Unable to subdue this Slav rival alone, the Republic made use of superior forces. Venice was contracted to transport the Fourth Crusade to Egypt, and then Palestine. When the French knights were unable to pay their bills, the Doge Enrico Dandolo offered temporarily to ignore their debts if they helped deal with this Christian thorn in the Republic’s side.23 The Crusade was diverted, and on 10 November 1202 a fierce attack ended with the town being pillaged and burned. To prevent Zadar’s power from ever re-emerging, the Venetians tore it down brick by brick.24
Dandolo saw the potential for Venice to become the trading power of the eastern Mediterranean, La Dominante. But the strength of the Byzantine Empire and its continued control over the seaways constrained Venetian access to the Levant and the Black Sea – and thus to slaves, sugar, silks and spices. So the Doge made profitable use of the Fourth Crusade by directing it to Byzantium’s capital: Constantinople.
The Byzantines had long held an important technological advantage over the West: ‘Greek Fire’. This liquid was created from crude oil brought by camel train from the pits of Balakhani, near Baku. In the midst of battle the liquid was pumped through tubes and ignited, setting fire to attacking ships. But this time the Byzantines were deprived of their last line of defence: the Venetians had discovered how to treat leather with chemicals, rendering their vessels invulnerable.25 Christendom’s largest and richest city was assaulted and captured. Days of looting and plundering followed, in the most profitable of the Crusader sieges.26
Byzantium was divided up between the Crusader lords and Venice. Dandolo sought not vast tracts of territory, but strategic islands suitable for naval bases and harbours in which its commercial convoys might stop and resupply.27 The Winged Lion of St Mark, the symbol of Venice, fluttered over ports and islands such as Rhodes, Methoni and Kefalonia. For five centuries, Venice’s military helped secure the trading ventures in which the city’s merchant families invested. The Republic’s bureaucracy maintained surveillance over rival powers, subject peoples and its own citizens, to ensure stability and protect its network of interests.
With the rise of the Ottoman Turks, the Venetian galleys were pushed back. One after another, fortresses and colonies fell to the new power, whose armies marched westwards from Constantinople across the Balkans, and reached the frontier of the Republic just inland from Zadar.28 The decline of Venice’s military power went hand-in-hand with the withering of her trade routes.
Present-day Republicans in Washington, DC, seek to learn from Venice’s success, perceiving in La Serenissima’s domination a means of preserving US economic power without the costs of ongoing occupations.29 Indeed, the model of Venice can help us understand how states such as Azerbaijan and Georgia lie within the imperium of the US and EU. These contemporary powers are not driven by desire for territory or tax revenues, but by desire for access to resources and markets – resources such as oil, and markets such as those for oil products. But this depends upon trade routes structured in terms favourable to the West, and secured through military dominance – routes such as the ‘energy corridor’ along which we are travelling, which runs so close to US forces at Krtsanisi in Georgia, İncirlik in Turkey, and NATO’s Aviano airbase near Venice.
DAY 5, 08:08 – 1,350 NM – 4,455 KM – NORTHERN ADRIATIC
One hundred and fifty kilometres north of Zadar lies the port city of Rijeka. Once known by its Italian name, Fiume, it was a node in the first Oil Road from the Caspian. In the early 1880s the market for kerosene in the Austro-Hungarian Empire was booming, fed mainly by the products of Rockefeller’s Standard Oil, imported from the US. But the Austrian branch of the Rothschild Bank began a rival venture that would transform the Central European energy world.
Under the technical direction of Milutin Barac, a brilliant young Croatian chemist, the continent’s largest refinery with the most advanced technology was built along the shore on the western edge of Fiume. By early 1884, the plant was transporting twenty train wagons a day of kerosene and other products along the Sud Bahn, north to Laibach (Ljubljana) and Vienna, Prague and Budapest – a railway majority owned by the Rothschilds. Initially the Fiume refinery processed crude from Pennsylvania, but soon the raw oil was coming from Baku. The Paris branch of the Rothschild Bank had purchased the Caucasus-based BNITO, financed the construction of the Baku–Batumi Railway, and built a fleet of tankers with Marcus Samuel to transport kerosene.
