Oil and the New Great Game

by Lutz Kleveman

The Nation magazine, February 16, 2004

... the new "Great Game" [is a] rerun of the first "Great Game", the nineteenth century imperial rivalry between the British Empire and czarist Russia, [as] powerful players once again position themselves to control the heart of the Eurasian landmass, left in a post-Soviet power vacuum. Today, the United States along with the ever-present Russians, new regional powers such as China, Iran, Turkey and Pakistan have entered the arena, and transnational oil corporations are also pursing their own interest in a brash, Wild East style.

Since September 11, 2001, the Bush Administration has undertaken a massive buildup in Central Asia, deploying thousands of US troops not only in Afghanistan but also in the newly independent republics of Uzbekistan, Kyrgyzstan and Georgia. These first US combat troops on former Soviet territory have dramatically altered the geostrategic power equations in the region, with
Washington trying to seal the cold war victory against Russia, contain Chinese influence and tighten the noose around Iran. Most important, however, the Bush Administration is using the "war on terror" to further American energy interests in Central Asia. The bad news is that this dramatic geopolitical gamble involving thuggish dictators and corrupt Saudi oil sheiks is likely to produce only more terrorists, jeopardizing America's prospects of defeating the forces responsible for the September 11 attacks.

The main spoils in today's Great Game are the Caspian energy reserves, principally oil and gas. On its shores, and at the bottom of the Caspian Sea, lie the world's biggest untapped fossil fuel resources. Estimates range from 85 to 219 billion barrels of crude, worth up to $4 trillion. According to the US Energy Department, Azerbaijan and Kazakhstan alone could sit on more than 110 billion barrels, more than three times the US reserves. Oil giants such as ExxonMobil, ChevronTexaco and British Petroleum have already invested more than $30 billion in new production facilities.

The aggressive US pursuit of oil interests in the Caspian did not start with the Bush Administration but during the Clinton years, with the Democratic President personally conducting oil and pipeline diplomacy with Caspian leaders. Despite Clinton's failure to reduce the Russian influence in the region decisively, American industry leaders were impressed. "I cannot think of a time when we have had a region emerge as suddenly to become as strategically significant as the Caspian," declared Dick Cheney in 1998 in a speech to oil industrialists in Washington. Cheney was then still CEO of the oil-services giant Halliburton. In May 2001 Cheney, now US Vice President, recommended in the Administration's seminal National Energy Policy report that "the President make energy security a priority of our trade and foreign policy," singling out the Caspian Basin as a "rapidly growing new area of supply." Keen to outdo Clinton's oil record, the Bush Administration took the new Great Game into its second round.

With potential oil production of up to 4.7 million barrels per day by 2010, the Caspian region has become crucial to the US policy of "diversifying energy supply." The other major supplier is the oil-rich Gulf of Guinea, where both the Clinton and the Bush administrations have vigorously developed US oil interests and strengthened ties with corrupt West African regimes. The strategy of supply diversification, originally designed after the 1973 oil shock, is designed to wean America off its dependence on the Arab-dominated OPEC cartel, which has been using its near-monopoly position as pawn and leverage against industrialized countries. As -global oil consumption keeps surging and many oil wells outside the Middle East are nearing depletion, OPEC is in the long run going to expand its share of the world market even further. At the same time, the United States will have to import more than two-thirds of its total energy needs by 2020, mostly from the volatile Middle East.

Many people in Washington are particularly uncomfortable with the growing power of Saudi Arabia, whose terror ties have been exposed since the September 11 terror attacks. As the recent bombings in Riyadh have shown, there is a growing risk that radical Islamist groups will topple the corrupt Saud dynasty, only to then stop the flow of oil to "infidels." The consequences of 8 million barrels of oil-10 percent of global production- disappearing from the world markets overnight would be disastrous. Even without any such anti-Western revolution, the Saudi petrol is already, as it were, ideologically contaminated. To stave off political turmoil, the regime in Riyadh funds the radical Islamic Wahhabi sect, many of whose preachers call for terror against Americans around the world.

