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US plays spoiler in India-Pakistan
pipeline accord
By Siddharth
Srivastava
NEW DELHI - India's 10-day
campaign to tie up a deal on a fresh source of
energy has met with resistance from the United
States. Reports, confirmed by Foreign Ministry
officials in New Delhi, say the US has warned
Pakistan of sanctions if it goes ahead with the
proposed $4 billion, 2,600-kilometer
Iran-Pakistan-India gas pipeline. The US has been
seeking democratic reforms in Iran and a clampdown
on its nuclear program, which the Iranians
maintain is for peaceful purposes.
The
latest US threat comes in the wake of a marathon
nine-hour meeting between Indian and Iranian
officials in Tehran that reiterated both
countries' firm commitment toward building the
pipeline. Apart from the pipeline issue, India
signed a US$22-billion deal to buy liquefied
natural gas (LNG) from Iran over 25 years starting
2009. India recently signed a LNG deal with Qatar
as well to tide over its energy shortages.
Pakistan's newspaper Dawn, as well as The
Times of India, quoted officials in Washington
saying that the US warned Pakistan of sanctions if
it went ahead with the project, disregarding US
concerns over Iran's nuclear plan. This is despite
Pakistan's Foreign Minister Khurshid M Kasuri
making a strong plea in favor of the pipeline
given the potential revenue ($700 million in
transit fees alone) and the country's need for
energy security. Kasuri, who was in the US last
week, impressed upon US Secretary of State
Condoleezza Rice that Pakistan cannot abandon the
project. However, the US believes that given the
$1-billion-plus yearly aid that it has been
advancing to Pakistan since 2002, the country
should fall in line.
It's understood that
Rice suggested to Kasuri that Pakistan should look
at other options, including a pipeline from Qatar
or the central Asian republic of Turkmenistan.
Rice reportedly said that even if the US gave up
its resistance to the pipeline, powerful groups
within the US Congress would ensure that the
project is derailed.
Reacting to the new
US pressure, Iran's Oil Minister Bijan Zanganeh
said: "It is unreasonable to prevent India and
Pakistan from accessing Iranian gas. Energy
markets should be depoliticized. We sell crude oil
and LNG. Why can't we be allowed to sell piped
gas?" The minister told reporters on the sidelines
of the Asia Oil and Gas conference that a decision
on the pipeline would be inked within two weeks.
But it is easier said than done, given Pakistan's
dependence on, as well as proclivity toward, the
US.
Striking a more diplomatic note,
India's Petroleum Minister Mani Shankar Aiyer, who
recently met with Pakistan President Pervez
Musharraf on his Pakistan-Iran trip to seal the
pipeline deal, said: "We are sensitive to US
concerns and trust they are aware of our
requirements. It is impossible for India to secure
its energy requirements without access to natural
gas resources in the extended neighborhood,
especially Iran...I hope that even as we work with
the US and Iran in the International Atomic Energy
Agency (IAEA) to meet international concerns, the
US will work with us in securing our vital energy
requirements."
There is a lot at stake for
Iran, Pakistan and India in this pipeline.
Negotiations on the mega pipeline began in 1994,
but no headway has been made until last year
because of tensions between Pakistan and India,
and the project's massive cost. The warming of
ties between the two South Asian rivals has now
resulted in a renewed focus on building the
pipeline. For Iran, which holds the world's
largest gas reserves after Russia, India is as
important as the European market, which it hopes
to access through a pipeline across Turkey. India,
which imports nearly 70% of its annual energy
needs, has been using ships to ferry LNG.
In the new environment of improved
Indo-Pak relations, India feels it can pull off
the construction of the pipeline from Iran through
Pakistan, which will make the gas transport much
easier and cheaper. It is estimated that unless
India taps new energy sources, given the rising
international price of crude, it will be
impossible to grow at the projected 7-8%. So the
pipeline is an absolute must.
But even as
India and Pakistan have reconciled to a deal that
would have been dismissed as impossible even a
couple of years ago, the US seems bent on playing
spoilsport. The US stand vis-a-vis India has been
that it will assist India's long-term energy needs
if New Delhi forgoes the proposed gas pipeline.
