Monday, August 25

The rather odd BTC pipeline, Saakashvili's rather odd reversal on Georgia's opium trafficking, and Karzai's rather understandable position on poppies

"Pundita, dear, are you hinting at a mystery with your mention of death warrants for Russia and Karzai?

I don't think I'm up to another mystery investigation. If I remember it was six weeks of tracking clues about sick pigs and Chinese villagers before your readers landed in Shenzhen exclaiming "Elementary!"
Boris in Jackson Heights"

Dear Boris:
You mean what was left of my readership. By the fourth week on the topic of mystery pig illness, readers were dropping like flies. Yes indeed; loyal Pundita readers are a hardy breed. But look on the bright side. Our efforts helped stamp out what was threatening to become a global panic and escalation of Sino-US tensions.

In the present case I don't know whether there is a mystery. I have questions that I've not been able to answer to my satisfaction. It all started one dark and stormy night -- just checking to see if you're paying attention, Boris.

It all started when I read the Wikipedia article on the Baku-Tbilisi-Ceyhan pipeline (BTC). That was on August 11 after John McCain said in a speech:
[...] We have other important strategic interests at stake in Georgia, especially the continued flow of oil through the Baku-Tbilisi-Ceyhan pipeline [...]
I thought that was an odd remark because from what I'd heard about the BTC, the oil it carried was primarily intended for Europe.

The pipeline is owned by a consortium of energy companies led by BP (formerly British Petroleum), the operator of the pipeline. Here's the list of shareholders:

BP (United Kingdom): 30.1%
State Oil Company of Azerbaijan (SOCAR) (Azerbaijan): 25.00%
Chevron (USA): 8.90%
StatoilHydro (Norway): 8.71%
Türkiye Petrolleri Anonim Ortaklığı (TPAO) (Turkey): 6.53%
Eni/Agip (Italy): 5.00%
Total (France): 5.0%
Itochu (Japan): 3.4%
Inpex (Japan): 2.50%
ConocoPhillips (USA): 2.50%
Hess Corporation (USA) 2.36%

So what we see is that U.S. companies together hold less than a 14% share in the BTC consortium and that Britain's BP, which is the world's third largest global energy company, holds the lion's share.

However, I haven't heard of any British troops in Georgia. Have you?

For that matter, I haven't heard that Japanese, Norwegian, Turkish, French, Italian or Azerbaijani troops are in the country; just U.S. Marines, about 1,000 them. This is not counting the 1,500 CIA operatives hanging out in Georgia.

There's some question about whether those Marines were still in country when the fighting broke out. They were probably involved in the war games in Georgia that started in July.

Yet I couldn't recall any other country having troops in Georgia since the pipeline project began; just American troops, over the years.

The pipeline doesn't seem to carry enough oil, little more than 1% of the world's supply, to make it an effective hedge against Iran blocking oil shipments or Russia turning off the oil spigot.

Even so, that would be all the more reason for European countries to be involved in training Georgian troops and putting in a military presence there. Yet it was only the USA in Georgia -- despite the USA holding only a minority shareholder interest in the BTC.

An explanation could be that the USA is just using the pipeline as an excuse to hang out in Georgia and provoke Russia. That would be par for the course.

Yet I kept returning to the words I blurted when I first read the Wikipedia article: "This is an oil pipeline version of the East India Company."

I couldn't figure out what caused me to say that. There are elements of the pipeline project that one might argue are neocolonialist. But the East India Company was a straight-out colonialist enterprise. The British Raj was raised up on the foundation of the British East India Company.

So finally I went back to the Wiki article and closely re-read it, then I started plowing through the footnoted articles that were available in English.

The more I read about the project and recalled the era in which it arose, the more it didn't stack for me.

I'll continue this in the next post. But just so you don't lose sleep worrying about Karzai, he may have bought himself more time if this report by Ramtanu Maitra is correct. He claims that Karzai strongly supports the Afghan-based poppy field anti-eradication lobby.

Maitra also has much to say about the Senlis Council and George Soros' great interest in legalizing opium, which I knew nothing about.

The biggest surprise for me was Maitra's mention of a report from a Soros-funded foundation that Eduard Shevardnadze "initiated harsh legal measures and public campaigns against drug users in the 1970s" and that:
[...] there were promising changes under President Mikheil Saakashvili, who has "announced the possibility of shifting the focus of drug policy away from the predominantly law enforcement orientation." [...]
That would be quite a shift. In 2002, Saakashvili sounded like a law-and-order kinda guy about narcotics trafficking:
A Q&A with Mikhail [sic] Saakashvili: 1/7/02

Mikhail Saakashvili has emerged as a leading reformer in Georgia. In September 2001, Saakashvili resigned as justice minister in protest of the reluctance of President Eduard Shevardnadze's administration to implement anti-corruption measures. In October, he won a seat in the Georgian parliament in a special by-election, and since then has sought to strengthen his power base. Some observers now consider him a possible candidate to succeed Shevardnadze as Georgia's president. Saakashvili recently discussed Georgian politics with Jeffry K. Silverman, a Tbilisi-based journalist. Saakashvili expressed concern that narcotics trafficking in Georgia was developing into a serious problem. His comments follow:


Soon there will have to be some pressure applied from the West for Georgia to follow the correct path: the level of organized crime in the country is increasing with money laundering and a booming drug trade. There is a chance that the West might not react soon enough in addressing this problem. Something needs to be done before it gets out of hand.


Silverman: Can you comment on Georgia's role in drug trafficking?

Saakashvili: The source of the drugs starts out in Afghanistan, mostly in the region that the Northern Alliance controlled prior to the war with the Taliban. The US and their allies may not want to hear this, but we expect this business to increase in Georgia with the defeat of the Taliban forces. It was the Uzbeks and Tajiks that had the export business under control with their connections with transit points such as Tashkent [Uzbekistan], Osh [Kyrgyzstan] and other Central Asian routes. Also, many of those responsible for enforcing the laws and international agreements to combat the drug trade are directly involved in making substantial money from keeping things as they were.

The current political and economic situation in Georgia is perfect for the drug business to develop without barriers. We have created an ideal situation for drug dealing in terms of territories that are out of control, and our strategically important location. We have immediate access to seaports and thus the shortest routes to the West. Right now the West is more involved with larger issues and drugs appears to be secondary. This is a mistake.

Silverman: Where do you get information about drug dealing? What are your sources? Can you back up your claims with sources?

Saakashvili: I have many sources but I can't name any of them directly. Human life means almost nothing in Georgia and especially in the Pankisi Gorge. If I would name a concrete person, then this person would be immediately be killed or, even worse, members of his family [would also be targeted]. [...]

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