Crude was soon being transported from the shores of the Caspian on the railway across the Caucasus, and by tanker from Batumi via the Bosphorus to the northern Adriatic. It was refined into kerosene at Fiume and distributed by rail wagons as far afield as Salzburg. Each one of these stages was part-owned by either the Austrian or French House of Rothschild. This was the first incarnation of the industrial Oil Road along which we are travelling, and it lasted a mere generation.
In 1911 the Rothschilds, unsettled by the militancy of the workforce in Batumi and Baku and the destruction caused by the 1905 Revolution, sold their Caucasus assets to Royal Dutch Shell. The outbreak of World War I three years later halted all exports of oil from Batumi. The defeat of the Central Powers in 1918 saw Fiume, like her sister city Trieste, further up the Adriatic, gripped by a whirlwind of political turmoil. When the Austro-Hungarian Empire was dismantled, the oil port could no longer serve its original market. It became overwhelmed by a struggle between the Italians and their Slav neighbours.
On 12 September 1919, the Italian poet Gabriele D’Annunzio arrived triumphantly in a red sports car at the head of a column of 297 black-shirted Arditi followers, and seized the city. At first the intention was to hand the territory to Italy, but the latter refused to recognise the action, and D’Annunzio declared Fiume the independent Regency of Carnaro, and himself as ‘Duce’ or ‘Il Commandante’. Fiume became a crucible of political experimentation, the first self-defined fascist state. Seismic events were happening along the Oil Road – six months later the Bolsheviks seized Baku, and a year after that Ordjonikidze rode victorious into Tbilisi on a white horse.
Four days after the coup, the Futurist poet Filippo Marinetti hurried to D’Annunzio’s side, filled with the excitement of what was taking place. In its fifteen-month life, the Regency was seen by many as the model of future political structures, inspiring the ambitions of Mussolini and, later, Hitler. Here the culture of dictatorship and rituals of fascism were practised and developed, including the rhetoric and the balcony address, corporatist economics, and the fascist salute. Fiume was proclaimed a purely ‘Italian’ city. Many Croats were expelled, including Milutin Barac, who remained responsible for the refinery’s operations thirty-six years after first taking the job.30 The plant itself, which employed 500 workers, was shut down.31
D’Annunzio’s Regency surrendered to the troops of the kingdom of Italy in December 1920, but the fascists returned within three years. After ‘The March on Rome’ in 1922, one of Benito Mussolini’s immediate priorities was to reduce Italy’s dependence on British and American oil companies and build a state-owned industry.
Within a month of seizing power, the new regime took steps to buy the refinery from the Rothschilds, assuming full shareholder control by 1923. The Hungarian-built, Austrian-financed and Croatian-managed plant had already been selected as the ‘nucleus of the Italian oil programme’, and the basis for the new national oil company Agip.32 By 1935 the refinery was among ‘the most important mainstays of the country’s armed forces’, fuelling the invasion and occupation of Ethiopia.33 The existing plant had been refitted to prioritise petrol production, in parallel with Italy’s militarisation and colonial ambitions. Meanwhile, a new Agip refinery was constructed at Muggia, next to Trieste.
However, Mussolini’s intention to be free of the foreign oil companies was far less successful than Stalin’s moves in the Soviet Union, partly because Italy lacked a crude source similar to Azerbaijan’s. Throughout the 1920s, the Anglo-Persian Oil Company – later BP – helped supply the fascist state with oil products, a
nd tried, unsuccessfully, to buy a percentage of Agip. By the 1930s, Italy was Anglo-Persian’s fourth largest market for gasoline.34
After World War II, a restructured Agip grew from its fascist roots, expanding into Nigeria, Libya and ultimately the new Oil Road across the Caucasus itself. The company, now subsumed into Italy’s larger oil corporation ENI, is one of the shareholders in BTC Co. Meanwhile Fiume is no longer Italian. At the end of World War II, Tito’s partizani wrested the city from the German army, and the refinery became a key part of Yugoslav industry, eventually becoming the Croatian port of Rijeka. This city-incubator of fascism was governed by six different states in the twentieth century – echoing the upheaval in Baku and Batumi during the same period.
DAY 5, 14:00 – 1,432 NM – 4,607 KM – MUGGIA, ITALY
As the Dugi Otok heads north, the Adriatic is narrowing. Soon the tanker will be docking at Muggia in the Gulf of Trieste. There is a change in the rhythm of the engines as the vessel makes her final approach. The 790,000 barrels of black crude in the ship’s hold are nearing the white geometry of the tank farm on the hillside overlooking the bay. The small pilot boat pulls alongside. From the bridge, the pilot instructs the vessel’s officers on how to manoeuvre into port, and then to their allotted docking station at the oil terminal.
