Pipe Dreams

No one wants to be the Taliban's friend now -- but it wasn't so long ago that US energy companies actively courted the Afghan regime

| Fri Oct. 12, 2001 3:00 AM EDT
Whenever the US takes military action in the Middle East, critics are quick to ask: Is this really about oil?

Clearly, that question is moot with respect to the current air strikes against Afghanistan. But Central Asia experts point out that energy politics did help set the stage for the current crisis, and that at least one US oil company has provided aid to the Taliban regime in pursuit of a business deal.

Ever since the fall of the Soviet Union, Western energy interests have hungrily eyed the massive, untapped oil and natural gas reserves in the former Soviet republics of Central Asia. It's estimated that roughly 15 billion barrels of oil and about 9 trillion cubic meters of natural gas lie beneath the soil of Afghanistan's neighbors, Azerbaijan, Kazakhstan, Turkmenistan, and Uzbekistan. One calculation puts the potential value of Central Asian fossil fuels at $3 trillion.

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Afghanistan itself is not known to have major energy reserves. Instead, the country's most valuable natural resource is its location: It sits smack between the oil and gas fields of its neighbors and potentially huge markets in Pakistan, India, and beyond. So in the mid-1990s, while Russia, China, Iran, and several European nations squabbled over pipelines through Russia and Iran, California-based oil and gas giant Unocal was looking at another route -- from Turkmenistan straight through Afghanistan to Pakistan or India. To build such a pipeline, however, the company would have to dance cheek-to-cheek with the Taliban, who were then rising to power.

Unocal's strategy was straightforward enough: in 1996, the company cobbled together a coalition of six energy companies and the government of Turkmenistan, and went head to head with an Argentinian rival, in a race to win Afghanistan's blessing for a $2 billion gas-pipeline project.

Unocal has long been criticized for doing business in countries with repressive governments, and the company wasn't afraid to pursue the Taliban. "We're an oil and gas company. We go where the oil and gas is," Unocal spokesman Mike Thatcher told MotherJones.com.

According to one business analyst's report, Unocal courted both the Taliban and the rival Northern Alliance, but paid special attention on the Taliban. In 1997, the Unocal vice president in charge of the pipeline project was quoted as saying that his company had provided "non-cash bonus payments" to members of the regime in return for their cooperation.

"We basically had to 'pre-sell' them on the idea of this pipeline," says Thatcher. "Some of them didn't understand the idea of profit motive. We had to educate them."

The approach seemed to work. By late 1997, a Taliban delegation visited Unocal's offices in Sugarland, Texas to meet with company executives. A few days later, the Taliban's minister of mines met with the State Department's top official for South Asia. The visit, which came just a month after then-Secretary of State Madeleine Albright chastised the regime for its human-rights record, was arranged by Unocal.

"US interest in the lucrative gas pipeline... gives the appearance that while democracy and women's rights are defended in public, commercial interests may really drive US policy toward the Taliban," the Washington Times' Toni Marshall and Tom Carter opined at the time.

Ahmed Rashid, a journalist who has written extensively about Central Asia, says that US willingness to look the other way in the interest of profit helped the Taliban and other authoritarian regimes in the region gain legitimacy. "[T]his game has continued," he told the radio program Living on Earth, "and has unfortunately resulted in probably destabilizing Central Asia."

So did Unocal ever strike a deal with the Taliban? That depends on whom you ask. According to the US Department of Energy, "In January 1998, the Taliban signed an agreement that would allow a proposed 890-mile, $2-billion, 1.9-billion-cubic-feet-per-day natural gas pipeline project led by Unocal to proceed." Other reports put the date of the deal even earlier. But Unocal now denies that a firm agreement was ever reached.

All the company had, according to Thatcher, was a "letter of support" signed by representatives of both the Taliban and the Northern Alliance. "It wasn't a binding business deal," he says, "just a piece of paper that basically said they liked the idea of the project."

But even with a symbolic nod from the Taliban, the pipeline never got off -- or into -- the ground. In August 1998, the US launched retaliatory air strikes in Sudan and Afghanistan in retaliation for the bombing of US embassies in Kenya and Tanzania. Investors bailed out of the pipeline project in droves; several months later Unocal quit CentGas, saying it was unwilling to collaborate with the oppressive regime, at least until it was recognized as a legitimate government by the West.

Still, in 1999 reports from Pakistan suggested that Unocal was considering rejoining Centgas. Unocal vehemently denied the reports, and Thatcher insists the company has no plans for pipelines in Afghanistan.

"There is compelling economic logic for a pipeline there," he says. "We're not going to do it, but sooner or later, someone will."

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