Pipelines to Power

by Chris Richards

New Internationalist magazine, October 2003

... Oil makes the difference between living in a developed or a developing world. I heats houses, provides fuel for cars and machinery, and lubricates the generators that produce electricity. As a primary energy producer, oil creates power. And oil pipelines bring that power to the people. How can any other conclusion be reached?

Because through oil pipelines flows political and economic power, not just an energy source. And that power is working against, rather than for, the people in the countries where the pipelines run.

Oil is economic power: a rich resource that can be traded for income to forge a better life for people in desperately poor oil-producing nations. Yet as soon as the oil comes whooshing up from the ground, corporations with offices in other countries and interests all over the world take control of the resource by pumping it into a pipeline. Immediately the slithering steel snake swallows the oil, it is separated from the people who've called it their resource. In a gushing one-way stream of billions of barrels of oil every day, the pipeline plots a clear course for the oil away from its country of origin towards the tankers and refineries of those companies which profit most from it.

In Africa, Latin America and Central Asia - where many governments are desperate for a stable source of income - oil is being extracted and land is being 'rented' for pipeline corridors on terms that are far more favourable to oil companies than to the oil-producing countries. Taxes are waived. Environmental and corporate laws are flouted, changed or avoided. 'Profit-sharing' agreements are struck so that countries don't get to share in the profit until after corporate investors recoup both their costs and a 'fair' return on their investment which can be one, even two decades after the oil starts flowing.

Consequently, as the oil flows away down the pipeline and out of the country, so do the profits. In 2002, five oil corporations made the list of the top fifteen largest companies in the world, with Shell and ExxonMobil the globe's third and fifth most profitable companies. In the same year, 4 of the 5 top oil-exporting countries failed to rate a place amongst the top 60 in the UN Human Development Index (which ranks nations according to their people's life expectancy, education and real income).'While BP's chief executive Sir John Browne is looking forward to an annual pension of $1.97 million, the majority of people in one of the world's largest oil-exporting nations, Nigeria, are getting less than a dollar a day. And the proportion of Nigerian households living below the dollar-a-day poverty line has actually grown, from 27 per cent in 1980 to 66 per cent in 1996.

In Middle Eastern countries like Saudi Arabia, health, education and benefits available to the people smooth discontent about the unfair distribution of oil wealth. But in poor countries with unstable democracies, too little oil money comes back to benefit the people and is instead being spent on maintaining political and personal power of the ruling elite.

A good example is provided by Africa's Chad-Cameroon pipeline - through which oil started flowing three months ago. The World Bank Group justified its $93-million commitment to the project by trumpeting its poverty-reducing potential - so desperately needed for Chad. In an embarrassing turn-around in November 2000 the World Bank admitted that Chad's Government had spent an estimated $4.5 million of oil-related money on arms to fight its civil war.

Blood in the pipeline What the Chad Government has done is not new. Governments in Sudan, Colombia and Angola have also been turning oil-revenues into weapons to use against minorities seeking a more equitable share of economic and political power. The resulting armed struggle plays out on the pipeline, as opponents bomb the route to cut off the flow.

The figures about how many have died in pipeline conflict around the world lack precision: one of the reasons that these events continue to occur is that there are few on the ground actually counting. Thus, in clearing the way for oil fields and pipelines in Sudan, tens of thousands of civilians have been killed or displaced in the south of the country. This area is the base of the Sudan People's Liberation Army - the Government's strongest opponent in a 20-year civil war.

Just as pipelines arm conflict, they also create it. As Michael Renner, one of a number of writers now reviewing conflict caused by resource exploitation, observes: 'In case after case, an array of burdens - ranging from the expropriation of land, disruption of traditional ways, environmental devastation, and social maladies - are shouldered by the local population, 'who are typically not consulted at all about oil extraction and transportation. In Nigeria - in addition to the unfair distribution of oil revenues - Renner points to enormous network of oil pipelines crisscrossing communities as a continual source of conflict. The rusted pipelines have ruptured, spilling 2.5 million barrels of oil over the land and waterways of the Niger Delta. Widespread sickness and environmental destruction have resulted.

