Opium Rules: Afghan Oil Will Never Get Out Of The Ground

Tyler Durden's picture

Submitted by Zainab Calcuttawala via OilPrice.com,

Afghanistan may have mouth-watering oil riches, but opium still rules this economy amid a lack of any real investment in getting oil and gas out of the ground.

In 2011, the United States Geological Survey released a report on Afghanistan arguing that the responsible exploitation of the country’s natural resources, including oil and natural gas, could help alleviate its economic addiction to opium sales.

At that time, opium production represented just under 50 percent of Afghanistan’s Gross Domestic Product. Since then, the nation has set new opium cultivation records.

With an estimated 59 trillion cubic feet of natural gas resources hidden in its ground, Afghanistan does not seem to get the financial attention it deserves as a potential game-changer in the Central Asian natural gas market.

American efforts to rebuild Afghanistan’s economy through the energy industry have created opportunities for Republican candidates to criticize the ability of the U.S. government—and of the Obama administration, in particular—to affect positive change in Iraq, Afghanistan and other areas in the Middle East.

Case in point: the scandalous story that broke last November about a $43 million compressed natural gas station built in Afghanistan by the Task Force for Business and Stability Operations (TFBSO).

A report by the Special Inspector General for Afghanistan Reconstruction (SIGAR) said the costs of the Sherberghan station appeared to exceed 140 times the amount of capital needed to build a comparable station in Pakistan.

However, as Glenn Kessler from The Washington Post pointed out in February in a MythBusters-style piece, the $43 million figure cited by SIGAR included “misallocated” overhead costs and other expenditures from non-related TFBSO projects.

The inflated number made for catchy headlines, even though Sherberghan’s real cost stood under $10 million.

Regardless, corrective journalistic endeavors rarely generate the attention or coverage the original mishap is able to conjure, allowing Republican presidential nominee Donald Trump to capitalize off of bureaucratic fumbles.

However, the Department of Defense’s (DOD) motivations behind the construction of the gas station speak to how far behind Afghanistan has fallen in taking full advantage of its domestic energy supplies.

The station, located in northern Afghanistan, serves as a pilot project for the introduction and spread of the use of CNG as fuel for vehicles. The site included a compression station, a pipeline extension from the gas grid to supply the fuel, vehicle conversion kits to equip cars with the necessary facilities, and more.

Pakistan - Afghanistan’s further developed, yet still third-world neighbor - has managed to prop itself up as the largest user of CNG in the world. An estimated 70 percent of vehicles registered in the South Asian country run on the ‘’environmentally-friendly’’ fuel, and the nation hosts 3,000 stations to service the converted vehicles.

To add an additional CNG station in Pakistan would be a cookie-cutter operation, whereas developing Afghanistan’s first site requires developing human resources and know-how to make the process successful and replicable.

Though the DOD took the first steps in developing Afghanistan’s CNG infrastructure, the lack of meaningful energy investment will keep the country from returning its oil and natural gas output to the levels it enjoyed during the late 1960s, when it conducted big business with the Soviet Union.

The Afghani natural gas industry’s heyday came to an end when, after decades of working with Afghani leaders to build natural gas extraction capacity, the USSR invaded its former Central Asian ally as part of the Cold War.

Production declined in the decades of fighting that followed, with current natural gas output levels at just 450,000 cubic meters for the domestic market.

Even the newest industry developments in the region do not lend themselves to further Afghani energy goals. The $10 billion Turkmenistan-Afghanistan-Pakistan-India (TAPI) or Trans-Afghanistan pipeline, to be completed in 2019, will link natural gas from Turkmen waters in the Caspian Sea to Afghanistan, Pakistan and India, cheaply and economically.

Because the line creates a huge new market for Turkmen gas, Turkmenistan has pledged to pay 85 percent of the modern day Silk Road’s construction costs.

Overall, the move blocks Russian and Iranian control of export pipelines to the region. Both nations have previously refused TAPI nations access to their pipeline network during political impasses.

Though the pipeline is outstanding as a political victory for the newly neighborly countries, the US$400 million in revenues Afghanistan stands to gain from natural gas customs fees and a new, cheap energy source could make the country complacent regarding domestic exploration and extraction efforts.

As Afghanistan distances itself from its Soviet history and modern Russia, and as new projects provide effortless revenue streams, will Afghani oil and natural gas ever make it to the world stage?

And as a side note, presidential candidates should refrain from using Afghanistan—however tantalizing—as a point of criticism, or he or she will become the next president to fail in Afghanistan.

No one is going to fix Afghanistan in this lifetime, and everyone’s been trying to bring Afghanistan into the fold since the time of Peter the Great.

