A child plays in Bibi Heybat, a poor district in Baku, Azerbaijan situated in a former Soviet gas factory.
In the control room of Azerbaijan's sprawling oil terminal near the capital, Baku, Bala Mirza sits peering at a fuzzy map on a computer monitor. The outline of Azerbaijan, Georgia and Turkey looks like little more than a jumble of hills and farming towns. But for the engineer, 41, what lies underground has rocked his world: a new 1,100-mile oil pipeline, which in recent months has tied this tiny country on the edge of the Caspian Sea to the huge Western market. "There is a lot of oil and a lot of money," says Mirza, who spent 14 years earning about $10 a month working on a creaking old Soviet oil rig. "And because there is a lot of money, our lives will surely improve."
The stakes in Azerbaijan's new pipeline are far higher than the fortunes of just Mirza and his family. This Muslim republic, directly north of Iran and tucked into the southwest corner of the vast former Soviet empire, is suddenly a central player in one of the West's most distressing problems: how the U.S. and Europe will secure enough oil and gas to power cities, factories, airplanes and cars--in short, how to keep our entire modern lives afloat. Since last June, hundreds of thousands of barrels of oil a day have surged through a pipeline running from Baku through Georgia's capital, Tbilisi, to Turkey's Mediterranean port of Ceyhan. Named the Baku-Tbilisi-Ceyhan (BTC), the $4 billion pipeline is one of the world's longest and is operated by the British-American oil company BP, with partners that include U.S. oil companies Chevron, ConocoPhillips and Hess. By spring, about 1 million bbl. a day will move down the pipe, and BP could increase that soon after to about 1.5 million bbl. a day. A parallel BP pipeline opened last month to send hundreds of billions of cubic feet of natural gas from the Caspian to Western Europe, in order to break the Continent's overwhelming reliance on Russia.
As a piece of engineering, the BTC pipeline is a brilliant geopolitical bank shot. Built over three years, the pipeline had to skirt war zones in the Armenian-occupied Nagorno-Karabakh region in Azerbaijan, and in Georgia, which has been in a conflict with South Ossetian separatists. Then there were the engineering issues: the pipeline had to pass under about 1,500 rivers. At one point BP hired 400 archaeologists to sift through the mountain of ancient artifacts unearthed along the way. Equally daunting was the political wrangling: two of the three countries changed Presidents during construction, requiring lengthy renegotiations over the deal.
But to the countries and the global oil companies, the benefits are so compelling that they trump politics and old ethnic rivalries. The Caspian's oil and natural gas reserves, which some estimates have put as large as 200 billion bbl. (vs. 260 billion in Saudi Arabia), could deliver economic independence to the South Caucasus region and energy independence to the West. "This is about diversifying energy supplies," says Michael Townshend, a BP executive who ran the project in Baku until last year. "It is not from the Middle East and it is not from Russia."