The earth bleeds Provoked by such corporate disregard for those who live around the pipelines, the Ogoni people of the Niger Delta staged mass protests that succeeded in shutting down Shell (the main oil operator in the country) in 1993. The military dictatorship responded with a campaign of violence that provoked ethnic groups to attack each other. Some 2,000 Ogoni were killed and 80,000 uprooted as a consequence. So many activists now try to cut off the flow of oil that Nigeria has a special force to police the lines.

The steel shell tubing of the pipelines is designed to keep the oil secure - beyond the reach of its political and environmental opponents. But, as the pipes wend hundreds, often thousands of kilometres through the land of friends and foes, their length works against them. Laid in one line the world's pipelines could run around the Equator more than five times - providing ample sites for conflict. On just nine pipelines now operating or under construction in politically volatile areas, an estimated total of 14,872 kilometres is vulnerable to 'rebel or terrorist attacks.

Sabotage is also a threat to the proposed Azerbaijan-Turkey-Georgia pipeline
last 12 years has experienced two armed struggles for territory and independence in an area within 130 kilometres of the proposed pipeline - has already lined the route through its land with military posts. Another killing corridor appears inevitable.

What is particularly obscene about this is that oil corporations - knowing the history of and potential for devastating death-tolls and displacements on their pipelines - go ahead and build them anyway. Maybe this should not surprise. As the song goes, money is their blood.

More surprising is that countries and financial institutions throughout the world are prepared to support such bloody enterprises.

Surprising, that is, until world oil supplies are placed in the picture. Because oil is running out. And that means that countries and companies will be increasingly prepared to overlook death and destruction to maintain the flow.

The great oil auction opens

Experts disagree about when oil supplies will start running down. At the start of this century, BP's boss Sir John Browne predicted that current level of production might be maintained for 30 or 40 years. Others say that supplies are about to peak or are already in decline.

One thing is certain: oil is a finite resource, and it will run out. Without imports, Britain's total reserves are enough to satisfy just 7.5 years of its peoples' present consumption, with the US having people's voracious appetite for a mere 3 years.

These reserves will disappear even more quickly if, as predicted, world consumption increases by nearly 55 per cent between 2000 and 2025.9 Significantly, in the developing world oil consumption is expected to grow at two or three times the rate of the industrialized world in the next two decades. From 1997 to 2020 the oil that will be consumed by China alone is estimated to increase by 150 per cent.

While oil supplies are going down international demand is going up... and so is the competition. Already pipelines are being taken to ever-increasing lengths to get at the oil on which industrialized economies and societies so heavily rely. As supplies start to dwindle, and the price of oil starts to rise, companies will find profit in places previously considered - because of their geography or political situations - impenetrable.

US professor of peace and security studies Michael Klare predicts the emergence of a new geography. 'Attracting the greatest interest,' he says, 'will be places that harbour particularly abundant supplies of vital materials.' Possessing two-thirds of known future oil reserves, the Persian Gulf region (which includes Iraq, Iran, Saudi Arabia, and Kuwait) is most likely to experience the interest of oil competitors. The Caspian Sea Basin (which includes the Central Asian states of Azerbaijan, Kazakhstan, Turkmenistan and Uzbekistan) is next, with a fifth of the world's total reserves.

There is now an extensive US military build-up in both regions. US companies and those of its allies are now being given the rights to extract the oil and lease the land over which their pipelines can run. These pipelines will map out strategic allegiances. For countries not playing on the US team the consequences will be significant.

Israel is in. Shunned by the Middle East for its position on Palestine, Israel has been buying its oil from Russia. Soon this may no longer be necessary. Diplomatic sources now indicate that the Bush Administration will not support lifting UN sanctions on Iraq unless Saddam's successors agree to supply Israel with oil."

