U.S. oil geopolitics in the Balkans

result. The Western public, above all in the United States, was told by establishment media that the problems were all a result of a corrupt Belgrade dictatorship. The American media chose rarely if ever to mention the provocative Washington actions, or the IMF policies which were driving events in the Balkans.5

In 1995, the Dayton accord brought an end to the war in Bosnia. This coincided with the point at which the Clinton administration became convinced of the strategic importance of Caspian oil, and the extent of EU efforts to secure that oil for Europe via Balkan pipelines. Washington decided apparently that peace in the region was needed to develop oil routes from the Caspian into Europe. But it was to be ‘peace’ on Washington’s terms.

After Dayton, Bosnia, once multiethnic, was established as a de facto Muslim state, in effect a client state under control of the IMF and of NATO. The Clinton administration had largely fi nanced the arming of the Bosnian Muslim army. The depiction of the war in the international media maximized the impression of European Union powerlessness to settle a major war on its borders without America’s intervention. Washington’s argument for extending NATO eastward advanced signifi cantly in the process. Hungary, Poland and the Czech Republic became prospective NATO partners, something inconceivable just fi ve years earlier.

Soon the Clinton administration went to work on the next stage of dismantling any nationalist residue in the Balkans that might have a different agenda for the region than that of Washington. American and British oil companies scrambled to exploit the potentially vast oil reserves believed to lie under the Caspian Sea off Baku, and bordering Kazakhstan in central Asia. Geologists spoke of a ‘new Kuwait or Saudi Arabia’ there. The U.S. government estimated oil reserves could be in excess of 200 billion barrels—if true, the largest oil discovery in decades. Zbigniew Brzezinski, a well-paid Washington lobbyist, represented the interests of BP, the Anglo-American oil giant with a major stake in the Caspian oil region.

U.S. OIL GEOPOLITICS IN THE BALKANS

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 fi rst 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 Kazakhstan, 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, however.

In December 1994, when the EU hoped to secure the ratifi cation of its energy charter by 49 countries, among them the United States and Russia, Washington abruptly refused on fl imsy 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 fi gure 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.

Slobodan 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 confi rmed 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 specifi es 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 offi cial, Joseph Grandmaison, declared, ‘The prospect that the U.S. government would guarantee security in the region and also provide fi nancial 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 confl ict, Albania, Macedonia and Bulgaria now seek economic compensation from the West for their support.6

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. In the wake of the Kosovo war, the United States had preempted 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 fi rm 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 fl ag of the free market was fi rmly 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 signifi cant for Americans and for the world.