LONG-TERM PIPELINE, SHORT-TERM FOREIGN POLICY

Pipelines last a long time. Geopolitical relationships come and go.

This is one of two problems with the overbearing US role in the signing last week of two pipelines from the Caspian Sea region to Turkey.

The other problem was manifest in the necessity that US energy Sec. Bill Richardson declare the oil pipeline, from Baku, Azerbaijan, to Ceyhan, Turkey, commercial.

That is a problem because commercial decisions belong to the companies that risk capital in projects under question. And companies have expressed doubt about economics of the Baku-Ceyhan oil line.

The purpose here is not to oppose projects to which governments agreed last week-the oil line and a trans-Caspian gas line from Turkmenistan to Turkey.

The purpose here also is not to express preference for any of the projects with which those pipelines compete.

And the purpose here is not to deny the inevitability or legitimacy of a political role in decisions about pipelines crossing international borders, especially touchy borders around the Caspian Sea.

The purpose here is to question the wisdom of using pipelines covering 1,200 miles each and costing $2.4 billion and $2.7 billion to further foreign policy objectives that are both complex and subject to near-term change.

US objectives are clear: to fortify an alliance with Turkey, to contain Russian influence in the Caspian, and to keep Caspian oil from transiting Iran.

A case can be made for each of those objectives-right now. But things can change quickly in foreign policy.

One US foreign-policy objective, an objective President Clinton pressed in meetings in Istanbul this week with Russian Pres. Boris Yeltsin, is peace between Russia and Chechnya. It is not inconceivable that the two sides in that now-bloody conflict might make sharing of pipeline transit fees part of some future amnesty. But the pipeline central to such an accord would be an existing one, the repair and expansion of which would compete with the Baku-Ceyhan line.

Would the US, in the interest of peace in Chechnya, let it happen? What, then, about economics of the pipeline through Turkey?

Nor is it inconceivable that Iran might finally resolve the issues that stand between it and normal relations with the US, then request that the US cancel its opposition to movement of Caspian oil across Iranian territory to the Persian Gulf.

Would the US find restoration of relations with Iran worth new competition to a pipeline in which it has staked so much? Would construction of the Baku-Ceyhan pipeline put Turkey and Iran into automatic conflict in US foreign policy?

If either or both of those surprises occurred now, would the US back away from the pipelines from the Caspian to Turkey? What, then, about relations with Turkey?

The oil and gas pipelines through Turkey have advantages, among them financial assistance arranged by the Turkish government. And the interests of Turkey in all this certainly deserve priority attention.

For its part, the US is right to pursue its interests in the region, including its alliance with Turkey.

The US mistake is addressing regional, contemporaneous foreign policy problems with 1,200 mile assets that someone will have to support financially for several decades.

If the pipeline materializes primarily for reasons of US foreign policy and not because investors decide it is economically superior to the alternatives, then both US foreign policy and the commercial interests involved will suffer in the long term.

Related Articles

Wyoming seeks judicial review of BLM’s new fracing regulations

03/27/2015 Wyoming’s government sued in response to the US Bureau of Land Management’s final rule covering hydraulic fracturing on onshore public and Indian t...

Chevron to sell Caltex Australia interest

03/27/2015 Chevron Global Energy Inc. has entered an underwriting agreement for the sale of its 50% interest in Caltex Australia Ltd. to what it described as ...

Polarled pipeline installation under way from Norwegian Sea

03/27/2015 The Solitaire pipe-laying vessel has started Stage 1 of the Statoil ASA-operated Polarled installation project connecting Aasta Hansteen field...

Riggs named Clayton Williams Energy president

03/27/2015 Mel G. Riggs has been named president of Clayton Williams Energy Inc., Midland, succeeding Clayton W. Williams Jr., who remains chairman and chief ...

Deck named senior VP of EnLink Midstream

03/27/2015

Andrew A. Deck has been appointed senior vice-president of the Permian basin of EnLink Midstream, Dallas.

NZOG goes for jugular on Cue takeover

03/27/2015

New Zealand Oil and Gas Ltd. has issued a tough fifth supplement to its hostile takeover attempt on Cue Energy Resources Ltd.

Schlumberger subsidiary pleads guilty to violating US sanctions

03/26/2015 Schlumberger Oilfield Holdings Ltd. (SOHL) agreed to plead guilty and pay a fine of more than $232.7 million for conspiring to violate the Internat...

Motiva to integrate Norco, Convent refineries in Louisiana

03/26/2015 Houston-based Motiva Enterprises LLC reported it will integrate the company’s two Louisiana refineries—the 220,000-b/cd Norco facility and the 227,...

NGC asks CEQ to withdraw GHG guidance for agencies

03/26/2015 Six US natural gas associations jointly asked the White House Council on Environmental Quality (CEQ) to withdraw its December 2014 guidance for fed...
White Papers

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...
Available Webcasts


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

When Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.

register:WEBCAST



On Demand

Prevention, Detection and Mitigation of pipeline leaks in the modern world

Thu, Apr 30, 2015

Preventing, detecting and mitigating leaks or commodity releases from pipelines are a top priority for all pipeline companies. This presentation will look at various aspects related to preventing, detecting and mitigating pipeline commodity releases from a generic and conceptual point of view, while at the same time look at the variety of offerings available from Schneider Electric to meet some of the requirements associated with pipeline integrity management. 

register:WEBCAST


Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


US Midstream at a Crossroads

Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected