Oil and gas are not the reason the US has attacked Afghanistan, but Afghanistan has long had a key place in US plans to secure control of the vast but landlocked oil and gas reserves of Central Asia. Though the primary US motivation is to destroy Osama bin Laden’s sanctuary in Afghanistan, another, rather more pecuniary objective is also on the agenda, particularly in the search for an alternative government in Kabul. With the Taliban out of Kabul and the search for a new Afghan government on center stage, one criterion on Washington’s mind will be how best to make Afghanistan safe for a couple of billion-dollar pipeline investments.
In the case of the great natural gas and oil fields of Turkmenistan, immediately north of Afghanistan, the US government has for a decade strongly supported plans by US-led business groups for both an oil pipeline from Turkmenistan to the Arabian sea via Afghanistan and a gas pipeline from Turkmenistan across Afghanistan to Pakistan. Such pipelines would serve important US interests in a number of ways:
- Drawing the Central Asian oil states away from the Russian sphere of influence and establishing the foundation for a strong US position
- Thwarting the development of Iranian regional influence by limiting Turkmenistan-Iranian gas links and thwarting a plan for a Turkmenistan-Iran oil pipeline to the Arabian Sea.
- Diversify US sources of oil and gas, and, by increasing production sources, help keep prices low
Benefiting US oil and construction companies with growing interests in the region
- Providing a basis for much-needed economic prosperity in the region, which might provide a basis for political stability.
For much of the 1990s the United States supported the Taliban’s rise to power, both by encouraging the involvement of US oil companies, and by implicitly tolerating Pakistan and Saudi Arabia, two of its key regional allies, in their direct financial and military support for the Taliban. The Taliban, which is committed to a particularly primitive vision of Sunni Islam, had the added advantage for the US of being deeply hostile to Shia Muslims in neighboring Iran (as well as within Afghanistan).
A crucial condition for building the pipelines is political stability in Afghanistan, and for a time the US believed the Taliban could provide just that. Had it not been for the Taliban’s apparent tolerance of the former US-supported Osama bin Laden, and the Taliban’s highly visible extremely repressive attitude to women and other social issues, the US would most likely have continued its support for the Taliban, and the construction of the pipelines would have got underway in the late 90s. Certainly Iran believed that the US was behind Pakistani and Saudi support for the Taliban as part of a long-term plan to contain Iran. But as so often before, US foreign policy based on the principle of “my enemy’s enemy is my friend” helped generate the conditions that allowed the New York and Washington atrocities to be conceived.
The key to Central Asian politics is economic development in Azerbaijan, Kazakhstan, Turkmenistan, Uzbekistan and Kyrgyzstan, all of which are amongst the poorest parts of the former Soviet Union. Most are authoritarian dictatorships of the most dismal kind. For the past ten years the US has been wooing the governments of these countries, and opening the doors for profitable investment by US companies.
Turkmenistan, Uzbekistan, Tajikistan and Kazakhstan make up the eastern side of the Caspian Sea Basin, beneath which lie oil reserves to rival those of Saudi Arabia and the world’s richest reserves of natural gas. If you read the trade newspapers and websites of the world oil industry, words like “fabulous“, “huge“, “enormous” flow across the pages describing the Caspian Sea Basin gas and oil fields. But more importantly, these words go together with “undeveloped“, “isolated” and “politically unstable“. There are billions of dollars to be made there, but the possibility of realizing these fabulous profits hinges on one crucial issue: how is the gas and oil to get to its potential markets? While the countries of Central Asia may be floating on a sea of hydrocarbon, they are far from both actual seas and centres of industry. – and deep in the heart of Islam
In the past the Caspian republics exported most of their oil and gas to a pipeline grid integrated into the rest of the Soviet Union/Russia. But with the collapse of the Soviet Union, the terms of trade became very sharp. In the 1990s the ex-Soviet buyers of Caspian hydrocarbons could no longer afford to pay world prices. And Gazprom, the old Soviet oil company that owned the pipelines, was selling its own oil in competition with that of the Caspian republics. In 1997, Gazprom denied Turkmenistan access to its pipelines over a payment dispute, resulting in a devastating 25% drop in the Turkmenistan GDP. The ex-Soviet Russian pipeline network itself is past its use-by date, having been sloppily built with out-of-date technology, and itself needs billions of dollars simply to renovate it.