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Budnacho's picture

Well....Hash-oil maybe....

besnook's picture

way back when it was safe to backpack through afghanistan black hash bound with opium used to make an appearance occasionally. great dreams.

Shemp 4 Victory's picture

Afghan farmers can make more money growing grapes than they do growing poppies. This was known even back in the early days of the Chimpy Bush invasion. The only problem with grapes is that there is a lag of a few seasons between the time you first plant them and the time of your first harvestable crop.

The new grape farmers would have to receive a subsidy for a few years, and there's no way the US was going to throw money at Afghan grape farmers for a few years. This was going to be a quick war, and the US would be in and out before any grapes were harvested. Plus, subsidizing farmers is Socialism®, and every good US citizen knows that Socialism® is just Commonism without the little red book.

OK, I guess the subsidy isn't the only problem with grapes. Although farmers would make more money from grapes than poppies, the multiple layers of international middlemen which handle the poppies post harvest would see grapes as a somewhat less bountiful commodity. These middlemen are glad to deliver very convincing and persuasive arguments on the evils of Socialism®.

Here2Go's picture
Here2Go (not verified) Aug 16, 2016 8:46 AM

FFS ~ They could grow opium in Arizona if they wanted to that bad. But that would be ridiculous, right?

 

Now, back to my aching knees & my Obamacare premiums.

PirateOfBaltimore's picture

You should make some poppy seed tea for those aching knees ;)

El Vaquero's picture

59 trillion cubic feet of natural gas?  Isn't that something like two years of consumption by the US?  That ain't shit.  The 1.9 trillion barrels of oil is nothing to scoff at, assuming that there is actually something to that number which is a guess, but good fucking luck extracting it.  That kind of infrastructure requires stability, and I don't think that we're ready for the kind of slaughter that would be required to bring stability to that region. 

MrBoompi's picture

The problem with the Afghan fossil fuels is it makes much more sense to sell them to China, who would be happy to see the US provide all the money for the infrastructure and the supply go to them.  Whereas the infrastructure for poppy production is already in place including the heroin manufacturing sites and money-laundering apparatus.

Here2Go's picture
Here2Go (not verified) MrBoompi Aug 16, 2016 9:31 AM

U got that right...

 

A fucking "Silk Road" pipeline would probably be even more of a nightmare to the Zionists than the Syrian debacle that exists now...

Winston Churchill's picture

Thats exactly the true reason for the invasion in the first place.

A Iranian Chinese pipeline was already being planned,transiting Afghanistan at the turn of the century.

That would have neutered the USN.

Times have moved on and now China is about to get its pipeline,from Russia instead,still neutering

the USN.The CIA isn't about to give up its extra income though,so the meatgrinder will continue to turn.

With Iran,Pakistan, and India solidly in the SCO,Afghanistan is looking a little untenable.

Here2Go's picture

I'm quite sure that the 'Acuifero Guarani' aquifer in Paraguay has nothing to do with anything & is nothing more than an average, everyday, run of the mill QUANTUM OF SOLACE...

38BWD22's picture

 

 

The eastern part of Paraguay's Chaco has the lowest price biomass in the world.  And lots of water.  It's very easy to understand why some thoughtful people looking ahead might want a 2000 acre piece of the action.

Kirk2NCC1701's picture

Like I said a number of times before... the real reason the US invaded Afghanistan had nothing to do with 9/11, which was a mere pretetext.

The real reason had everything to do with competing pipelines:  

   (a) a US-led north--> south pipeline from Turkmenistan to Pakistan

   (b) a Chinese-led west --> east pipeline from Iran to China

Apparently the ruling Taliban "did not choose wisely", when they turned down the US.  9/11 and the invasion of Afghanistan followed.  When you understand this, you understand everything that's going on with Iran, China and the Petrodollar.

The End.

DownWithYogaPants's picture

Talking about Afghanimistan:  Talked to an old high school friend who told me about her daughter who has disappeared into the street because of her heroine addiction.

........Interesting how all this heroine is hitting U.S. streets sort of like all the crack cocaine in the 80s.  Almost like our fearless leaders are allowing it to come in because of their ties to organized crime.  Naaaah ......that would never happen right?

Falling Down's picture

A lot of the cheap heroin is being grown in Mexico.

DownWithYogaPants's picture

Ah ok.  Still think our fearless leaders are involved.  NSA has everybody bugged and yet it's like the Keystone Kops trying to catch anybody except lone gunman nutbags that stir up exactly the type of trouble that our Lords and Masters appear to need to promote the agenda of the day.

Al Bondiga's picture

"Allowing!?" Shit, son, they're bringing it in by the tonne. Gotta keep the billions rolling in to fund all the black ops. It's also good for keeping the prisons full, and as a way to keep a lid on dissent by the working class.

