Confrontation Declined?
Thomas Dawson
June 18, 2005
Pakistan find’s itself in an awkward position with the US as it makes an attempt to provide its people with energy. In the past couple of years, ties have warmed between Pakistan and India to a degree that had not seemed possible. Both of these countries have growing needs of continuing supplies of energy.
Pakistan has been considering a pipeline from the United Arab Emirates at Sharjah under the sea to Pakistan, and another pipeline from Turkmenistan across Afghanistan and into Pakistan. Major US oil companies (UNOCAL) have an interest in the latter project, which naturally has the attention of the Bush Administration. The advantages of a pipeline under the sea would be offset by a very high initial expense and continued maintenance. The project through war-torn Afghanistan does not appear to be a reasonable alternative either, in the reasonably near future. UNOCAL’s only real interest in the area is in bringing oil from central Asia through Pakistan to the sea to be shipped to the US. This has always been our main interest in Pakistan.
Of crucial interest to Pakistan is a pipeline from Iran through Pakistan to India. This would assure a continued reliable supply of liquefied natural gas for many years to come.
In addition to obtaining a secure supply of its own, Pakistan would inherit revenues of more than $700 million each year in transit fees on the pipelines to India. Negotiations for this project have been going on for more than ten years, but because of the relatively cold relations between these three countries in the past, little has been accomplished beyond occasionally talking to one another. India would further sweeten the pot for Pakistan by laying a pipeline from the Punjab region to Lahore to meet the requirements of Pakistan’s diesel fuel needs, that now are approaching nearly 5 million tons a year.
Although Iran and India were on opposite sides during the Cold War, they found themselves in concert as they both supported the Northern Alliance opposing the Taliban in Afghanistan. In 2003 India and Iran made agreements worth over $25 million and engaged in joint military exercises. Trade between India and Iran is up 20% in the past year.
India is in desperate need of energy. She presently imports well in excess of two-thirds of her energy needs. President Pervez Musharraf says that it is impossible for India to secure its energy requirements without access to natural gas resources in the surrounding neighborhood. Without new sources of energy, India will not be able to grow at the annual seven percent plus, projected growth rate.
Iran has the second largest gas reserves in the world. A pipeline to India would be nearly as profitable for Iran as the proposed pipeline to Europe.
Indeed this is the rub! Not only does the pipeline from Iran to India compete with UNOCAL’s interests, but it also strengthens the ties between these adjoining countries; and one of those countries is a member of the “axis of evil.”
Prime Minister Khurshid Kasuri has tried to convince the US that Pakistan, in her national interests, cannot walk away from this project. Because of the current dependence of Pakistan on US aid, the US has simply is taken the position that it has bought the Pakistanis with over a billion dollars of aid during the War On Terror and therefore, they should do as they are told. Since US aid is ongoing and mostly of a military nature, the powerful military in Pakistan is plainly on the US side of the argument.
Last week, Asian newspapers were reporting that Condoleezza Rice has threatened India with US sanctions under the Iran-Libya Sanctions Act (ILSA) that allows President George Bush to punish any international company investing more than $20 million in Iran’s energy sector. Both the Hindustan Times of India and Pakistan’s paper, Dawn, have since reported that the same threat has been made to Pakistan. These sanctions apply to investments in Iran and its questionable if they should, or can be applied to the purchase of gas or oil.
Suddenly, this week there is a ray of sunshine on the horizon.
Putting their own interests first in a deal separate from the pipeline, on Monday India independently inked a $22 million deal with Iran for 5 million tons of LNG per year beginning in 2009. India is continuing to negotiate for another 2.5 million tons. Indian Petroleum Minister Mani Shankar Aiyar also expressed India’s interest in making investments in Iran’s petroleum projects according to the Iranian News Agency.
On Tuesday, Foreign Office spokesman Jalil Abbas Jilani pointed out that Pakistan understands the US concerns, but Islamabad’s national interest has to come first; strongly suggesting both consternation with the US interference, and his intention to continue negotiations with Iran and India for the pipeline.
In a briefing on Thursday, Condoleezza Rice was asked if the US would use sanctions against India and Pakistan. With a carefully guarded reply she said “We’ve communicated our concerns to both Pakistan and India about this, but we have very positive relations with Pakistan and India.” When asked directly on the subject, she pointed out that “… we are sharing our concerns in a constructive way with them and not in a negative way.”
It has not been in the recent experience of either Pakistan or India that US policy would actually have concerns regarding their welfare. The Hindustan Times carefully reported in less than confident terms “Secretary of State Condoleezza Rice has indicated that the US may not impose sanctions…” and likewise the headline for the article in Pakistan’s Dawn reads “Pipeline not to draw sanctions, hints Rice”. They fully understand that whatever is politically indicated may not, in reality be the case. You can never be sure the US is going along until they get on the train … and the train pulls out!
Assuming that Bush does act out of character and decides not to sanction Pakistan and India, Iran would receive considerable monetary benefit over the next few years. An opportunity to stick a pin in Iran would be missed.
Failure to confront or punish these countries for not cooperating with US policy would be unexpected, not at all typical of the Bush Administration. Perhaps we just don’t need another confrontation with the few friends we have left, at least for the moment. Perhaps we have noticed that our bullying everyone is unifying the Asian countries to look askance at us and we need to consider our own aspirations for a pipeline. Perhaps we need to continue selling weaponry in the area to support our weapons industry. Perhaps we need to give a little time and attention to some of the important issues on the domestic front, if the administration thinks there are any beyond social security. Perhaps … perhaps indeed! We may be assuming too much.