A small number of new pipelines have been built, but many more are, as they say, in the pipeline. But all have costs in the billions, and each of the possible routes from the Caspian Sea Basin – west, south, southeast and east – has very serious political difficulties. If Afghan political turmoil could be ended, there are literally billions of dollars to be made by US and Japanese companies, by the Turkmenistan, Afghan and Pakistani governments, and one key element of US planning for Central Asian regional hegemony would be achieved.
The Northern Route: from the Caspian through Russia
An existing Russian pipeline to the huge oil terminal on the Black Sea port of Novorossiisk could be linked to the new fields in Azerbaijan and later Kazakhstan. A plan for this “Northern Route” involving the Caspian Sea Pipeline Consortium of Russian and foreign corporations is pressing ahead, but faces several severe obstacles. The first is the war in Chechnya, through which the first phase of this pipeline passes. The second is that the US is opposed to it for precisely the reasons that Russia likes it: it would be good for Russia. The third is that Turkey is uneasy about increasing Russian oil and gas tanker traffic exiting the Black sea through the already over-crowded 17 mile-long Bosphorus/Turkish Straits which connect the Black Sea to the Mediterranean, and which now carry 1.7 million barrels/day of oil alone.
The Western Route (2): via Georgia to Turkey
In late September of this year, Azerbaijan and Georgia agreed on terms for passage rights across Georgia of a gas pipeline from Azerbaijan to Turkey to start exports in 2004. In total, the Trans-Caspian Gas Pipeline will cost about $1 billion, but would open the way to Azerbaijani gas reaching either Turkish domestic markets or onward to Europe. This would fit with EU planning to create a gas grid stretching from the Caspian to the Atlantic. Georgia is still politically unstable, but more importantly, this route is not especially suitable for the states to the east of the Caspian Sea – Uzbekistan, Tajikistan, Turkmenistan and Kazakhstan. Anything involving the Caspian Sea itself is regarded as extremely sensitive by oil companies because in the mess left by the break-up of the Soviet Union, there is no accepted legal framework for governing the Caspian Sea itself. The US has been pressing hard for the project to come on line quickly, both because it would begin the flow of serious investment funds, and because it would strengthen its current favourite for regional strongman, Turkey, against its former favourite, Iran.
The Eastern Route: China
Another possibility of considerable importance for East Asia and Japan would be a pipeline from Turkmenistan to Xinjiang in China, and then into the Chinese gas grid to the industrialized east coast – and possibly on to Japan. The problem however is the huge distance involved – more than 7,000 km. – and very rugged terrain in places. According to a study prepared jointly by Mitsubishi, Exxon and China National Petroleum, such a pipeline would cost more than $10 billion. There is also a small problem of providing a tempting and vulnerable target to separatist movements in China’s western provinces. China National Petroleum recently abandoned an agreement with Kazakhstan to construct an oil pipeline east because of disagreements about cost. However, China is seriously interested in Caspian Sea hydrocarbon resources, and has even reported an interest in a pipeline to the Arabian sea, with a view to importing gas and oil by supertanker.
The Southern Route: Iran
Turkmenistan shares a long border with Iran, and there is already a gas pipeline linking it to the northern region of Iran, where most of Iran’s industry is located. Iran, of course, itself has very large gas and oil reserves, but these are located in the south of the country, close to the Persian Gulf. An expansion of the Turkmenistan-Iran relationship could be beneficial to both states. More importantly, it would provide another route to Turkey, and hence Europe, or to the Indian Ocean. However, the prosperity of Iran is not something viewed with great favour in Washington. Nonsense about rogue states apart, Washington’s core concern about Iran is its role as the natural dominant power in the Persian Gulf. When the Shah was in power, this was to be lauded; come the Iranian revolution, to be abhorred. As French, Japanese, Italian, Chinese, Malaysian and Russian companies have moved back into a politically changing Iran, American oil and construction companies have long been nudging Washington to soften its stance toward Iran, and in particular to abandon the Iran and Libya Sanctions Act of 1996. But until Washington is sure it can control ensure the safety of its own oil interests in Saudi Arabia and other conservative Gulf states, there is little likelihood of Washington supporting a major Iranian pipeline for Caspian Sea Basin gas.