To get out of its Faustian pact with Saudi Arabia, the United States has tried to reduce its dependence on Saudi oil sheiks by seeking to secure access to other sources. Central Asia, however, is no less volatile than the Middle East, and oil politics are only making matters worse: Fierce conflicts have broken out over pipeline routes from the landlocked Caspian region to high-sea ports. Russia, still regarding itself as the imperial overlord of its former colonies, promotes pipeline routes across its territory, notably Chechnya, in the North Caucasus. China, the increasingly oil-dependent waking giant in the region, wants to build eastbound pipelines from Kazakhstan. Iran is offering its pipeline network for exports via the Persian Gulf.

By contrast, both the Clinton and Bush administrations have J championed two pipelines that would circumvent both Russia and Iran. One of them, first planned by the US oil company Unocal in the mid-1990s, would run from Turkmenistan f through Afghanistan to the Pakistani port of Gwadar on the Indian Ocean. Several months after the US-led overthrow of the Taliban regime, Afghan President Hamid Karzai, a former Unocal adviser, signed a treaty with Pakistani leader Pervez Musharraf and the Turkmen dictator Saparmurat Niyazov to authorize construction of a $3.2 billion gas pipeline through the Herat-Kandahar corridor in Afghanistan, with a projected capacity of about 1 trillion cubic feet of gas per year. A feasibility study is under way, and a parallel pipeline for oil is also planned for a later stage. So far, however, continuing warlordism in Afghanistan has prevented any private investor from coming forward.

Construction has already begun on a gigantic, $3.6 billion oil pipeline from Azerbaijan's capital of Baku via neighboring Georgia to Turkey's Mediterranean port of Ceyhan. British Petroleum Amoco, its main operator, has invested billions in oil-rich Azerbaijan and can count on firm political support from the Bush Administration, which stationed about 500 elite troops in wartorn Georgia in May 2002. Controversial for environmental and social reasons, as it is unlikely to alleviate poverty in the notoriously corrupt transit countries, the pipeline project also perpetuates instability in the South Caucasus. With thousands of Russian troops still stationed in Georgia and Armenia, Moscow has for years sought to deter Western pipeline investors by fomenting bloody ethnic conflicts near the pipeline route, in the Armenian enclave of Nagorno-Karabakh in Azerbaijan and in the Georgian breakaway regions of Abkhazia, South Ossetia and Ajaria.

Washington's Great Game opponents in Moscow and Beijing resent the dramatically growing US influence in their strategic backyard. Worried that the American presence might encourage internal unrest in its Central Asian province of Xinjiang-whose Turkic and Muslim population, the Uighurs, are striving for more autonomy-China has recently held joint military exercises with Kyrgyzstan.

The Russian government initially tolerated the American intrusion into its former empire, hoping Washington would in turn ignore Russian atrocities in Chechnya. However, for the Kremlin, the much-hyped "new strategic partnership" against terror between the Kremlin and the White House has always been little more than a tactical and temporary marriage of convenience to allow Russia's battered economy to recover with the help of capital from Western companies. The US presence in Russia's backyard is becoming ever more assertive, but it is unthinkable for the majority of the Russian establishment to permanently cede its hegemonic claims on Central Asia.

One man who is quite frank about this is Viktor Kalyuzhny, the Russian deputy foreign minister and President Vladimir Putin's special envoy to the Caspian region, whom I interviewed in Moscow last year. "We have a saying in Russia," he told me. "If you have guests in the house there are two times when you are happy. One is when they arrive, and one is when they leave again." To make sure that I got the message, Kalyuzhny added, "Guests should know that it is impolite to stay for too long."

Unfazed by such Russian sensitivities, American troops in Central Asia seem to be there to stay. Two years ago, when I visited the new US air base in Kyrgyzstan, I was struck by the massive commitment the Pentagon had made. With the help of dozens of excavators, bulldozers and cranes, a pioneer unit was busy erecting a new hangar for F/A-18 Hornet fighter jets. Brawny pioneers in desert camouflage were setting up hundreds of "Harvest Falcon" and "Force Provider" tents for nearly 3,000 soldiers. I asked their commander, a wiry brigadier general, if and when the troops would ever leave Kyrgyzstan. "There is no time limit," he replied. "We will pull out only when all A1 Qaeda cells have been eradicated."