SixIsNinE's picture

CIA/DEA is really pissed @ Bolivia currently - they just nabbed a 7.5 ton cocaine shipment  and destroyed it. !

http://www.dw.com/en/bolivian-police-make-record-cocaine-bust/a-19443770

 

Kirk2NCC1701's picture

I suspect that if she self-identifies as a "Sister" and acts accordingly, that she qualifies for all sorts of Gov benefits, money and programs.  Hell, she might even get an affirmative action job at the Gov or some Fortune 500 company.

(I think I'm being sarcastic, but not sure)

jaxville's picture

 Opium poppies can still be found in America.  Grow them to keep your seeds fresh.  Don't harvest opium until you have no choice because pharmaceuticals are no longer available.

http://harpers.org/archive/1997/04/opium-made-easy/

DuneCreature's picture

We could grow it in the median strip on all the Interstate Highways and anyone who needed some for pain attenuating purposes could gather some and keep it in their medicine cabinet until the need for it arose.

That's the way Mother Nature intended for it to be.

Then came 'god fearing' white boys, big business and government and we all see what happened to a system that was in perfect balance and free for all.

Progress. .... Funny that word.

Live Hard, Lose Your Connection To Nature And You Lose Your Soul To The Darkness, Die Free

~ DC v2.0

 

 

DownWithYogaPants's picture

I've always thought drugs should be legal for sure.  I am complete believer in Darwin and evolution.  

NOTE:  First law of survival - you have to want to survive.

More Ammo's picture

I am a great believer in Darwin Awards for those who cleanse the gene pool for us...

DuneCreature's picture

Yep, all of them.

If a person wants to snort, shoot, smoke, or ingest straight toxins and die in a week. .... Great, go for it dumbass. .... You and your genes are now out of the gene pool. .... Bye bye.

Live Hard, Teach Your Children Respect For Themselves And Others, Die Free

~ DC v2.0

 

GeezerGeek's picture

Back in the 60s there were plants growing alongside the early eastern stretches of I-80 coming out of NYC headed westward. Cops noticed that certain individuals could be found cutting down these plants, which grew in what was a northern extension of the NJ Meadowlands. After a while the cops got suspicious and discovered the guys were harvesting a plant belonging to the genus Canabis.. 

Iconoclast421's picture

Gee I wonder why we cant get people to invest in compressed natural gas in Afghanistan. Hmmm... Did you say kaboooom?

 

Say what you will about the poppy, but at least they dont explode.

overmedicatedundersexed's picture

Opium is addictive, much like coffee and tobacco ..and like both is easy to grow and cheap - so of course we import coffee and heroin, and kill tobacco..seems the powers that be don't want the ave folk finding cheap solutions  to ease pain and make live bearable ..why profits for the elite owned cartels would suffer.

ps I do not do drugs nor do I want people to dull their senses..as a war is coming.

The best Sun's picture

The opium trade also keeps a lot

of US FRN overseas from coming

home and messing up the place.

overmedicatedundersexed's picture

great point..I just wish it would help in stopping the corruption that comes with keeping drugs illegal..but then the clinton foundation would suffer..possibly the cia/nsa/hls budget as well.

the world economy is a crime scene..but at this point....yada yada yada.  Is Milwaukee burning?

El Vaquero's picture

The funny thing about opium is that it wasn't a problem until the Chinese figured out that it could be smoked.  Alexander the Great took it with him during his rampage across the east, and his armies were still effective. 

overmedicatedundersexed's picture

i smoked it in Nam and Hong Kong..but never had a problem walking away from it..as well you don't get much done stoned..as I observed in Nam, smoking opium was a cheap aid to the very sick and old in viet nam villages..had alot of advantages over modern synthetic narcotics

Here2Go's picture

I hear ya...

 

I was a 13 varsity letter (figure that one out) jock in high school so never really touched drugs of any kind. Then, high school was over, went to college, wasn't really doing anymore sports to speak of (after the 1980 Olympics boycott)...

 

I fooled around a little... tried just about everything, weed, ludes, betty's, microdot, mushrooms, coke, you name it... Probably spent a year pretty much stoned one way or another, but then just dropped it as quickly as I'd started doing it when I got some other 'goals' in life...

 

Frankly, I think 'addictive'  is simply a medical (cop out) term to fit square pegs into round holes... I'm not trying to be judgemental here towards people who struggle coping with life or addictions... But FFS, we all struggle with something... You either deal with it, or you don't, or you go back & forth...

 

As for me, after many years, I wouldn't mind if there were something that could help with the 24/7 aches & pains... I'm confident that I wouldn't abuse it...

