Part One: Crude Measures

At the Gates of a Global Oil Rush, Turkish Fishermen Threaten a Blockade

INCIRLI, TURKEY—Standing before his rundown storefront, Sevket Baykan looks toward the sea. Beyond a row of beachside shacks made of particleboard and sheet metal, three tugboats maneuver an Iranian supertanker toward an L-shaped pier.

In a few moments the ship will plug into the BOTAS marine terminal, where a complex network of tubes will feed it 20,000 cubic meters of oil per hour. In roughly a day, the tanker will leave with close to a million barrels' worth of crude in its holds.

The terminal is run by a self-contained community. On a nearby hill, security guards overlook a barbed-wire fence that encompasses pastel apartment buildings, a hospital, mosque, school, movie theater, hotel, beauty salon, and a solar-powered water-heating system.

illustration: Suzanne Allen

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Oil, Empire, and Influence in the New Eurasia

Deep beneath the waters of the Caspian Sea lie oil reserves rivaling those of the entire United States. Extracting the crude is one problem; finding a way to bring it to Western markets has been almost impossible. Backed by the U.S. government and a collective of 11 major oil firms, the Baku-Tbilisi-Ceyhan pipeline will cross mountains, desert wastes, and earthquake zones, while skirting potential battlefields and terrorist hideouts as it covers a distance equivalent to that from New York to Miami.

Construction will begin this spring, officials say, whether American troops invade neighboring Iraq or not. In this series, correspondent Raffi Khatchadourian explores the geography-political, economic, and social-of a conduit for coveted oil.

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For now, this oasis of prosperity serves as the downstream portal for nearly half of Iraq's outgoing crude. But in two years' time, the terminal is slated to become the westernmost extreme of the BTC pipeline, a transnational, 1094-mile conduit capable of delivering upward of 350 million barrels a year from the Caspian Sea. Even as American troops gather for a war with next-door Iraq, workers here are preparing for construction almost in the shadow of combat.

Just outside the gates of the terminal lies Incirli, where Baykan has been village leader, or muhtar, for three years. Because the job comes without pay, he also keeps a grocery store. At 3 p.m., there is no business. He locks the door and heads to a nearby teahouse. Twenty young men quickly gather to hear what he has to say.

In Incirli, modernity virtually begins in decay. Oil pipes rust on roadsides. Cacti push in human-sized clusters against rotting edifices. A beat-up satellite dish clings to a corrugated aluminum roof. When the wind shifts, a smell of brine and sulfur wafts ashore.

During his time as muhtar, Baykan has seen resentment spread like pestilence, frustration sting like saltwater on an open wound. "We have no place to farm, no place to graze," he says. "They took those things from us, too."

Life here is edging toward a point of desperation, and the villagers blame their most immediate and powerful neighbor: the marine terminal, run by the state since the 1970s, when Turkey's Gulf of Iskenderun became the destination of two underground pipelines originating in northern Iraq.

For the people of Incirli, it makes little difference where the oil comes from, or goes. Practically no one in the village works at the terminal. Financial compensation for the land it occupies remains locked in lawsuits. Fishing in an extended zone around the pier is forbidden.

With his people destitute, Incirli's regional representative flew to Ankara on January 28 to hand-deliver a list of 118 unemployed villagers—roughly a seventh of the population—to the BTC pipeline company, a group of 11 oil firms that will build and own the $3 billion pipeline.

Some in Incirli hope new jobs await them. The consortium, headed by the Anglo-American oil concern BP, has pledged to visit Incirli in two weeks. Any talks are likely to be fraught, though, since the business of oil requires land and sea, surveyors and engineers, but little unskilled labor. Meanwhile, the villagers are considering ultimatums.

"As a last resort," says Ali Askin, a 24-year-old unemployed automotive technician, "we will be blocking the gates."


For BTC, the anger of a few hundred villagers comes with oversize implications. This energy project has always been larger than a simple tale of a few companies trying to turn a profit. BTC's initials stand for its ambitious international scope: Baku, Tbilisi, Ceyhan, the beginning, middle, and endpoint of one of history's longest and most complexly designed pipelines.

