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36 comments on How To Get A Pipeline Built
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36 comments on How To Get A Pipeline Built
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GAIA Host Collective
I don't understand why other posters agree with your article. While you're right to go over the details and requirements of building a pipeline, geopolitics IS a significant factor.
There are regularly stories in the media or in the blogosphere about various pipeline projects that are ...seen as the "real" justification for various military or diplomatic acts...
These analyses (which are absurd to anyone with a basic knowledge of the oil&gas industry)
I don't know where to start on this one, but the history of industry has numerous examples of when the ROUTE of a pipeline was a major political decision. Yergin's Prize describes the Suez crisis, when Nasser effectively stopped oil tankers from going over Suez and Syria which had a major pipeline through was feeling sympathetic. This lead to increasing understanding of the Western countries that they could be very easily choked by hostile governments. And this would be not only on the mind of government administration it would also be a very real concern for oil companies: no trade means no money.
So, you're very wrong to take it out of the picture. The recent agreement between Russian and Central Asian countries DOES threaten EU energy security and the preceding cut of Russian gas supplies to Belarus is a good lesson. Since the pipeline will go through Russia, if Russia closes the tap, the Europe will feel it. And it doesn't matter that the supplier is from some C.A. country... the pipeline goes through Russia.
That said, it is hard to justify military intervention purely because of some pipeline. There must be other factors at play, but something that transports millions of tons of oil every year is a business with many zeroes... and money does affect military decisions.
"The recent agreement between Russian and Central Asian countries DOES threaten EU energy security and the preceding cut of Russian gas supplies to Belarus is a good lesson."
I completely agree with this summary
Well, i vigorously disagree.
The Russian-Central Asian announcement is just bluster - no pipeline will be built because they are already there! Russia fully controls Central Asian gas already, so it can threaten us more than reality does.
As to Belarus, I've written previously about it. It's about internal oligarchic fights, mostly. I can only send you back to these on TOD:
Russian gas and European energy security
Ukraine vs Russia: Tales of pipelines and dependence
The Russian-Central Asian announcement is just bluster - no pipeline will be built because they are already there!
If I'm not mistaking, the announcement came just a few days before Kazakhstan was supposed to promised its supplies for another pipeline in a conference in Poland. So Russians made sure there was no other pipeline with Putin visiting Turkmenistan and Kazakhstan during that week.
And I thought that I had explained that such promises were meaningless because there is no possibility of any other pipeline being built, because it misses major necessary ingredients.
It's all PR and show-business. It works because people believe these announcements, but they shouldn't.
You ignore that there already IS a pipeline through Russia! How does the mere possibility of *another* Russian-Central Asia pipeline threaten EU security?
Central Asia is NOT adjacent to any part of Europe, including Ukraine. The only way to build an EU-CA pipeline that bypasses Russia is go across the Caspian, through the Caucasus, and then across Turkey and the Balkans.
Europe can build it if it wants to, but nobody wants to spend the money just IN CASE Russia might disrupt supplies again for a few days. How much more secure would it be, anyway? In the long term, gas supplies through Russia are far more stable and predictable than the potential for disruption in half a dozen young democracies and dictatorships with potentially serious ethnic, religious, or terror problems. Looks like a good way for Al Qaeqda or the Chechens to get Europe's attention! Or, what would stop the Russians from encouraging "separatists" or "criminals" to disrupt pipeline operations or steal fuel? Abkhazia and South Georgia don't have to be the only Russian clients in the region.
If you're looking at tens of billions of dollars for (carbon) energy security, there's much better things to do with the money - like wind, solar, and fuel economy.
Finally, it's not like energy is the only risk Russia poses to the EU. There's lots more to create tension over, so spending all that money on this one problem seems like a bad deal. And, of course, the relationship is really not that one-sided: the EU actually has plenty of other responses it can (and does) take to exert pressure back on the Russians,
Of course it is. But politics can only influence the choice between different routes that are each economically viable and acceptable to the other players. It cannot drive a route on its own - that was my point.
But politics can only influence the choice between different routes that are each economically viable and acceptable to the other players. It cannot drive a route on its own - that was my point.
Well, "economically viable" is too broad when politics comes into play. The politicians have the government budget that can subsidize construction expenses directly or give some tax breaks/incentives. If I'm not mistaking there is a quite close relation between top officials and top management of US oil companies, with some having financial interests in those companies...
Look, my whole post was about explaining that such subsidiesare not enough, because you need more than money to build a pipeline - you need a comprehensive cotnractual framework, which money cannot create (or - of course it can, but the amounts required are an order of magnitude larger than the construction costs)
Jerome:
Sometimes a little historical background can help people understand the deal. The interstate natural gas business in the United States was started by Texas Eastern, who purchased and converted the "Big Inch" and "Little Big Inch" pipelines in the United States from a crude and crude products line to natural gas. There's a wonderful history of the construction at http://culturalresourcegroup.com/pdf/inchlines.pdf
Reading it you will learn what real patriotism and real leadership can do. During the Second World War the Germans sent 5 U Boats to the Atlantic and Gulf Coasts to sink tankers and it was incredibly effective-they knocked out a third of the US tanker fleet almost immediately, and the East Coast refineries and the whole European war effort was stalled out. The Allies couldn't land at Normandy or Sicily without oil, and the Germans couldn't finish conquering Russia or invade England without oil.That's why Hitler was willing to lose a million soldiers on the road to Baku and had his best tank divisions in North Africa under Rommel tring to conquer the oilfields of Libia. The big oil companies cooperated in a no profit construction project that resulted in a 24" crude line and a 20" products line to the East Coast refineries from the East Texas field and the Houston Refineries.
Its a long PDF, 54 pages, but well worth a read, also has some great old WW II posters. But its efforts like this that give me a little faith in the future. This is a fine explanation of the gas rationing in the US during WW II, and even has some explanations of the old railroad tank car shipments of crude.
Bob Ebersole
Thanks for that post and reference, Bob.
I see very little faith unless we start seeing some leadership that isn't simply taking campaign bribes and has the fortitude to make some real changes. The current system is all about immediately covering one's own rear end rather than planning and building things that solve problems over the long haul. Long haul projects without guaranteed profit are now unconstitutional, aren't they?