BP has a 90-year history of running pipelines, concerns that exist over the BTC pipeline can be examined by looking at the experience of BP’s three biggest existing pipeline systems: the Trans-Alaska Pipeline System (TAPS, also known as Alyeska after the operating consortium) in the USA, the Forties Pipeline System (FPS) in Scotland, and the Oleoducto Central pipeline system (OCENSA) in Colombia.

This is the approach of our book, ‘Some Common Concerns’.

Lessons from BP's past:

Azerbaijan regards the projected oil and gas revenues as a source of great future prosperity. These riches are projected to come to the government in the form of taxes on the profits of the foreign oil companies, royalties on the resources they extract, and a share of the resources themselves. In Azerbaijan, for example, oil-related revenues currently make up about 50% of the government's annual revenues. Meanwhile, Azerbaijan, Georgia and Turkey all hope for substantial incomes from transit payments for pumping oil and gas in pipelines through their countries.

Yet BP’s practice in other countries casts doubt on the extent to which the host governments would benefit from the BTC pipeline.

Head of BP John Browne made his name on the Forties Pipeline System in the North Sea, coming to prominence in the1980s by skilfully enabling BP to avoid paying tax to the UK government. Throughout the last 30 years of the Forties pipeline, BP has continually lobbied UK governments to lower the tax on North Sea oil extraction. Today, the North Sea has the lowest taxation of any oil province in the world: royalties and petroleum revenue tax were abolished for fields developed after 1982 and 1993 respectively.

BP followed the same pattern of driving down taxes, and thereby depriving the host states of revenue, in Alaska and Colombia. In the Trans-Alaska Pipeline System, BP was found several times (including in two court cases where BP settled out of court) to have overcharged transport fees and underpaid royalties through inaccurate accounting. In the OCENSA pipeline in Colombia, BP has repeatedly threatened to disinvest from the country so as to improve its contract terms, and it succeeded in obtaining a reduction of the state share of production from 50% to 30%.

From BP's point of view, much of the pre-construction phase of the BTC pipeline involved persuading the Azeri, Georgian and Turkish governments to lower the taxes they wish to impose on the project. Indeed, BP's withholding of a commitment to BTC up until late 1999 was linked to the effort to drive down payments to the host governments for the pipelines system. And not only have the governments' incomes been forced down, Turkey has guaranteed the construction cost for its section of the BTC pipeline - in effect writing a blank cheque which could amount to billions of dollars, to cover delays and overspends.

There is no reason to suppose that BP will not keep pressurising the governments of Azerbaijan, Georgia and Turkey throughout the lifetime of the project – the next 40 years or more – to reduce taxes on BTC, just as it has on its other pipeline systems. Georgian, Turkish and especially Azeri hopes for prosperity need to be considered with this in mind.

Back to top

As with host states, it is instructive to look at how communities have fared in BP's other pipelines. Between 1995 and 1996, during the pre-construction and construction phases of the 837 kilometre (520 mile) OCENSA oil pipeline in Colombia, BP negotiated compensation packages with the peasants across whose smallholdings the pipeline passes.

Compensation was offered for a strip of farmland just 12.5 metres (41 feet) wide. But soil erosion caused by the pipeline construction blocked springs and diverted streams, rendering land infertile. The military imposed a civilian-free corridor and a curfew along the pipeline which blocked locals' access to their land and, for some, their homes. As a result of the environmental damage and the security presence, a corridor of up to 200 metres wide has in fact been taken away from landowners. Overall, instead of having a narrow strip of land temporarily disturbed by construction, some peasants have lost the use of their entire holdings, have left their homes and drifted to the outskirts of the city of Medellin where they are now living in dire poverty.

Today, six years after the construction of the OCENSA pipeline, lawyers working on behalf of 200 families are still trying to get compensation from BP for this disruption of their lives and communities. BP’s attitude is that the issues should be resolved by the courts, even though the communities involved have scant resources to put into a legal case.

BP often talks of the benefits to local people of employment during construction. It makes no mention, however, of the possible long-term dis-benefits, such as those that the farmers in Zaragoza and Segovia provinces of Colombia are experiencing.

[more info on BTC pipeline and social and economic development]

When talking about the impacts of the pipeline, BP generally raises only ‘technical’ problems – problems that it claims can be reduced through the company’s policies, techniques and technologies. Some disturbance, however, is an unavoidable part of such a large project, as was the case, for example, when BP built its Trans-Alaska Pipeline System in the United States.

Much of the disturbance caused by the construction of the Trans-Alaska pipeline arose from the sudden arrival in the region of 28,000 young men to build it, many of them working on short-term contracts.Alaskan journalist and author John Strohmeyer describes its construction as follows:

The regions through which the BTC pipeline would pass are subject to several existing, or potential, violent conflicts.

