United States citizens must sooner or later face the fact that the bombings of our embassies in Tanzania and Kenya were brought about in part by the muddled actions of our own government. The story is worthy of a John Clancy novel. It is an open secret throughout the region that the United States, Pakistan and Saudi Arabia have been supporting the fundamentalist Taleban in their war for control of Afghanistan for some time. The U.S. has never openly acknowledged this connection, although it has been confirmed by intelligence sources and charitable institutions in Pakistan.

In U.S. rhetoric regarding the Middle East, the Taleban would seem to be strange political partners. They are a brutal fundamentalist group that has promulgated a cultural scorched-earth policy for their nation. They have committed extensively documented atrocities against their enemies and their own citizens. So why would the U.S. support them?

Middle Easterners easily understand the answer. The ancient proverb goes: The enemy of my enemy is my friend. In Afghanistan the dominant ethnic groups are the Pushtuns, who spill over the border into Pakistan and the Tajiks whose language is a form of Persian. The Pushtun Taleban have virtually eliminated their Tajik opposition, which had been heavily supported by Iran. The United States as an enemy of Iran must be a friend of the Taleban.

This still does not fully explain why the United States would support such a group, or why Pakistan, itself a fundamentalist Islamic state, would risk the wrath of Tehran's religious government.

The answer to this part of the question has nothing to do with religion or ethnicity--only with the economics of oil. To the north of Afghanistan is one of the wealthiest oil fields in the world-on the Eastern Shore of the Caspian Sea in the new republics of the former Soviet Union. American oil companies are involved in an oil boom larger than any in the last 40 years in this region. Untold wealth is at stake depending on getting the oil out of the landlocked region through a warm water port.

The simplest and cheapest route is through Iran. It is the route favored by all oil companies, because it involves building a short pipeline and transshiping the oil through the existing Iranian petroleum network.

The U.S. government has such massive antipathy to Iran that it is willing to do anything to prevent this from happening. One alternate route would be through Afghanistan and Pakistan. The difficulty is in securing the agreement of the powers that be in Afghanistan. From the U.S. standpoint the only way to deny Iran everything is for the anti-Iranian Taleban to win in Afghanistan, and to agree to the pipeline through their territory. The Pakistanis, who would also benefit from this arrangement, are willing to defy the Iranians for a share of the pot.

Enter Osama bin Laden, a sworn enemy of the United States living in Afghanistan. His forces could see that the Taleban would eventually end up in the American camp if things proceeded as they had been. His bombing of U.S. Embassies in East Africa (since there were none in Afghanistan) was accompanied by a message for Americans to get out of "Islamic countries." By this he meant specifically Afghanistan.

The American response was to bomb bin Laden's outposts while carefully noting that his forces were "not supported by any state." This latter statement was an attempt to rescue the Taleban relationship, while at the same time giving the Taleban leaders the message that they must ditch bin Laden. For good measure American missiles also took out a factory in the Sudan--a smokescreen for the real target of their action.

Now matters are really in a mess. Iran has actually issued a statement supportive of the U.S. actions. The Taleban are angry, and American citizens across the globe are now the targets of the most fanatical of Islamic militants. The U.S. may even lose the pipeline as a result of this tinkering.

Every time the United States has attempted one of these slick back-door deals, American citizens get burned. What our foreign policy community never seems to learn is that religion and ideology are as strong a motivating force in this region as money or guns. We underestimate these factors every time, and this myopic vision gets us in trouble every time.

_______________________

William O. Beeman is an anthropologist specializing in the Middle East at Brown University. He is currently conducting research in Islamic Central Asia.

©1998 William O. Beeman, All rights reserved. 

AND NOW!!

From the 1998 Congressional Record.
Emphasis added to text.

U.S. INTERESTS IN THE CENTRAL ASIAN
REPUBLICS HEARING BEFORE THE
SUBCOMMITTEE ON ASIA AND THE PACIFIC
OF THE COMMITTEE ON INTERNATIONAL
RELATIONS HOUSE OF REPRESENTATIVES

ONE HUNDRED FIFTH CONGRESS SECOND SESSION
FEBRUARY 12, 1998

Next we would like to hear from Mr. John J. Maresca, vice president of international relations, Unocal Corporation. You may proceed as you wish.