Twin tugboats move close alongside, providing a gentle nudge now and then to keep the tanker on track into the Vallone di Muggia. As the Dugi Otok docks at the number-one pontoon of the Societa Italiana per l’Oleodotto Transalpino, thick docking chains are run out, placed around large steel cleats, and tightened.
The arrival of a consignment of Azeri crude in Muggia has stirred activity in the office of BP Integrated Supply and Trading (IST) at Canary Wharf, in London’s Docklands. From here, BP tracks its global movement of crude in pipelines, ships and storage tanks. BP IST has overseen the delivery of the crude we are following from BP Azerbaijan to BP Oil Germany through the BTC pipeline, on the Dugi Otok, and now through the Transalpine Pipeline.
At the point of unloading, the cargo is checked by the Camin Cargo Assurance Inspection company, working under contract for IST. The inspection team conducts the checks by using BP’s Global Cargo Assurance System. This computer-based technology should issue an automatic alert if there is a variance of anything more than 0.2 per cent between what was loaded at Ceyhan and what is unloaded at Muggia. With the oil price in the spring of 2009 running at around $50 a barrel, 0.2 per cent of Dugi Otok’s cargo could be worth $79,000.
When the crude has been pumped out of the ship’s hold to the tank farm in the hills, BP’s IST team will have completed their sale of Azeri oil. Soon, after the crew of the Dugi Otok have taken a few hours on shore, the tanker will head south again to collect another load, perhaps at Ceyhan, perhaps at another port. Her course will be determined by the oil-traders speculating on changing prices. Everything is in motion.
Part IV THE ROAD
MAP V ITALY–AUSTRIA–GERMANY
18 THEY HAVE LONG ARMS . . . LIKE THE ARMS OF AN OCTOPUS
TAL KP 1 – 4,608 KM – VALLONE DI MUGGIA, ITALY
‘How the pipeline works? They put the oil from these ships into tanks, at the tank farm up on the hill, then they pump it to Ingolstadt in Germany.’ Our train has carried us to Trieste, and we have made our way to the town of Muggia, at the southern edge of the city. In the harbour of Muggia we meet with Marzia Piron, a marine biologist studying the Gulf of Trieste. Part of the shallow northern Adriatic, it was as rich in fish, historically, as İskenderun Bay. Marzia has brought us to Fabio, one of the local squid fishers, who is working on his boat by the quayside. Fabio talks of the Transalpine Pipeline as he picks the seppia from his nets, his hands and clothing covered in their black ink. His family have been fishermen in the region for over four centuries. His father moved his boat here in the 1960s from the harbour of Capodistria, which is now across the border in Slovenia and known as Koper. In referring to it by its former name, Fabio shows that his family is one of the thousands of Italians who left Yugoslavia as refugees in the two decades after World War II.
The harsh wind of the Adriatic bora whistles through the rigging of the yachts in the adjacent marina. Across the blue of the Vallone di Muggia, this wide inlet of the Gulf, the foot ferries track back and forth to Trieste. Fabio knows Marzia well, and quickly warms to his theme. ‘There was a big oil spill in the Vallone in 1974 or ’75. They swept all the oil into this harbour in order to pump it out. But the mud at the bottom of the Vallone is contaminated. The tankers churn up the mud, which gets onto the nets: it’s a lot of work cleaning them.’ He says there are too many ‘forbidden areas’ in the Gulf, because of the zona, the channel for the ships, which makes fishing difficult. ‘Sometimes there are ten or twelve ships waiting for the oil terminal, and the Golfo is little’. We ask if he has problems with the coastguards. ‘I’d better not say anything about the coastguard. They work to get money from the fishermen and not to solve our problems.’ He says fishing has declined because the species of fish have changed, as the water has become warmer since the 1970s; all the phosphorous pollution means that algae have bloomed. ‘The worst year was in 1987 – we had to stop the seppia fishing.’ As we part, he concludes: ‘I worked at the Esso refinery here. I was happy to work there until it closed on 22 November 1987 – I remember the date well.’
