Sunday, October 19, 2008

Drill, baby, Drill!

In a previous posting, I mentioned that my accomodations in Baku were at the Crescent Beach Resort, on the coast of the "beautiful Caspian Sea."

Well, here it is - a sight that would make Sarah Palin proud...

The history of oil in Azerbaijan goes back as far as the third century, with Arabic and Persian authors mentioning oil in their manuscripts.

Later, the famous traveler Marco Polo wrote about how inhabitants of this region used oil that gushed from natural springs as a salve for men and camels affected with itch or scabs, and for burning in lamps.

By the 1870s, Azeri oil was being pumped on an industrial scale by the Russians, and by the end of the 19th century European firms were in on the action.

The first years of the 20th century saw Azerbaijan producing more than half of the worlds petroleum.

Civil unrest, World War One, and the Russian Revolution brought about severe reductions in Azeri oil production, but the Soviet Union ramped it back up, and the oil field of Azerbaijan became a target for Hitler's troops during the Second World War.

The collapse of the Soviet Union inspired new foreign investments in Azeri oil production, including a desire for a new export route that bypassed Russia and Iran. The result was the Baku-Tbilisi-Ceyhan pipeline, an 1,100 mile link from the oil fields on the Caspian coast near Baku, Azerbaijan through Tbilisi, Georgia and onward to the Turkish port of Ceyhan on the Mediteranian coast.

The Baku-Tbilisi-Ceyhan pipeline was a thinly-disguised plot point in the James Bond film "The World is not Enough" and is the second-longest pipeline in the world - after the Druzhba pipeline, which connects western Siberia with Europe.

Today, Azerbaijan produces nearly 1.2 million barrels of oil per day - more than Alaska (sorry, Sarah) - as well as a vast amount of natural gas. This has made Baku the most cosmopolitan city in this part of the world, but hasn't resulted in much economic benefit for most Azeri people.

The irony of this struck me during my stay in the rural mountain village of Gadabay - which was serviced by a natural gas line of such poor reliability that cooking was done over hot coals instead of on stoves, and our gas water heaters never worked.

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