Asia Times Online had earlier reported that Rice,
during her visit to India, had made it clear to
her Indian counterpart, Foreign Minister Natwar
Singh, that if India proceeds with the pipeline it
could invite US ire under the Iran-Libya Sanctions
Act (ILSA) that empowers President George W Bush
to order punitive measures against any
international company that invests more than $20
million a year in Iran's energy sector. Rice is
now reported to have reiterated the same threat to
Pakistan.
The ILSA disallows any move that
would aid Iran's economic expansion, as the US
considers the country a "safe haven for
terrorists". The sanctions provisions apply only
to investments in Iran and not to any purchase of
oil or gas, thus not affecting the Indo-Iran LNG
deal that the two sides just signed.
While
India does not want to annoy the US, it favors a
de-linking of issues concerning energy security
and Iran's supposed nuclear aspirations. "We live
in a very complex neighborhood, surrounded by
governments and rulers of different orientation -
communists, military dictatorships,
monarchies...we hope the US understands the
difficult choices we have to make for the
well-being of our people," India's Ambassador to
the US, Ronen Sen. A US official has been quoted
as saying that the pipeline issue is a "minor
wrinkle" in growing Indo-US relations.
But
with Pakistan, it clearly seems more than that for
the US. Pakistan Tuesday asserted that the
decision whether or not it would allow the
pipeline to run through its territory would solely
be taken in consideration for its national
interest, hinting that external pressures from the
US or others wouldn't make any difference. Foreign
Office Spokesman Jalil Abbas Jilani said Pakistan
is aware of US concerns, but Islamabad's national
interest came first. He said the Iranian oil
minister would visit Pakistan on June 20-21 at the
invitation of his Pakistani counterpart to discuss
the project. He also said that during their recent
meetings in Islamabad, Pakistani and Indian
ministers agreed to set up a joint working group
to discuss all aspects of the project, including
technical, financial and pricing issues.
Pakistan has of late adopted the policy of
welcoming all schemes to transport oil in any
shape through pipelines. Two other pipeline
projects are being actively discussed in Pakistan.
One is for oil to be brought from Sharjah under
Persian Gulf waters through a pipeline - US
interests seem to have some minor share in the
project. The other plan is a major three-country
project: hydrocarbons sourced in Turkmenistan
carried through a pipeline to Afghanistan and
Pakistan's newest port at Gawadar, to be exported
to the rest of the world. The company that will
set up that pipeline and manage distribution of
these hydrocarbons is a composite subsidiary of
major US oil corporations, so it is not surprising
that Washington is keen that this project
succeeds.
When and if this UNOCAL project
- intended to transport as many hydrocarbons from
Turkmenistan, Uzbekistan, Kyrgyzstan and
Kazakhstan as possible - succeeds, the US may have
attained its objective of acquiring access to most
of the oil from the former Soviet republics in
Central Asia, which is considered to be more
secure than Middle Eastern oil and does not
involve an implicit subsidy to Islamic fanatics.
Russia is not involved in UNOCAL, or the new
pipeline from Baku to a Turkish port via Georgia.
The pipeline projects illustrate the
geopolitical rivalry between the world's
hyper-power and the two giants of Asia: Russia and
China. Both are trying to win over the rulers of
Kazakhstan, Uzbekistan and Kyrgyzstan to their
side and to meet their fuel needs on a secure and
permanent basis. The US-favored UNOCAL pipeline
has to run the gauntlet of a simmering guerrilla
war in Afghanistan and an unpredictable law and
order situation in Pakistani Balochistan. Even the
Iranian pipeline will have to traverse
Balochistan, albeit west-to-east. The law and
order situation in that region can, however,
vastly improve if good governance and political
savoir faire can be brought to bear on it.
The Afghanistan situation cannot be said to be as
amenable to improvement as Pakistan's because the
continued presence of foreign troops - vital to
the survival of the Karzai regime - is an
incitement to rebellion.
The Iranian
nuclear crisis casts a long shadow on all the
three proposed pipelines: from Iran, Sharjah, and
Turkmenistan. The economics of the Sharjah
pipeline is likely to knock it out of the running
in any case. Any US intervention in Iran would
create a situation like 15 or 20 Iraqs. Nothing
can be said about the future in that case.
Siddharth Srivastava is a New
Delhi-based journalist.
(Copyright
2005 Asia Times Online Ltd. All rights reserved.
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