VACILLATION, confusion, indecision — or maybe governments have been unable to understand that the truth will eventually come out. And so it was on Monday that the Senate Foreign Affairs Committee was informed by the minister and secretary of petroleum and natural resources that the Iran-Pakistan gas pipeline can neither be built on the Pakistani side nor can gas flow through it without attracting sanctions imposed by the US and the international community for doing business with Tehran. This after years of hemming and hawing, first by the PPP government and for months now by the PML-N rulers. Even now, however, neither Petroleum Minister Shahid Khaqan Abbasi nor Petroleum Secretary Abid Saeed have specified precisely which sanctions — US or UN — affect the pipeline, how they affect the IP pipeline plans and whether there is any discretion available that can allow Pakistan to make a case for an exemption that is much needed by its desperately energy-starved economy.
It would also be reasonable to ask if Pakistan’s ties with Saudi Arabia — which has gone into paroxysms over the recent deal between Iran and the P5+1 group — are part of the equation of the Pakistani government. Surely, Saudi Arabia’s intense rivalry with, if not outright animosity towards, Iran will have caused policymakers there to fret at the idea of an important new economic link between Iran and Pakistan at this point in the history of a tumultuous Middle East and Persian Gulf. Tricky as it may be for Pakistan to navigate all the geopolitical cross-currents affecting the pipeline, that is surely not an excuse to pretend every once in a while that movement on completing the pipeline is in fact taking place while in reality doing little to identify and protect the country’s economic interests.
Failure on the diplomatic front is one thing (and it’s surely a failure to not explicitly explain what the sanctions-related issues are and to refrain from mounting a campaign for permissible exceptions) and failure on the domestic energy planning front quite another. If the IP pipeline cannot be completed, what are the government’s medium- and long-term plans to bridge the enormous gap between supply and demand for gas? Construction of an LNG terminal may be under way as Mr Abbasi told the Senate committee, but the multibillion-dollar contracts for gas to be signed have yet to materialise. And given the enormous subsidies that gas consumers here are granted, how will the government truly be able to charge four to six times the existing gas costs without succumbing to manipulation by the usual special interests? Or is there really no way of ramping up domestic exploration for gas, despite pricing, security and province-centre constraints? Promising good and timely policies does not translate into real policies, as the government seems to be hoping.
Wednesday, January 8, 2014
Pakistan: IP pipeline: yes or no?
VACILLATION, confusion, indecision — or maybe governments have been unable to understand that the truth will eventually come out. And so it was on Monday that the Senate Foreign Affairs Committee was informed by the minister and secretary of petroleum and natural resources that the Iran-Pakistan gas pipeline can neither be built on the Pakistani side nor can gas flow through it without attracting sanctions imposed by the US and the international community for doing business with Tehran. This after years of hemming and hawing, first by the PPP government and for months now by the PML-N rulers. Even now, however, neither Petroleum Minister Shahid Khaqan Abbasi nor Petroleum Secretary Abid Saeed have specified precisely which sanctions — US or UN — affect the pipeline, how they affect the IP pipeline plans and whether there is any discretion available that can allow Pakistan to make a case for an exemption that is much needed by its desperately energy-starved economy.
It would also be reasonable to ask if Pakistan’s ties with Saudi Arabia — which has gone into paroxysms over the recent deal between Iran and the P5+1 group — are part of the equation of the Pakistani government. Surely, Saudi Arabia’s intense rivalry with, if not outright animosity towards, Iran will have caused policymakers there to fret at the idea of an important new economic link between Iran and Pakistan at this point in the history of a tumultuous Middle East and Persian Gulf. Tricky as it may be for Pakistan to navigate all the geopolitical cross-currents affecting the pipeline, that is surely not an excuse to pretend every once in a while that movement on completing the pipeline is in fact taking place while in reality doing little to identify and protect the country’s economic interests.
Failure on the diplomatic front is one thing (and it’s surely a failure to not explicitly explain what the sanctions-related issues are and to refrain from mounting a campaign for permissible exceptions) and failure on the domestic energy planning front quite another. If the IP pipeline cannot be completed, what are the government’s medium- and long-term plans to bridge the enormous gap between supply and demand for gas? Construction of an LNG terminal may be under way as Mr Abbasi told the Senate committee, but the multibillion-dollar contracts for gas to be signed have yet to materialise. And given the enormous subsidies that gas consumers here are granted, how will the government truly be able to charge four to six times the existing gas costs without succumbing to manipulation by the usual special interests? Or is there really no way of ramping up domestic exploration for gas, despite pricing, security and province-centre constraints? Promising good and timely policies does not translate into real policies, as the government seems to be hoping.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment