Pained by concern for the environment and overfishing of the Caspian Sea's sturgeon stock, this past week the US Department of Commerce placed a total ban on imports of Caviar from the region. Of coarse this did not affect Iran because there has been a ban on imports from Iran in effect for a longtime. But, what hypocrisy? Overfishing is serious but there are more significant abuses of the Caspian Sea.
If the USDOC really cared for the Caspian Sea they would have gone after Chevron or Unocal or BP Amoco. These companies and others have been, and are right now, participating in what will be the total destruction of the Caspian and it is about to escalate to unprecedented levels.
This, by the way, is not just an issue for Iranian consideration, but I would argue for the whole world.
To be fair, a little environmental enforcement did lead to a $75 million fine being imposed on Chevron in 2001 (who controls the huge Kazakh fields) and another fine on Agip (Italy's oil company). And by all accounts, poachers and renegade (unlicensed) fishermen especially in Kazakhstan and Tajikestan have caught much more sturgeon than even the controlled, licensed fishermen. And Iran has reported serious reductions in its Sturgeon catch and Caviar production.
But, the very survival of the Caspian Sea is in question — and the future of over 400 unique biological species. All the biological focus has been on Sturgeon populations, yet for example there is unprecedented death among the Caspian's seal population with thousands dying as a result of poisoning from pollution. The carcasses are there for every one to witness.
Did you know that the Volga River that feeds into the Caspian accepts half, yes half, of Russia's waste sewage? All that untreated shit (literally), along with other industrial and chemical waste that comes with raw sewage, dumps right into the Caspian.
Did you know that the water level of the Caspian Sea has risen 2.5 meters (over 7 feet) since 1978? This has turned several cities on its land perimeter like Darvish in Turkmenistan into islands – which were once connected to the mainland. And many Iranian towns will be following Darvish or may simply be flooded out.
Then, there is the issue of oil and gas. The Caspian region is the largest untapped hydrocarbon reserve in the world. The wealth under the sea is measured in trillions – not billions of dollars. The world is hungry for more energy. Consider for example that China will be adding 110 million cars to its existing stock of 30 million cars by 2020.
Digressing for a minute, let's forget where they are going to get the gasoline from — can you imagine the global impact of another 110 million cars on this planet? What about more cars in India, and Indonesia, and so on…? Can the planet afford all this pollution?
And then, there is the small issue of at least one large-scale (multi-MW) electric power generation plant being commissioned every month in China (especially as progress comes to its western provinces). And where is all the oil and natural gas going to come from for all this economic growth? You guessed it … the Caspian Basin.
There is over 200 billion barrels of oil, and over three trillion cubic meters of natural gas under there. These riches are at stake in a new economic and political 'great game.' Now that North Sea oil is depleted and more Alaskan Oil is shut out (because of US Congressional protection of Alaska's wildlife reserves), Britain and the United States have partnered up to get their hands on Iraqi and Caspian region oil in full force. What's $100 billion dollars for the Iraq war when there's trillions out there?
This is a new high-stakes scramble of vital long-term geopolitical significance. Basically, the very future of Britain's economy and US economic leadership are at stake — with for example China and India's long-term dependence on Western controlled energy resources at issue.
Until recently only a few small regional pipelines through this energy corridor have existed — with significant quota restrictions and fees from Russia. Basically Oil was pumped north to Russian markets or to ships on the Black Sea. And, Turkey does not want any more tankers going through the Straits of Bosporus.
So the only option is to build large pipelines across the Caspian Sea bed to Southern Turkey – crossing 4 countries each. Two pipelines are now on the drawing board across the Caspian Sea (one from Turkmenistan and the other from Kazakhstan) to ports on the Mediterranean.
To get a sense of what these pipelines might do to the Caspian, lets look at two smaller pipelines operating today. Already the Baku-Novarisk and the Baku-Sepia pipelines have caused major leaks. And then there is the issue of discharges from actual oil and gas drilling into the Sea. And finally, there is the issue of operating refineries and chemical plants on the perimeter of the Sea.
