6 IF THE PIPELINE BURNS, I’LL BURN WITH IT
BTC KP 55 – 242 KM – LAKE HACIQABUL, AZERBAIJAN
A large Steppe Eagle circles leisurely overhead. Wings spread, it glides over us, passing above the road faster than Mehdi’s Lada. We are an hour west of Sangachal now, following the oil as it leaves the Caspian behind and crosses the Azeri desert. Lake Hacıqabul stretches out on our left, blue and still, unexpected in the dry ground around us. On the steppe to our right, between us and the hills rising to the north, a train thunders west, a caravan of fat black tankers strung out in a line. Loaded with Exxon’s oil, this train is destined for Batumi, on the Georgian Black Sea coast.
Closer yet, metal stakes with yellow hats with numbers stencilled in black paint appear every kilometre, marking the pipeline route:
61 62 63 64 65
Below the soil, the BTC pipeline runs parallel with the train tracks, along with its twin sisters, the South Caucasus gas pipeline and the older Baku–Supsa line. From Sangachal, it takes ten days to pump Caspian crude, unrefined, through the steel pipe of BTC, 1,768 kilometres to the Turkish Mediterranean coast. We can track its markers, following the oil as it is pushed across deserts and mountains, fields and forests.
Oil trains were first dragged west along this route 125 years ago, fuelled by ostatki or ‘leftovers’, the liquid fuel remaining after the refineries in Baku’s Black Town had extracted lighting kerosene from crude. When this railway line was built across the Caucasus in 1883, locomotives and steamers in Europe and the US were still predominantly coal-powered. The notion of liquid petroleum fuel was widely ridiculed in Berlin, London and New York, but in the Caspian region it was already taken for granted.1
Until this train track brought access to the seaports in the West, the steamers sailing from Baku could only export to Persian and Russian markets around the Caspian, and to the Volga and Ural river-basins. The Nobels quickly saturated the Russian market, increasing kerosene consumption many times over. But the real prize lay beyond the Tsar’s empire: the potential consumers in Western Europe and the Far East, which were monopolised by Rockefeller’s Standard Oil. Several oil barons, finding it difficult to break into the Russian market in which the Nobels held a dominant position, explored the idea of constructing a railway from Baku to the Black Sea port of Batumi. The coastal town had just been seized from the Ottoman Sultan Abdulhamid II by the Tsarist armies in the Russo-Turkish War of 1877–78, and Tsar Alexander II was keen to consolidate his new military base and develop the city as a port.
When Alphonse Rothschild, director of the French branch of the Rothschild Bank, arrived in Baku in 1883, he brought the capital to make this mountain-crossing plan a reality. Initially barred from direct investment in oilfields by anti-Jewish legislation brought in by the new Tsar Alexander III, the Rothschilds concentrated instead on oil distribution. With previous experience of financing railway construction in Europe, the Rothschilds approached the Tsar with a proposal to complete a project previously proposed by two Russian-Armenian oil magnates, A. A. Bunge and S. S. Palashkovski, who had gone bankrupt. With Alexander III’s approval, construction of the line began. From Baku, it crossed the desert, followed the valley of the River Kura up to Tbilisi, went over the high Suram Pass, and down the River Rioni to Batumi. Baku kerosene could now be shipped from the Black Sea coast, through the Bosphorus, to markets all over the world. Deliveries were soon being made to Fiume, Trieste, Marseilles, Barcelona, Antwerp and London. Railway tonnage soared, and between 1884 and 1887 the number of tank cars went from a few hundred to several thousand.
The construction, with its gangs of labourers, embankments, cuttings, tunnels and bridges, spearheaded the transformation of the Caucasus from a mountain region to an industrial heartland of the Russian Empire. The railway was completed within two years, and soon the continued dominance of the Nobels, and now the Rothschilds, over the Azeri oil barons became clear. Of the oil cars that travelled the line, 450 were owned by the Nobels and a hundred by the Rothschilds. Soon the ‘proverbially cautious Rothschilds’ had ‘thrown themselves with vigour’ into Baku’s oil scene, purchasing the Batumi Oil Refining and Trading Company (usually known by its Russian acronym BNITO) and founding a second entity, the Caspian–Black Sea Oil Company.2 Between 1884 and 1887, they invested nearly £2,000,000 – equivalent to £2.2 billion today.3 This was an enormous sum at a time when a rail oil tanker cost a mere £75. As the heavy engines pulled the crude westwards, the trains rumbled onwards past the hut in Gori where Joseph Djugashvili was growing up.
