Town Hall, DC
May 26 2005
New Oil Pipeline ‘Advances Cause of Freedom, Bush Says
(CNSNews.com) – In a major achievement for the Caucasus and a
strategic victory for the U.S., one of the world’s longest oil
pipelines has come on line, providing the region with its first
outlet to world oil markets that bypasses Russia.
The Baku-Tbilisi-Ceyhan (BTC) pipeline “can help generate balanced
economic growth, and provide a foundation for a prosperous and just
society that advances the cause of freedom,” President Bush said in a
message, read by Energy Secretary Samuel Bodman at the inauguration
ceremony Wednesday.
Just short of 1,100 miles long, the buried pipeline will by the
year’s end funnel one million barrels of oil a day, traveling at two
meters per second, from Azerbaijan on the landlocked Caspian Sea, via
Georgia, to the Turkish Mediterranean port of Ceyhan.
The project is strongly supported by the U.S., while Russia has
opposed it, favoring an existing route for Caspian Basin oil via the
Russian Black Sea port of Novorosiisk — a route that provides Russia
with transit revenues and bypasses both Georgia and Turkey.
Although the Bush administration has been cautious not to antagonize
Moscow — which has seen its influence sharply wane on its
southwestern flank — the State Department hailed the pipeline
opening as “a major success for the U.S. goal of enhancing and
diversifying global energy supplies.”
Not only will the BTC break Russia’s virtual monopoly on regional
energy export routes, it will also boost supplies from non-OPEC and
non-Middle Eastern sources. Oil will come both from Azerbaijan’s
offshore fields and from Kazakhstan, the giant republic east of the
Caspian Sea.
The ceremony near Baku, the Azerbaijan capital, was attended by the
presidents of Turkey, Georgia, Azerbaijan and Kazakhstan, and guests
including the head of British energy giant BP, which holds the
largest stake (30 percent) in a consortium running the pipeline.
Other major shareholders include Azerbaijani state oil company SOCAR
(25 percent and U.S. Unocal (almost nine percent).
An expected Russian attendee, President Vladimir Putin’s
representative for international energy cooperation, failed to turn
up. The Interfax news agency said the Kremlin cited illness.
Listing the benefits Washington sees in the project, the State
Department said it would reinforce the sovereignty and prosperity of
Azerbaijan and Georgia and further integrate the two into the
international free market economy.
“The BTC pipeline will also enhance Turkey’s emerging role as an
energy transportation hub and help reduce oil tanker traffic
congestion in the Bosphorus and Dardanelles straits,” it added,
referring to the narrow waterways tankers now have to navigate to
exit the Black Sea en route to the Mediterranean and world markets.
Bolstering the participating states’ independence from Russia, the
launch of the pipeline marks a further shift in geo-political
alliances in a region that formed part of the Soviet empire before
its disintegration in 1991.
In 2003, Georgia’s “Rose Revolution” replaced a pro-Moscow
administration with a pro-Western one under President Mikhail
Saakashvili.
Bush’s recent visit to Tbilisi cemented strong relations between
Georgia and the U.S., which is also backing Saakashvili’s call for
Russia to remove two remaining Cold War-era military bases from the
small country.
Azerbaijan and Kazakhstan still are ruled by autocratic regimes
relatively friendly to Moscow, under presidents Ilham Aliyev and
Nursultan Nazarbayev, respectively. Nonetheless, Nazarbayev’s
last-minute announcement that the BTC will be used as one export
outlet for oil-rich Kazakhstan is likely to upset Russia further.
Construction on the $3.6 billion project began in 2003, almost a
decade after the idea was broached.
Among concerns raised over the years was the security issue —
related to Chechen terrorists hiding out in Georgia and to the
long-running Azerbaijan-Armenian dispute over an enclave called
Nagorno-Karabakh — and environmentalists’ worries about the impact
of a potential accidental or terror-related oil spillage.
On Monday, Georgia’s government said the three BTC countries were
concluding a mutual-assistance agreement in case of security or other
threat to the pipeline.
According to BP’s head office in the UK, just filling the length of
the pipeline will require ten million barrels of crude oil, and it
will take about six months for the flow to reach the Turkish end for
the first tanker loading.
A gas pipeline is also under construction, following the same route.