THE
ROVING EYE In the heart of
Pipelineistan By Pepe Escobar
TEHRAN - Iranian Foreign Minister
Manouchehr Mottaki may have captured all the
headlines when he announced that Iran would not
use the oil weapon in the event it was slapped
with sanctions by the UN Security Council. But in
the world of Pipelineistan, the nuclear row waged
by the US, the EU-3 (Britain, France and Germany),
the United Nations and Iran is just a detail.
The heart of Pipelineistan itself has been
transposed to Tehran for the International
Conference on Energy and Security: Asian
Vision, organized by the
Institute of International Energy Studies and the
Institute for Political and International Studies.
There could not be a better place to meet and
discuss oil-and-gas geopolitics with an array of
scholars and executives from Iran, China,
Pakistan, India, Russia, Egypt, Indonesia,
Georgia, Venezuela and Germany.
And their
overall message is unmistakable: the
interdependence of Asia and "Persian Gulf
geo-ecopolitics", as an Iranian analyst put it, is
now total; the nuclear row should be solved
diplomatically in the next few months; and Asian
integration has everything to gain from
Pipelineistan linking the Persian Gulf, Central
Asia, South Asia and China.
It's a gas,
gas, gas The heart of Iran's gas strategy
lies in the gigantic South Pars field, responsible
in itself for 50% of Iran's and 8% of the world's
natural-gas reserves. South Pars is strategically
located between Bushehr to the west (where Russia
is helping Iran to build its first civilian
nuclear power station) and the Persian Gulf port
of Bandar Abbas to the east.
According to Gholamreza Manouchehrie,
chief executive officer of PetroPars Co, South Pars at
its full capacity could deliver 28 billion cubic feet of gas a
day. But not all of its 19 blocks have been
negotiated for exploration. Iranian participation
stands at 60%. Join ventures are common; for
instance, the liquefied natural gas (LNG)
operation is shared at 50% each by the state-owned
National Iranian Oil Co (NIOC) and TotalFinaElf.
But much more foreign investment is
needed. "We are 10 years behind Qatar," said
Manouchehrie, referring to the neighboring gas
emirate. "There is cooperation between our
experts, but it's still not enough. But we will
catch up with them in production by 2012."
South Pars' enormous strategic importance
is that its production will be exported to Asian
countries - after the construction of a pipeline
to the Pakistani border and then to India, pumping
150 million cubic meters of gas a day. As for
North Pars, it's an independent field, 100
kilometers to the north, and geared for domestic
consumption.
Manouchehrie said that "this
pipeline controversy has been going on for 10
years. Now it's a compelling geo-economic reality.
China also wants to be a beneficiary." Most agree
that the pipeline should be finished as soon as
possible. For Asia, it's the most feasible and the
most cost-effective.
Welcome to
IPIL High-level negotiations between India
and Iran started on Tuesday in Tehran. According
to Seyyed Alavi, an Iranian oil executive, a final
agreement between the three countries (Iran,
Pakistan and India) will be reached "by June or
July".
The tentative schedule is for the
pipeline to be concluded in five years and three
months. Pakistan needs to build 1,000km of 48-inch
pipeline, plus the infrastructure, and India needs
to build 600km.
Farshad Tehrani, an
Iranian oil executive based in Norway, is in favor
of the project being called the
Iran-Pakistan-India pipeline (IPIL), a joint
venture with a cross-section of ownership. Tehrani
finds many reasons for India and Pakistan to
switch from oil to gas: they reduce their oil
imports; they opt for cleaner fuel; they save
foreign currency.
For Iran, it's also
inevitably about geo-economic power: "Iran is the
only country in the world with more than 15
neighbors. Iran wants to be a true regional power
- we are in West Asia after all. Besides, all our
neighbors can swap gas with Iran as well," said
Tehrani.
Maqsud Hassan Nuri, a senior
research fellow at Islamabad Policy Research
Institute, agrees with all the benefits. But he
preferred to single out President George W Bush's
recent visit to South Asia, where once again it
was clear that "the US does not want stable
relations between Iran and India and Pakistan".
The Pakistani perspective - shared by
Pakistani oil executives in Tehran - is that the
ongoing nuclear row could be solved within the
International Atomic Energy Agency (IAEA), and not
the UN Security Council, which is this week
deliberating moves to reprimand Tehran over its
nuclear program.
The Pakistanis agree that
Iran is a factor of stability in the region. They
also agree with Iranian and Egyptian executives
that the current standoff won't be frozen in time
- just as it did not between India and Pakistan
regarding their dispute over Kashmir.
As
Tehrani, the Iranian oil executive, put it, "In
the subsequent months there will be some kind of
arrangement whereby the West is satisfied and
Iran's legitimate rights will be respected." Nuri
added a conditionality: "Nuclear weapons take care
of the strategic ego, they don't solve our
economic problems. Forty percent of South Asia
still lives below the poverty line."
Rafiullah Azmi from the Institute of
Islamic Studies in New Delhi stressed that IPIL
would reach way beyond South Asia, offering a
vital link among the Persian Gulf, Central Asia,
South Asia and China, and thus "it goes against
the geopolitical game of the US in the Persian
Gulf".
So basically why is Washington so
much against it? "The Americans feel it will help
Iran; it will set dangerous precedents for other
countries to buy gas from Iran; and it will cement
friendly ties between Iran, India and Pakistan,"
said Azmi.