As extraction increased, the railway developed bottlenecks at the steep Suram Pass in Georgia, where two engines were needed to push and pull just eight tankers over the summit. The lowest point in the mountain range dividing lush western Georgia from the drier east, the Pass is over 1,000 metres above sea level. By 1886, increasing drilling in Baku showed that expanding the capacity of this Oil Road could be profitable – the oil baron and philanthropist Zeynalabin Taghiyev had just hit his gusher in Bibi Heybat. With additional financing from Taghiyev as well as Ludvig Nobel, the Rothschilds began to construct a kerosene pipeline running alongside the railway, together with a telephone connection.
But work was slow, and St Petersburg initially only approved construction of the line across the sixty steepest kilometres in central Georgia. It took nearly two decades and a new Tsar before permission was granted to construct the full pipeline to Batumi on the Black Sea, where it arrived in 1906.
The railway and the pipeline reconfigured the geopolitics of the lands between Baku and Batumi, between the Caspian and the Black Sea. For a century and a half it had been the fault-line between two empires, Russia and Persia. Now its orientation was towards Western Europe. New economic and political forces were created as Russia, France, Britain, Austro-Hungary and a number of companies redefined the region as an ‘export corridor’ in which they held substantial economic interests – eventually leading to the British occupation of the Caucasus with 40,000 troops in 1918. The train network and oil port created a growing working class in Tbilisi and Batumi, both of which later became centres of Bolshevik activity.
In 1929, after the Soviet conquest of the region, kerosene exports were dwindling in an age of electric light and petrol-fuelled transport, so a parallel pipeline for crude was opened from Baku to Batumi. This new construction supplied the refinery of Batumi, where petrol was produced and sold into European markets by the Soviet Union. However, barely more than a decade later the pipeline was dismantled again. Retreating rapidly in the face of the invading Nazi army, Soviet forces took the pipeline sections with them to Western Siberia, where they rebuilt it to fuel the Red Army’s counter-attack.
In the post-war period more pipelines were laid through the Caucasus, providing various pathways along which to transport Azeri crude to distant Soviet consumption centres. By the late 1980s most of these were disused, with the likes of Sumqayit making the region primarily a refining and petrochemical hub. So in the mid-1990s, when BP began to plan expansion and extraction from the ACG field, it had a variety of potential oil export routes. From the earliest negotiations between the Western companies and the Azeris, the promise to construct a route was included in the contracts – such as that signed by Browne and Sabit Bagirov in front of Thatcher in September 1992. The most obvious and cheapest route to use appeared to be Baku–Novorossiysk, a pipeline that runs north along the Caspian coast into Russia, before bending west through Chechnya towards the northern Black Sea port of Novorossiysk. The pipeline already existed and would only need upgrading, and Novorossiysk was well appointed, having been the export terminal for oil produced in the Maikop and Grozny fields, on the northern side of the Caucasus, since the 1880s.
But BP’s interests did not coincide with those of US policymakers. In a post-Soviet world, the United States could take advantage of Russia’s vulnerability. From 1993 onwards, national security officials in President Bill Clinton’s administration were staking out a strategic
interest in the region, claiming ‘legitimate political reasons for an aggressive US presence in the Caspian’.4 The idea of a new east–west ‘energy corridor’ that avoided Russian territory was being promoted in conference rooms in Washington, DC.5 The deputy national security advisor to the president, Sandy Berger, pulled together a group of high-level government officials and began to issue policy guidance on the importance of Caspian oil reserves to the US, and the need for defence cooperation with Azerbaijan.6 In mid-1995, when it became clear that BP and the Azerbaijan International Operating Company intended to use the line from Baku to Novorossiysk to export initial ‘Early Oil’ crude across Russian territory, Berger sprang into action. Twice that summer Berger met Terry Adams, the BP executive then running AIOC, and laid down the law: the game must be played according to US rules. Rather than spend $50 million fixing up the existing pipeline, BP should construct a new $250 million line from Sangachal to Georgia’s Black Sea port of Supsa, thus bypassing Russia. Berger was persuasive, especially since he was backed up by the subsidised loans offered by the World Bank and other international finance institutions.