Today, the troops are still there and many tents have been replaced by concrete buildings. Increasingly annoyed, Russian Defense Minister Sergei Ivanov has repeatedly demanded that the Americans pull out within two years. Significantly, President Putin has signed new security pacts with the Central Asian rulers and last October personally opened a new Russian military base in Kyrgyzstan. It is the first base Moscow has set up outside Russia's borders since the end of the cold war. Equipped with fighter jets, it lies only twenty miles away from the US air base.

Besides raising the specter of interstate conflict, the Bush Administration's energy imperialism jeopardizes the few successes in the war on terror. That is because the resentment US policies cause in Central Asia makes it easier for A1 Qaeda-like organizations to recruit new fighters. They hate America because in its search for antiterrorist allies in the new Great Game, the Bush Administration has wooed some of the region's most brutal autocrats, including Azerbaijan's Heydar Aliyev, Kazakhstan's Nursultan Nazarbayev and Pakistan's Musharraf.

The most tyrannical of Washington's new allies is Islom Karimov, the ex-Communist dictator of Uzbekistan, who allowed US troops to set up a large and permanent military base on Uzbek soil during the Afghan campaign in late 2001. Ever since, the Bush Administration has turned a blind eye to the Karimov regime's brutal suppression of opposition and Islamic groups. "Such people must be shot in the head. If necessary, I will shoot them myself," Karimov once famously told his rubber-stamp Parliament.

Although the US State Department acknowledges that Uzbek security forces use "torture as a routine investigation technique," Washington last year gave the Karimov regime $500 million in aid and rent payments for the US air base in Khanabad. Though Uzbek Muslims can be arrested simply for wearing a long beard' the State Department also quietly removed Uzbekistan from its annual list of countries where freedom of religion is under threat.

In the Uzbek capital of Tashkent, I once met 20-year-old Ahmad, who declined to give his family name out of fear of reprisal. Over a cup of tea the young man told me that he had just been released from prison, after serving a three-year sentence for allegedly belonging to an Islamic terrorist organization. "The guards beat me every day," Ahmad said, his eyes cast down. "It was awful, but I never stopped praying to Allah."

The group the Muslim belonged to was a religious Sufi order that, he insisted, had nothing to do with terrorists such as the Islamic Movement of Uzbekistan, which is blamed for several deadly attacks in the late 1 990s. "But maybe in the future my brothers and I have to defend ourselves and fight," he told me. I asked Ahmad how he felt about the arrival of American antiterror troops in Uzbekistan. "They only make things worse. They don't help us, the people, but only the government. I hate America."

What makes a man a terrorist? On my travels, I met countless angry young men who, with nothing to lose but their seemingly valueless lives, were prepared to fight for whatever radical Islamic leaders told them was worth the fight. As in the Middle East, lack of democracy is one of the root causes of terrorism in Central Asia: The young men's anger is primarily directed against their own corrupt and despotic regimes. As Washington shores up these rulers, their disgusted subjects increasingly embrace militant Islam and virulent anti-Americanism.

Recent events in Azerbaijan are perfect examples of how this works. Whenever I travel to the capital of Baku, I am impressed with the new glittery office buildings in the city center and the many flashy Mercedes cars on the streets. Smart biznizmeny and their wives stroll past expensive boutiques, wearing Versace and Cartier jewelry. They are the few winners of the oil boom. Just ten miles out of Baku, however, in the desolate suburb of Sumgait, about 50,000 people live in abject poverty. Many are refugees who fled the war between Azerbaijan and Armenia over the NagornoKarabakh enclave in the early 1990s.

All of Sumgait's fourteen Soviet-era factories have been shut down, leaving everybody jobless. There is little electricity or running water. One man, who eked out a living with his wife and several children and grandchildren in a single room of a shabby highrise block, told me, "What oil boom? Our president's family and the oil companies put all the money into their pockets."

Azerbaijan is known as "BP country," as the company wields a budget of $15 billion to be invested off the Azeri coast over the coming years. "If we pulled out of Baku," a former BP spokesman once told me, "the country would collapse overnight." So Big Oil's interests had to be taken into account when Azerbaijan's late ruler, Heydar Aliyev, feeling that his death was nigh, rigged the presidential elections last October to pass on his crown to his playboy son Ilham. This establishment of the first dynasty in the former Soviet Union triggered popular protests in the capital that were brutally put down by Aliyev's security forces. They arrested hundreds of opposition members and killed at least two people.

