goals in the current military operation;  I suspect it will become clear in coming weeks that the U.S. will require a similar stability in Pakistan, thereby closing the circuit of pipeline between Turkmenistan and the West.
        It can certainly be argued that a monetary windfall for U.S. companies numbering in the trillions of dollars represents a significant U.S. policy interest;  however it seems imprudent not to question the loftier motives the current administration would ascribe to the "war on terror".

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