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Energy ballet-2: Syria, Ukraine & 'Pipelineistan'

Pepe Escobar is the roving correspondent for Asia Times/Hong Kong, an analyst for RT and TomDispatch, and a frequent contributor to websites and radio shows ranging from the US to East Asia.

Published time: August 26, 2014 09:57
AFP Photo/ Andrey Sinitsin

As much as Iran, Russia, the US and the EU are involved in a sophisticated nuclear/energy ballet, Syria and Ukraine are also two key power play vectors bound to determine much of what happens next in the New Great Game in Eurasia.

And both Syria and Ukraine also happen to be energy wars.

The Obama administration’s Syria master plan was ‘Assad must go’; regime change would yield a US-supported Muslim Brotherhood entity, and a key plank of Pipelineistan - the $10 billion Iran-Iraq-Syria gas pipeline - would be forever ditched.

Also read: Energy ballet: Iran, Russia and 'Pipelineistan'

The Emir of Qatar himself had taken the road to Damascus in 2009 to negotiate a Qatar-Syria-Turkey gas pipeline. Bashar al-Assad though, said no; his excuse was his unwillingness to jeopardize Syria’s energy deals with Russia.

And yet, in 2001, an agreement went ahead for a rival Iran-Iraq-Syria project. So the writing was on the wall – or on the (steel) pipes arriving one day in the Eastern Mediterranean. The gas for prospective European customers would in fact come from Iran’s South Pars field, contiguous to Qatar’s North Dome; together, they form the largest gas field on the planet.

Not only for Qatar and Turkey, but especially for His Masters Voice, this was unacceptable; the official US ‘isolate Iran’ policy would be in tatters. Worse: the possibility was open for the EU to soon become the privileged customer of both Russia and Iran for no less than 45 percent of its gas supply. Full energy/trade integration of Eurasia – in this key case involving most of the EU, Russia and Iran - is absolute anathema for the Empire of Chaos.

Thus the key economic rationale for the whole ‘Assad must go’ disaster; a war OF terror largely financed by Qatar and Saudi Arabia, with logistical support from Turkey, with Ankara, the CIA and the GCC (Gulf Cooperation Council) gang running a ‘secret’ weaponizing airlift of so-called ‘good’ jihadists using Saudi, Qatari and Jordanian military cargo planes since 2012.

Reuters / Khaled al-Hariri

The least one can say is that the blowback was spectacular. ‘Assad must go’ didn’t go. And nothing less than IS (Islamic State), formerly ISIS, led by Caliph Ibrahim, reared its ugly head. Even US Special Forces are drooling at their fighting power.

The Caliphate engulfing parts of Syria and Iraq is now making a fortune selling – irony of ironies - cut-rate oil and gas in the black market. It amounts to at least $38 million a month: $8 million from a captured Syrian gas field and $30 million from at least six captured Iraqi oil fields.

The Houses of Saud and Thani now ostensibly profess to be horrified by the Caliph and his beheaders, including the so-called Beatles jihadists. And yet private Saudi and Qatari donors, as well as other GCC notables, continue to shower the Caliphate with cash and weapons. President Erdogan in Turkey is now also officially horrified. And yet the Turkish-Syria border remains a free for all for traveling jihadists.

As things stand in Pipelineistan, the possibility for the Qatar-Syria-Turkey gas project taking off is zero. And the prospect is not much better for Iran-Iraq-Syria, considering two of these nations are raked by civil war with no endgame in sight.

Have Grad, will frack

In the Ukraine scenario, the ‘villain’ is Russia instead of Iran. And there’s a much wider implication of direct US interests.

What really matters in eastern Ukraine is to clear off a large area for fracking – via a Grad missile offensive, leading to a mass exodus of refugees.

Michael Hudson has neatly summarized it: “Now, just imagine in this country if President Obama and Vice-President Biden were to send troops into upstate New York, which has opposed oil/gas drilling, and bombed Rochester, bombed Buffalo, and began just bombing the cities and shooting the opponents of the fracking. That’s exactly what’s happening in the [sic] Ukraine. And they’re doing this supported by the World Bank.”

Royal Dutch Shell happens to be the top shale gas explorers/exploiters in eastern Ukraine; a $10 billion deal was signed in January.

And then there’s the Exxon as well as the Burisma Holdings connection. Dual Israeli-Ukraine citizen and appointed governor of Dnepropetrovsk, shady billionaire Igor Kolomoisky – who also deploys his own private militia - is in bed with no less than VP Biden. Joe Biden’s son was appointed a director of oil and gas concern Burisma Holdings, the largest fracking company in Ukraine.

Moreover, parliament in Kiev passed a law that will allow US and EU investors to lease up - on a joint venture basis – up to 49 percent of Ukraine’s transit pipelines and underground gas storage facilities.

Kiev’s spin is predictable; the joint venture will bring in much-needed ‘investment’ and shelve for good another key Pipelineistan plank; the 2,446-kilometer long South Stream pipeline, which is planned to bring Gazprom’s blue gold under the Black Sea, entering the EU in Bulgaria, and thus totally bypassing transit through Ukraine. Translation: Kiev’s already wobbly budget will shrink even further with more meager transit fees.

Reuters / Gleb Garanich

The EU imports almost 30 percent of the gas it needs from Russia. Half, at the moment, transits via Ukraine. But for the near future the Nord Stream pipeline under the Baltic Sea will be boosted, and South Stream is a near certainty once the Ukraine mess is finally sorted out. Bypassing Ukraine is an increasingly sound option.

Compare it to Kiev’s wet dream, boosted by Washington, to ‘control’ the flow of gas from Gazprom to the EU and on top of it secure all trade in US dollars. Once again we’re back to prime Empire of Chaos policy – preventing further energy/economic integration between Russia and the EU.

Washington’s short-term priority thus is to sabotage South Stream; no wonder the pipeline is temporarily on hold, with the European Commission (EC) duly obeying His Masters Voice. Yet this also means that for the moment large swathes of the EU remain hostage to Ukraine.

It's under this light that we should examine the recent intervention by Iran’s deputy oil minister Ali Mejidi, when he enthusiastically affirmed the perennially troubled Nabucco, a Pipelineistan opera if there ever was one, was back in play.

Nabucco’s idea was to bring gas to the EU via Turkey, Bulgaria, Romania, Hungary and Austria. Bur where from? Turkmenistan and Kazakhstan were finally ruled out. It could be Azerbaijani gas, but that requires a fortune in extra investment. The Iraqi industry won’t be ready anytime soon. And Iran will be finally in play only if a nuclear deal is clinched till the end of 2014, and sanctions lifted in 2015 (all this a major ‘if’).

So in Ukraine, just like in Syria, we’re back to square one in energy terms. The country is an economic basket case now being hurled inside the hellish disaster capitalism pit. The details are here. In the end, Gazprom is likely to emerge the winner.

Confused by Syria and Ukraine? Don’t worry: just follow the energy wars.

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.