Tehrani said that "it goes back
to [former US president] Bill Clinton, when he
said that you're free to buy energy from anywhere,
as long as it's not from Iran".
Azmi
stressed that India was creating "a multitude of
options" for its energy needs - from nuclear to
gas. Nuclear power in 2010 will attend to no more
than 10% of India's requirements. He recalled what
Prime Minister Manmohan Singh recently told the
Indian parliament: "We are not part of any push
towards regime change in the region." Azmi is
convinced "geo-economics will triumph over
geopolitics".
No tapping The
Trans-Afghan Pipeline (TAP) has disappeared from
view - obliterated by the Taliban resurgence - but
the project remains in the cards, although the
realistic prospects are grim, according to Seyed
Shah Bukhari of the Institute of Strategic Studies
in Islamabad.
An agreement among
Turkmenistan, Afghanistan and Pakistan was signed
last month. India is an observer. The US is very
much in favor. But besides the chaos in
Afghanistan, it is the reliability of Turkmenistan
that is in question.
Turkmenistan has
signed multiple contracts, especially with Russia
and Ukraine, but there's no guarantee it will be
able to supply all of its customers. Bukhari
stressed that both India and Pakistan may need
more than two pipelines for their needs. That
would mean IPIL, TAP and another US$2.7 billion
project from Qatar via Oman to Pakistan and then
India.
Tamine Adeebfar, an analyst at the
Caspian Energy Politics in Brussels, expected the
Middle East to supply energy to East Asia for
nearly a century. There's total interdependence
now, but everything "needs to be anticipated and
planned now". This is dawning on the Iranians.
Iranian oil executives Alavi and Tehrani
make two important points - both of them related
to the urgency of foreign and local direct
investment in its gas industry. Iran still cannot
compete with Russia in exporting gas to Europe -
one of its priorities for the 21st century. And
incredible as it may seem, Iran still imports gas
from Turkmenistan - even though it holds the
second-largest gas reserves in the world.
Ahmed al-Najar, of Al-Ahram Institute for
Strategic and Political Studies in Cairo, prefers
to puncture the myth that oil prices are related
to the Organization of Petroleum Exporting
Countries. World demand for oil grew from 76.6
million barrels a day in 2004 to 83.3 million in
2005. In China, it grew from 4.7 million barrels a
day in 2001 to 6.7 million in 2005. But in the US
it grew only from 24 million barrels a day in 2001
to 25.6 million in 2005.
So the growth in
demand is basically from Asia. Al-Najar said that
"supply now exceeds demand by 2 million barrels a
day. There's plenty of oil, all the time." So
who's profiting? "Big oil companies. They receive
from 25-40% of what they discover. This is related
to the American oil strategy, which is biased
towards the American oil companies."
Vulnerable China The
interdependence of the Persian Gulf and Asia
anyway is more than enshrined. World demand for
natural gas will triple from now to 2020. By 2025,
Asia will import 80% of its total oil needs, and
80% of this total will be from the Gulf.
Chinese executives such as Liu Guochen of
Sinochem Corp, based in Amman, admit that China
imports energy from unstable areas, and is worried
about US hegemony over the flow of energy
resources.
So China is frantically
diversifying, said Iranian scholar Masoud
khavan-Kazemi of Razi University, "in its
investments, pursuing territorial claims and
building up strategic oil reserves". He foresees
Asia facing "great imbalances"; the potential for
conflict in the Persian Gulf, Russia, Central Asia
and the Caspian; insecurity suffered by China,
India and Japan in relation to the US presence in
Asia; and the Chinese sense of vulnerability as
China and the US are de facto strategic rivals.
Akhavan-Kazemi pointed out that the US was
pursuing three key objectives. The first two may
be shared by many Asians: guaranteeing the energy
flows from Asia to international markets; and
trying to stop Russian hegemony. But a crucial
factor - which the Russians are keen to point out
- is that Iran, India and Pakistan are now
observers at the Shanghai Cooperation Organization
(SCO). And "the SCO would be able to protect
pipelines going in all directions", said a Russian
oil executive.
As for the third US
objective - preventing Iran from exporting its gas
- definitely it is not shared by anyone.
Akhavan-Kazemi emphasized that "despite the
American military hegemony in the Persian Gulf,
its political hegemony is in doubt".
In
the corridors of the conference, most of the oil
and gas executives and scholars agreed that the
way the game is played today in Pipelineistan,
everything is politicized.
"When Bush
tells India, 'You don't need to import gas from
Iran,' that's totally illogical," said a Georgian
scholar based in Bologna. "The [alleged Iranian]
bomb is a pretext," said an Iranian oil executive
based in London. "The Americans don't want Iran to
develop, and that's equally true of China and
Venezuela. We need to talk about security through
knowledge."
Pipelineistan actors are
actively discussing the possibility of limited US
strikes against, for instance, the Bushehr plant,
as was implied by a recent belligerent statement
of the US ambassador to the UN, John Bolton.
But the general consensus is that an
agreement of sorts will be reached in the next few
months - with no UN sanctions against Iran. Asia
does not want an Iran battered by the West; Iran,
after all, is part of West Asia.
Manochehr
Mohammadi, Iran's deputy foreign minister, may
have spoken for all of Asia when he said, "Any
sanctions will badly reflect more on our immediate
neighbors than on ourselves."
(Copyright
2006 Asia Times Online Ltd. All rights reserved.
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