| Oil
pipelines / THE FACTS
Oil from the
pipelines:
who's got it and who
wants it
As current oil-consumption patterns continue, the largest oil-consuming
nations are making plans to cope with their massive reliance on oil reserves
from outside their borders. The three regions that consume over two-thirds
of the world’s oil have less than 6 per cent of the oil reserves
left in the world. While the US has less than 2 per cent of world crude-oil
reserves, it consumes a quarter of the world’s petroleum.
Whose oil is it anyway?
Oil economies achieve slower economic growth – an average of 1.7
per cent per annum – than non-oil economies – an average of
4 per cent per annum4. The more reliant economies and government are on
oil revenue, the less ordinary people profit from their oil resources.
Nigeria – where crude oil generates between 90 and 95 per cent of
its foreign-exchange earnings and 80 per cent of government revenues – is
ranked seventh in the world as an oil exporter. The proportion of Nigerian
households living below the UN’s $1-per-day poverty line grew from
27 per cent in 1980 to 66 per cent in 19964.
Even the
people of Saudi Arabia (the biggest oil producer and exporter in the
world, where oil accounts for nearly 90 per cent of total export
earnings5) are themselves surprisingly poor, with an average per-capita
income of $8,4606 in 2002.
By comparison,
the oil company majors Shell and ExxonMobil – both
of which trade and operate in Saudi Arabian oil and have a strong crude
oil presence in Nigeria – are ranked third and fifth most profitable
companies in the world in 20027.
  
 Why oil is measured in barrels
During the first oil discoveries in northwest Pennsylvania in the United
States, oil was transported in old wooden whiskey barrels, which were
made to a standard size. Teamsters – clogging the roads with their
horse-drawn barrel-loads – charged more to move each barrel over
a few muddy miles to a railway stop than it cost to transport each barrel
by rail from Pennsylvania to New York. By building pipelines (initially
wooden) to replace barrels as oil transporters, oil owners were able
to avoid both the teamsters and their exorbitant charges.14
Oiling government palms
A study of 113 countries concludes that oil and mineral wealth tends to
make countries less democratic. Governments that fund themselves through
oil revenues and large budgets are more likely to be authoritarian and
more able to build armed forces and encourage repression.9 Foreign oil
companies aggravate anti-democratic cultures by paying unaccountable
and untraceable sums of money, like bribes.
 An estimated 87 per
cent of Angola’s income comes from oil, much
of it paid directly to the Government by foreign companies. Of the $5 billion
the Angolan Government receives in oil revenues every year, an estimated
$1 billion goes missing.4
Corruption is widely acknowledged as a major problem within all three
of the countries through which the Azerbaijan-Georgia-Turkey oil pipeline
will pass. Contractors in Turkey have traditionally been asked to pay up
to 15 per cent of the value of their contracts to politicians. The former
speaker of the Azerbaijan Parliament, Rasul Guliyev, has been charged with
misappropriating $12 million from a $300-million oil contract in 1992-93.
Guliyev hit back with allegations that then President Aliyev had accepted
$50 million.10
Halliburton – an engineering and construction company previously
run by US Vice-President Dick Cheney that is developing an offshore oil
and gas facility in Nigeria – has admitted that one of its subsidiaries
paid bribes totalling $2.4 million to a Nigerian tax official during 2001
and 2002 in an effort to obtain favourable tax treatment.
US authorities accuse consultant James Giffen of taking more than $78
million in commissions and fees from Mobil and other Western oil companies
and then illegally funnelling them to senior officials in Kazakhstan in
order to get a slice of the action in the huge Tengiz field then operated
by ChevronTexaco. Charges have also been filed against a former Mobil executive
involved in negotiating related oil deals.11
Private pipelines
get public dollars
At least $20 billion worth of public money from the rich world has gone into
supporting oil exploration and exploitation in the past decade. Much of this
finance is provided by Minority World governments through the World Bank Group,
whose various financing agencies spend an annual average $433 million on oil
and gas projects.4
From
1992 to 2002, the World Bank Group has financed consortium projects
involving the following major oil players12:
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1 Compiled from statistics in the Oil and Gas Journal;
2 Compiled from
Energy Information Administration (US) tables on World Petroleum Consumption;
3 Ian Roberts ‘The second gasoline war and how we can prevent a third.’ in
British Medical Journal Vol 326, 18 Jan 2003;
4 Christian Aid Fuelling
poverty: oil, war and corruption (Christian Aid (UK), 2003);
5 Energy Information
Administration (US) OPEC Revenues: Country Details (EIA, 2003);
6 World
Bank Group ‘GNI per capita 2002, Atlas method and PPP’ in World
Development Indicators 2003 www.worldbank.org;
7 Fortune Global 500 (July
2003);
8 Energy Information Administration (US) OPEC Fact Sheet (June 2003)
and Non-OPEC Fact Sheet;
9 ML Ross ‘Does Oil Hinder Democracy?’ in
World Politics, Vol 53 (April, 2001);
10 PLATFORM and others Some Common
Concerns: Imagining BP’s Azerbaijan-Georgia-Turkey Pipelines System
(PLATFORM et al, 2002);
11‘Bribery has long been used to land international
contracts’ in Alexander’s Gas and Oil Connections Vol 8, No
11, June 2003 and other news agency outlets;
12 J Vallette Transnational
corporate beneficiaries of World Bank Group fossil-fuel projects 1992-August
2002 www.seen.org;
13 The two pipeline projects are the Chad-Cameroon
pipeline (see here) and the AGT pipeline (see here);
14 Daniel Yergin The
Prize (Simon & Schuster, 1992); www.pipeline101.com
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