[Congressional Record Volume 147, Number 29 (Wednesday, March 7, 2001)]
[House]
[Pages H710-H711]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               CONCERN OVER PROPOSED CASPIAN OIL PIPELINE

  The SPEAKER pro tempore (Mr. Cantor). Under a previous order of the 
House, the gentleman from New Jersey (Mr. Pallone) is recognized for 5 
minutes.
  Mr. PALLONE. Mr. Speaker, I come to the House Floor today to voice my 
concern regarding the proposed Baku-Ceyhan pipeline, originating in the 
Azerbaijani capital of Baku, bypassing Armenia via Georgia and ending 
at the Turkish port of Ceyhan.
  Over the last few years, despite the reluctance of major U.S. oil 
companies, the Clinton administration promoted the Baku-Ceyhan 
pipeline, which many experts are now questioning. Cato Institute 
analyst Stanley Kober recently noted at a foreign policy briefing that 
the pipeline, far from promoting U.S. interests in the region 
undermines them.
  Another report by the Carnegie Endowment for International Peace 
knows that pursuit of this pipeline only exacerbated tensions between 
the United States and Russia and did little to advance U.S. interests.
  Mr. Speaker, let me be clear today that I strongly oppose the current 
plans for this project that is expected to cost $3 billion.

                              {time}  1945

  It is my hope that the Bush administration will take into account 
these reports and thoroughly examine the need for this proposed 
pipeline route. I am not encouraged, however, by recent reports that 
the Bush administration, like the Clinton administration before it, 
seems to believe that the pipeline would provide the West with a 
greater amount of oil, thus cutting down on the U.S. dependence on 
Middle Eastern countries for oil. I am here today to say that this is 
not the case. In fact, with reserves estimated at approximately 2 to 3 
percent of the world's total, experts note that Caspian oil reserves 
will have no significant impact on world oil prices.
  The Bush administration also seems to be under the impression that by 
building a pipeline in this volatile area

[[Page H711]]

of the world, that strained relations between affected nations would 
begin to heal. Again, Mr. Speaker, I want to say that this is not the 
case. In fact, I believe that the pipeline could make relations in the 
region a lot worse. At the very least, we should wait until peace is 
achieved in the region. The presidents of Armenian and Azerbaijan just 
concluded a round of talks in Paris. It is my hope that a resolution to 
the Nagorno-Karabagh conflict will be found this year. We should focus 
our efforts and attention on the peace process instead of wasting our 
resources on a commercially nonviable pipeline.
  President Bush's support for the Caspian oil pipeline was first 
announced several weeks ago by Ambassador Elizabeth Jones, special 
advisor to Bush on Caspian energy policy. At that time, Ambassador 
Jones said that the oil companies find the project commercially viable 
and that the project would only happen if ``it is determined that there 
is money to be made there by commercial companies.''
  Mr. Speaker, I am baffled to hear that the ambassador believes this 
project would be profitable to the participating oil companies. 
American oil companies, after years of exploration, still have not 
found any commercially viable oil fields. Many, in fact, have pulled 
out.
  Realistically, the only way that this plan can be feasible for these 
oil companies is if the United States Government and other governments 
subsidize the project. Amoco president Charles Pitman might well have 
said just that when he testified before the Senate Foreign Relations 
Committee 4 years ago. At that hearing Pitman said, and I quote, ``I 
encourage Congress and the administration to promote the strategic 
interests of the United States by helping make the Baku-Ceyhan route 
economically feasible.'' Since these companies have already said that 
the project is not economically feasible on its own, the only way to 
make it feasible is with a substantial subsidy from the U.S. 
Government.
  Mr. Speaker, let me turn to the other reason Ambassador Jones gave 
for the Bush administration's supporting this pipeline: the belief that 
it would bring sovereignty and economic independence to the Caspian 
states. While proponents of this pipeline argue that it would 
strengthen the economic independence of states like Azerbaijan and 
Georgia, it is also very probable as outlined in the Cato and Carnegie 
reports that the pipeline plan would bring more tension to the area, 
already beset by instability.
  Mr. Speaker, Armenia, which is completely bypassed by this pipeline, 
already suffers at the hands of a dual blockade from the east from 
Azerbaijan and from the west from Turkey. Azerbaijan has used its 
influence to ensure that Armenia would not benefit economically from 
the pipeline. Ilham Aliyev, son of Azerbaijan's president and a vice 
president of the State Oil Company of the Azerbaijani Republic, told 
the Azerbaijani newspaper Baku Tura in early January, and I quote, 
``Azerbaijan's position remains unchanged. The pipeline will not go via 
Armenia under any circumstances.''
  This would explain why the pipeline, which avoids the most direct 
route from the oil fields to the Caspian to Ceyhan, would be brought 
through Armenia. In fact, the pipeline route takes great pains to avoid 
Armenia and Nagorno Karabagh. This is simply unacceptable, and the U.S. 
should not subsidize this plan in any way which serves to further 
isolate Armenia.
  Therefore, Mr. Speaker, I request that the Bush administration 
reconsider this decision and withdraw any support for the Baku-Ceyhan 
pipeline. I ask the Bush administration to take a fresh and honest look 
at pipeline policy in the region and take steps to ensure that all 
countries of the Caucasus are included in east-west energy and trade 
routes.

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