The Southeastern Route: Afghanistan to Pakistan
For gas exporters, cost rises with length of pipeline. The shortest and cheapest export route for Turkmenistan oil and for its vast gas reserves is through Afghanistan, and serious planning for both oil and gas pipeline construction by US companies has long been in place. Turkmenistan, Uzbekistan, Afghanistan and Pakistan agreed in 1997 to build a large Central Asian Gas pipeline through the less mountainous southern parts of Afghanistan to Pakistan, and then possibly on to the growing market of India. The Central Asian Gas Pipeline Consortium was made up of Unocal (US, 47% share), Delta Oil (Saudi Arabia, 15%), Government of Turkmenistan (7%), Itochu Oil Exploration (Japan, 6.5%), Indonesia Petroleum [INPEX] (Japan, 6.5%), Hyundai Engineering and Construction (5%), and the Crescent Group (Pakistan, 3.5%). Unocal was the lead developer, much encouraged by the US government. In December 1997, senior officials of the US Department of Energy meeting in Washington with Taliban ministers put their blessing on the enterprise.
The $1.9 billion Centgas pipeline is to be 120 cm. in diameter, and to run 1271 kilometers from the Afghanistan-Turkmenistan border, due south and then east, generally following the Herat – Kandahar road, then cross the Pakistan border at Quetta, terminating at Mulat. The Turkmenistan government has agreed to build a short pipeline to the huge Dauletabad gas field. 20 billion cubic meters of natural gas per year will flow down the pipeline, and the Turkmenistan government has guaranteed to deliver 708 billion cubic meters of gas to the consortium – equivalent to the entire reserves of the Dauletabad field.
Just how much the consortium stands to make depends on many factors, especially fluctuations in the price and demand for natural gas in the markets of East and Southeast Asia. But there are clearly huge profits to be made. And for Pakistan and Turkmenistan, as well as Afghanistan, the project would be immensely beneficial. For Afghanistan it would be the first major foreign investment since the Soviet invasion in 1979. For Pakistan it could be a key to the next stage of industrialization. Just how much the Centgas consortium agreed to pay the Taliban for transit rights is unknown. But Unocal’s competitor in the race to build an oil pipeline from Turkmenistan through western Afghanistan to the Arabian Sea coast of Pakistan — the Argentinian company, Bridas — was reported to have offered the Taliban $1 billion in transit fees, plus a considerable amount of railroad track, road construction, and a police post building every 20 km. along the pipeline to by garrisoned by Taliban troops.
The US government pressured Turkmenistan to give preference to the Unocal-led Centgas consortium over Bridas. In 1997 Centgas got the gas pipeline contract, but by the time it was ready to commence work, the political situation in Afghanistan that had looked promising to US eyes in the mid-1990s had deteriorated. Civil war continued, the Taliban’s cultural extremism and hostility to women had exploded in the world media, and Afghanistan had become a major terrorist base. In August 1998, the US attacked bin Laden’s Afghanistan camps, and four months later, Unocal pulled out of Centgas. The combination of instability, pressure from the US government and attacks from shareholders and women’s groups in the US was too much.
With Afghanistan at war with itself and the United States, the alluring Centgas project was on hold, despite repeated efforts to re-start the consortium by the governments of Pakistan, Turkmenistan and Afghanistan. With the profits to be made so enormous, Unocal was reported to be trying to edge back into the project last year. But in addition to its obvious problems in Afghanistan, Unocal is being sued in a US court for use of Burmese forced labour over its Thailand-Burma project. (If this case succeeds, it will be the first occasion in which a US court has held a US corporation legally responsible for foreign human rights violations related to its profit-making activities; Unocal could face many millions in damage awards.) And the United States government imposed economic sanctions on Myanmar, banning new investment, largely because of the domestic reaction to Unocal’s exploitation of Burmese forced labour organized by the Myanmar dictatorship.