Each of these cities claims its share of intrigue. Located on the Caspian, Baku is the capital of Azerbaijan, the birthplace of global oil, a city of past fortunes and barons in the making. Tbilisi is the capital of Georgia, a mountainous former Soviet republic imperfectly stitched together after civil war, and today possibly a redoubt for Al Qaeda militants. Ceyhan is a hardscrabble town just north of Incirli, on Turkey's Mediterranean coast, a trading post at no comfortable remove from either contested Kurdish land or the border of Iraq.

No one would choose to run 655,000 tons of steel tubing through these places, or at least not anyone who had another choice. One by one, for reasons political and environmental, other possible routes were canceled out, until BTC was left only with the most expensive, tortuous path on the map. The geography alone is forbidding, forcing the underground pipeline to weave through harsh desert, steep vales, and mountains of over 9000 feet.

As the company notes, the project will be "one of the great engineering endeavors of the new millennium." It may also be one of the millennium's great geopolitical endeavors, the culmination of a diplomatic drama that unfolded across the ruins of Soviet collapse for nearly a decade. Arguably, since the end of the Cold War, no single financial venture has more entangled the desires of big business and sovereign states. World powers have contrived to shape the pipeline according to their needs; impoverished countries locked in bitter wars have sought to gain from the prosperity it seems to promise.

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The pipeline's route from Azerbaijan to Turkey: No one would choose to run 655,000 tons of steel tubing through these places, or at least not anyone who had another choice.
(Courtesy BTC)

In the pipeline's vicinity, American soldiers are training proxies to hunt terrorists. Every year, adventurers bump along its path in boxy IMZ motorcycles. Thieves, kidnappers, and saboteurs live within sight of its route. Angry villagers, such as the ones at Incirli, are fighting to protect their turf. Working amid them all are some of the world's largest oil firms.

With land staked and piping shipped, issues of financial and political feasibility have given way to the kind of questions that always attend global commerce. What effect will the pipeline have on the unsettled societies hosting it? How will local economies handle the avalanche of capital that will flow through the Caucasus and Central Asia? Who will make sure the public money involved is used to benefit the public?

"We recognize that the BTC pipeline will be a global project," says Selahittin Soylu, the Incirli representative. "Of course, Turkey will benefit from it, and it is in Turkey's national interest to support it. The village would like to support the project, too, and in turn be supported."


If war does come to Iraq, just over the border from Turkey, construction on the pipeline will continue, pressed forward by companies whose sense of time is nearly geologic. Years before Operation Desert Storm got under way, or the Soviet Union fell, a handful of Western oilmen with reputations as risk-takers scouted the shores of Azerbaijan, looking for new deposits of crude. Some of the largest Caspian Sea fields won't be tapped for years to come. The pipeline is set to have a life span of four decades, longer if need be.

Whether bombs rain on Baghdad four months from now, or four years from now, or never, it will not change the fact that roughly 3 to 4 percent of the world's proven oil reserves are hidden beneath the brackish waters of the Caspian, and that someone will bring it to the global oil bazaar. For the industry, the question is less when, or how, than who?

Governments also operate on extended timelines. Over the past decade, Russia, Georgia, Azerbaijan, Turkey, and the United States have struggled with the riddle of landlocked Caspian crude. A late-'90s CIA map of the Eurasian landmass showed different-colored lines crisscrossing an area extending from Europe to China, from northern Siberia to the Persian Gulf. Some were existing routes, such as a jagged red scratch that represented the so-called Baku-Supsa pipeline, cutting westward from Azerbaijan to a Georgian port on the Black Sea. Others were proposed passages, fat pink lines such as one that expressed an option favored by some oil companies: a pipeline that would channel Caspian oil into the Iranian grid. Still others were pure fantasy, taken seriously by only a few, such as a green line representing a way to ship natural gas from Turkmenistan through Afghanistan to Pakistan and beyond.

Since the idea of the Baku-Tbilisi-Ceyhan export route was conceived (no one now can agree on when or where it began), the U.S. government has worked to make it reality. America's intent: to crack Moscow's monopoly on export lines, to further isolate Iran, to strengthen the independence of several post-Soviet states, and to foster an "East-West corridor" of trade and security alliances.

