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U.S. Oil Geopolitics in the Balkans

Written by The Informed Aussie
Published on Sunday, April 22nd, 2012
Globalist Report

balkan oil production and world oil consumption

No sooner had the Berlin wall come down than the European Union, backed by France, Italy and Holland, announced a major EU energy security strategy. The stability of the Balkans was a central part of that strategy.

In a June 1990 EU summit, the Dutch prime minister, Ruud Lubbers, unveiled a proposal for a European energy community, to bind the countries of the ‘European Economic Community with the USSR and the countries of Central and Eastern Europe.’ The Lubbers Plan was just the first of a series of aid programs for EU energy security in the post-cold war period.

By 1992, the EU had created the Energy Charter Treaty to give a legal framework for EU investment in the oil and energy resources of the now dissolved Soviet Union. The newly independent states of the Caspian, above all Azerbaijan and Ka

zakhstan, were high on the priority list for future EU energy security. But the new Clinton administration seemed preoccupied with other problems and paid little note to Caspian oil at that point. That slowly began to change.

In December 1994, when the EU hoped to secure the ratification of its energy charter by 49 countries, among them the United States and Russia, Washington abruptly refused on flimsy technical grounds. The EU proceeded without U.S. support, and in December 1998 a transit working group was established by the countries signing the energy charter. The secretary-general of that conference stressed the importance of new oil and gas regions, ‘such as the Caspian Sea region. Ensuring the security of supply from such areas is a key strategic task for governments.’ The EU spoke of building a ‘milestone in East– West energy co-operation.’

From 1990 until the bombing of Serbia in 1999, the EU had created a series of little-heralded initiatives, including aid to upgrade the port of Azerbaijan near Baku ‘to allow up to 500,000 barrels a day of oil shipments from the eastern Caspian,’ according to one U.S. Energy Department report. In 1995, the EU had initiated the Interstate Oil and Gas Transport to Europe (INOGATE) program with the goal, ‘to promote the security of energy supplies.’ In February 1999, just before the Clinton administration began bombing Belgrade, EU commissioner Hans van der Brock stated the goal of INOGATE to be ‘to help free the huge gas and oil reserves of the Caspian Basin by overcoming … bottlenecks which have impeded access to local and European markets.’ The biggest bottleneck was about to come: a NATO strike on Belgrade.

Western European governments clearly saw the region from the Balkans to the Caspian Sea as a strategic focus for investment in alternative oil and gas supplies, a potential step to greater energy independence, especially as North Sea oil reserves began to decline. That was definitely not the vision of leading policy circles in Washington in 1999.

By the mid 1990s, partly through the active lobbying of Brzezinski and the major U.S. oil companies, the Clinton administration had begun to recognize the Caspian oil issue as a strategic priority. In July 1996, Washington created the Southern Balkan Development Initiative to discuss pipeline cooperation with Bulgaria, Macedonia and Albania. It backed two Caspian pipeline routes. One would go from Baku through Georgia to the Turkish port of Ceyhan. In 1997, former Bush secretary of state James Baker wrote an op-ed in the July 21 New York Times titled ‘America’s Vital Interest in the “New Silk Road.”’ Baker, who would later emerge as a major figure in a later Bush administration, argued that it ‘was in the strategic interests of the United States to build the strongest possible economic, cultural and political ties to Georgia,’ a country between the Caspian oil and Western markets. ‘Caspian oil may eventually be as important to the industrialized world as Middle East oil is today,’ he added. At the time, Baker was also attorney for the Baku interests of BP– Amoco.

A second pipeline route, AMBO or Albanian Macedonian Bulgarian Oil Pipeline Corp., backed by the U.S. government and First Boston Bank, had been on ice for several years. Before it could move ahead, Washington decided it had to eliminate the obstacle of the Milosevic regime.

Map of Balkans, former Yugoslavia and southern europeSlobodan Milosevic, the elected Yugoslav president, a former banker who had once, when it was thought he might play the IMF game, enjoyed the backing of Washington, became a new ‘Adolf Hitler’ in the U.S. media. Numerous accounts from the region and from impartial outside observers confirmed that by the mid 1990s, all sides in the destabilized former Yugoslavia were guilty of atrocities— Bosnian Muslims, Croatian Catholics and Serb Orthodox Christians.

Washington and NATO-scripted media reports concentrated, however, on only one side: the recalcitrant Serb president Milosevic. So long as a well-defended enclave remained in the middle of the Balkans, which rejected IMF ‘reform’ and the presence of NATO, the long-term geopolitical agenda of Washington for the control of the Caspian pipeline routes and central Asia was blocked.

