• April 29, 2008

Iran holds key to India’s energy insecurity

Iran holds key to India’s energy insecurity

In the rapidly intensifying international energy game, Iran holds a master key to the most staggering roadblock to India”s economic growth – energy insecurity. With the issue of energy cooperation expected to dominate talks on Tuesday between visiting Iranian President Mahmud Ahmadinejad and his hosts in New Delhi, a new chapter in India-Iran relations is on the horizon that will likely bring the two countries closer together on a long-term basis.

While not an official state visit, since it is Indian Prime Minister Manmohan Singh”s turn to visit Iran, Ahmadinejad”s brief yet significant stopover after his trips to Sri Lanka and Pakistan has been widely interpreted by the global media as a landmark development that will usher in a new era of energy cooperation between energy-starving India and energy-rich Iran, which is also

a suitable conduit for the third-country supply of energy to India, given Iran”s expanding oil and gas connections to landlocked Central Asian nations.

With oil prices skyrocketing, India”s thirst for cheaper imported gas has acquired a greater urgency than ever before, considering what the Hindustan Times has termed as the growing “supply-demand mismatch” reflected in the recent news that “as against an overall requirement of 77 million standard cubic meters per day (mmscmd) of gas between April 2007 and January 2008, only 37 mmscmd was supplied”.

Sure, India has other prospects besides Iran and, in addition to investing in Yemeni oil fields and negotiating with Saudi Arabia, Oman and Qatar, questing for a piece of the Iraqi energy market and scouting various African countries (such as Nigeria, Chad, Angola, Cameron and Congo), Indian officials have also been playing catch-up with China in Central Asia lately, seeking deals with Kazakhstan and Turkmenistan.

But with the Turkmenistan”s proximity to Iran and Iran”s ability to act as an energy corridor for the sub-continent, the salient importance of Iran is indisputable.

In addition to the US$7.6 billion Iran-Pakistan-India (IPI) pipeline, India has set its eyes on a Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline that is, for now at least, more of a pipedream because of growing insecurity in Afghanistan, reflected in the bold assassination attempt on President Hamid Karzai in Kabul this week.

President Gurbanguly Berdymukhamedov of Turkmenistan has called for a United Nations convention on pipeline security, but few expect that the opponents of the government in Kabul, which has limited control outside the capital, will honor any such conventions. As soft targets, pipelines have been attacked in both Pakistan and India and while the IPI pipeline will go through insurgency-infested Balochistan province in Pakistan, there is ample reason to believe that Islamabad can provide sufficient security through a deft combination of surveillance and economic carrots for the ethnic Balochis.

Thus, with the TAPI put on hold pending security developments in Afghanistan, India, which has come out empty handed from its recent gas efforts with respect to, among others, Myanmar and Bangladesh, has woken to the simple fact that nearly all roads lead to Tehran.

So, instead of TAPI, a revised TIPI (Turkmenistan-Iran-Pakistan-India) may be plotted, whereby Turkmenistan”s plentiful gas reserves can reach both India and Pakistan. This is not to mention Iran”s ability to expand its present oil-swap agreements, for example with Kazakhstan, whereby India could collect at Iran”s Persian Gulf terminals the equivalent of what the Kazakhs, or for that matter Azerbaijanis or even Russians, deliver at Iran”s northern and Caspian points. Iran”s hitherto ill-explored oil riches in its Caspian sector are also a candidate for joint ventures with Indian companies.

Already, beginning in 2005, Iran and India have entered into a $40 billion, 25-year LNG (liquefied natural gas) agreement, and India, along with China, is a (30%) shareholder of a joint company to develop Iran”s largest oil field, the Yadavaran. Iran and India have also reached an agreement for development of Chahbahar and construction of a highway from that port city to Afghanistan and Central Asia, as part and parcel of the ambitious project known as the North-South Corridor.

The Oil Ministry in Tehran posits India as the fourth-largest consumer of Iran”s energy, while India, which imports more than two thirds of its oil needs, anticipates this figure to increase by up to 90% by 2030 following a 1997 parliamentary document “Hydro-carbon Prospects 2025”. New Delhi therefore has no alternative, whatever the side-effects with respect to its relations with the US, but to pursue a comprehensive energy cooperation with Iran.

Hypothetically then, what is needed is a follow-up to the 1997 report by the Indian parliament”s energy committee, which lamented the absence of a “coherent and long-term” energy strategy and which acknowledges the dual role of Iran, both as a source of energy as well as an outlet for other countries” energy exports to India.

Maybe then US lawmakers will realize why their Indian counterparts have risked violating US sanctions laws on Iran that forbid such bold initiatives by New Delhi toward Iran. And these, by all accounts, are not limited to energy, but include the entire gamut of economic, trade, cultural, political and even security cooperation.

Kaveh L Afrasiabi, PhD, is the author of After Khomeini: New Directions in Iran”s Foreign Policy (Westview Press) and co-author of “Negotiating Iran”s Nuclear Populism”, Brown Journal of World Affairs, Volume XII, Issue 2, Summer 2005, with Mustafa Kibaroglu. He also wrote “Keeping Iran”s nuclear potential latent”, Harvard International Review, and is author of Iran”s Nuclear Program: Debating Facts Versus Fiction.

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