Whatever the new regime decides, a taste of the fate that awaits such a move has been provided by the re-opening of the pipeline between Iraq and Turkey: it was bombed two days after the oil started flowing through it.

By contrast, Russia and China are being excluded from the potential oil wealth of the Caspian region. After fierce competition between Russia and the US for oil rights in the former Soviet states, post-11 September aid and military assistance given by the US to Azerbaijan, Kazakhstan, Turkmenistan and Uzbekistan seems to have worked. China - which will be the main competitor of the US for supplies in the next two decades - now appears unlikely to receive the guarantee from Kazakhstan that it needs to justify its plans to build a 2,880 kilometre pipeline from the Kazakh oil fields.

Strategic alliances flow with the oil As a consequence, two former enemies are now forming their own alliance: an agreement writ large on an oil pipeline. Russian President Vladimir Putin and Chinese President Hu Jintao announced in May this year that a $2.5-billion pipeline will be built to take Russian oil through Siberia to China (profiled on page 23). At the same time, the two leaders declared greater co-operation in trade, criticized the US go-it-alone attitude in international affairs and called for a multipolar world order.

For the Caspian region, Michael Klare paints a picture of separatist conflict and rising tension between the oil-rich and poor. 'To protect vital pipelines against recurring attack and sabotage, regional leaders will be forced to deploy their armies along vulnerable sections for indefinite periods... [It] is also possible for such contests to experience sudden escalations leading to deeper involvement by outside powers."

Which brings us to the prospect of further wars. The shortest and therefore the most economical route for the US to get oil from the land-locked Caspian Basin is a pipeline south to the Persian Gulf through Iran. The US presently has executive orders and legislation in place to impose sanctions on any company (US or otherwise) that develops Iran's oil fields. It will not support such a route unless there is a regime change in Iran.

Indeed, the US is explicit that the protection of pipeline routes (rather than the protection of people) is a prime reason why its 'war on terror' is being waged. In its May 2002 report, the US Office of the Co-ordinator for Counterterrorism has classified more than half of the international terrorist attacks committed during 2001 as being directed at a single pipeline in Colombia. In keeping with this 'new world order', the US military is redefining its role to include oil pipeline security. As a consequence, US troops are now in Colombia training that country's army to provide pipeline protection.

Russia too has already shown itself prepared to use military force to keep open the routes it needs. Its refusal to grant independence to the republics of Chechnya and its neighbour Dagestan in 1999 was widely seen as motivated by the desire to control a route - and the transit fees that go with it - from the Caspian oil fields to its tankers in the Black Sea. Estimates of civilian deaths in Chechnya alone, since this round of fighting broke out in 1999, are as high as 20,000.

There are of course ways to deal with an impending oil crisis other than by force. In rich countries, people have been able to use their growing wealth to opt for ever-increasing oil consumption and dependence: gas-guzzling cars and bigger houses that require more energy for heating, cooling and lighting. So much can be done to stop - even reverse - these trends.

Like accelerating the supply of alternative energy, committing money and effort to renewable sources - as Germany is doing, now on track to generate 25 per cent of its electricity with wind by 2025. Like discouraging car transport, building up public transport, taxing car use by the kilometre, encouraging bikes, town-planning away freeways.

These changes will require a bold shift: challenging what we consume and overthrowing present thinking about what goods and services are needed for a decent standard of living. They are changes that must happen when oil supplies start their inevitable downward slide. So why not now?

The car - consuming about a third of all oil supplies - is the best place to start. For if the oil from the pipelines is no longer poured out in such gushing volumes into petrol tanks, oil company profits will fall significantly. And that fall in profit will deliver a message in a language that both business and governments are likely to understand: securing oil supplies through conflict, death and war is morally and economically bankrupt, and piping the blood of the Majority World down the lines is no longer the price we will pay for our oil.

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