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U.S.: Future Policy Toward Caspian, Iran Unpredictable

Boston, 24 November 1999 (RFE/RL) -- As oil companies make plans for the Baku-Ceyhan pipeline, it remains hard to predict what the future of U.S. policy toward Iran and the Caspian will be.

Of the two leading contenders for the U.S. presidential election next year, only one has taken a position on the current Caspian policy and opposition to Iranian pipelines, despite growing commitments to building Baku-Ceyhan as a result of agreements at the OSCE summit in Istanbul last week.

A campaign spokesman for Vice President Al Gore told RFE/RL this month that "the administration (of President Bill Clinton) has consistently supported the building of the Baku-Ceyhan pipeline." But when asked whether that would also be the policy of a Gore administration, the answer was less certain.

"It is at this time. I don't know whether he'll be saying anything differently. All I can tell you is where we are right now," the Gore campaign said.

The campaign of Texas Governor George W. Bush indicated this month that it had stopped trying to find an answer to the same questions more than a week after they were forwarded to a group of advisers. "It wasn't going to work out," said a Bush campaign spokeswoman. In his first foreign policy speech last Friday and in a televised interview Sunday, Bush did not touch on either the Caspian or Iran.

The uncertainty may leave the Caspian countries and the oil industry in the dark as they commit to building a 1,730-kilometer oil line to the Mediterranean by 2004. Although the search for financing and engineering studies must get underway soon, the project is not scheduled to start until a new U.S. administration takes office in January 2001.

The possibility of a policy change has been a problem for oil companies for over two years. With the election of Iranian President Mohammed Khatami in 1997, expectations have been raised over a possible easing of sanctions that could leave the oil companies with a costly project designed to avoid Iran. But so far, there has been no sign of any change in the U.S. policy on pipelines.

Although Bush has not stated his position, two of his advisers have interests in the region. Earlier this month, former U.S. Secretary of State George Shultz visited Turkmenistan to help promote the trans-Caspian pipeline, which has been condemned by Iran. Shultz, who helped prepare Bush for his foreign policy speech, is a director of Bechtel Corp., one of the partners in the trans-Caspian project.

Another Bush adviser, former Defense Secretary Richard Cheney, has frequently criticized U.S. sanctions policy. Cheney is the chairman of Texas-based Halliburton Co., an oilfield services firm. It is not yet clear how a Bush administration would resolve the two seemingly opposite positions.

But the future in Iran is even harder to forecast. An election for the Majles (parliament) in February may give the outside world an indication of the direction that the country will follow. But the government's willingness or ability to seek improved relations with the United States may not be known until after 2001, when President Khatami faces re-election. The possibility of new administrations in both the United States and Iran may make the practical questions of pipeline routes unfathomable.

But the growing commitments to Baku-Ceyhan and the trans-Caspian line that were reflected in agreements at the OSCE summit in Istanbul last week suggest that policies for the region will soon come to a crossroads. If the oil companies proceed with the projects, they will have to presume that the United States will remain opposed to Iranian routes for the long term. The investments in the projects themselves could become a vested interest in the continuity of the U.S. policy of avoiding Iran, regardless of the change in administrations.

Such logic is likely to dominate in the absence of any major breakthrough between Tehran and Washington. Any change in relations may be difficult, with both countries facing an election year.

But the deadlines for the pipeline projects could bring the issue to a head, despite the difficulties of confronting it. Just as the OSCE meeting was seen as an "action-forcing" event for reaching agreements, so the decision to proceed with the pipelines may force both countries to deal with consequences that could last for years. If there is any chance for relations, it could be foreclosed by political reactions to the projects.

If nothing else, the agreements have set targets for the pipelines and expectations that they will be met. While politicians may try to keep their options open, the next step may turn the present plans into the future of Caspian policy.