Meanwhile Unocal remains the lead developer on the consortium to build a 105-cm diameter 1700 kilometer-long oil pipeline from northern Turkmenistan through Afghanistan to a Pakistani port on the Arabian Sea. A Unocal spokesman boasted to Congress that it would compare with the giant (and environmentally risky) Trans-Alaska Pipeline. Unocal – and Japanese – executives regard this $2.5 billion plan as by far the cheapest and least difficult way of bringing Turkmenistan’s oil to the sea, where it can be loaded onto supertankers bound for Japan and Korea, and possibly China..
Oil and gas are not the direct causes of the war in Afghanistan, but understanding the motives of long-term US policy towards that country is important. The pursuit of hydrocarbon interests has been a constant of US policy in the region for more than half a century. Having created the mujahadin resistance to fight the Soviets during the Cold War, the US then lost interest in the country, and allowed its former clients to destroy it. In order to gain the stability necessary for oil and gas operations, it flirted with the Taliban, until finally the whirlwind its earlier support for the mujahadin had created came blowing back home as a terrorist horror.
There is a great map of all the Central Asian pipelines at the end of the following file:
The END GAME for the Dollar: China vs the U.S. | Grant Williams and Luke Gromen
In this episode of On The Margin Mike is joined by returning guests Grant Williams & Luke Gromen. We welcome back two financial market veterans for a special episode exploring the fracturing geopolitical landscape between the east and the west. Grant and Luke share their insight surrounding China’s declaration of war on the U.S, how the current monetary system could collapse China’s economy, the consequences of globalization, what the end game is for the dollar & how to prepare for the changing world order as two global superpowers collide.
00:00 ・ introductions
00:55 ・ The great power competition: China vs U.S
08:39 ・ Is it ethical to be in business with China?
18:44 ・ The consequences of globalization
20:11 ・ A battle of ideologies between the east and the west
24:51 ・ The current structure of the monetary system
31:30 ・ Inflation is the only way out of a sovereign debt crisis
31:30 ・ Emblematic of moral decay
49:38 ・ Understanding the financial oppression
55:06 ・ Opinion on how Bitcoin plays in all this
Charlie Rose Interview with Sir James Goldsmith on Trade, 1994
Goldsmith warned elites about the dangers of free trade.
00:55・The great power competition: China vs U.S
08:37・The difference in financial markets between China & the U.S
18:42・The consequences of globalization
20:08・A battle of ideologies between the east and the west
24:48・The current structure of the monetary system
28:45・Coinbase Prime Ad
31:26・Inflation is the only way out of a sovereign debt crisis
36:52・The end of an empire
49:32・What assets to buy during financial repression
54:58・Grant & Luke’s framework for Bitcoin
The Greatest Deal in American History Ever Made (Birth of the petrodollar)
This Attorney Took On Chevron. Then Chevron-Linked Judges and Private Prosecutors Had Him Locked Up.
After spending more than 700 days under house arrest, a human rights and environmental lawyer was found guilty last month of criminal contempt in a legal saga that has demonstrated the deep-rooted conflicts of interest layered throughout the judicial system when it comes to climate justice. In Steven Donziger’s conviction, the initial judge who referred him to trial, the second judge who was asked to lead the trial, and the private prosecutors who tried him all had deep ties to Chevron, the company Donziger had won a landmark multibillion-dollar ruling against.