Pakistan has been considering a pipeline from the United Arab Emirates at Sharjah under the sea to Pakistan, and another pipeline from Turkmenistan across Afghanistan and into Pakistan. Major US oil companies (UNOCAL) have an interest in the latter project, which naturally has the attention of the Bush Administration. The advantages of a pipeline under the sea would be offset by a very high initial expense and continued maintenance. The project through war-torn Afghanistan does not appear to be a reasonable alternative either, in the reasonably near future. UNOCAL’s only real interest in the area is in bringing oil from central Asia through Pakistan to the sea to be shipped to the US. This has always been our main interest in Pakistan.
Of crucial interest to Pakistan is a pipeline from Iran through Pakistan to India. This would assure a continued reliable supply of liquefied natural gas for many years to come.
In addition to obtaining a secure supply of its own, Pakistan would inherit revenues of more than $700 million each year in transit fees on the pipelines to India. Negotiations for this project have been going on for more than ten years, but because of the relatively cold relations between these three countries in the past, little has been accomplished beyond occasionally talking to one another. India would further sweeten the pot for Pakistan by laying a pipeline from the Punjab region to Lahore to meet the requirements of Pakistan’s diesel fuel needs, that now are approaching nearly 5 million tons a year.
Although Iran and India were on opposite sides during the Cold War, they found themselves in concert as they both supported the Northern Alliance opposing the Taliban in Afghanistan. In 2003 India and Iran made agreements worth over $25 million and engaged in joint military exercises. Trade between India and Iran is up 20% in the past year.
India is in desperate need of energy. She presently imports well in excess of two-thirds of her energy needs. President Pervez Musharraf says that it is impossible for India to secure its energy requirements without access to natural gas resources in the surrounding neighborhood. Without new sources of energy, India will not be able to grow at the annual seven percent plus, projected growth rate.
Iran has the second largest gas reserves in the world. A pipeline to India would be nearly as profitable for Iran as the proposed pipeline to Europe.
Indeed this is the rub! Not only does the pipeline from Iran to India compete with UNOCAL’s interests, but it also strengthens the ties between these adjoining countries; and one of those countries is a member of the “axis of evil.”
Prime Minister Khurshid Kasuri has tried to convince the US that Pakistan, in her national interests, cannot walk away from this project. Because of the current dependence of Pakistan on US aid, the US has simply is taken the position that it has bought the Pakistanis with over a billion dollars of aid during the War On Terror and therefore, they should do as they are told. Since US aid is ongoing and mostly of a military nature, the powerful military in Pakistan is plainly on the US side of the argument.
Last week, Asian newspapers were reporting that Condoleezza Rice has threatened India with US sanctions under the Iran-Libya Sanctions Act (ILSA) that allows President George Bush to punish any international company investing more than $20 million in Iran’s energy sector. Both the Hindustan Times of India and Pakistan’s paper, Dawn, have since reported that the same threat has been made to Pakistan. These sanctions apply to investments in Iran and its questionable if they should, or can be applied to the purchase of gas or oil.
Suddenly, this week there is a ray of sunshine on the horizon.
Putting their own interests first in a deal separate from the pipeline, on Monday India independently inked a $22 million deal with Iran for 5 million tons of LNG per year beginning in 2009. India is continuing to negotiate for another 2.5 million tons. Indian Petroleum Minister Mani Shankar Aiyar also expressed India’s interest in making investments in Iran’s petroleum projects according to the Iranian News Agency.
On Tuesday, Foreign Office spokesman Jalil Abbas Jilani pointed out that Pakistan understands the US concerns, but Islamabad’s national interest has to come first; strongly suggesting both consternation with the US interference, and his intention to continue negotiations with Iran and India for the pipeline.
In a briefing on Thursday, Condoleezza Rice was asked if the US would use sanctions against India and Pakistan. With a carefully guarded reply she said “We’ve communicated our concerns to both Pakistan and India about this, but we have very positive relations with Pakistan and India.” When asked directly on the subject, she pointed out that “… we are sharing our concerns in a constructive way with them and not in a negative way.”
It has not been in the recent experience of either Pakistan or India that US policy would actually have concerns regarding their welfare. The Hindustan Times carefully reported in less than confident terms “Secretary of State Condoleezza Rice has indicated that the US may not impose sanctions…” and likewise the headline for the article in Pakistan’s Dawn reads “Pipeline not to draw sanctions, hints Rice”. They fully understand that whatever is politically indicated may not, in reality be the case. You can never be sure the US is going along until they get on the train … and the train pulls out!
Assuming that Bush does act out of character and decides not to sanction Pakistan and India, Iran would receive considerable monetary benefit over the next few years. An opportunity to stick a pin in Iran would be missed.
Failure to confront or punish these countries for not cooperating with US policy would be unexpected, not at all typical of the Bush Administration. Perhaps we just don’t need another confrontation with the few friends we have left, at least for the moment. Perhaps we have noticed that our bullying everyone is unifying the Asian countries to look askance at us and we need to consider our own aspirations for a pipeline. Perhaps we need to continue selling weaponry in the area to support our weapons industry. Perhaps we need to give a little time and attention to some of the important issues on the domestic front, if the administration thinks there are any beyond social security. Perhaps … perhaps indeed! We may be assuming too much.
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