Page 2 of 2 India on the front line in
energy war By M K Bhadrakumar
has been worked out between Iran
and Pakistan, the two countries will discuss early
implementation of the pipeline project,"
Ahmadinejad said.
Russian companies are
evidently conscious of the huge volume of business
generated through the transportation of Iranian
gas to the rapidly growing South Asian market,
apart from the highly lucrative distribution and
retailing of the gas in India and Pakistan. By a
rough assessment, for receiving the gas coming
through the
$7
billion pipeline, infrastructure development
within India alone will generate business close to
$40 billion in immediate terms.
But energy
cooperation among Russia, Iran and India has a
much wider backdrop than business opportunities.
Energy security, inevitably, is a subject where
politics mixes with economics. India is keenly
watching the tectonic shifts in the Eurasian gas
market. Iran has proven gas reserves of about 28
trillion cubic meters, while its gas output
increases by 10% annually. At present, Iran uses
almost its entire gas production in its domestic
market. About 100 billion cubic meters (bcm) is
supplied to domestic consumers, including 35bcm
for power plants, while 40bcm is pumped into the
country's oil beds for maintaining the well flow
rate. In other words, Iran's export capacity is
poised to grow dramatically in the near term.
New Delhi is aware that many of Europe's
plans to diversify its gas supply involve Iran. In
other words, a competitive struggle for Iranian
gas between the European market and the Asian
market is becoming inevitable in the near future
as Europe faces an acute gas shortage by 2015,
even if Russia keeps up its supplies and the
Northern Gas Pipeline becomes operational.
India has been watching with interest
Ahmadinejad's proposal to Putin on the sidelines
of a Shanghai Cooperation Organization (SCO)
summit last June that Iran is prepared to
determine gas prices jointly with Russia and the
main routes of gas pipelines. The Russian-Iranian
energy dialogue has significantly advanced since
then, culminating in the proposal by Iranian
Supreme Leader Ali Khamenei to Putin on January 28
that the two countries must cooperate along the
lines of the Organization of Petroleum Exporting
Nations. To be sure, New Delhi has taken careful
note that the prospects for the merging of Russian
and Iranian gas-transportation networks have
distinctly brightened.
Taking matters
further, the Iranian Supreme Leader's adviser on
international affairs, Ali Akbar Velayati, visited
Moscow last week and held discussions with Putin.
Velayati said on his return from Moscow that
Tehran sees the present juncture as a "turning
point" in Iran's strategic cooperation with
Russia. He alleged that Washington is trying its
utmost to disrupt the emerging Russian-Iranian
strategic cooperation in the transit of energy, as
it will impact phenomenally on the correlation of
forces internationally.
With Russia
controlling 27% of the world's gas reserves and
Iran 15%, cooperation between these countries is
bound to have huge potential in terms of global
gas distribution. It is only natural for a major
potential gas consumer like India optimally to
exploit the opportunities arising out of the
matrix of energy cooperation between these two
countries with which it has traditionally enjoyed
close and friendly relations.
From the
Indian perspective, Russia's resurgence as an
assertive player on the global scene and Iran's
preference to foster energy cooperation with the
Asian market open up the prospects of a unified
Asian market for gas, involving the Central Asian
countries as well.
China, which has a gas
deal with Turkmenistan for the supply of 30bcm of
gas annually with effect from 2009, is already
anticipating the enormous implications of these
developments for its energy security. Last June,
coinciding with the SCO summit, the Beijing
Morning Post gave a detailed description of
China's prospective plan for developing its
domestic gas-pipeline network during the next 20
years in anticipation of gas supplies from Russia
and Central Asian countries. According to the
report, China's 24,000-kilometer gas-pipeline grid
will be expanded to 36,000km by 2010.
New
Delhi has no alternative but to partake of the
emerging Asian market for gas if it is to get
anywhere near seriously addressing its
energy-security problems. In comparison, the
Indo-US nuclear deal will have a very long
gestation period before it makes any real impact
on India's energy map. Nuclear energy will remain
a marginal player in the Indian economy in the
foreseeable future.
In the geo-economic
context of energy security, Indian and US
interests are far apart at the moment. Whereas the
US favors European projects for diversifying gas
supplies that will reduce the West's dependency on
Russian supplies, India has a definite interest in
Tehran's preference to direct the bulk of its gas
resources to Asia. India cannot attach credibility
to the US counsel to trust the market instead of
trying to "lock in" energy supply when Washington
is actively promoting various oil- and
gas-pipeline projects heading toward the European
market from the Caspian and Central Asian regions.
Without doubt, Russia will be actively
supportive of the warming of Indo-Iranian ties,
which went through a rough patch after India's
vote against Iran at the IAEA in October 2005.
Curiously, a meeting of the foreign ministers of
India, Russia and China in New Delhi set for
February 24 closely follows Mukherjee's visit to
Iran. A Chinese Foreign Ministry spokesperson said
in Beijing that the three foreign ministers will
discuss cooperation in the economic field and that
their meeting will "help the three countries to
expand common ground and push forward trilateral
mutually beneficial cooperation".
India
and Russia share deep apprehension over
Washington's aggressive stance against Iran. Any
US military attack against Iran will threaten to
have adverse consequences for India's energy
supplies. Again, while Washington can be expected
single-mindedly to try to scuttle Indo-Iranian
energy cooperation, Moscow will encourage such
cooperation and offer to be party to it.
Finally, while Washington may have plans
for inveigling India as a counterweight to China,
Moscow hopes to foster greater Sino-Indian
understanding within which an Asian market of
energy producers and energy consumers could
flourish.
M K Bhadrakumar served
as a career diplomat in the Indian Foreign Service
for more than 29 years, with postings including
ambassador to Uzbekistan (1995-98) and to Turkey
(1998-2001).
Head
Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
Central, Hong Kong Thailand Bureau:
11/13 Petchkasem Road, Hua Hin, Prachuab Kirikhan, Thailand 77110