Furthermore, the Baku–Novorossiysk pipeline was looking problematic. In September 1991 the Chechens declared independence from Russia, and over the following six years a brutal war took place. During the fighting the prospect of Caspian oil using the Baku–Novorossiysk pipeline was a significant factor, as the route of the pipeline passed through the Chechen capital of Grozny. The British journalist Sebastian Smith wrote:
In the North Caucasus you only have to say ‘neftprovod’, or ‘the oil pipeline’, and everyone knows what you mean. Not many people have ever seen it or really know exactly where it is, but there’s no mistaking what pipeline you are talking about. The Baku–Novorossisysk pipeline has its own presence, like the mountains, and when people talk about the war in Chechnya, they think of the pipeline.7
Eventually, in November 1996, Russian forces withdrew, and the Chechens now had de facto independence. Running through their territory was the pipeline – although its opening was delayed, partly due to a complex set of negotiations with the new Chechen government demanding a share of the transit fees along their section of the pipe. The Russian government was obviously deeply opposed to such a strategic oil route passing across the land of a hostile state, and in 1999 fighting broke out again as the Russian army invaded. Pumping through the pipeline soon stopped, and the oil from AIOC was now transported by rail to Novorossiysk, so as to avoid the Chechen war zone. Over the following months a new pipeline, known as the Chechen Bypass, was constructed by the Russian company Transneft to carry the crude to the Black Sea port via a route that avoided Chechnya.
By this time Baku–Novorossiysk had ceased to be such a vital artery for the oil companies. In September 1995, BP and AIOC had agreed to build what became known as the Baku–Supsa pipeline. The Clinton administration, meanwhile, had developed an innocuous-sounding phrase in which to frame its foreign energy policy towards the Caspian: they called for ‘multiple pipelines’.8 In this formulation, Baku–Novorossiysk was titled the Northern Route Export Pipeline (NREP), and Baku–Supsa formally termed the Western Route Export Pipeline (WREP).
Built to pump 115,000 barrels of oil per day, Baku–Supsa could only carry a fraction of the 1 million barrels that AIOC planned to extract daily from its offshore fields. With the pipeline to Novorossisyk looking undependable, how would the remaining 885,000 barrels of oil a day be transported to global markets?
BP, it seems, was keen to link Sangachal to the Iranian pipeline system in order to transport Azeri crude to the terminals of the Persian Gulf; but US policy was strongly opposed to this. However simple and financially viable a short pipeline to Northern Iran appeared, reliance on Tehran was not an option. Nor was another idea then being floated: a pipeline across Central Asia to China.
Pressure for multiple westbound pipelines continued to be exerted by Washington and London throughout the 1990s. Berger was promoted to national security advisor and worked closely with Richard Morningstar, who was appointed ambassador for Caspian Basin energy diplomacy. Together they lobbied for construction of the Baku–Tbilisi–Ceyhan pipeline through countries sympathetic to US policy. Berger and Morningstar achieved their goal in 1999 when the intergovernmental agreement – a treaty – was signed between Azerbaijan, Georgia and Turkey. Three years later BP formed the Baku–Tbilisi–Ceyhan Pipeline Company (BTC Co.), together with Statoil, Total, Chevron and other oil companies, in order to construct and operate the pipeline.
In the 1880s the Rothschilds’ railway and pipeline, driven by financial imperatives, caused major political transformations. Now, with BP’s pipelines through the Caucasus, the geopolitics came first. Morningstar himself stated how the fundamental objective of US policy in the Caspian was ‘not simply to build oil and gas pipelines. Rather, it is to use those pipelines, which must be commercially viable, as tools for establishing a political and economic framework.’9
In the heat, we can hear through the open car windows the rhythm of the wagons on the rails laid down at the end of the nineteenth century. Alongside them run three new pipelines built as the twenty-first century was starting. The oldest, Baku–Supsa, constructed in the late 1990s, was later joined by younger but larger twin sisters: the oil-carrying Baku–Tbilisi–Ceyhan and the gas-pumping South Caucasus Pipeline, buried together in one trench.
