The IPI conundrum
The South Asian region is home to 1.3 billion people, close to a quarter of the world’s population. The region is currently experiencing a rapid growth in energy demand, concomitant with economic growth and industrialisation. Adequate energy supply is, therefore, a major challenge facing the economies in the region. Pakistan’s energy portfolio has been unbalanced for a long time. In recent years its economy has shown signs of improvement, thanks partly to the ‘war on terror’. But despite the improvement, Pakistan faces a looming crisis — deficiency of energy resources. The economy will not be able to sustain its present growth rates for long if the issue of energy deficiency is not resolved. The country may plunge into an energy crisis by the year 2007 due to rising electricity demand which is in double digits by now. The Iran-Pakistan-India (IPI) gas pipeline project is in Pakistan’s interest because of our burgeoning energy needs and this should act as a catalyst to give a go-ahead to the project.
Talks on the IPI gas pipeline project among the three countries ended Thursday without any agreement. A new round of negotiations is scheduled for April 30. The three countries have not reached any agreement on the multi-billion dollar project due to technical problems. A mutual understanding on the pricing, feasibility and other technical issues needs to be arrived at before the project starts. Technicalities aside, there is much talk of the political connotations of the pipeline project. The real issue is, if both India and Pakistan go ahead with the project, would the US object or not? Apart from the misleading statement by Bush in his recent visit to South Asia that the US does not object to the project, the other indications from the US are quite clear on their opposition to this pipeline. In his recent visit to Pakistan, US Energy Secretary Samuel Bodman expressed reservations about the IPI pipeline, saying, “The US has significant problems with Iran as she is trying to acquire nuclear weapons and she should be stopped.” He said that the US firmly opposes a proposed pipeline to bring natural gas from Iran.
Although Foreign Minister Khurshid Kasuri has said that regardless of any objections, Pakistan would decide on the IPI project in accordance with its energy requirements, given the track record of Pakistan having to eat its own words, this situation is unlikely to be any different from the past, if the US decides to turn the screws on us. Even if there is no immediate attack on Iran, the US could impose sanctions on the countries investing with or in Iran. India too has kept a tactical silence after voting against Iran at the IAEA meeting to gain US favour, but since energy is extremely crucial for India as well, it is trying to eat its cake and have it too to find a solution to its energy needs.
This pipeline is also risky given the current scenario in Balochistan, through which the pipeline has to pass. In recent months, militants have fired hundreds of rockets at military installations, derailed trains, and murdered three Chinese engineers at work at a cement factory in the town of Hub. They have regularly cut off gas supplies for days by attacking existing pipelines. Both Pakistan’s current and future economic growth hinges on developing Balochistan, particularly its energy resources. Unless and until there is a political settlement in Balochistan, the IPI project would seem to be a risky business. The government must settle these issues and should take a positive decision regarding the IPI gas pipeline project in the light of its benefits.
Talks on the IPI gas pipeline project among the three countries ended Thursday without any agreement. A new round of negotiations is scheduled for April 30. The three countries have not reached any agreement on the multi-billion dollar project due to technical problems. A mutual understanding on the pricing, feasibility and other technical issues needs to be arrived at before the project starts. Technicalities aside, there is much talk of the political connotations of the pipeline project. The real issue is, if both India and Pakistan go ahead with the project, would the US object or not? Apart from the misleading statement by Bush in his recent visit to South Asia that the US does not object to the project, the other indications from the US are quite clear on their opposition to this pipeline. In his recent visit to Pakistan, US Energy Secretary Samuel Bodman expressed reservations about the IPI pipeline, saying, “The US has significant problems with Iran as she is trying to acquire nuclear weapons and she should be stopped.” He said that the US firmly opposes a proposed pipeline to bring natural gas from Iran.
Although Foreign Minister Khurshid Kasuri has said that regardless of any objections, Pakistan would decide on the IPI project in accordance with its energy requirements, given the track record of Pakistan having to eat its own words, this situation is unlikely to be any different from the past, if the US decides to turn the screws on us. Even if there is no immediate attack on Iran, the US could impose sanctions on the countries investing with or in Iran. India too has kept a tactical silence after voting against Iran at the IAEA meeting to gain US favour, but since energy is extremely crucial for India as well, it is trying to eat its cake and have it too to find a solution to its energy needs.
This pipeline is also risky given the current scenario in Balochistan, through which the pipeline has to pass. In recent months, militants have fired hundreds of rockets at military installations, derailed trains, and murdered three Chinese engineers at work at a cement factory in the town of Hub. They have regularly cut off gas supplies for days by attacking existing pipelines. Both Pakistan’s current and future economic growth hinges on developing Balochistan, particularly its energy resources. Unless and until there is a political settlement in Balochistan, the IPI project would seem to be a risky business. The government must settle these issues and should take a positive decision regarding the IPI gas pipeline project in the light of its benefits.
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