Although the BTC pipeline would only skirt the predominantly Kurdish regions of south-eastern Turkey, it would pass through areas of north-eastern Turkey where Kurds make up around 40 per cent of the population. In these areas, the Turkish State has been at war with much of the local people for many years, committing human rights abuses, and harassing and imprisoning elected Kurdish officials. The BTC pipeline requires a continuous militarised corridor which threatens the existing fragile cease-fire between Turkey and Kurdish groups. Up to 4 million people were displaced during the war, their villages burnt as they fled. Now the pipeline may well produce a form of ‘double displacement’, preventing refugees from going back to their homes, perhaps permanently.

Elsewhere, a pipeline system with such great strategic importance as BTC may re-ignite conflicts such as that between Azerbaijan and Armenia from 1988 to 1994, which created nearly a million refugees and left at least 25,000 dead. The inevitable militarisation of BTC can be foreseen in the promises made by the presidents of Georgia and Azerbaijan that they would devote substantial military resources to protection of the pipeline.

The impacts of such militarisation on the everyday lives of those who live along the BTC pipeline route may be imagined by looking at the experience of local people impacted by BP’s OCENSA pipeline in Colombia, a country that has for several decades been divided by civil war. Here, the safety of the pipeline was not so much a matter of engineering as one of politics, militarisation and conflict.

Throughout the 1990s, BP produced oil and gas, and constructed pipelines and other facilities in Colombia. The OCENSA pipeline has been at been at the centre of horrific human rights abuses, including assassinations, beatings and disappearances. These have been carried out by the Colombian army, with which BP has a close relationship, and paramilitary groups, which the army mostly condones. BP has provided equipment and funds to the army to defend its pipeline. According to an investigation by the British national newspaper The Guardian BP’s security contractors have been accused of training Colombian police in lethal operations and of passing to the army details of local peasant and union campaigners, many of whom have later been targeted. BP denies both charges.

In June 1996, Marcos Mendoza, who had participated in a protest against BP that involved stopping work on the pipeline, was shot dead at his home by the Colombian army. Arrigui Cerquera, President of the Asociación Departmental de Usuarios Campesinos (the smallholders association in the oil fields region of Casanare) and leader of the January 1994 work stoppage, was also assassinated. His killers are not known. BP was not directly responsible, although the paramilitary groups who are the likely culprits are known to target anyone who criticises the oil companies.

The pipeline itself has been frequently attacked by guerrilla groups. In October 1998, for instance, the ELN guerrilla group blew up BP's OCENSA pipeline at the village of Machuca in the state of Antioquia, Colombia. The resulting fireball killed at least 70 people. One survivor described a 50-metre ball of flame roaring along a river before hitting the village, where it engulfed wooden homes in which villagers were sleeping.

BP and its partner companies predicted even before they had built the pipeline that it would be attacked. They would have been aware, therefore, of at least some of the potential impact of increased militarisation along the pipeline. British development agencies Oxfam and Save the Children Fund argue that BP's presence has exacerbated tensions, violence and poverty.

[more info on BTC pipeline and conflict]

To properly understand the BTC pipeline, we need to consider it as part of a much larger system, within which no part functions without the other parts. A complete system of oil and gas fields (Azeri-Chirag-Guneshli, Shah Deniz and others), coastal oil and gas terminals (Sangachal), two pipelines (Baku-Tbilisi-Ceyhan and South Caucasus Pipeline), and downstream terminals (Erzurum and Yumurtalik, near Ceyhan). There is also an existing BP-owned refinery at Mersin, 100 kilometres (62 miles) from Ceyhan, which would be fed by the oil pipeline from Baku.

Just one failure in any part of the system could have enormous environmental consequences.

The disaster was not a one-off occurrence. It was a consequence of the companies behind the pipeline cutting safety standards over three decades in order to save money. Workers and journalists who have tried to raise safety issues have been harassed, sacked from their jobs, and subject to surveillance.

And what of the risks of fractures along the pipeline route, which passes through earthquake zones, and of oil spills on the offshore fields in the Caspian?

[more info on environmental impacts of BTC pipeline]

The best clues as to probable worker safety on the BTC pipeline system are in BP's safety record elsewhere. Another complete pipeline system – the Forties pipeline system, comprising North Sea oilfields, a sea and land pipeline, and a refinery at Grangemouth in Scotland – should provide some of these.

Despite Britain having strict health and safety legislation, and a critical media and political culture, Grangemouth refinery and the offshore oil installations have had a litany of safety disasters. In 1990, for example, two explosions within 10 days at Grangemouth killed three workers. In July 2000, evacuation alarms failed to go off when explosive gas leaked around the plant. The fire was the seventh safety incident in the space of a year. One contractor said, "The workmen don't have any confidence in the safety of this site." Several workers required trauma counselling, so dangerous were the conditions they had to work in. Meanwhile, on the installations of the North Sea oilfields, the memory of the Piper Alpha disaster (a platform operated by US company, Occidental), which in 1989 killed 187 workers, still looms large. There are fears that continuous cost-cutting by the oil companies create the risk of another similar tragedy.

In all BP’s largest three pipelines – the Forties Pipeline System (UK), the Trans-Alaska Pipeline System (US) and the OCENSA system (Colombia) – despite national legislation to protect trade union rights, BP and its partners have fought hard against recognition of unions, and routinely intimidated workers, especially when they point out safety problems.