STATEMENT OF JOHN J. MARESCA, VICE
PRESIDENT OF INTERNATIONAL RELATIONS, UNOCAL CORPORATION

Mr. Maresca. Thank you, Mr. Chairman. It's nice to see you again. I am John Maresca, vice president for international relations of the Unocal Corporation. Unocal, as you know, is one of the world's leading energy resource and project development companies. I appreciate your invitation to speak here today. I believe these hearings are important and timely. I congratulate you for focusing on Central Asia oil and gas reserves and the role they play in shaping U.S. policy.

I would like to focus today on three issues. First, the need for multiple pipeline routes for Central Asian oil and gas resources. Second, the need for U.S. support for international and regional efforts to achieve balanced and lasting political settlements to the conflicts in the region, including Afghanistan. Third, the need for structured assistance to encourage economic reforms and the development of appropriate investment climates in the region. In this regard, we specifically support repeal or removal of section 907 of the Freedom Support Act.

Mr. Chairman, the Caspian region contains tremendous untapped hydrocarbon reserves. Just to give an idea of the scale, proven natural gas reserves equal more than 236 trillion cubic feet. The region's total oil reserves may well reach more than 60 billion barrels of oil. Some estimates are as high as 200 billion barrels. In 1995, the region was producing only 870,000 barrels per day. By 2010, western companies could increase production to about 4.5 million barrels a day, an increase of more than 500 percent in only 15 years. If this occurs, the region would represent about 5 percent of the world's total oil production.

One major problem has yet to be resolved: how to get the region's vast energy resources to the markets where they are needed. Central Asia is isolated. Their natural resources are land locked, both geographically and politically.  Each of the countries in the Caucasus and Central Asia faces difficult political challenges. Some have unsettled wars or latent conflicts. Others have evolving systems where the laws and even the courts are dynamic and changing. In addition, a chief technical obstacle which we in the industry face in transporting oil is the region's existing pipeline infrastructure.

Because the region's pipelines were constructed during the Moscow-centered Soviet period, they tend to head north and west toward Russia. There are no connections to the south and east. But Russia is currently unlikely to absorb large new quantities of foreign oil. It's unlikely to be a significant market for new energy in the next decade. It lacks the capacity to deliver it to other markets.

Two major infrastructure projects are seeking to meet the need for additional export capacity. One, under the aegis  of the Caspian Pipeline Consortium, plans to build a pipeline west from the northern Caspian to the Russian Black Sea port of Novorossiysk. Oil would then go by tanker through the Bosporus to the Mediterranean and world markets.

The other project is sponsored by the Azerbaijan International Operating Company, a consortium of 11 foreign oil companies, including four American companies, Unocal, Amoco, Exxon and Pennzoil. This consortium conceives of two possible routes, one line would angle north and cross the north Caucasus to Novorossiysk. The other route would cross Georgia to a shipping terminal on the Black Sea. This second route could be extended west and south across Turkey to the Mediterranean port of Ceyhan.

But even if both pipelines were built, they would not have enough total capacity to transport all the oil expected to flow from the region in the future. Nor would they have the capability to move it to the right markets. Other export pipelines must be built.

At Unocal, we believe that the central factor in planning these pipelines should be the location of the future energy markets that are most likely to need these new supplies. Western Europe, Central and Eastern Europe, and the  Newly Independent States of the former Soviet Union are all slow growth markets where demand will grow at only a half a percent to perhaps 1.2 percent per year during the period 1995 to 2010.

Asia is a different story all together. It will have a rapidly increasing energy consumption need. Prior to the recent turbulence in the Asian Pacific economies, we at Unocal anticipated that this region's demand for oil would almost double by 2010. Although the short-term increase in demand will probably not meet these expectations, we stand behind our long-term estimates.