At various times, wild speculation that the region could contain as much oil as the Persian Gulf fueled these objectives. Experts now figure the Caspian Sea contains perhaps 30 billion barrels; Saudi Arabia's reserves alone are almost 10 times larger. Nevertheless, Caspian crude is still significant, and the United States is still playing a role, albeit much more quietly, in ensuring the oil will be extracted and shipped in a way that maximizes Washington's leverage over the region.

As one high-level State Department official explained when asked about the BTC route, "What's this about? It's not about money or molecules. I think, in a fundamental sense, it's about the strategic geography of Central Asia."


To reach Ceyhan, one must pass through the Turkish lowlands, where tall eucalyptus trees cluster in scattered, half-moon formations among basalt boulders, scrub grass, and extinct volcanoes. Here, Alexander the Great dealt a crushing victory in 333 B.C. to the Persians; today it is not hard to imagine this territory as the frontier of a new empire. Roughly 30 miles inland, the Turkish Incirlik air base hosts the screaming American fighter squadrons that have enforced the UN no-fly zones over northern Iraq for 12 years.

Empire, of course, is a big idea. It is coincidental that a Turkish base hosting the United States Air Force rests side by side with the terminus of Washington's favored pipeline route. But in a larger sense, oil, war, and the reach of American power have become inextricably linked. By far the world's heaviest consumer of oil, the U.S. burns through roughly 20 million barrels per day, of which we import nearly 11 million, or 60 percent. By 2020, the United States could be forced to import even more, 18 million barrels a day. Maintaining such a habit requires the application of unparalleled diplomatic and military resources across the globe.

Our unceasing hunger, and the pipeline intended to take the edge off it, will transform Ceyhan and its sleepy seaside environs into one of the most significant petroleum outposts in the world. The marine terminal's manager, Gurhan Unal, estimates that the Caspian, Iraqi, and Turkish crude coming this way will amount to an annual throughput of nearly a billion barrels. Dozens of tankers will line up each week to drink from the new spigot.

"America is greedy," Unal says. "That is my personal opinion." He steers his mud-spattered Mercedes jeep to a guard tower at the edge of a cliff, and gets out. Unal has been touring the BOTAS marine terminal—a surreal juxtaposition of brightly colored industrial artifacts and the community that keeps them running. Directly below the cliff, the road passes through a tank farm, where 12 cylindrical structures hold Iraqi petroleum.

Here, the earth is crimson, a by-product of local volcanic activity. White steel pipes run from the tank farm down to the jetty, fueling three supertankers with Kirkuk crude. According to the marine terminal's operators, oil coming to Ceyhan from Iraq travels in liquid columns 200 kilometers long, moving at half a meter per second. This may be the closest one can get to fixing Saddam Hussein's pulse.


BTC will own the newly expanded portion of the BOTAS terminal, with BP holding the largest share and essentially governing the operation. The other partners are a mix of state-owned and private oil companies with stakes in Azerbaijan's offshore reserves: ConocoPhillips, Amerada Hess, Total Fina Elf, Socar, Statoil, Unocal, Turkish TPAO, Agip, Itochu, INPEX. Lashed together, this raft of players will move their construction teams north from Ceyhan and south from Baku, threading the pipeline through treacherous terrain.

Turkey, Azerbaijan, and Georgia are all dysfunctional states—the latter two in far worse condition than the former. Neighboring Armenia, which does not host the pipeline but whose internal politics matter in the cramped strip of land these countries share between the Caspian and Black seas, is not much better off.

All four countries are threatened by war. The 15-year Kurdish insurrection in Turkey's southeastern provinces officially ended in 1999, but shootouts between rebels and government forces continue. Azerbaijan and Armenia remain freeze-framed in a feud over the mountainous Nagorno-Karabakh enclave, situated in Azerbaijan but effectively controlled by Armenia—an arrangement that emerged after fighting over the land in the early '90s claimed roughly 30,000 lives and generated close to a million refugees. Karabakh's front line remains volatile, with small gun battles periodically punctuating streams of invective from the two capitals. Georgia's sinews could tear apart at any moment; in the country's northwest, the breakaway territory of Abkhazia, which gained de facto independence after a civil war, is only the most inflamed of several regions within the country. Directly north of Georgia is Chechnya, a hornet's nest of freelance warriors.

