Blood and Oil in Central Asia

In the past month, two seemingly unrelated events have turned Central Asia into a potential flashpoint: an aggressively expanding North Atlantic Treaty Organization (NATO) and a nascent strategic alliance between Russia and China.

At stake is nothing less than who holds the future high ground in the competition for the world’s energy resources.

Increasing Competition

Early this summer, the U.S. Energy Information Administration (EIA) predicted a sharp drop in world oil reserves. According to energy expert Michael Klare, the "era of cheap and plentiful oil is drawing to a close," and is likely to result in "a new era of cutthroat energy competition."

In early July, after a full-court press by Washington and an agreement to increase its yearly rent, Kyrgyzstan reversed a decision to close the U.S. base at Manas, thus giving the United States a powerful toehold in the countries bordering the oil- and gas-rich Caspian Basin.

While Manas is portrayed as a critical base in the ongoing campaign against the Taliban and al-Qaeda in Afghanistan, the war in Central Asia is less over "terrorism" than it is over energy. "Never reading the words ‘Afghanistan’ and ‘oil’ in the same sentence is still a source of endless amusement," says the Asia Times’ Pepe Escobar.

Escobar, who has coined the term "Pipelineistan" to describe the vast network of oil and gas pipelines that "crisscross the potential imperial battlefields of the planet," sees Afghanistan "at the core of Pipelineistan," strategically placed between the Middle East, Central and South Asia."

As Escobar points out, "It’s no coincidence that the map of terror in the Middle East and Central Asia is practically interchangeable with the map of oil."

The Role of NATO 

For most Americans and Europeans, Afghanistan appeared on their radar screens shortly after the 9/11 assaults on the World Trade Center and the Pentagon. But according to Escobar, three months before the 2001 attack U.S., Iranian, German, and Italian officials met in Geneva to discuss toppling the Taliban because it was "the proverbial fly in the ointment" in a scheme to run a $2 billion, 800-mile natural gas pipeline from Turkmenistan to Pakistan via southern Afghanistan.

Following the collapse of the Soviet Union, NATO moved aggressively to fill the vacuum left by the demise of the Warsaw Pact, quickly recruiting former Soviet allies and provinces.

According to Escobar, one of NATO’s first forays in the energy war was the Balkans, which NATO represented as a fight to liberate the Albanians in Kosovo. Moscow and Beijing, however, viewed it as an opportunity for the Albanian Macedonian Bulgarian Oil Corporation (AMBO) to build a $1.1 billion pipeline to bring Caspian Basin oil to the West, thus bypassing Iran and Russia. The AMBO pipeline — due to open in 2011 — will transport Caspian Basin oil via Georgia, Turkey, Bulgaria, Macedonia, and Albania.

"How could Russia, China, and Iran not interpret the war in Kosovo, then the invasion of Afghanistan (where Washington had previously tried to pair with the Taliban and encourage the building of another of those avoid-Iran, avoid-Russia pipelines), and finally Georgia (that critical energy transportation junction) as straightforward wars for Pipelineistan?" Escobar asks.

For every action, however, there is an opposite and equal reaction.

Competition Increasing 

In 2001, Russia, China, Kyrgyzstan, Uzbekistan, Kazakhstan, and Tajikistan founded the Shanghai Cooperation Organization (SCO), which now has observer status from Iran, Pakistan, and India.

Unlike NATO, the SCO is a regional organization, not a military alliance. Counting observers, it embraces the bulk of humanity, much of the world’s energy resources, and a growing section of its GNP.

However, the Collective Security Treaty Organization (CSTO), made up of all of the SCO members, plus Belarus and Armenia, is a military alliance. Last February, CSTO created a collective rapid reaction force which, according to Russian expert Ilya Kramnik, "will give CSTO a quick tool, leaving no time for third parties to intervene."

The only "third party" capable of intervening in Central Asia is NATO.

Chinese Linchpin 

In many ways, Beijing is the linchpin in this 21st-century "great game," because China is weathering the current worldwide depression better than most countries. While its exports have taken a beating, the Chinese have successfully fallen back on their enormous internal market to take up some of the slack. As a result, China recently opened the aid spigots to nations in the region.

In June, China loaned Turkmenistan $3 billion, which will give it a stake in the Turkmen’s enormous Yolotan Osman gas field, rumored to be the world’s largest. The Turkmenistan loan also benefits Moscow by underwriting the Russian oil company Roseneft, and the pipeline builder, Transneft. Kazakhstan got a $15 billion loan, giving China a 22% share in Kazakh oil production.

According to former Indian diplomat and current Asia Times commentator M.K. Bhadrakumar, after years of tension between Moscow and Beijing, the two countries are burying that past and "steering their relationship" in the direction of a "strategic partnership in the overall international situation," rather than competing over energy resources.

This past April, Russia and China signed a $25 billion oil agreement that will supply Beijing with 4% of its needs through 2034. The two countries are currently negotiating a natural gas deal.

Beijing is planning an almost 4,000 mile, $26 billion Turkmen-Kazakh-China pipeline to run from the Caspian Basin to Guangdong Province in China. Included in the deal is a proviso to keep "third parties" — NATO bases — out of Turkmenistan.

In the meantime, Russia is paying premium prices to lock up Kazakh, Uzbek, and Turkman gas. It’s also negotiating to buy more Azerbaijani oil which, if successful, could end up bankrupting the western-controlled BTC pipeline that runs through Georgia.

Writing in BusinessWeek, S. Adam Cardais, former editor of the Prague Post, says that Russia is "doing its damnedest to keep Europe out of Central Asia," and that Russia and China "may have already outmaneuvered Europe."

U.S. Still in Game

But Washington is hardly throwing in the towel. The Manas coup is a case in point, and the Obama administration is increasing aid to Kyrgyzstan and Tajikistan.

In short, the Central Asian chessboard is enormous, the pieces are numerous, and the stakes are high.

Pipelineistan isn’t limited to the Middle East and Central Asia. It exists wherever gas and oil flow, from the steamy depths of Venezuela’s Oronoco Basin to the depths of the South Atlantic off the coast of Brazil.

"Oil and gas by themselves are not the U.S.’s ultimate aim," argues Escobar, "It’s all about control." And if "the U.S. controls the sources of energy of its rivals — Europe, Japan, China, and other nations aspiring to be more independent — they win."

The U.S. has enormous military power. But as Iraq, and now Afghanistan, makes clear, the old days of cornering a market by engineering a coup or sending in the Marines are fast receding. The old imperial nations are fading, and the up-and-comers are more likely to be speaking Portuguese, Chinese, and Hindi than English. The trick over the next several decades will be how to keep the competition for energy from sparking off brush fire wars or a catastrophic clash of the great powers.

Reprinted with permission from Foreign Policy In Focus.

Author: Conn Hallinan

Conn Hallinan writes for Foreign Policy in Focus.