The critical BTC pipeline
TODAY’S COLUMNIST
By S. Rob Sobhani
July 14, 2006

Washington Times, DC
July 14 2006

Yesterday, at the southern Turkish Port of Ceyhan on the Mediterranean
Sea, the 1,087-mile Baku-Tbilisi-Ceyhan (BTC) crude-oil pipeline will
be inaugurated at an official ceremony with the presidents of Turkey,
Georgia and Azerbaijan in attendance. This historic event marks
the culmination of a major U.S. foreign policy effort to connect
the Mediterranean with the heretofore landlocked but energy-rich
Caspian Sea.

Since the discovery of sizable hydrocarbon reserves in the Caspian
Sea, a fundamental premise of U.S. energy policy has been the
uninterrupted transportation of the Caspian’s 80 billion barrels
of oil to international markets, thereby diversifying world energy
supplies and easing Western reliance on Middle East crude supplies.

The new pipeline is the linchpin of this policy because it carries
crude oil directly from the offshore oil fields of Azerbaijan to the
Mediterranean via Tbilisi, the capital of Georgia.

This world-class marvel of the 21st century runs entirely underground
in order to preserve the environment. Operated by BP, it has the
capacity to deliver more than 1 million barrels per day of crude oil
to the port of Ceyhan, where the oil can be offloaded to tankers with
destinations worldwide.

Support from both the private (BP) and public (World Bank) sectors
for the BTC pipeline has helped bring prosperity to the region. More
than 500 villages along the pipeline route have received improvements
in their medical, water and educational facilities.

Interestingly, of the 15,739 micro-loans issued by the World Bank
in Azerbaijan, 49 percent were to women. The gross domestic product
of Azerbaijan alone is expected to grow by 20 percent per annum,
transforming this nation into the Kuwait of the Caspian Sea.

Sadly, the man most responsible for making the BTC pipeline a reality
died before it was completed. Former Azerbaijan President Heydar Aliyev
used his formidable leadership capability, determination and courage
to bring the pipeline into existence. The obstacles Mr. Aliyev faced
were tremendous. When the U.S. government determined that it did not
want a pipeline from the Caspian Sea to run through the territory
of Iran, then-President Aliyev showed enormous courage and stood up
to the clerical regime in Tehran, despite the latter’s vociferous
objections. Azerbaijan’s neighbor to the north also objected to the
U.S. policy of multiple pipelines, but Mr. Aliyev did not buckle
under Moscow’s pressure. He forged ahead because he realized that
U.S.-Azerbaijan interests were mutually reinforcing, and nowhere did
they overlap more than in the uninterrupted exploration, development
and transportation of Caspian Sea oil and natural gas to international
markets.

Upon Mr. Aliyev’s death in December 2003, the responsibility for
ensuring the completion of BTC was inherited by his son, Ilham
Aliyev, who was elected president after his father’s death. The young
president, who recently visited President Bush at the White House to
discuss global energy security, has continued his father’s legacy
and can be credited for turning this South Carolina-sized country
of 8 million into the transport hub of the Caspian Sea region,
thus elevating Azerbaijan’s strategic importance to the West. Just
last month, oil-rich Kazakhstan signed a long-term agreement to
transport 140 million barrels per annum through the BTC pipeline,
thereby enabling it to deliver crude oil to Western markets without
Russian involvement.

Credit for today’s historic event must also be given to those many
individuals within the U.S. government who fought day and night
for years to see this pipeline become a reality. Furthermore, the
personal commitment to the pipeline by Sir John Browne, chairman of
BP, was also instrumental in giving confidence to the international
financial community to finance the $3.4 billion project.

BTC must be seen as a project of geo-strategic significance: linking
three allies of the United States along an East-West energy corridor,
loosening Russia’s long-standing grip over oil exports from the
Caspian and denying the Islamic regime of Iran transit revenues.

In order to ensure the viability of this strategic asset, which is
of enormous importance to Western energy security, Washington might
consider the following initiative: First, the resolution of the
Azerbaijan-Armenia conflict over the territory of Nagorno-Karabagh
should be a priority of American diplomacy because resumption of
this conflict could negatively affect the flow of oil to the United
States. And second, Congress must immediately allocate funding to
bolster U.S.-Azerbaijan military ties.

Over the last decade, the strategic partnership between the United
States and Azerbaijan has helped both countries significantly.

Today, with the flow of oil through the BTC pipeline, this important
relationship has also enhanced global energy security.

S. Rob Sobhani, Ph.D., is president of Caspian Energy Security.