Entangled in energy web
Farhat Akram
Commendable developments have aterialized lately on various avenues of
energy sector in Asia with countries fostering forward their
collaborations for fulfilling their energy requirements. The dream of
making Asian gas grid could transform the quest for energy by Asian
economies into a cooperative, not conflictive enterprise. Regional
actors entangled subjectively in energy web of interdependence, could
generate far reaching effect on the security, stability and development
of the region. Hence locking their positions by working together in a
manner of complex correlation. The outcome of this interconnectedness
would determine the future course of economics, politics, inter-state
relationships, economic cooperation and security status of the region as
a whole. With growing oil prices skyrocketing, Asian country’s thrust
for cheaper imported gas has acquired a greater urgency than ever
before. In order to fulfill energy requirements, countries like
Pakistan, India, Iran and China have leaned their thrust even to develop
civilian nuclear technology to meet the needs of ever expanding
economies. Nowadays, we are totally dependent on an abundant and
uninterrupted supply of energy for living and working. It is a key
ingredient in all sectors of modern economies. It is high time that we
must secure our future in the growing state of depleting energy
resources.
As the new energy world order dawned with momentum in Asia, several key
benchmarks have been achieved on aspired projects of IPI
(India-Pakistan-Iran) and TAPI ( Turkmenistan- Afghanistan-Pakistan-
India) gas pipelines. These pipelines can be more appropriately called
as “life lines” to the industry and economies of Asian subcontinent and
beyond. Countries involved in both either IPI or TAPI had serious
reservations involved, which had descended them to remain reluctant in
pursuing the projects. We are still in the state of wilderness as yet
the projects, which have actually set foot in early 90s or later failed
to materialize as yet. Both projects got badly snagged in international
and regional politics. But latest signing of “ Government Framework
Agreement” in Islamabad to initiate TAPI project, readmission of India
in IPI, workable agreement between Pakistan and India on transit fee,
recent agreement on IPI to draft the final phase of the project and
finally signing an accord, depicts active assertion of the stakeholders
to remove the impediments on the way.
Both projects (IPI) and (TAPI) would provide the gas to the Asian
developing countries including Pakistan, India, China and beyond the
region. These states have limited oil/liquid reserves to meet their
demands. With rocketing prices and limited supply of oil, signifies the
option of gas which is cheaper, cleaner and plentiful, and in an
increasingly environmentally conscious world, developed countries see
this as an attractive alternative to oil and mineral fuels. Hence oil
producing states of Persian Gulf are striving to develop their gas
supplies to supplement their dwindling oil reserves. While the
landlocked El Dorados of Central Asia offer the energy hungry burgeoning
economies to invest and evolve effective methods to transfer the
resources. These states have abundance of proven and unproven gas and
oil reserves anticipating to be explored. It is quite mandatory for the
states to develop the national strategies for robust exploration of not
only indigenous resources but requires enhancing by trans- national
energy options to meet the constraints.
TAPI gas pipeline project ,would begin from the Dauletabad gas field
(Turkmenistan), and runs through Herat, Kandhar (Afghanistan), Quetta,
Multan (Pakistan) and the final destination of the pipeline will be the
Indian town of Fazilka, near the border between India and Pakistan. The
total length of the pipeline would be 1,680 kilometer will be built and
operated by a consortium of national oil companies from the four
countries, furthermore the cost of the project was just over 3$billion
in 2003; today it is 7.6$billion. The pipeline is to begin its
operations in 2015, if all the contending issues are to be resolved. The
pipeline will transport 33 billion standard cubic meter (scm) gas from
the Dauletabad gas field. There will be six compressor stations along
the entire length of the pipeline and it will have to be guarded by the
states they pass through, apart from the pipeline. The largest stretch
will fall to the share of Pakistan, between Quetta and Multan and the
Indian border. ADB provided the financial assistance of 1.0$ million for
the feasibility study of the project.
Several major risks were proving as impediments in materializing the
TAPI project. Security of the pipeline is the most important in this
regard, as it passes through the tumultuous region of Afghanistan, where
the security situation is far more satisfactory. Turkmenistan requested
UN to adopt a new convention guaranteeing pipeline security. The
proposal represents the abandonment of fiercely nationalist policy
adopted by Niyazove.