The next day, US Deputy Secretary of State Richard Armitage officially congratulated the new baby dictator on his "strong showing." Armitage is also a former board member of the US-Azerbaijan Chamber of Commerce in Washington, set up in 1995 to promote US companies' interests in Azerbaijan's multibillion-dollar oil industry. Democracy versus stability for oil investments-few Azeris will forget what side the US government took.

It need not be that way. The US-supported overthrow in November of strongman Eduard Shevardnadze in neighboring Georgia, a linchpin country for the pipeline export of Caspian oil and gas, showed that protecting strategic energy interests can, however accidentally, go hand in hand with promoting democracy. To be sure, the Bush Administration's motives for dropping Shevardnadze had less to do with a sudden pro-democracy epiphany than with hard-nosed realpolitik: Washington's longtime pet ally-who had secured nearly $100 million in annual US aid for Georgia, which is more per capita than any other country except Israel-could no longer provide stability in Georgia and had recently allowed Russian companies to buy up most of the country's energy sector, which increased Moscow's clout on this crucial Great Game battleground at Washington's expense.

While it is too early to tell how things in Georgia will play out, one general lesson appears clear: The September 11 attacks have shown that the US government can no longer afford to be indifferent toward how badly dictators in the Middle East and Central Asia treat their people, as long as they keep the oil flowing. American dealings with Saudi Arabia have become a fatal affair. President Bush acknowledged as much in recent speeches calling on Saudi Arabia to start democratic reforms to dry up the breeding ground for terrorism.

In Central Asia, however, the current US policy of aiding tyrants repeats the very same mistakes that gave rise to bin Ladenism in the 1980s and '90s. Most Central Asians believe that US antiterror troops are stationed in their region mainly to secure American oil interests. I lost count of how many Azeris, Uzbeks, Afghans and Iraqis I met during my travels who told me that "it's all about oil." Right or wrong, this distrust of the US government's motives is one of the key factors in the insurgencies in Afghanistan and Iraq. The presence of US troops on their soil motivates angry Muslim men to sign up with Al Qaeda-like terror groups. However terribly they suffered under Saddam Hussein, few Iraqis today believe that America would have sent its young men and women to the region if there were only strawberry fields to protect.

With or without military force, there are obvious limits to any US government's ability to nudge autocratic petrostate regimes toward democratic reform-especially as long as America is becoming ever more dependent on oil imports. An addict is hardly able to force his pusher to change his criminal activities. In the United States, 4 percent of the world's population consumes one-fourth of the world's energy. One out of every seven barrels of oil produced in the world is burned on American highways. This is not quite a position that allows us to tell Arab oil sheiks and Central Asian despots, "If you don't stop churning out angry young men, we won't do business with you anymore."

For the common people in all oil-producing countries (except Norway and Britain), oil wealth has been more of a curse than a blessing, leading to corruption, political instability, economic decline, environmental degradation, coups and often bloody civil wars. This is why oil is known as the "devil's tears." Today, however, the local people's problems are America's too, because it has become clear since the September 11 attacks how the politics of oil contribute to the rise of radical Islamic terrorism.

So, while the war on terror may not be all about oil, certainly in one sense it should be about just that. A bold policy to reduce the addiction to oil would be the most powerful weapon to win the epic struggle against terrorism. In the short term, this means saving energy through more efficient technologies, necessary anyway to slow the greenhouse effect and global warming. The Bush Administration's old-style energy policies of yet more fossil-fuel production and waste continue in the wrong direction. It is time to realize that more gas-guzzling Hummers on US highways only lead to more Humvees (and American soldiers) near oilfields. What is urgently needed instead-for security reasons-is a sustainable alternative energy policy.

Ultimately, no matter how cleverly the United States plays its cards in the new Great Game in Central Asia and no matter how many military forces are deployed to protect oilfields and pipelines, the oil infrastructure may prove too vulnerable to terrorist attacks to guarantee a stable supply. The Caspian region may be the next big gas station, but, as in the Middle East, there are already a lot of men running around throwing matches.

Lutz Kleveman (lutz@,kleveman.com) is the author of The New Great Game: Blood and Oil in Central Asia (Atlantic Books, www . newgreatgame. com).

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