KP 187 – 374 KM – QARABORK, AZERBAIJAN
‘They came yesterday. They were here yesterday. Men in red suits.’‘How many?’
‘Eight. We tried to talk with them, but they wouldn’t talk. They just stayed outside the fence and looked. We tried to wave down their cars, but they wouldn’t stop.’
Visiting the village of Qarabork in May 2003, we had an uncanny sense that we, people from distant cities, were following on the heels of another group from the same cities. These eight men in red boiler suits were surely the team of engineers who were staying in the same hotel as us in Gәncә in Central Azerbaijan. We had seen them in their BTC overalls climbing the stairs with heavy holdalls as we sat talking on the landing. At least four of the group were from England, guys in their forties and fifties. We overheard them say that they needed to visit four more sites.
The small village of Qarabork, 187 kilometres along the pipeline from the Sangachal Terminal, lies west of the desert, where the River Kura waters the lush green fields. We had come to this village six years previously, as it was the site of a piece of complex engineering. Along the pipeline’s route through Azerbaijan and Georgia, there were only two places where its construction would involve destroying houses; Qarabork was one of them. BP was keen to avoid knocking down homes and thus forcing resettlement, as this might have made it more difficult to source public funds to finance the construction. Certainly it would have altered the profile of an already controversial project with the public in cities such as London. So in Qarabork the engineers explored the option of running the pipeline underneath the home of Mansura Ibishova.
Mansura’s house was a fine structure of two storeys. Built of wood and raised off the ground on stilts, it had a front veranda and a garden dotted with fruit trees, neatly bounded by plank fencing. At the back there was a large vegetable patch, a clump of bamboo, and the fields watered by the Kura.
The elderly Mansura was tiny and could not have been much over five foot. Her small, deeply lined face was tightly hemmed by an orange headscarf, and her eyes were almost frantic as she explained: ‘They are going to tunnel under the house, but they won’t give us any compensation.’
They came in early 2002. They were foreigners. They brought a document in Azeri, which she signed, but could not read. It was in the Latin alphabet, and like most of her generation she only reads Cyrillic, the standard script until President Heydar Aliyev decreed that it change. They left a brochure entitled Caspian Sea Oil and Gas Export Project. The men said she would have to move and would get compensation. She stopped growing her tomatoes and potatoes. Th
en she heard nothing.
A hoopoe flapped across the yard and landed briefly in one of the fruit trees. The sun was bright, but in the shade of the house it was cool. We stood talking with Mansura and her daughter as friends and children gathered around us, including a tiny baby girl in a fluorescent top and a boy of six or seven with a shaved head. He looked thin, his scalp bald in patches.
The municipality had told her the company would build a tunnel under the house, so they would not have to move – so they would receive no compensation. Under the terms of the pipeline agreement, any farmer whose land was disrupted by the construction work was entitled to compensation equivalent to the value of their lost crops.
She wanted compensation. She would rather they knocked down her house. She did not want to live over the pipeline. She said her neighbour had declared: ‘If the pipeline burns, I’ll burn with it.’ But her neighbour was mad. Mansura said: ‘If I don’t get compensation, I’ll write to President Aliyev’.
We paced out the width of the construction corridor: forty-four metres in total.10 The entire garden was only thirty-eight metres across. In the still air we could almost sense the future pipeline coming from the east, passing beneath the house and hurrying away towards Georgia. The thought of that oil, a million barrels a day, moving at two metres per second, flowing under the kitchen at night, the baby girl in her cot, Mansura asleep, her headscarf on the dresser beside her.
We had visited Qarabork as part of a fact-finding mission carried out by the network of organisations raising concerns over the impacts of the pipeline’s construction. This coalition included both the Azeri Centre for Civic Initiatives, for which Mayis worked, and the Committee of Oil Industry Workers’ Rights Protection led by Mirvary Gahramanli, the Georgian group Green Alternative, the CEE Bankwatch Network in Central and Eastern Europe and Rome’s Campagna per la Riforma della Banca Mondiale. In England, Friends of the Earth, the Corner House, the Kurdish Human Rights Project, Rising Tide and Platform were heavily involved, with many more in other countries.11
The Oil Road Page 13
