The Pipelineistan Power Game

by Charlie_East_West on April 23, 2013

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Everyone needs energy, and as it becomes more premium, combined with the vast reserves of oil and gas being located around the world’s more troublesome locations – it creates a potent mix for some serious geopolitical maneuverings.

There has always been, and always will be, posturings between so called good states v bad states dressed up as cultural, security, ideological and religious differences – but, the elephant in the room is the energy race in the middle east.

Russia and Iran together control roughly 20% of the world’s oil reserves and nearly 50% of its gas reserves. This is scary stuff – especially for an energy dependent West.

The natural gas pipeline linking Iran and Pakistan is almost completed. The final stretch of the $8 billion, 1,000 mile natural gas Iran-Pakistan (IP) pipeline, is expected to be up and running by the end of 2014.

This is a project that creates a huge geopolitical power shift from the West and towards China, and, as always, with Russia somewhere in the middle. We are now facing the next stage within the most complex power struggle for blue gold (gas) and black gold (oil). It is the Pipelineistan power game, and it is a game that never ends.

The Iranian stretch of IP is already finished. Iran has loaned Pakistan $500 million to help finish the remaining Pakistani section. Dark diplomacy is at work here, as Iran only agreed to the loan after Pakistan agreed it won’t back out of the completion of the IP as a result of increasingly aggressive Washington pressure. Both Pakistan and India have consistently teamed up since rejecting relentless pressure from the early George W Bush administration to end the IP deal. The US continues the pressure today – through the Hillary Clinton led sanctions to isolate Iran and Pakistan by all means available and a no-holds-barred campaign to force India, China and Turkey to cut off their imports of Iranian oil and gas.

The US concern over the IP is easy to understand. Once the IP is up and running it will transform Iran, and in particular, Pakistan from near-failed states into economic major players in the Middle East through massive trade agreements for Iran and Pakistan with Russia and China.

The IP project also helps to explain Iran’s cosy relations with both Russia and China. China needs Iranian oil and gas, and as such, has already clinched a $100 billion gas deal with the Iranians, and has an open conveyor belt of shiny new weapons and consumer bling to sell. Russia also has even more weapons with a “for sale” sign attached, as well as additional nuclear energy technology.

Central Asians love to do business with China and Russia. Unlike Britain or America, they offer geographical linkage, tons of cash, and very little pressure on internal human rights or dictatorships.

The US trump card is Afghanistan. US involvement is potentially less about liberation towards freedom, reduction of terrorism, and more towards gaining a significant regional presence for energy negotiations and trade. It is muscular diplomacy in action.

Afghanistan has huge potential reserves of natural gas, oil, and hundreds of other minerals and natural resources. Indeed, there is another hidden agenda to all of this – the global heroin cartels that trade with Afghanistan only work with U.S. dollars.

In the mid-1990s, during the Clinton era, the Taliban were even given the VIP treatment by Unocal and the Clinton administration. Straight after the US bombing and invasion of Afghanistan in 2001 came the US-led agreement to build the Trans-Afghan Pipeline (TAP) – a pipeline extension from Central to South Asia (with Afghanistan used as the regional link point).

American policy has been as such since Congress passed the Silk Road Strategy Act in March 1999. The act identified American trade and defence needs from the Black Sea to China with a need to build up American protective bases in Central Asia and to ensure a military and energy industrial base across the Eurasian energy corridor.

And then there is Turkmenistan. This is country so forgotten about, its only major claim to fame is that it is forgotten about. Since 2007, Turkmenistan has become important. Bloody important.

Vladimir Putin responded to the US TAP agreement by turning to the strategically placed Turkmenistan. An agreement was reached to give the entire Turken gas surplus to the Russian company Gazprom in 2009, and also a preference for letting Russia explore the country’s new gas fields. Turkmenistan also stated that it was removing itself from any US-backed Trans-Caspian pipeline project.

China also has its paws all over Turkmenistan. The Chinese lobbied hard towards the Turkmen president (the commentators nightmare of Gurbanguly Berdymukhamedov) to speed up the construction of the Mother of All Pipelines. This Turkmen-Kazakh-China corridor from eastern Turkmenistan to China’s Guangdong province would be the longest pipeline in the world. When China signed the agreement to build it in 2007, they added in a sneaky little nugget of a clause that states that “Chinese interests” will not be “threatened from [Turkmenistan's] territory by third parties.” Cutting to the chase, this means no US bases in that country.

So who will win this giant game of energy snakes and ladders? As usual, it comes down to three major players – America, Russia and China. I suspect however, it is a game that will run and run. For every snake, there will be a ladder. For every square on the board, there will be another middle eastern/Asian state to manipulate, threaten or throw cash at.

These are just the Pipelineistan game highlights. To construct a detailed analysis on this geo-political issue is an endless encyclopaedia in itself. The Pipelineistan power game is the game with no end.

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