I should note that it is in everyone's interest that there be adequate supplies for Asia's increasing energy requirements. If Asia's energy needs are not satisfied, they will simply put pressure on all world markets, driving prices upwards everywhere.

The key question then is how the energy resources of Central Asia can be made available to nearby Asian markets. There are two possible solutions, with several variations. One option is to go east across China, but this would mean constructing a pipeline of more than 3,000 kilometers just to reach Central China. In addition, there would have to be a 2,000-kilometer connection to reach the main population centers along the coast. The question then is what will be the cost of transporting oil through this pipeline, and what would be the netback which the producers would receive.

For those who are not familiar with the terminology, the netback is the price which the producer receives for his  oil or gas at the well head after all the transportation costs have been deducted. So it's the price he receives for the oil he produces at the well head.

The second option is to build a pipeline south from Central Asia to the Indian Ocean. One obvious route south would  cross Iran, but this is foreclosed for American companies because of U.S. sanctions legislation. The only other possible route is across Afghanistan, which has of course its own unique challenges. The country has been involved in bitter warfare for almost two decades, and is still divided by civil war. From the outset, we have made it clear that construction of the pipeline we have proposed across Afghanistan could not begin until a recognized government is in place that has the confidence of governments, lenders, and our company.

Mr. Chairman, as you know, we have worked very closely with the University of Nebraska at Omaha in developing a training program for Afghanistan which will be open to both men and women, and which will operate in both parts of the country, the north and south.

Unocal foresees a pipeline which would become part of a regional system that will gather oil from existing pipeline infrastructure in Turkmenistan, Uzbekistan, Kazakhstan and Russia. The 1,040-mile long oil pipeline would extend south through Afghanistan to an export terminal that would be constructed on the Pakistan coast. This 42-inch diameter pipeline will have a shipping capacity of one million barrels of oil per day. The estimated cost of the project, which is similar in scope to the trans-Alaska pipeline, is about $2.5 billion.

Given the plentiful natural gas supplies of Central Asia, our aim is to link gas resources with the nearest viable markets. This is basic for the commercial viability of any gas project. But these projects also face geopolitical challenges. Unocal and the Turkish company Koc Holding are interested in bringing competitive gas supplies to Turkey. The proposed Eurasia natural gas pipeline would transport gas from Turkmenistan directly across the Caspian Sea through Azerbaijan and Georgia to Turkey. Of course the demarcation of the Caspian remains an issue.

Last October, the Central Asia Gas Pipeline Consortium, called CentGas, in which Unocal holds an interest, was formed to develop a gas pipeline which will link Turkmenistan's vast Dauletabad gas field with markets in Pakistan and possibly India. The proposed 790-mile pipeline will open up new markets for this gas, traveling from Turkmenistan through Afghanistan to Multan in Pakistan. The proposed extension would move gas on to New Delhi, where it would connect with an existing pipeline. As with the proposed Central Asia oil pipeline, CentGas can not begin construction until an internationally recognized Afghanistan Government is in place.

The Central Asia and Caspian region is blessed with abundant oil and gas that can enhance the lives of the region's residents, and provide energy for growth in both Europe and Asia. The impact of these resources on U.S. commercial interests and U.S. foreign policy is also significant. Without peaceful settlement of the conflicts in the region, cross-border oil and gas pipelines are not likely to be built. We urge the Administration and the Congress to give strong support to the U.N.-led peace process in Afghanistan. The U.S. Government should use its influence to help find solutions to all of the region's conflicts.

U.S. assistance in developing these new economies will be crucial to business success. We thus also encourage strong technical assistance programs throughout the region. Specifically, we urge repeal or removal of section 907 of the Freedom Support Act. This section unfairly restricts U.S. Government assistance to the government of Azerbaijan and limits U.S. influence in the region.

Developing cost-effective export routes for Central Asian resources is a formidable task, but not an impossible one.  Unocal and other American companies like it are fully prepared to undertake the job and to make Central Asia once again into the crossroads it has been in the past. Thank you, Mr. Chairman.