The Oil Road

by James Marriott

  Much of the coalition’s campaign focused on the ‘Lender Group’ – the gathering of international finance institutions, export credit agencies and high street banks who were planning to provide $1.6 billion of loans towards the BTC pipeline. The public officials at the European Bank for Reconstruction and Development and the International Finance Corporation – part of the World Bank group – as well as the various European, US and Japanese export credit agencies, had received strong steers from their respective governments to support BTC during the early 2000s. Both the US and EU had stated their geopolitical interests in ensuring that Caspian crude was pumped westwards.

  The remit of these international finance institutions is to use public money for the development of poorer countries. Consequently they regularly offer loans to multinationals to construct fossil-fuel projects that export natural resources. These loans are explicitly directed towards promoting liberalised economic structures in which foreign corporations can make substantial profits.

  From BP’s point of view, public finance provided not only capital, but, crucially, political support. The contribution of funds from Western export credit agencies indicated that the states to which they belonged would ally themselves with BP in any future arguments over BTC with the governments of Azerbaijan, Georgia and Turkey. As John Browne later explained, ‘We also needed the [international finance institutions] to underpin our property rights . . . That would reduce the risk for the companies involved.’12

  Because these public institutions use taxpayers’ money, and because of sustained campaigning by civil society groups, most of them are subject to some level of public oversight. Publicly funded projects need to meet basic standards on issues such as forced resettlement – the concern at Qarabork. Hence the local, national and international campaigns highlighted the threatened impacts of the pipeline’s construction in meetings and protests addressed to those public officials.

  BISHOPSGATE, LONDON

  Five weeks after our visit to Mansura in May 2003, we met with Jeff Jeter, senior environmental advisor of the European Bank for Reconstruction and Development, at Bishopsgate in the City of London. We had seen him the previous week and he had asked for a further meeting, as he was keen to know the details of ‘the place where the pipeline runs under a house’.

  His interest put us in a morally difficult position. Jeff had mentioned that ‘if the pipeline goes under a house we can’t fund the project’. However, if we told Jeff about this house, would he tell the company, and would the company in turn tell the state authorities in Azerbaijan? Would our actions lead to the family of Mansura coming under threat?

  We had warmed to Jeff in that first meeting. He was friendly, looked concerned, and was tentative in his assertions. On the phone he had been chatty, filled with an American camaraderie. He was a civil servant of the financial realm: surely he would stand neutral between us and BP, listen, and take careful action?

  As we had remembered it, Jeff had also agreed to confidentiality, meaning that he would not talk to the company before checking with us, for fear of setting off a chain of repercussions leading back to Mansura. But when we met him he started off by explaining how he had already talked to BTC Co.,13 and how they had clarified their position to him.

  Across the lined paper of his notebook his black biro drew the ground-plan of Mansura’s house, and then a second, with an orchard between them. ‘BP says they can pass between these two houses and underneath the orchard. They didn’t want to dig a trench and lay a pipe because of the disruption it would cause to the two households, so they’ve decided to do HDD – horizontal directional drilling. At two points on the route they are doing HDD, at point 169 km and . . . I can’t remember the other one.’

  We switch tack, talking about international standards on the proximity of pipelines to occupied buildings: BS 8010 Code of Practice for Pipelines on Land – subsection 2.4.2.1 for oil and subsection 2.4.2.2 for gas, amended in 1993, setting out the British standard for such matters.

  He asks for the printout we have brought along, so that it can be photocopied. A young woman returns shortly with the A4 sheets, and Jeff deals with our concerns one by one: ‘It’s clear that if the thickness of the pipe wall is sufficient then the regulations for line J in the diagram 2.1 apply . . . that means the minimum distance is 3 meters. I don’t think your assertion about the danger deriving from the distance between the gas pipeline and a dwelling can be correct’. He rounds up by saying: ‘BTC just wouldn’t put a pipeline in an unsafe setting, let me tell you. I’ve worked on this project for two years, and the care they give to safety…’ There is a powerful sense of the presences beyond the room, with its wall of glass looking out over the Square Mile – of the meeting that Jeff must have had with the BP officials and engineers, of our time in Mansura’s garden with the hoopoe flying about.