 

I have some weed around the house somewhere but I forget where... Maybe once or twice a year I'll blaze up... Have about 10 oxycontin tabs (leftover from a previous dental surgery prescription)... But they're more like a IN CASE OF EMERGENCY~BREAK GLASS option...

 

Ibuprofen works decent enough, but I try to limit it to only 3-4x a week... Beer handles the rest...

 

overmedicatedundersexed's picture

many of us can use drugs and not get into trouble, unless the law comes looking .. what a wasted effort the whole drug war is. although it makes big budgets for police agencies..so there is a whole industry and jobs that depend on it. funny how that works

SixIsNinE's picture

you're in luck - the CBD products are awesome - of the hundreds of cannabinoids in the cannabis plant (sic)

we've made incredible progress with isolating CBDs for pain - so much so that the DEA is trying to do the bidding of the Big Drug Cartels to hamper the legal states initiatives for God's miracle plant -

anyway, CBD products are shipping nationally now, since they have no THC it is all legal -

the older folks are now getting CBD mailers with the other junk mail - but this stuff is the real deal

i'll post a couple recommendations for ordering later

agNau's picture

What other reason is there for US military presence?

GeezerGeek's picture

Someone had to kick out the Taliban. If I recall correctly, they had suppressed the poppy business.

besnook's picture

china signed a huge developement contract with afghanistan for coomodity extraction. without mentioning that this article is bs except to point out the failure of usa efforts.

Kirk2NCC1701's picture

The CYA also signed a "Commodity" deal with the Afghans.

Guess what Commodity is being harvested and extracted to Russia, Europe and North America (via the Khazarian and Albanian mafias), with the usual Cut/Fee going to the CYA?

medium giraffe's picture

Unfortunately it's an evil of the western empire as our opiates for modern medicine find their source there.

CuttingEdge's picture

Last I heard, big pharma were growing opiate crops in Sri Lanka and India under some special dispensation.

Logically, it would be far better for them to be buying from the farmers in Afghanistan (cuts the amount converted to heroin), but methinks logic would interfere with CIA funding...

The best Sun's picture

As if the Afghani people ever had
any option other than to be the
ESF/CIA opium producer of choice.
How else do they keep this shit show
running except with Zillions of narco-dollars?
Look what happened in 2001 when the Taliban
shut off the opiates spiggot.
9/11 was manufactured to go in there and start it up again.
What did you think the war on terror was for?
The WHOLE THING is cover for controlling the poppies.
I bet you thought it was about oil.

111111111111's picture
111111111111 (not verified) The best Sun Aug 16, 2016 9:06 AM

the afgan people are not really producing the opium.

its the usa who is producing opium in afganistan using the afgan population to produce it.

 

its comparable to a computer produced in china. china isnt really producing the computer. its foreign companies producing the computer in china.

The best Sun's picture

You are correct.

If by US you mean

the CIA/ Exchange Stabilization Fund.

HRH of Aquitaine's picture
HRH of Aquitaine (not verified) The best Sun Aug 16, 2016 5:29 PM

Air America. When you have special needs cargo ;)

iceCube's picture

"...American efforts to rebuild Afghanistan’s economy.."

Oh, the irony!

samsara's picture

They already rebuilt it in Detroit's image

Bill of Rights's picture

Do the serious global banksters think major advances in gold and silver are ahead?

In its latest 13F filing with the SEC, Deutsche Bank disclosed that as of June 30, 2016, its investment management affiliates, owned approximately $2 Billion in gold and silver mining shares.

The bank disclosed ownership in a total of fifty gold and silver mining companies.

The top three holdings are: Newmont Mining ($278.7 million) Barricks ($240.5 million) and Gold Corp ($196 million).

Other Deutsche Bank holdings include First Majestic ($44.9 million) and Sprott’s Physical Gold and Silver Funds ($268K)

Consuelo's picture

 

 

 Not sure about what they 'think', but I have a hunch that they Know something wicked this way comes.

111111111111's picture
111111111111 (not verified) Aug 16, 2016 9:03 AM

opium should be legalized and made cheap as grass.

people who are ready to take drugs should then die. thats called natural selection.
i also would suggest to sell overdose so they die faster.
if opium is free it will be less attractive anyway as its no longer forbidden.
opium mafia will starve to death too as opiates are legally available in stores or you can grow them in your backyard.

problem fixed

overmedicatedundersexed's picture

just a small point..it is impossible for an adult  to OD on smoking opium..now eating a hand full might do it..smoking never.

Winston Churchill's picture

I beg to differ on that.I smoked three cups of chandoo once in Bombay.

I certainly felt like I was going to die,for about three days.