Is The BTC Oil Pipeline Part Of A Political Game?

Publication: Eurasia Daily Monitor Volume: 1 Issue: 64

On July 22 Georgia’s Ministry of Environment and Natural Resources ordered British Petroleum (BP) to suspend construction of the Baku-Tbilisi-Ceyhan oil pipeline in the Borjomi valley of Western Georgia. The U.S.-backed and BP-led strategic $3.6-billion, 1750-km pipeline is intended to transport 800,000 barrels of crude oil per day from Azerbaijan to the Turkish Mediterranean port of Ceyhan via Georgia (Civil Georgia, Itar-Tass, July 23). It remains unclear whether Tbilisi’s request is motivated by environmental safety or big politics.

The United States wants construction to continue as planned. The future of the BTC oil and Baku-Tbilisi-Erzerum gas pipeline projects in Georgia, as well as the separatist conflict South Ossetia, were the main topics of a two-hour, closed-door meeting between Georgian President Mikheil Saakashvili and U.S. Assistant Secretary of State Elizabeth Jones on July 30. After the meeting, Jones underlined the strategic importance of the BTC pipeline for the United States and stated that Saakashvili had promised that construction of the pipeline would continue and that its route would not be changed. Jones said that she had inspected the pipeline by helicopter and noted the safety measures in force.

Although Jones had made clear that Washington would not tolerate any modification of the existing BTC project, Tbilisi remains resistant. After meeting with Jones, Georgian Parliamentary Chair Nino Burjanadze said that, despite the strategic importance of the BTC pipeline, Georgia would not sacrifice the environmental safety of the Borjomi valley. She said that the Georgian government remains concerned about how well BP adheres to the environmental safeguards defined in the agreement between the two parties.

“The Borjomi district is of vital importance, due to its natural resources and location,” explained Environment Minister Tamar Lebanidze at a news briefing on July 23. “Thus, we are demanding additional safety guarantees.” Lebanidze also said that the request to halt pipeline construction does not envisage a long-term suspension of the project or alteration of the route. “But we urge BP to meet its commitments undertaken during the November 2002 agreement,” Lebanidze added (Kavkas Press, Civil Georgia, TV-Rustavi-2, July 23). The Ministry plans to survey the situation over the next two weeks in order to determine a plan of action.

In a July 22 interview with the newspaper 24 Hours, Lebanidze stated, “I fully agree with the opinion that the pipeline route was poorly selected. If we could make the decision today, we would definitely choose a different route, not Borjomi.” Even if the risk of oil spills were small, Saakashvili’s government would not have taken the risk. “Our society should have more assertively opposed the Borjomi route,” she said, adding that the BTC project would resume only after BP implemented all prescribed safety measures.

BP’s representative in Tbilisi, Rusudan Medzmariashvili, told reporters, “We are complying with the Georgian request and have suspended construction temporarily.” According to BP, about 60% of the project has been completed. “The temporary suspension of the construction work will not affect the target date for commissioning the Georgian section of the pipeline.”

Symptomatically, on July 22, on the eve of the Environment Ministry’s decision, the newspaper 24 Hours published an open letter to President Saakashvili, signed by 50 Georgian scholars, NGO leaders, and public figures. While acknowledging the pipeline’s role in guaranteeing Georgia’s stability and security, the authors criticized the decision to run the pipeline through the environmentally unique region.

The “Letter of 50” said that President Eduard Shevardnadze, his government, and foreign investors made a number of political, administrative, and technical mistakes when determining the route. According to the letter, Shevardnadze and the Georgian International Oil Corporation put BP’s interests ahead of Georgia’s. Furthermore, the government and GIOC did their best to mislead the public opinion by downplaying the environmental impact of the pipeline.

Borjomi valley is the source of Georgia’s famous “Borjomi” mineral water, which is widely exported throughout the post-Soviet region. The entire area has a unique biodiversity and is home to one of Georgia’s most famous health resorts. Borjomi is considered a Georgian national treasure, an opinion that BTC opponents frequently attempt to invoke.

One of the pipeline’s staunchest opponents is Manana Kochladze, from the Georgian NGO Green Alternative. Kochladze won the Goldman Environmental Prize, the highest award for environmentalists, in April 2004 for advocating better environmental guarantees from BTC. “From the very beginning, we were against the construction of the oil pipeline via Borjomi, since there are no sufficient guarantees that the BP-led project would not have a negative impact on the fragile ecology of the region. Two weeks are not enough to determine the environmental safety measures,” Kochladze told Civil Georgia.

Shevardnadze considered the BTC project to be the crowning achievement of his presidency. While he was in office the media depicted the project as the solution to most of Georgia’s problems. But Saakashvili has sought to debunk the myths surrounding the pipeline and told Georgians not to pin unrealistic hopes on it. Saakashvili pledged to honor the obligations taken by the previous government, but created a special commission to monitor construction.

The pipeline was originally planned to trace either via Akhalkalaki, a region densely populated by ethnic Armenians and home to a Russian military base, or Kharakai, a mountainous region in southern Georgia. However, the route was changed in 2002, for reasons that are still shrouded in mystery and controversy. An investigation conducted by 24 Hours concluded that the decision to transit Borjomi was made in 2002 when Shevardnadze gave the Georgian National Security Council a risk assessment prepared by the U.S. State Department, U.S. Embassy in Tbilisi, and intelligence community. Although, the Minister of Environment at the time, Nino Chkhobadze, was categorically against the Borjomi route, sources say Shevardnadze forced her to sign the agreement.

The press tends to emphasize political undertones in the decision to halt the BTC pipeline. On July 29, Resonance directly asked the government whether halting BTC was a political decision and did it mean that Saakashvili’s government has lost interest in international oil projects? Resonance quotes Michael Townsend, BP’s representative in Georgia, as saying: “During his [mid-July] visit in London, Saakashvili met BP CEO Lord Brown and pledged that there would be no delay in the construction of the pipeline. We trust President Saakashvili’s words.” Meanwhile, Azerbaijan has called for an intergovernmental commission to explore the reasons for the suspension (Alia, July 29-30). On August 2, Azerbaijan will host an extended and high profile meeting of BTC stakeholders to discuss recent developments.

From the start of construction, the BTC pipeline has been attacked by different interest groups, including NGOs and some media outlets. Most of the criticism focused on disputes with local residents who sold BP plots of land and ecological safety infractions. BTC was forced to provide explanations to Georgian civic groups and even stood trial in several court cases. Some analysts suggested that such information warfare against BTC might have been the work of Russian special services, since Moscow opposed Georgia’s involvement in international oil transit projects.

Other observers point to recent efforts to link BTC with the unresolved South Ossetian conflict. BTC, touted as the hallmark of Georgia’s pro-Western orientation, was suspended for the first time shortly before Saakashvili’s visit to the United States and coincided with increased tensions in the conflict zone. During her visit in Tbilisi, Assistant Secretary Jones explicitly stated that the U.S. administration supports only a peaceful solution to the South Ossetian problem. Days earlier, on July 14-15, Steven R. Mann, Bush’s advisor on Eurasian conflicts, visited Tbilisi, explaining that the U.S. government needed first-hand information about the situation in Ossetia. According to Mtavari gazeti, Washington is working on a special program to settle the conflict (July 16).

If part of the Georgian establishment has deliberately tried to rekindle the environmental controversy linked to the Borjomi route 14 months after construction began — and shortly before Saakashvili travels to the United States — either some local interest group believes it will profit from the problems or the Georgian government seeks to benefit from the political intrigue.