  We should have resisted arguing it on technical grounds, where the masterly self-assurance of numbers renders everything solvable. We allowed ourselves to defer to the absent engineers. We failed to make Jeff defer to the absent Mansura. And did this mean that we might have put her in a difficult position for nothing?

  We said that the woman had told us the pipeline would pass under her house. Jeff said the engineers had told him that things were following standard procedures. We should have said: ‘But if BTC are so sure it is safe, why haven’t they properly informed the householders? Why are they terrified? Why does she want to be moved?’

  In the months following this meeting, the cavalcade of machines and men involved in laying the BTC pipeline approached Qarabork from the east. First the land was staked out, then a section of topsoil twenty-eight metres across was removed, and mounded carefully along one side of the bare strip stretching far off into the distance. Then the lorries came, each carrying three massive sections of black pipe. A Caterpillar truck with a magnetic grabbing arm lifted each length through the air and lowered it onto a cushion of white plastic sandbags. The pipes were laid out in a line, stretching kilometre after kilometre across the fields and streams.

  Each section was guided into its place in the strip, and the welders set to work inside their silver steel huts, lifted into place over each joint. Next the diggers came, cutting a deep trench through the landscape, the raw earth heaped to one side. The pipes, now welded together, were lifted by a team of machines and laid in the trench. In due course the earth was backfilled and the topsoil replaced. Then the army of labourers in yellow hard hats, dark glasses and orange flurescent jackets moved on, heading west towards Georgia.

  But near this village the standard method of laying the pipe halted, and both BTC and SCP plunged deeper underground, under the road and under the gap between the houses.

  BTC KP 187 – 374 KM – QARABORK, AZERBAIJAN

  Six years later, we return to Qarabork with Mayis. The fig trees are in full leaf and the land along the stream is thick with undergrowth. Mansura and her daughter appear to have aged a great deal. Mansura’s hair is still covered in a bright headscarf, but we notice that her shoes are torn and that she is wearing multiple layers of socks. The house feels cold, heated only by a small wood stove, despite the vast quantities of gas being pumped past so close by.

  The marker posts delineating the pipe’s route run just beyond the garden fence. Neither she nor her daughter feel any safer now that construction is over. Ultimately it matters little to them whether the pipeline passes under their house or their orchard. Both are part of their home, and were there an explosion, the slight difference in route would be academic – their wooden fence will not protect them. A couple of times a week they feel a vibration that shakes the house, which did not happen before the pipeline was built. Cracks have started to appear in the walls.

  Why did we tell Jeff Jeter that compliance with British standards was all that was required for a pipeline in Azerbaijan? Why did we get sucked into the language of the regulatory detail? After all, the pipeline runs near numerous ongoing conflict zones, has been targeted
by both Russian and Kurdish bombs and is patrolled by both local military forces and BP’s own security guards. Qarabork lies only 40 kilometres from the frontline of the ‘frozen conflict’ of Nagorno-Karabakh.

  ‘Nobody comes to check on us, to see that we are still alive’, Mansura says.

  BTC KP 264 – 451 KM – RәHIMLI, AZERBAIJAN

  We were sitting on the grass, in the shade of a few trees, with two women who were refugees from Nagorno-Karabakh. They pointed to the village where they lived – a purple silhouette on the far side of the field. They had no land there. There was running water in the village, but no gas supply. They lived on food parcels delivered every month: one kilo of sugar, one litre of oil, one kilo of rice per person.

  One of the two women said that she wished she had been killed by Armenians rather than have to live like this. She and the other woman had put down their loads at the edge of the field. We had seen them bent low under heavy bundles of firewood, trudging across the plough, their brightly coloured clothing – oranges and reds – against the brown earth.

