Wednesday, 13 March 2013

A Tale of Two Pipelines and Pakistan's Geopolitical Significance

A report for The Australian ( Pakistan risks wrath of US in pipeline push ) contains much illuminating information on the geopolitical stakes in the New Great Game over pipeline routes and the contest for the oil and gas of Eurasia.

The reason NATO has "stayed the course" in neighbouring Afghanistan, and why western special forces and advisers will remain after what is now called in public diplomacy troop "drawdown" as opposed to withdrawal, is that it needs to ensure the potential viability of the TAPI pipeline.

Pakistan is facing several energy blackouts per day and is heavily dependent upon gas. As demand grows on the Indian subcontinent, the supply has to come either from Iran via the IP pipeline or Turkmenistan via TAPI.

Consequently, President Asif Ali Zardari has decided to finalise an agreement with Iran that has annoyed the US which has consistently put pressure on Pakistan to only accept future gas supplies via Afghanistan.

The report states,

'Nobody has the power to halt this project,” President Zardari said this week, adding Pakistan had a sovereign right to tackle its energy crisis however it saw fit.

It was a terse - and no doubt electorally popular - response to the latest round of warnings from the US State Department that the pipeline violated US sanctions against Iran (designed to persuade Iran to abandon its nuclear weapons development) and could bring punishing consequences for Pakistan.

Four days after Monday’s ceremony Zardari is tipped to dissolve parliament and appoint a caretaker government in preparation for national polls, thereby absolving his administration of responsibility for ensuring pipeline work continues.

Yet Pakistan’s energy crisis is real and the Iran gas project has widespread public and political support, notwithstanding Washington’s threats of economic sanctions.

The US seems oddly bemused by Pakistan’s pursuit of the pipeline, despite the political and economic crisis the country faces as a result of its critical energy shortfall.

Residents suffer an average six hours of power cuts a day, often more during Pakistan’s bitter winters and searing summers. The shortages routinely drive thousands of protestors onto the streets.
US ambassador to Islamabad Richard Olson did his best this week to put a positive spin on the intense pressure Washington is putting on Pakistan to pull out of the so-called Peace Pipeline, so named because it was originally to extend into India.

New Delhi quit the project in 2009, a sacrifice sweetened by the US civilian nuclear materials supply deal with India that violated a previously strictly-observed ban on the sale of nuclear materials to nations outside the nuclear non-proliferation treaty. (India continues to buy oil from Iran).

A similar nuclear deal with Pakistan is not an option for the US, which is still seeking access to Pakistani nuclear scientist Abdul Qadeer Khan over the sale of nuclear technology and materials during the 1990s to Libya and, it is strongly suspected, Iran, which is believed to be close to developing its own nuclear arsenal.

At a press conference this week Ambassador Olsen pointed to the millions of US dollars being spent to rehabilitate hydroelectric power projects in Pakistan, which he said would add an extra 900 megawatts of power by the end of this year and plug 20 per cent of existing energy shortfalls.

But the US projects cannot compete with the Peace Pipeline which is expected to deliver 21.5 million cubic metres of natural gas to Pakistan every day by mid-2015.

Pakistan relies heavily on natural gas not just for energy but also motor vehicles, and the Iran project would go a lot further towards meeting its massive energy shortfall and turning around its moribund economy.

The US has also been working hard to lure Pakistani into an alternative Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline, bypassing Iran. But even the most optimistic observers put its completion date at around 2018.

And TAPI will be every bit as vulnerable to security issues as the Peace Pipeline which will run through Balochistan, a province plagued with rising sectarian and separatist violence.

Many in Pakistan believe recent, large-scale attacks on Shiite Muslims, particularly in Balochistan’s Quetta City, are sponsored by Wahabist Sunni Muslim elements in Saudia Arabia that hope to derail the pipeline and prevent Shiite Iran from profiting from the deal.

But Iran has already completed its side of the pipeline and, if work goes as planned, Pakistan’s section is scheduled for completion in just 15 months.

Despite Pakistan’s defiant tone, not everyone believes the pipeline will go ahead.

British think tank Chatham House’s senior energy research fellow Paul Stephens, who has tracked the proposed project’s shifting fortunes over almost two decades, rates its likely completion as “extremely low”.

“The Pakistanis are under huge pressure not to go ahead with this. I find it inconceivable in the current circumstances the pipeline would go ahead,” he told The Weekend Australian, citing supply problems in sanction-hit Iran as an extra obstacle.

Many regional analysts disagree and say the US will cannot risk upsetting Pakistan, which provides the US and Nato’s main military supply route into Afghanistan and, more crucially, a key exit path for equipment ahead of the December 2014 withdrawal.

“It would be inconceivable (the US will impose sanctions on Pakistan) and that’s the calculation Mr Zardari has made,” says Imran Ahmad Khan, a British Pakistani strategist and director of the Transnational Crisis Group.

“It would be monumentally stupid of the US to take any action that would further inflame anti-US feeling.”

Beyond Pakistan’s immediate need for energy, the obvious geostrategic benefits from the Iran deal, which will cement regional alliances with China, Russia and Iran at a time when the US is preparing to exit the region, is an undeniable motivator.

Pakistan wants its Gwadar Port to become a regional hydrocarbon transit hub and the proposed gas pipeline and oil refinery will help realise that ambition.

The deal offers an energy and trade corridor that would connect China to the Arabian Sea and Strait of Hormuz, a gateway for a third of the world’s traded oil, and significantly reduce the distance oil and gas imports must travel from Africa and the Middle East to China.

Announcing China’s lease agreement for the Gwadar port last month President Zardari said the port “gives new impetus to Pakistan-China relations”.

“I have a strong feeling it will be very, very difficult to take Pakistan out of this deal,” says Islamabad-based energy expert Abdul Hameed Nayyar.

“Pakistan sees sanctions as something that come and go but if it doesn’t pursue this deal it stands to lose a lot more.”

No comments:

Post a Comment