The Absheron Peninsula refinery (in Azerbaijan) for example has already been sited with environmental abuses. All this in a framework of lax environmental regulations to begin with (to attract foreign investment) and corrupt dictatorships that are heavily interested in signing multibillion dollar deals with foreign companies. (ref: Azerbaijani's recent $4Bn deal with BP Amoco)!
All, southern land-based pipeline options across Iran have been rejected, although it is by far the cheapest and most environmentally benign option.
Two significant 'land-pipelines' concepts have in fact come to fruition — across Afghanistan and Pakistan. Yes, the agreements were signed only a few months after President Karzai took office — right after the 'liberation' of Afghanistan. And the company involved was, yes you guessed it, UNOCAL. A 1300 Km gas pipeline and an 700 Km oil pipeline down to the Arabian Sea.
Who wants to deal with the mullahs running Iran anyway? Iran has been by-passed, isolated and ignored. Iran's Islamic theocracy has managed to alienate itself so badly that it has:
a) Lost out access to significant portions of the Caspian Basin to the other 4 countries. Iran at one point had a claim to 50% of the Caspian (before USSR's breakup), now it is lucky to claim 18%!
b) Lost out on deals to have pipelines passed through it — even though it was by far the best. And apparently, the most 'politically' risky one too!
c) Lost out on any ability to influence the environmental protection of the Caspian Sea. The Caspian Sea will be destroyed forever, and Iran cannot do a damn thing about it.
Iran's national interests have been and are being substantially compromised – with significant long-term consequences. But forget Iran for a moment – damn it – what about protecting the Caspian Sea? Does anyone want to see what happened to the Aral Sea happen to the Caspian Sea? (In case you do not know, the Aral Sea has shrunk 75% with hardly any fish left in it, and every perimeter city destroyed – a victim of Russia's economic growth plans). The Caspian Sea is a global treasure.
Forget normal operations, what if these pipelines are sabotaged? Think of what happened in Russia this past month: 300+ children died during the siege of the school, or the bombings last week by Chechen separatists. Will these pipelines or oil platforms be safe?
My final point is, that if the US government really cares about the environment, and the future of the Caspian Sea – it should do everything it can to lead the Mullahs in Iran (and these dictatorships in Azerbaijan, Uzbekistan, Tajikestan, etc.) towards extinction — instead of taking a small symbolic action to save the Sturgeon population. Illegal fishing will not stop. All these other abuses of the Caspian will continue.
The exploitation of hydrocarbon reserves in the Caspian region and the delivery of them to markets has to be done in the most sensible and decent way possible, instead of being done with dirty political considerations of maintaining Iran's isolation and enriching corrupt dictatorships operating with lax environmental regulations. The Caspian region and the whole world will, in the long-run, be much better off if all this exploitation is done within a framework of good environmental laws passed by representative governments working in cooperation with each other — than in a quick, greedy, and bandit-like fashion with no long-term interests in mind.
These oil and gas projects are long-term projects. If these projects are not set on sound foundations — the end game risks will be large. A quick review of history will teach anyone that the people of this region are not dumb or docile. No one knows this better than Condoleeza Rice (Bush's right hand). She was after-all on the Board of Chevron until she entered the administration. She even has a super tanker named after her. She is a Russian Linguist and knows Central Asia very well. Not to mention Bush himself or Cheney's background in the oil industry.Yes, the Bush administration has out-foxed Russia – taken the mineral wealth from its former republics and even forced the breakage of Russia's $40 Billion+ (multi-year) contract with Saddam with the war.
But this is only the first round. In order to truly win, in the long-run, it will have to Win-Win (i.e. both sides will have to win) and the other side are the people and environment of the Caspian Region (including Iran). Let's not forget that. Win-Win is a noble American business practice, that I am sure Bush learnt at Harvard Business School.