  They told us that they had spent two and a half hours gathering wood beyond the main road. The bundles were enough for one day – wood for cooking and boiling water. They gathered wood every day. The first woman had six in her family, the second had five. There were children with them, playing among the trees. One of them, a boy of perhaps ten years, had also been carrying a bundle of firewood.

  A metre beneath us, 140,000 barrels of oil a day passed from the Chirag field to the Supsa terminal. It was one o’clock on 9 May 2003 in the field at Rәhimli, near Yevlax in central Azerbaijan. BP’s main pipeline had not yet been built, but its smaller Baku–Supsa route to the Black Sea was already pumping. It was 9 a.m. in London, and the International Petroleum Exchange was just opening, a barrel of crude trading at $30.20. That meant that beneath the bundles of firewood was fuel worth roughly $4,200,000. No wonder the oil companies devoted so many years to negotiating the deal they achieved. No wonder they call the agreement the ‘Contract of the Century’. No wonder BP reports to its shareholders that Azerbaijan is a profit centre.

  Together with Mayis we had driven twenty kilometres west of Qarabork, along the main highway still heading away from Sangachal. We were searching for the field near the village of Rәhimli where we had sat and talked with the women six years previously, the marker posts of the pipelines acting as our guides. Quite suddenly we spot the trees and then the marker for SCP, the South Caucasus gas pipeline. Mehdi stops the car and we clamber out.

  The Azeri economy was once heavily based on gas. Major grid expansion projects in the 1960s and 1970s led to widespread gas use for heating homes, with 80 per cent of Azerbaijan’s 1.8 million households hooked up by 1990. The main power plants also ran off natural gas, so the fuel had a far higher level of penetration than in Western European economies, well before the ‘dash for gas’ in Britain and elsewhere. After the Soviet Union fell apart the grid deteriorated, and soon less than half of all households could receive gas, especially those outside Baku.14

  Today, BP, the public banks and the Azeri government have rebuilt elements of Azerbaijan’s gas infrastructure. But rather than heating homes in the villages and cities, much of the fuel is pumped from the Shah Deniz field to Sangachal, into the South Caucasus pipeline, and then westwards out of the country.

  The SCP was completed in 2007 to force an annual 8.8 billion cubic metres of Caspian gas across the Caucasus mountains to the city of Erzurum on the Anatolian plateau, where it enters the existing Turkish gas network and is sent onwards to Ankara and İstanbul. The companies and the European Union intend that a new 4,000-kilometre pipeline should extend beyond the SCP across Bulgaria, Romania and Hungary into Central Europe, locking Azerbaijan into the expanding European gas grid. Representatives of the five partner countries in the project all attended the Vienna State Opera and saw a production of Verdi’s Nabucco, about a Persian emperor, and named the pipeline after it.15 If built, it would fuel power stations and domestic cookers in Austria, Germany and across Europe. Ultimately, if all goes according to plan, a vast cobweb of pipelines will extend outwards in all directions from Europe, reaching into the Arctic, Central Asia and the Niger Delta.

  The EU is promoting increased gas consumption at a time when the extraction of gas from within the member states is set to decline. This will create a major shortfall in coming years. By 2020, the EU expects to consume 650 billion cubic metres of gas annually, compared to 530 billion in 2010. For this to happen while domestic extraction falls, imports of gas will need to rise by 50 per cent over the same ten-year period.16 The European Commission has devised a two-pronged strategy to address the shortfall. Internally, the twenty-seven member countries have been liberalising and integrating the pan-EU gas market, while separating energy supply companies from transportation companies.

  In parallel, a concerted drive to build infrastructure to transfer fuel resources to Europe is led by European Commission civil servants working on energy and external relations, backed by financial support from the European Investment Bank and the European Bank for Reconstruction and Development. New pipelines are to be laid across thousands of kilometres of mountains, sea, desert and tundra. Running north, east and south, these will remove natural resources from ‘producer countries’ and transfer them to EU consumers in the dominant economy.