Turkmenistan’s claims of having reserves of more than 25 trillion cubic
feet need to certify through an independent auditor. Issues like that of
consortium formation, legal and regulatory framework, and issues of gas
sales and purchase agreements need to be resolved at earnest. Political
discords among the regional and international powers related to US
support to TAPI project due to contentious relations with Iran, Pakistan
and India’s conflicts and disagreements on various issues and Pakistan’s
constrained relations with Afghanistan are proving as hindrance on the
way. The rival IPI (Iran-Pakistan-India) pipeline, conceptualized in
1989, have the potential to link Persian Gulf with roaring economies of
Far East. The proposed pipeline would deliver gas from Assalouyeh in
southern Iran through Baluchistan and Sindh provinces of Pakistan and
then to India. This pipeline was smudged and hampered by conflictual
issues ranging from security to pricing and finalizing the framework.
Length of pipeline runs 1700 miles with 3.2 billion cubic feet per day
of Iranian gas to Pakistan and 2.1 billion cubic per day to India by
2011 moreover the cost of the project is nearly 7-8 $billion. To settle
the major issues apropos of pricing, Iran demands that clause to revise
the gas price every three years to be incorporated into the agreement,
which both India and Pakistan disagreed.
If substantiate effectively, then IPI pipeline would also assert and
depicts independent foreign policies adopted by Pakistan and India on
issues of high priority related to energy with certainly wanting to
break from the pressure to abort the plan. With sever warning to India
against joining the project by the US because of Iran, still it
demonstrated sign of thrust to move forward for the project. Even US
lured India to have the much aspired civilian nuclear deal to meet its
growing energy demands. However later early this year, when , India
shows reluctance in the IP project, Pakistan declared that China would
become part of the project and convert into (IPC). This proclamation
sent quaver to India. While depending on the feasibility of the project,
China illustrated keen interest in making this a reality with having
necessary expertise and resources. With growing demand at domestic
markets soaring, and involvement of China led India to participate with
revised sense of urgency. For India and Pakistan, it is difficult to
show the same level of consent on the IPI because of the divergent
foreign policies and priorities involved. Pakistan has deep rooted and
closer relations with Iran and support on various issues either nuclear
or forming a regional energy grid. Pakistan clearly realized that Iran
sees the IPI as both a source of valuable foreign exchange as well as
warding off the mounting US and other western powers to isolate Iran on
its nuclear enrichment foreign policy. For both states, it would be
appropriate to understand the emerging reality that in near future the
solution to Afghan problem is far from being a reality and TAPI project
is less likely to be practically implemented. Even option was propounded
that instead of TAPI, a revised TIPI (Turkmenistan-Iran- Pakistan
-India) may be plotted. This is actually more feasible and viable
solution, with less troubles for the project.
Analysis reveals that on one hand if IPI project carries greater
political price for both Pakistan and India than on the other TAPI had
been put on hold because of security and sensitive areas on the way. But
the fact remains that nearly all roads which provides energy security in
Asia lead from Tehran. Iran’s ability to act as an energy corridor for
the sub-continent and salient importance of Iran is indisputable. In the
rapidly intensifying international energy competition, Iran holds the
master key to the most staggering political and economic roadblock that
impedes the economic growth. The problems wont be solved while isolating
Iran but close and competitive environment leads to prosperity of the
Conclusively, the fact remained which must be kept in mind is that TAPI
and IPI would be operational in domains of disorder lying between
economically upward regions. Afghanistan as reluctantly been controlled
but still has the seeds of insurgency expected to be blossoming this
summer as illustrated by the attack on President Hamid Karzai with loud
and clear message of “ strike any where in the world”. On the other hand
Pakistan present shaky coalition government has been involved in
settling the domestic political instability with paying merge attention
to resolve the economic issues. Therefore it can be concluded TAPI and
IPI could not become good devices of leverage unless and until Pakistan
is to set its house in order and become a normal, democratic and stable
state.
The writer is Research Assistant at IPRI |
