The Pak-Iran gas pipeline, long presented as the best hope for overcoming our energy crisis, now appears to be dead. And with this devastating development we need to bury all the loud talk, repeated promises, tall claims of sovereignty and freedom to take decisions in our national interest, especially coming from our old and new rulers. The writing had been on the wall for some time. The US was particularly vociferous in warning Pakistan against going through with the project and international sanctions against Iran made it difficult for us to raise the $2 billion needed to build our portion of the pipeline. We had earlier requested Iran to fund us in this endeavour but, now that their oil minister has said that the contract for supplying gas to Pakistan will likely be annulled, that means the certain end of the pipeline. Iran had already constructed the pipeline on their side of the border but the added expense of paying for Pakistan’s part of the pipeline and the fear that we would abandon the project under US pressure has forced the Iranians to take this drastic step. As recently as last week, Nawaz Sharif was making the case for the pipeline at international forums and vowing not to bow down to international pressure. But Pakistan’s past of meek subservience to the superpower obviously weighed heavy on Iran’s mind. Let us be clear though: that the pipeline will not be pursued is because of the US, which wants to isolate Iran for its nuclear programme.
Some doubts had recently been raised about the efficacy of the pipeline. One organisation, the Sustainable Development Policy Institute (SDPI), claimed that Iran would have sold gas to Pakistan at many times the price of domestic gas. This, according to the institute, would have spelled an economic disaster for the country. That did not necessarily have to be the case. The price of domestic gas is indeed quite low right now but that is only because the government heavily subsidises its use. As we begin to run out of gas, those subsidies are gradually being reduced and we will most likely be paying the market price of gas within a few years. The SDPI also ignored how quickly our gas supplies are being depleted. Moving away from gas is simply not an option for us after the Musharraf government made switching to CNG such a priority. Our gas addiction will have to be fed, and Iran was the best option for that. Now the only available alternative is the Tapi pipeline, which comes with an American seal of approval. Constructing the Tapi pipeline will be fraught with risk though since it will run through Taliban-infested parts of Afghanistan. Still, now that the US has scuttled the Iranian pipeline, we have been forced into a corner and left with no other choice.
Friday, November 1, 2013
Pak-Iran gas pipeline: End of the line?
The Pak-Iran gas pipeline, long presented as the best hope for overcoming our energy crisis, now appears to be dead. And with this devastating development we need to bury all the loud talk, repeated promises, tall claims of sovereignty and freedom to take decisions in our national interest, especially coming from our old and new rulers. The writing had been on the wall for some time. The US was particularly vociferous in warning Pakistan against going through with the project and international sanctions against Iran made it difficult for us to raise the $2 billion needed to build our portion of the pipeline. We had earlier requested Iran to fund us in this endeavour but, now that their oil minister has said that the contract for supplying gas to Pakistan will likely be annulled, that means the certain end of the pipeline. Iran had already constructed the pipeline on their side of the border but the added expense of paying for Pakistan’s part of the pipeline and the fear that we would abandon the project under US pressure has forced the Iranians to take this drastic step. As recently as last week, Nawaz Sharif was making the case for the pipeline at international forums and vowing not to bow down to international pressure. But Pakistan’s past of meek subservience to the superpower obviously weighed heavy on Iran’s mind. Let us be clear though: that the pipeline will not be pursued is because of the US, which wants to isolate Iran for its nuclear programme.
Some doubts had recently been raised about the efficacy of the pipeline. One organisation, the Sustainable Development Policy Institute (SDPI), claimed that Iran would have sold gas to Pakistan at many times the price of domestic gas. This, according to the institute, would have spelled an economic disaster for the country. That did not necessarily have to be the case. The price of domestic gas is indeed quite low right now but that is only because the government heavily subsidises its use. As we begin to run out of gas, those subsidies are gradually being reduced and we will most likely be paying the market price of gas within a few years. The SDPI also ignored how quickly our gas supplies are being depleted. Moving away from gas is simply not an option for us after the Musharraf government made switching to CNG such a priority. Our gas addiction will have to be fed, and Iran was the best option for that. Now the only available alternative is the Tapi pipeline, which comes with an American seal of approval. Constructing the Tapi pipeline will be fraught with risk though since it will run through Taliban-infested parts of Afghanistan. Still, now that the US has scuttled the Iranian pipeline, we have been forced into a corner and left with no other choice.
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