Tornado Alley (PROG)

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GR, (vid. add) Some Say Pipelineistan Caused This War

.. one opinion from someone who claims to have worked in the industry for years ..

by 6412093 .. Fri Sep 06, 2013 at 03:06 PM PDT .. 28 Comments

Several recently published articles, and some Kos comments, claim that Syria's refusal to site a natural gas pipeline is the real reason the US is considering military action in Syria.

The claim is that in 2009, Syrian leader Assad blocked a Qatar-to-Syria-to Europe natural gas pipeline. Syria blocked the Qatar line to protect their Russian ally’s near-monopoly on natural gas sales to Europe. Then Syria planned its own gas pipeline to Europe with Iraq and Iran. This all angered Qatar, who then poured $3 billion into funding the Syrian rebels to overthrow Assad, clear their pipeline’s path, and kill the Iran/Iraq pipeline.

Now, the theory continues, the US will attack Syria to help its allies Qatar and Saudi Arabia get their gas pipeline through Syria to Europe. On the other hand, Russia backs Assad to protect their gas monopoly from competition from the Qatar pipeline.

“Pipelineistan” is the shorthand for this and similar assertions that hidden struggles for key oil and gas pipeline routes throughout the Middle East and the “Stans” are actually fueling most current conflicts there, including the Syrian civil war.

I’ve dealt with natural gas pipelines in the US at times, over the last 25 years, and know a little about the industry. The US has almost 300,000 miles of major gas pipelines, with new lines constructed frequently with little fuss. I am skeptical that the failure to construct a single pipeline in the Mideast would trigger US involvement in the Syrian Civil War, as these articles claim.

Permit me to present my arguments why “Pipelineistan” was unlikely to trigger the Syrian civil war, much less US involvement.

Qatar is a small country on a peninsula reaching northeast from Saudi Arabia, into the Persian Gulf, towards Iran. Qatar has plentiful oil reserves, and possesses, with Iran, one of the world’s largest natural gas fields just off its shores. Natural gas costs about 75 cents (per million BTUs) on the Arabian Peninsula, but sells in Europe for about $11, so there’s a huge profit margin, minus costs of shipping.


attribution: None Specified

According to Pepe Escobar in Asian Times, and others, Qatar wants to crush Assad for blocking a 2009 effort by Qatar to run its own pipeline through Syria to Europe, and because Syria was promoting a competing pipeline in league with Iraq and Iran.

That’s why Qatar is financing the rebellion to overthrow Assad. And that’s why Russia backs Assad, because he quashed the Qatar pipeline that would compete with Russian gas sales.

That's the theory. However, while Qatar would profit from a pipeline, they have wisely invested, for the last several years, in massive facilities to “freeze” natural gas (into liquefied natural gas, or LNG) and ship it around the world in specialty tankers. Their world-leading ability to ship LNG, including shipments to Europe, means that a pipeline, while convenient, is not a life-or-death matter. The Syrian denial of Qatar’s pipeline only meant that Qatar will ship LNG to Europe by tanker, rather than by pipeline. That raises their gas sale prices by less than 1 percent, compared to using a pipeline.

That doesn’t even take into account the $10 billion price tag to build that Qatar-Syrian pipeline, and the substantial ongoing costs to operate and maintain –- and protect it. The existing Egypt-Lebanon gas pipeline was blown up a dozen times last year. LNG shipments may be more secure than trying to protect a several-hundred-mile-long pipeline through lands you do not rule.

Lowering shipping costs by 1% is a good idea, but is it really a likely justification to finance a war against your neighboring country? Qatar is already selling 30% of its gas to Europe as LNG, with high profits, without a pipeline.

It's clear why Qatar would want a pipeline to supplement and increase its LNG shipping capacity. Their LNG tankers must access the world through the Straits of Hormuz, which are subject to occasional shooting wars.

However, even if Assad is gone, any Qatar land pipeline must run through Saudi Arabia, whom has, and could still, thwart Qatar’s pipeline ambitions. Yet Qatar is not apparently trying to topple the Saudis.

Assad also offered European access for a pipeline originating in Iraq and Iran. But that pipeline would also have harmed the Russians’ semi-monopoly on gas sales to Europe, same as the Qatar pipeline. Yet Russia still backs Assad, indicating the Iran/Iraq pipeline is apparently a minor concern to the Russians, despite its threat to Russia’s European gas markets.

The potential European customers of the "Syrian-blocked" Qatar gas pipeline are not crying for war on Syria either, even though they would benefit, in theory, if Assad fell and the pipeline went through.

The Pipelineistan theory also inadequately explains potential US involvement in the Syrian war. Simply put, we are competing with Qatar to sell natural gas around the world. Why should we help them?

The US is on the verge of exporting massive amounts of our own LNG to Europe, at 300% profit margins. Our own oil and gas interests would profit if Assad stays in power, and Syria continues to block the Qatar-Syria gas pipeline, which would compete with our own efforts to sell gas to Europe.

So it makes little financial sense for Big Oil/Gas to push us to intervene in Syria, with the hidden agenda of promoting the Qatar pipeline. That would actually help their competition.

Qatar may be financing the Syrian rebels for many reasons, but Pipelineistan is probably a minor factor in their warmongering.

KEY FIGURES

Qatar shipped about 60 billion cubic feet of LNG to Europe in 2009, about 30% of their production, according to Wiki. It costs about $2.15 per million cubic feet to freeze, ship, and thaw natural gas from LNG. A million cubic feet of gas costs about $750 to produce on the Arabian Peninsula, and sells for about $11,000 in Europe.

SOURCE MATERIALS

Three Articles about the Syria-Qatar pipeline issues http://www.aljazeera.com/...

http://www.theguardian.com/...

http://www.thenational.ae/...

Information about Qatar's gas business

http://www.qatargas.com/...

Background on LNG, with some prices

http://online.wsj.com/...

http://www.dailykos.com/story/2013/09/06/1236718/-Some-Say-Pipelineistan-Caused-This-War?detail=hide

"I put my words down for the world to see. You have your opinion, I have mine. Let's see
who had the facts right. Events will evolve to vindicate one of us and make foolish another."

See also:

just so you understand that difference between our approaches
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=92274165

LOLOL .. am about pipelined out for now .. how about you? .. anyway .. whatever .. some pipeline wipeouts ..

http://www.youtube.com/watch?v=qK7dGhirjE4