BTC is treading gingerly, not least because 70 percent of the financing for the pipeline is expected to come from export credit agencies and international finance institutions (such as the European Bank for Reconstruction and Development, and the International Finance Corporation, a member of the World Bank Group). By mandate, they must fund projects that serve the public interest.

Maps of the pipeline route show it unfurling like a wrinkled string, avoiding hot spots, trying not to permanently displace even one community. For the sake of transparency, the company has placed more than a million megabytes of information on its Web site (www.caspiandevelopmentandexport.com), including legal agreements with the host countries, technical information, environmental and social impact studies, and detailed charts depicting the pipeline's precise path.

"A lot of people, when they hear of the word pipeline, they think of the old Soviet stuff—big tubes indiscriminately crisscrossing lots of territory aboveground," says Barry Halton, a spokesperson for BP. "But that actually isn't what BTC will look like." Company officials insist they will bury the piping three feet underground, using an environmentally sensitive method that involves shaving off topsoil and storing it so the earth can be reinstated in proper layers.

The completed pipeline will scarcely be noticeable, say BTC executives. They argue it will be at once invisible and a powerful engine for economic development, with oil and transport revenues reviving tired treasuries. "There are other pipelines in Turkey where the reinstatement isn't as good as it could have been," adds Halton. "We are very well aware of that, and what we will be doing is far superior. As we go along, we will even put right other people's work as we encounter it."

A number of nongovernmental organizations in the region and abroad are unconvinced. And the dialogue between them and the company is in many ways emblematic of the larger ongoing discourse between anti-globalization activists and big business, by turns constructive and frustrated.

"BP is demanding this money, but is unwilling to debate the public necessity of public funding," says Anders Lustgarten, an activist at the London-based Kurdish Human Rights Project. "We invited them to a debate at the House of Lords, and they refused to come. We had meetings with them in private, but the company appears to want to keep these discussions out of the public domain. But they're asking for billions in public funding. It doesn't seem legitimate to us."

Last year, the Kurdish group, along with Friends of the Earth, Platform, the Corner House, CEE Bankwatch, and Campagna per la Riforma della Banca Mondiale, published a 202-page report that explores the project's potential environmental and social impacts. It also challenges the pipeline's legal underpinnings, which place sizable burdens on the host governments should they decide to pass new legislation affecting the project.

These fixed agreements are of obvious importance for the pipeline's operators; in the Caucasus, corruption and lack of democracy mean that largely unaccountable leaders can make deal changes on whims. The downside, as activists see it, is that legitimate changes to correct unforeseen effects will be very hard to implement.

In protest of the pipeline, nine members of the activist group Rising Tide stormed the European development bank's London offices last month. With concerns mounting that the route might threaten a prized aquifer in Georgia, both the EBRD and IFC have stated that they intend to proceed cautiously.


But in Incirli, people's concerns are more immediate. Many of the men call themselves fishermen, but only a few continue going out on their boats. "The docks have powerful lighting systems that attract the fish," said Ali Soylu, 29. "And we can't go there. When they add the new pier, our fishing space will diminish even more." Worse, villagers say, when they look over the terminal's fence, they see gardeners and cafeteria workers who they know are not from the area. Their first instinct is to believe that somewhere a deal was cut.

Privately, BTC officials concede that they must deal with whatever inheritance, in terms of community relations, Turkey's embattled state pipeline agency has left them. That's liable to be an increasingly complex task. According to a BTC study, construction teams inevitably bring other ills: prostitution and communicable diseases, to name just two. The study also states that new terminals can spur greater urbanization, with a slow but steady influx of migrant workers and an overall shift in the way of life. Halton, the BP spokesman, says the company is trying its best to avoid that.

Regarding Incirli's specific complaints, BTC explained in an e-mail that the new jetty will reduce the gulf's fishing area by 16 percent. It also noted, "A majority of the presently working staff in the region and BOTAS's service contractors in the region are local hires," and promised an independent third party would be present during future recruitment.

That may not be enough for Ali Askin, the out-of-work mechanic who's ready to blockade the terminal. "When there are no options left," he says, "as the people of this village, that is what we will have to do."

Still, the company says it wants this project to set the standard of business in the countries hosting it. The true test, activists say, is whether it can redefine global norms on a local level, right here in a place like Incirli.

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