State Department's Keystone XL Contractor ERM Green-Lighted BP's Explosive Caspian Pipeline That Failed To Live Up to Jobs Hype

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The more things change, the more they stay the same.ย 

Almost 11 years ago in June 2002,ย Environmental Resources Management (ERM) Group declaredย the controversialย 1,300 mile-long Bakuโ€“Tbilisiโ€“Ceyhan (BTC) Pipelineย environmentally and socio-economically sound, a tubeย which brings oil and gas produced in the Caspian Sea to the exportย market.

On March 1,ย it said the same of the proposedย 1,179 mile-long TransCanada Keystone XL (KXL) Pipelineย on behalf of an Obama State Department that has the final say on whether the northern segment of the KXL pipeline becomes a reality.ย KXL would carryย diluted bitumen or โ€œdilbitโ€ย from the Alberta tar sands down to Port Arthur, Texas, after which it will beย exportedย to theย global market.ย 

Environmental Resources Management Group, a recentย DeSmogBlogย investigation revealed, hasย historical ties to Big Tobacco and its clients include ExxonMobil, ConocoPhillips and Koch Industries.ย Mother Jonesย also revealed that ERM – the firm the State Dept.ย allowed TransCanada to chooseย on its behalfย – has aย key personnel tie to TransCanada.ย 

Unexamined thus far in the KXL scandal is ERM‘s past green-light report on the BTC Pipeline – hailed as the โ€œContract of the Centuryโ€ – which has yet to be put into properย perspective.

ERM is a key player in whatย PLATFORM London describes as the โ€œCarbon Web,โ€ shorthand for โ€œthe network of relationships between oil and gas companies and the government departments, regulators, cultural institutions, banks and other institutions that surround them.โ€ย ย 

In the short time it has been on-line,ย theย geostrategically important BTC pipelineย – coined the โ€œNew Silk Roadโ€ byย The Financial Timesย – has proven environmentally volatile. Aย full review of the costs and consequences of ERM‘s penchant for rubber-stamping troubling oil and gas infrastructure is inย order.

Massive Pipeline, Massive Hype: Soundย Familiar?

Like the Keystone XL, theย BTC Pipeline – owned by a consortium of 11 oil and gas corporations, including BP,ย State Oil Company of Azerbaijan (SOCAR), Chevron, ConocoPhillips, Eni and Total – was controversial and inspired a bout of activism in the attempt to defeat itsย construction.

Referred to as โ€œBP‘s Time Bombโ€ byย CorpWatch, the BTC Pipeline wasย first proposed in 1992, began construction in May 2003 andย opened for business two years later in May 2005.ย BTC carries oil and gas from theย Azeri-Chirag-Gunashli (ACG) Caspian Sea oil field, co-ownedย by Chevron, SOCAR, ExxonMobil, Devon Energy and others, whichย contains 5.4 billion recoverable barrels of oil.ย 

Paralleling the prospectiveย 36-inch diameterย Keystone XL that would carryย 830,000 barrels per day of tar sands bitumen through the U.S.ย heartland, the BTC serves as aย 42-inch diameterย export pipeline andย moves 1 million barrels of oil per day to market.

Like today’s KXL proposal – which wouldย only create 35 full-time jobs – the false promise of thousands of jobs also served as the dominant discourse for BTC Pipeline proponents. The reality, like KXL, was more dim.ย The Christian Science Monitorย pointed out in 2005 that onlyย 100 people were hired full-time in Georgia, the second destination for BTC.ย 

โ€œPeople were told that there would be 70,000 Georgians that were going to be employed because of this pipeline,โ€ Ed Johnson, BP‘s former project manager in Georgiaย told theย St. Petersburg Timesย in 2005. โ€œThe (Georgian) government needed to sell the project to its own people so some of the benefits wereย overblown.โ€

Massive Ecological Costs andย Consequences

Part of the BTC Pipeline’s circuitย runs through theย Borjomi Mountain Gorge, an areaย known for its landslide hazards,ย and the source of Georgia’s massive bounty of mineral water. Theย pipeline also makes over 1,500 river crossings, according to theย St. Petersburg Times.ย 

Spills and explosions, both in the Caspian Sea that feeds the pipeline with oil and gas and in the pipeline itself, have alsoย occurred.ย 

The most prominent blowout, subject to a mainstream media blackout, was the 2008 BP Caspian Sea oil platform explosion that preceded the infamous 2010 BP oil disaster in the Gulf of Mexico.ย BP, to this day has never admitted it was an explosion – describing it simply as โ€œa gas leakโ€ย – but its plausible deniability cover was blownย in the form of aย Wikileaksย cable discussing the matter,ย and via whistleblowers who contacted investigative reporter Greg Palast.