By early 1999, the Clinton administration had decided the time was right to change all that. An indignant Milosevic rejected a U.S. demand at Rambouillet, the infamous Appendix B, mandating that he allow NATO troops to occupy Kosovo, and potentially Serbia, ‘for humanitarian reasons of preventing genocide.’ Milosevic’s predictable rejection was used to justify war. Washington began a massive bombing campaign, ignoring the niceties of international law, the UN Charter (and indeed any involvement at all of the UN in the process), the NATO charter (which specifies a purely defensive role), the 1975 Helsinki accords, and even the U.S. constitution (which mandates that only Congress has the power to declare war).

President Clinton cited ‘humanitarian’ reasons and the threat of imminent genocide against Kosovo Albanians, and began a merciless bombing of civilian Serb targets.

Thousands of tons of bombs later, and after an estimated $40 billion of destruction to the economy and infrastructure of Serbia, the Pentagon began the construction of one of the largest U.S. military bases anywhere in the world. Camp Bond Steel near Gnjilane in southeast Kosovo, a fortress housing 3,000 soldiers, an airfield and state-of-the-art telecommunications, gave the United States a commanding and clearly permanent military presence in the strategic Balkans, within reach of the Caspian Sea.

In June 1999, as soon as the bombing of Serbia was over, the U.S. government announced it was funding a feasibility study for the AMBO pipeline. Referring to the imposition of NATO control over Serbia and Kosovo, a senior U.S. government official, Joseph Grandmaison, declared,

‘The prospect that the U.S. government would guarantee security in the region and also provide financial guarantees, now makes it (AMBO) a much more attractive proposition.’

The AMBO engineering feasibility study had been undertaken by Halliburton Corporation’s Brown & Root, when Dick Cheney was head of Halliburton. When the new study was published in May 2000, U.S. Ambassador Richard Armitage, later to become deputy secretary of state in the Bush administration, stated:

In what one could term a ‘bombing dividend’ or a quid pro quo to the support provided by these surrounding states to NATO during the Kosovo conflict, Albania, Macedonia and Bulgaria now seek economic compensation from the West for their support.

Much as the Baghdad railway represented the efforts of Continental Germany, before the First World War, to open a trade route to the Arabian Gulf, which would be independent of British naval control so a new series of pipelines through the Balkans could potentially offer the EU diversity of oil supply and a degree of energy independence from U.S. and Russian controlled energy sources.

Map of Kosovo and Kosovo before the warIn the wake of the Kosovo war, the United States had pre-empted such possible energy independence, imposing NATO and U.S. control over possible pipeline routes and sources. As Belgrade dug out from the bombing and rubble of the Kosovo war, the U.S. appeared to be in firm control over any potential pipeline routes to the EU.

The military control of Eurasia by the sole superpower had taken a giant step forward by the end of the Kosovo war. Dollar democracy had marched ahead once more. The flag of the free market was firmly planted in a destroyed Yugoslavia. By 2001, Washington was in uncontested military control of the Balkans. The new U.S. ambassador to the Court of St. James in London, William Farish, son of a wealthy Texas oil family, pointed to the vast oil riches of the Caspian area as a major reason for American interest in the Balkans.

In a September 23, 2001, interview with the Sunday Times, Farish told of his planned trip to the Balkans, an unusual foray for an ambassador to Britain, to say the least. Farish was a trusted friend of the Bush family, an heir to the Standard Oil fortune, who understood oil geopolitics— no doubt the real reason he was at the Court of St. James as ambassador. He spoke of a strengthening of the NATO presence in the Balkans, as a consequence of the terror attacks on the United States that month, referring to the Balkans as a possible ‘buffer zone against unstable regimes to the east.’ He also mentioned the strategic importance of the Caspian energy resources and the pipeline routes.

As the new decade opened, Washington was the uncontested economic superpower, with its military dominance playing a less visible role. Within a few short months those roles had shifted dramatically. It took a Wall Street stock collapse, economic recession and unbelievable events in New York and Washington to bring about that shift. The consequences were to be significant for Americans and for the world.

The article was written by William Engdahl and is from one of his most recent publication titled ‘Anglo-American Oil Politics and the New World Order’. Born in Minneapolis, Engdahl grew up in Texas, and after earning a degree in engineering and jurisprudence from Princeton University in 1966 (BA), and graduate study in comparative economics at the University of Stockholm from 1969 to 1970, he worked as an economist and free-lance journalist in New York and in Europe. If you would like to purchase a copy of William Engdahl‘s book titled Anglo-American Oil Politics and the New World Order (from Amazon), please click here.