Thursday, September 20, 2012

The power of oil . . .

IRANIAN OIL has all sorts of political complexities, a lot of which are not immediately apparent to those of us who rely on orthodox news sources and commentary. Indeed, as we see, the Iranian nuke project and the posturing over Hormuz is rather a side-show, a distraction for American conservatives to dick-thump over.

ALJAZEERA has a report by Pepe Escobar, who is the roving correspondent for Asia Times, titled "All aboard the New Silk Road(s)", where he believes that Iran, India, Afghanistan, Pakistan, China and the US are all scrambling to get the upper hand across Eurasia. Add Russia to the mix and we have a three-ring circus here, folks, as the Great Game continues.

In the complex chessboard where the New Great Game in Eurasia is being played, both Kings are easy to identify: Pipelineistan, and the possible, multiple intersections of a 21st century Silk Road.  

Few have noticed a crucial meeting that took place during the recent Non-Aligned Movement (NAM) summit in Tehran, between senior Foreign Ministry diplomats from Afghanistan, India and Iran. Their ultimate goal; a new Southern Silk Road connecting Iran to Central and South Asia through roads, railways and last but not least, major ports.

The crucial Silk Road port in this case is Chabahar, in Sistan-Balochistan province in southeast Iran. Tehran has already invested $340 million to complete 70 per cent of the port construction - a decade-long project.

But with US and EU sanctions biting harder and harder, Tehran expects Delhi to come up with a closing $100 million. India has already invested $136 million to link Chabahar to Afghanistan's ring road system.

One does not have to be Alexander the Great to notice the fastest connection between Kabul and India would be through the fabled Khyber Pass. But that does not take into account the accumulated historical venom between Islamabad and Delhi - their constant promises to increase cross-border trade notwithstanding.

With Chabahar linking Iran directly to Afghanistan and India, in theory Pakistan is sidelined. But it's much more complicated than that.

• • •

Enter Pipelineistan - via the key Iran-Pakistan umbilical cord in the making: the 2,700 kilometre-long IP gas pipeline, from Iran's gigantic South Pars field through Balochistan and Sindh and into Punjab.

According to National Iranian Gas Company (NIGC) managing director, Javad Oji, the stretch from Iranshahr in southeast Iran to Zahedan and the Pakistani border is 90 per cent ready. The 900 kilometre-long pipeline on the Iranian side should be active one year from now. It's up to Islamabad to finish its stretch.

Totally in character in terms of interminable Pipelineistan soap operas, IP used to be IPI (Iran-Pakistan-India) - but Delhi pulled out, forced by relentless pressure from the Bush and Obama administrations.

And it's here that the going gets really tough - because there's nothing Beijing would love more than turn the former IPI into IPC.

Now, add the confrontation between China and its neighbors bordering the South China Sea and further North over deep-sea oil deposits, and the future has all sorts of interesting possibilities.

Pepe has another article, in Tom's Dispatch, "Tomgram: Pepe Escobar, Pipelineistan Goes Af-Pak", which points out that

Iran's relations with both Russia and China are swell -- and will remain so no matter who is elected the new Iranian president next month. China desperately needs Iranian oil and gas, has already clinched a $100 billion gas "deal of the century" with the Iranians, and has loads of weapons and cheap consumer goods to sell. No less close to Iran, Russia wants to sell them even more weapons, as well as nuclear energy technology.

And then, moving ever eastward on the great Grid, there's Turkmenistan, lodged deep in Central Asia, which, unlike Iran, you may never have heard a thing about. Let's correct that now.

Gurbanguly Is the Man

Alas, the sun-king of Turkmenistan, the wily, wacky Saparmurat "Turkmenbashi" Nyazov, "the father of all Turkmen" (descendants of a formidable race of nomadic horseback warriors who used to attack Silk Road caravans) is now dead. But far from forgotten.

The Chinese were huge fans of the Turkmenbashi. And the joy was mutual. One key reason the Central Asians love to do business with China is that the Middle Kingdom, unlike both Russia and the United States, carries little modern imperial baggage. And of course, China will never carp about human rights or foment a color-coded revolution of any sort.

The Chinese are already moving to successfully lobby the new Turkmen president, the spectacularly named Gurbanguly Berdymukhamedov, to speed up the construction of the Mother of All Pipelines. This Turkmen-Kazakh-China Pipelineistan corridor from eastern Turkmenistan to China's Guangdong province will be the longest and most expensive pipeline in the world, 7,000 kilometers of steel pipe at a staggering cost of $26 billion.

So, the players are making plans, but the future will be different from our expectations, it always is. My guess, my stupid opinion is that technology will have some surprises, and that 30 years from now, petroleum oil will be a 3rd world fuel of decreasing importance.

H/T — Daniel


opit said...

If oil were to become a 3rd world commodity because of better options it would most likely be the best thing that had happened on this planet for a long time. Meanwhile I'm sure you know Iraq, Iran and Libya all were causing problems with the lock on the world economy of the U.S. dollar regarding oil trading : Libya especially, which would have provided banking and loans for Africa. Now China will be buying from Yen.
Yeah. That's interesting.

Steve said...

The Great Game made fortunes for players but left their contries impoverished. The US has spent a trillion or more in Iraq, the oil companies got what they want and the taxpayer picks up the bill. To bad Obama could not say that. Then he could invest a trillion in making oil obsolete.

Gloria said...

Harper is selling the tar sands to China. Harper has permitted China to bring their own cheap labor. Harper had even said, China can bring swarms over, to build the Enbridge pipeline. Rumor is, China will own the Enbridge pipeline. The refining jobs also go to China. Harper has permitted company's to bring cheap foreign labor to exploit. I think, Canadian workers at the tar sands, will be phased out, for cheap Chinese labor. Harper loves China's human rights, because they don't have any.

Putin did visit China. Russia will give China all the oil they want. China is the leader in oil sales now. So oil sales will no longer be by the American dollar, but the Chinese yaun. China expects to be the world currency, within ten years. So with China pumping all the cheap tar sands oil and, with their cheap slave labor, they will make a very good profit, for resale.

If Harper is dumb enough to sell Nexen to Communist China too? We don't have slave wages in the U.S. or Canada quite yet. No country is going to buy our refined oil, will they?

Other country's are escorting Communist China out of their territories. Harper has brought them onto, our own damned Canadian soil.

China has been showing their aggression, around the globe. Hacking into other country's secret files. Selling infected electronic components to other country's. U.S. missiles and other weapons, had infected components, purchased from Communist China. And, Harper hands Canada to China, on a silver platter.

The Mound of Sound said...

Russia would dearly like to draw Europe away from the U.S. and closer to Moscow. One key to that is getting control of the Caspian Basin oil and gas riches. Halliburton, under Cheney, tried to get a lock on that via TAPI, even courting the Talibs. If America didn't get it Russia might and, with it, bolster its energy position with Europe.

Russia and especially China are working to get India, Pakistan and Iran into the Shanghai Cooperation Organization, their equivalent of NATO. We'll see.

China, facing the constant threat of energy security across the Indian Ocean, would love a land line from Iran, through Pakistan, into China. That's a key reason why the Americans and Brits are said to be quietly stoking the Baloch insurgency in southern Pakistan.

This is wheels spinning within wheels.