Palast obtained information from whistleblowers in Baku who said that, rather than a minor โ€œgas leak,โ€ย there was a serious well blowout akin to the Gulf disaster two years later. As in the Gulf, the well-capping cement had failed. A methane explosion from the wellย โ€engulfed the platform.โ€

โ€œIn fact, the workers themselves said that, like the workers on the Deepwater Horizon, they were one spark away from death, with frightened minutes to escape,โ€ Palast wrote forย EcoWatch. โ€œMore seriously, [its] official filing to the U.S. Securities Exchange Commissionโ€ฆagain talked about a ‘subsurface release,’ concealing that the methane blew out through its drillingย stack.โ€

BTC itself also had a major explosion in its first decade ofย existence.ย 

An Aug. 2008ย Wikileaksย cable discusses a BTC explosion in a mountainous area of eastern Turkey – where Environmental Resources Management said the pipeline was environmentally sound – whichย spewed 70,000 barrelsย of oil into the surrounding area.

Massive Landowner and Human Rights Costs andย Consequences

Eminent domainย – or the right of corporations to expropriate private land to build projects claimed to serve the public good – is a major concern for landowners living along the path of the Keystone XL.ย A parallel situation occurred for citizens living along BTC‘s route, with private property rights essentially eliminated to make way for theย pipeline.

โ€œHost Government Agreement – the legal document on which the pipeline is basedโ€ฆ[is a] document [that] is not simply a contract, but has the status of an international treaty, and over-rides all other national laws (except the constitution),โ€ย explainedย PLATFORM London. โ€œIt denies all future governments the right to introduce any new taxes or laws – including environmental, human rights or labour laws – which reduce the pipeline’sย profitability.โ€

Environmental critics described it as the oil and gas industry becoming akin to aย sovereign nationย along BTC‘sย route.

โ€œTurkey is now divided into three countries: the area where Turkish law applies, the Kurdish areas under official or de facto military rule; and a strip running across the entire length of the country where BP is the effective government,โ€ย Nick Hildyard ofย Cornerstoneย toldย The Guardianย in 2002, speaking to Turkey specifically but which can be applied to all countries which cross paths with the BTC due to the dictates of theย Host Governmentย Agreement.ย 

Getting rich quick has also turned out to be more rhetoric than reality for citizens whose property sits along BTC‘sย path.

โ€œOne landowner in northeast Turkey reports that he was paid the price of 7 pieces of chewing gum per square metre of his land. In some cases, no compensation has been paid at all,โ€ย PLATFORM wrote.ย 

Activists working on behalf of human rights for Kurds explained BTC‘s impacts in stark terms, with theย Kurdish Human Rights Project (KHPR)ย filingย cases in the European Court of Human Rights on behalf of 38 affected villagersย along theย route.

KHPR โ€œalleg[ed] multiple violations of the European Convention on Human Rights including the illegal use of land without payment of compensation or expropriation, underpayment for land, intimidation, lack of public consultation, involuntary resettlement and damage to land and property,โ€ย CorpWatchย wrote.ย 

The most shocking example of the BTC‘s human rights impact is explained in investigative journalist Jeremy Scahill’s book โ€œBlackwater: The Rise of the World’s Most Powerful Mercenary Army.โ€ He explains that the U.S. military contracted out the infamous Blackwater USA to guard Azerbaijan’s portion of the BTC Pipeline and the area surroundingย it.ย 

โ€œBeginning in July 2004, Blackwater forces were contracted to work in the heart of the oil- and gas-rich Caspian Sea region, where they would quietly train a force modeled after the Navy SEALsโ€ฆ[to] protectโ€ฆthe West’s new profitable oil and gas exploitation in [the] region,โ€ย Scahillย wrote.ย 

Grassroots Response to ERM Group inย 2003

As noted here onย DeSmogBlog, grassroots activists responded to ERM‘s claim that the BTC Pipeline’s Turkey portion was safe byย occupying ERM‘s office headquartersย located in theย City of London, a 1-square-mile subsection of London thatย serves as a tax shelter for multinational corporations.ย 

It still remains to be seen what activists will do about ERM‘s bogus KXL study in the U.S., with the Obama State Department expected to confer with the study’s โ€œfindingsโ€ in issuing a decision on the KXL pipeline by October.

BTC‘s sordid history – which ERM helped ensure – should also enter into any honest KXLย assessment.

โ€œERM played a crucial role in gaining approval for the BTC by presenting it as a sustainable success. But this doesn’t represent the reality of violence and pollution we have witnessed,โ€ PLATFORM‘s Mika Minio-Paluello, co-author of The Oil Roadย –ย a new book documenting the slew of destructive impacts of BTC – told DeSmogBlog in an interview. โ€œSupposedly an environmental consultancy, in practice ERM operated more like a PR firm representing BP and now they’re fulfilling a similar role forย TransCanada.โ€

Photo Credit:ย ShutterStockย |ย Leonidย Ikan

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Steve Horn is the owner of the consultancy Horn Communications & Research Services, which provides public relations, content writing, and investigative research work products to a wide range of nonprofit and for-profit clients across the world. He is an investigative reporter on the climate beat for over a decade and former Research Fellow for DeSmog.

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