The story began in 2011 when Donziger brought litigation against Texaco (now Chevron) in Ecuador for the harm it caused the Indigenous people in the Ecuadorian Amazon, where the fossil fuel company decided to deliberately discharge 16 billion gallons of toxic waste from its oil sites into rivers, groundwater, and farmland. A refusal from Chevron to adhere to environmental regulations—which earned the company an extra $5 billion over 20 years—led to more than 30,000 Ecuadorians being directly harmed by the oil giant’s actions, the judges in that case found. The case Donziger led made it all the way to the Ecuador Supreme Court, and successfully secured $9.5 billion in environmental damages for the Amazonian communities in a historic climate justice decision.ADVERTISEMENT
In a letter sent to the Administrative Office of the U.S. Courts at the end of last month, Sens. Ed Markey and Sheldon Whitehouse brought into question specifically the use of private prosecutors in the contempt case against Donziger. The three prosecutors that Kaplan appointed, Brian Maloney, Sareen Armani, and Rita Glavin (who is also Andrew Cuomo’s personal lawyer), were all at the time with the law firm Seward & Kissel. That firm had represented Chevron as recently as 2018. “These prosecutions,” the senators wrote, “are highly unusual and can raise concerning questions of fundamental fairness in our criminal justice system.”
Indeed, the apparent conflict of interest the private prosecution had is directly at odds with Supreme Court precedent. In the 1987 decision of Young v. United States ex rel. Vuitton et Fils, the Supreme Court ruled that, when it comes to private prosecutors pursuing criminal contempt cases, they “certainly should be as disinterested as a public prosecutor who undertakes such a prosecution.”ADVERTISEMENT
“Public confidence in the disinterested conduct” of the private prosecutor, the court warned, is essential to maintaining the integrity of the judicial system. That means that even the appearance of interest on the part of the private prosecutor can be considered a violation of Vuitton.
“Appearances are really functionally important for the rule of law, and for our judiciary,” said Guha Krishnamurthi, an associate professor of law at the University of Oklahoma. Krishnamurthi argues that one of the “biggest protections” of the criminal justice system is a disinterested prosecutor who can determine whether or not pursuing a case is to the benefit of the criminal justice system. The fact that a public prosecutor is accountable to the government and to the public, he says, reinforces this protection in a way that private prosecutors do not.
“I think it’s such a clear abuse that it violates the defendant’s constitutional right to due process. You can’t have someone who’s got a conflict of interest, who has personal reasons for wanting to see a person they’re prosecuting convicted,” said Louis Raveson, a professor of law at Rutgers Law School and the founder of the university’s Environmental Law Clinic. “That’s not an appropriate procedure, and, in my view, it’s not a constitutional procedure.”
“This is a perversion of justice, the whole idea that you can have a lawyer who previously worked for Chevron then prosecuting Donziger in the criminal case,” said Martin Garbus, Donziger’s attorney and a prominent veteran of human rights litigation. “It’s clear that it violates the law. … If you look at the body of law that deals with disinterest, people are disqualified for something far, far less than the involvement here.”
Raveson acknowledged that in certain instances, like police brutality cases or other times when the government is being asked to prosecute itself, private prosecutors can be truly beneficial. A private prosecutor there would likely be necessary in order to ensure disinterest and justice, as the public prosecutor works for the government. Often, though, they’re used in cases like Donziger’s, after a disinterested public prosecutor declines to pursue the charge and the judge decides to move forward anyway. “That’s all the more reason that judges need to err on the side of no possibility of a conflict,” Raveson said. Speaking of the Donziger case, he added, “It appears that a conflict is almost inevitable … and clearly that’s not by accident.”ADVERTISEMENT
When it comes to the decisions that could prevent one of the largest climate justice judgments of the past decade from taking effect, such appearances of conflict of interest are incredibly significant—and could be detrimental to future climate justice litigation.
“It’s scary going after a large corporation [and] it’s scary going after governments because they have so much power and so much influence that they can do a lot of damage to someone’s life,” Raveson said. “If the lawyers who bring [environmental justice cases like Donziger’s] are subject to biased determinations as to whether or not they should be punished … it’s going to have a deterrent effect on lawyers to bring these kinds of cases.”
Such a deterrence could have massive consequences for the climate, especially at a time when, as this week’s new report from the Intergovernmental Panel on Climate Change showed, the world is barreling further toward climate catastrophe, a crisis that is driven in no small part by fossil fuel companies like Chevron. “It’s up to the judiciary to really ensure that that kind of chilling and deterrence … doesn’t happen,” Krishnamurthi added. “And the way you do that is by having more than just the formality of the rules, [but] having a true fidelity to conflicts of interest and disqualifying where necessary.”