  The EU describes its plans as assuring ‘security of supply’ for the future. Working closely with European energy companies, its aim is to guarantee the increased provision of gas to European markets over coming decades. The argument runs that

  Europe is one of the world’s largest demand centres for gas. The Caspian and the Middle East make up the largest gas reserve region in the world. Today, there is no direct link between these two important demand and supply markets. To link those two markets through the Southern Corridor, i.e. Turkey and the south of Europe, is the logical thing to do.17

  It is perhaps unsurprising that the EU should find it ‘logical’ to transfer the gas resources of the Middle East, the Caspian, Siberia, the Russian and Scandinavian Arctic, North Africa and the Gulf of Guinea to the EU. Except, of course, that these resources do not flow of their own accord. This is not a rain catchment area in which mountain streams head downhill, joining tributaries and rivers to provide water to the city in the valley. Gas is lighter than crude, but it still requires pressure to force it down a pipeline, while political and financial forces determine the route along which it is transported.

  This web of gas pipelines, then, is centred on Brussels. Presentations by Commission officials and gas company executives show these threads fanning out in all directions – images that make the web appear natural, geographically determined. The reality is that the web is the outcome of intense lobbying, billions of dollars of loans, and the balance of political and economic power.

  Jean-Arnold Vinois of the European Commission’s Energy Directorate General and Marco Alvera, senior vice-president for the Italian oil company ENI, gave parallel dinner presentations on gas pipelines and security of supply to the European Energy Forum in Brussels in October 2008 – only weeks after the gas leak at Central Azeri, and with much of BP’s Caspian extraction shut down. These two government and corporate leaders celebrated ‘Europe’s unique position in respect of gas’, comparing the EU’s advantageous location to that of East Asia and North America.18 While these other dominant economies and sites of global gas consumption also expect to rely heavily on imports in the future, Europe is surrounded by potential sources that are all accessible by pipelines.19

  Very long pipelines. If Azeri gas from the Caspian does reach Austria, it will have travelled over 5,000 kilometres. This is the ‘Southern Corridor’, and the Nabucco pipeline is also intended to suck gas from Iraq, Egypt and possibly Iran into Central Europe. Meanwhile, the proposed Trans-Sahara Gas Pipeline would run for 4,300 kilometres northwards, from the coastal Niger Delta across the entire Sahara to Hassi R’Mel in Algeria, where it would
connect with existing lines that cross the Mediterranean to Spain and Italy. European companies, such as Shell, have been eager to support the plans, and EU Energy Commissioner Andris Piebalgs has offered to help finance the $21 billion project through the European Investment Bank.20

  When Vinois presented to the assembled diners from European corporations and governments in 2008, he referred to these schemes as ‘European priority projects’ that ‘must be included in national strategic plans’.21 The EU’s ‘four corridors’ strategy aims to tap into Central Asian and Middle Eastern, Russian, Scandinavian, and North and West African reserves, by extending, broadening and strengthening these import ‘corridors’ to ship more gas from greater and greater distances.

  The term ‘energy corridor’, used in policy documents and speeches, disguises the fact that these are pieces of one-way infrastructure that enable a long-term resource grab, locking extracted fuel into the European gas grid. The Shah Deniz field off Baku, Turkmeni reserves yet to be discovered, this ploughed field at Rәhimli we are standing in – they all play a role in a particular vision of Europe’s energy future.

  The trees at the edge of the field where we had sat with the women six years ago are now joined by more familiar marker posts. We turn from them, clamber into Mehdi’s mud-spattered Lada, and continue west.

  7 SCHRADER’S INSTRUCTION IS PAPER FOR THE TOILET

  BTC KP 320 – 507 KM – HACALLI, AZERBAIJAN

  The Easter sky is overcast on this bitingly cold morning. Light rain falls on the windscreen as we pass flat and fertile land. There are fields full of short wheat and clover, and shepherds herding small flocks of long-eared sheep. The land tilts away to the River Kura in the north.