We have lunch with Marzia on the terrace of the Ristorante Marina. There is the sound of couples conversing at the other tables, the click-clack of the waitress’s heels, the clatter of plates in the kitchen, and the far-off rumble of some industrial plant. Through the blurred, thick polythene windows is the Vallone; the dimpled surface of the water constantly moving, and the bulk of two tankers can be seen. We can make out the Dugi Otok, riding higher in the water after unloading, and the Zarifa Aliyeva, named after Ilham Aliyev’s mother. The oil pumped from the hold of the tanker passes through a pipeline to the Valle Dolina storage tanks belonging to Societa Italiana per l’Oleodotto Transalpino – known as SIOT. From the tank farm it will be pushed through the Transalpine Pipeline over the Alps to Germany.
The restaurant, like the yachts, belongs to the sedate, leisured realm of the European middle class. It feels a long way from the near-deserted Balık Restoran in Gölovası. Muggia happily trades on its Venetian past. Scrubbed lions of San Marco are mounted above the archway in the old town walls. This was a bastion of the Republic facing the Austrians in Trieste across the Vallone. Meanwhile SIOT is tucked away up the valley beyond signs that say ‘No Entrance’ in three languages. Few tourists ever notice the immense hub of energy and wealth that lies in the hills.
It is only May, but the heat of the afternoon is pounding. Foolishly, we leave Marzia and walk along the main road, which is heavy with traffic, to the east of Muggia, across the weed-clogged River Ospo. We want to visit the place once occupied by the Aquilina refinery, where Fabio worked. There is nothing there, just a great expanse of gravel, broken concrete and scrub. This is the site of the Agip plant built under Mussolini in the 1930s. After the war it was brought by Exxon, who ran it until its closure in the late 1980s. But now the land has lain barren for over twenty years. Fabio said that the soil is contaminated and that they would have to remove all of it in order to reuse the place. It reminds us of staring at the factory sites in Gәncә.
The Transalpine Pipeline, known as TAL, and the SIOT terminal, are children of the Cold War. Both are products and creators of a particular set of geopolitical realities. The Soviet Union constructed the southern branch of the Druzhba, or Friendship, pipeline from Russia to Czechoslovakia and Hungary between 1960 and 1964. The Bratsvo, or Brotherhood, gas pipeline followed soon after. Flush with Khrushchev’s promise of economic plenty, the USSR now provided cheap oil and gas to countries such as East Germany, whose armies, only two decades before, had invaded the Soviet Union, reaching as far as the peaks of the Caucasus. Former enemies now embraced with friendship and brotherhood.
The Transalpine Pipeline was a coun
terpoint to the Soviet ones. Driven by US and UK capital, it would link Italy, Austria and West Germany – all previously Axis powers, whose industrial infrastructure the Allies had bombed. Austria and West Germany were still divided into areas of military control by the victorious Allies, and the pipeline would run through both British and American Army sectors.
In the early 1960s, Saudi Arabia, Iran, Kuwait and Iraq all demanded that the foreign companies who extracted their oil increase their rate of production in order to generate a higher income for each state. President Kennedy’s administration was also eager that corporations in Middle Eastern states should ramp up their output, for the higher revenues would help bolster local regimes against popular opposition, and thereby halt the spread of Soviet influence. This logic was most clear in Iran, where the shah vociferously demanded higher production from BP, which held a commanding stake in Middle Eastern oil and 40 per cent of the Iranian oil company.
Between 1960 and 1969, crude extraction rocketed and the flow of oil into Western European markets increased dramatically. In Saudi Arabia, production jumped from 1 million to 3.5 million barrels; in Iran, from 1 million to 4 million. In the same decade, Baku’s production rose 22 per cent to its Soviet peak of 450,000 barrels, but the output of the region of the Middle East and North Africa grew by nearly 400 per cent, to 13.5 million barrels. Faced with this vastly increased flow of crude, the Western oil companies needed to stimulate consumption. In the same way that the Rothschilds, facing saturated European markets in the late 1880s, drove up kerosene consumption in the Far East, so the oil majors in the 1960s strove to reshape demand and restructure transport routes in order to sell their products. West Germany was a key area of potential growth, but the companies needed infrastructure to bring oil to future customers – infrastructure such as the Transalpine Pipeline. In 1963, the American engineering company Bechtel was hired to assess and plan a pipeline across the Alps.
The Oil Road Page 35