The anticipated Iran-Pakistan-India (IPI/”Peace Pipeline”) pipeline may end up running only through Iran/Pakistan as India backed out from the project last week says Muhammad Abbasi, Pakistani Ambassador to Iran. Delhi’s withdrawal comes simultaneously as the US pressures Islamabad to disengage from the multibillion dollar project set for completion in 2013. This adds to the list of obstacles IPI faced since it was conceptualized in the 1990’s. From international pressures, prolonged funding negotiations, to domestic insecurities and reservations, the pipeline has yet to begin construction. However, Pakistan stresses urgency in moving forward with construction in the face of alarming energy shortages :
Only 60% of households have electricity and 18% access to pipeline gas for heating. Energy demand is expected to increase 250% over the next 20 years. To meet expected demand, electrical generating capacity must grow by 50% from 20.4 gigawatts to 30.6 gigawatts by 2010
As a result, Islamabad works diligently to address the issue. President Zardari is dealing closely with the Chinese on hydel projects in underdeveloped areas of the north and this May, the 7.5 billion dollar deal allowing Iranian oil supplies to Pakistan was officially signed. It initially permits 30 million cubic meters of gas per day and later to 60 million whichgreatly begins to alleviate the energy crisis:
Pakistan’s domestic gas production is falling and import dependence growing tremendously. By connecting itself with the world’s 2nd largest gas reserve, Pakistan guarantees a reliable supply for decades. If the pipeline were to be extended to India it could also be an instrument for stability in often tense Pakistan-India relations. Under any scenario of pipeline expansion which makes Pakistan a transit state, Islamabad stands to gain from transit fees hundreds of millions of dollars every year.
Given such potential, it’s not surprising Pakistan is intent on moving forward with IPI regardless of pressure from D.C. Despite Special Envoy Holbrooke’s diplomatic suggestions that the United States might “link funds committed by the Democratic Friends of Pakistan” to their cooperation with Iran on IPI, foreign minister Shah Mahmood Qureshi maintained Pakistan’s urgency:
“The gas pipeline construction agreement with Iran and Pakistan will by no means go under the U.S. pressures,”
But some experts insist that without American support to release funding and loan guarantees, financing of IPI will make the 2013 deadline unfeasible. This poses problems for Pakistan, and on the American front, there are differing concerns. HOping to maintain US authority and secure interests in the region, President Obama shifts starkly from the previous administration using more engagement and soft power with Iran. So American moves to work with the international community in economically choking Iran and ultimately eliciting behavior from Tehran are diminished as Iranian influence increases through international projects such as IPI. Hardline Bush Administration and more diplomatic Obama led policies are interesting yielding similar ends as Iran continues to expand trade and relations with the international community. This flouts hard, soft, all stances the United States takes in attempting to contain Tehran.
For instance, a vastly constructed pipeline running over 2,775 kilometers (1,725 miles)from the Persian Gulf in Iran, through Baluchistan to a port in Karachi and then north to New Delhi creates “an unbreakable long term political and economic dependence” of billions of people from Pakistan, to India and potentially extending to China.
The prospect of the entire subcontinent being “dependent” on Iran actually sounds alarming, but if we look at certain realities it’s perhaps far fetched. Firstly, any semblance of an actual dependence is most likely only applied to Pakistan given their current energy crisis, the cost effectiveness and efficiency of natural gas as opposed to developing LNG sources: India on the other handhas “two LNG terminals and will complete a third terminal by this year. Two additional terminals have also been proposed, and several companies are examining viability of constructing additional LNG import sites”. So Delih is far less likely to be entirely reliant on Tehran for natural gas because developments in LNG and civilian nuclear projects. Plus, India’s long, strong alliance with Russia allows for a convenient energy supplier to the north if need be. In fact, for Moscow IPI is an opportunity to quell thoughts that Tehran will compete in supplying natural gas to EU markets. Russia’s deputy energy minister explains:
“It is therefore in Russia’s interest to derail the Nabucco project by diverting Iran’s gas away from Europe and locking it to the Asian market. We are ready to join the project as soon as we receive an offer”
Thus a point of contention for Moscow and Washington. DC’s fears are further exacerbated by a potential of IPI eventually ensuring energy supplies to long standing Pakistani ally, China with shipments along the Karakoram Highway through future pipelines . The argument is that hopes of modifying Iranian behavior with economic pressures plus our mutual hedging with China suffers if IPI is constructed. Again, this relies on the assumption that billions of Indians and Chinese become “dependent” on Iranian gas supplies, which I find unlikely. Pakistan if anyone, is likely to become heavily reliant on those supplies in the next couple decades should IPI be executed as planned. Thus suggested solutions point to alternative pipelines that bypass Iran:
“A rival gas-pipeline project — the Turkmenistan-Afghanistan-Pakistan-India (TAPI) carrying gas from Daulatabad in Turkmenistan via Herat and Kandahar in Afghanistan to Multan in central Pakistan is one such alternative”
But this concept is contingent to a stable Afghanistan, which most experts indicate is not in the near future. Without stabilizing Afghanistan and given chilly relations with India, TAPI is not likely to move forward without overcoming numerous diplomatic and security obstacles. And Pakistan’s energy crisis doesn’t afford Islamabad time to wait for the international community to stabilize Afghanistan or warming relations with India.
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