[A-List] Iran Holds Key to India's Energy Insecurity

["Yoshie Furuhashi" <critical.montages@xxxxxxxxx>]

<http://www.atimes.com/atimes/Middle_East/JD30Ak02.html>
Apr 30, 2008
Iran holds key to India's energy insecurity
By Kaveh L Afrasiabi

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.

<http://www.atimes.com/atimes/Middle_East/JD29Ak03.html>
Apr 29, 2008
Iran steps into enemy's territory
By Kaveh L Afrasiabi

This week, with his three-nation tour of Pakistan, Sri Lanka and
India, Iran's President Mahmud Ahmadinejad will fortify Iran's
regional ties and thus achieve a milestone in his administration's
"Look East" foreign policy orientation.

Accompanied by a high-ranking delegation, Ahmadinejad's trip
transpires at a time of heightened US allegations of Iran's meddling
in Iraq and serves as an antidote to the US policy of isolating Iran
and castigating it as a rogue or pariah state.

Too bad for the US, which now places the lion's share of the blame for
its quagmire in Iraq on Iran's "destructive influence", two key US
allies in the sub-continent, India and Pakistan, are now poised to
deepen their economic, political, cultural and even geostrategic
relations with the Islamic Republic of Iran, irrespective of Tehran's
defiance of United Nations Security Council resolutions calling for a
halt in Iran's uranium-enrichment activities.

Not only that, Sri Lanka, strategically situated in the Indian Ocean,
is also about to enter into a close economic relationship with Iran,
in light of Tehran's funding of the US$450 million multi-purpose Uma
Oya power project and its billion-dollar investment in Sri Lanka's
sole oil refinery [1]. This is bound to enhance Iran's regional clout
as well as create new points of geostrategic synergy between Tehran
and New Delhi.

After all, India "sees Sri Lanka as a sentinel of its security astride
the Indian Ocean", to quote a recent study on India-Sri Lanka
relations, and Iran's strong presence in Sri Lanka has definite
implications in the broader strategic context. In addition to power
and energy, Iran looks to expand its ties with Sri Lanka by expanding
tourism, educational assistance, an employee exchange program,
supplying vessels for Sri Lanka's shipping industry, among others.

As part of Iran's "Look East" (negahe be shargh) policy steered by a
Foreign Minister Manouchehr Mottaki [2] who, compared to his
Western-educated predecessors, received his education in (Bangalore)
India, the new chapter in Iran-Sri Lanka relations has been conceived
in Tehran principally as a reaction to the regime of sanctions and
limitations imposed by the West.

Ahmadinejad's "Look East" strategy, taking a page or two from India's
own eastern strategy of the 1970s through the 1990s, pins its hopes on
building win-win bilateral and multilateral relations and cooperation
in the economic, political and cultural spheres with the non-Western
world. This is basically a subset of an ambitious global strategy that
prioritizes ties with various countries, for example in Asia, Africa,
Central and Latin America, that are visibly anti-America, such as
Cuba, Nicaragua and Venezuela.

Others, such as India and Pakistan, are considered strategic allies of
Iran's chief nemesis, the US. Yet as these two countries forge closer
connections with Iran based on their pressing national interests,
above all energy security, they are forced into a delicate balancing
act with respect to their burgeoning US ties, that may suffer due to
US backlashes against their willingness to defy Washington's will on
isolating Iran.

But, with their Iran diplomacy serving as a litmus test of their
independence, both Pakistan and India have mirrored each other by
standing up to the US's pressure: this is micro-focused on the
Iran-Pakistan-India (IPI)"peace" pipeline - a $7.6 billion gas
pipeline planned to run from Iran through Pakistan and on to India.
After years of wrangling, an agreement might soon be signed.

Recently, at a lecture at Harvard University in the US, Nicholas
Burns, the outgoing US under secretary of state for political affairs,
cited as one of his accomplishments the US's ability to convince India
to stay away from the IPI project that, in the words of his boss,
Secretary of State Condoleezza Rice, at her testimony before the US
Senate in 2006, is in conflict with "the US laws". This in light of an
Iran sanctions act that penalizes foreign corporations or governments
that invest more than $20 million in Iran's energy sector.

But, with the IPI likely to be finalized in the coming weeks, if not
days, and with China and other players keen to participate in the
international bidding for various aspects of this massive project, the
US faces a triple jeopardy. These are:

# Impose reprisals against its important allies and thus alienate them.
# Inaction on this project makes US laws redundant and undermines the
US's image and prestige.
# De facto accommodation of the project will play into the hands of
Iran in its strategic games in relation to the intrusive superpower.

However, despite India's explicit turnaround on the IPI after a
temporary bout of cold feet, reflected in last week's successful
meeting of India's and Pakistan's oil ministers in Islamabad,
Washington has not altogether given up hope the Iran-benefiting
project will be scuttled at the last minute, or at least postponed
further, just as it has been during the past 15 years. (Last week,
India and Iran hammered out their main differences, which related to
the transit fee to be charged by Pakistan for the Iranian gas going to
India.)

On the eve of Ahmadinejad's state visit to Pakistan, where he is
scheduled to sign a gas sales purchase agreement, news from Pakistan
that a Baloch rebel group, the Baloch Republican Army (BRA), has blown
up a gas pipeline disrupting supplies to various Punjab districts
highlights the security problems of the IPI project that traverses 700
kilometers of Pakistani territory, including volatile Balochistan
province.

Given the demands of the BRA for royalties for the region's gas
supplies and job-creation for ethnic Balochis, Islamabad could
conceivably offset threats to the IPI by pledging to use the project
precisely for the economic revival of Balochistan.

An editorial in the Pakistan daily, the Nation, noted that the IPI
will "usher in a new economic era" both internally and also externally
by "adding new dimensions to Pakistan-India relations", in the words
of Pakistani Petroleum Minister Khawaja Muhammad Asif.

Pakistan will need foreign investment and support to cover the costs
of constructing the pipeline going through its territory and expects
institutions such as the World Bank, which has done a feasibility
study on the project and has come out in favor of it, to provide
financial assistance. [3] Yet, the US, which wields enormous clout in
the World Bank, may play the spoiler by blocking such assistance, in
which case it will earn itself the ire of Pakistan's newly-elected
government, as well as India, which needs to upgrade its
infrastructure to realize its dream of addressing its energy crunch
through the IPI pipeline.

Ahmadinejad's "whistle-stop" tour in India, to echo a headline in the
Hindustan Times, will be the shortest leg of his three-day South Asia
tour, yet it has the deepest diplomatic and symbolic significance,
coinciding with a week-long festival of Iranian culture in India that
serves to highlight the historical ties between the countries.

According to the Iranian news agency IRNA, Ahmadinejad's visit will
deepen ties and in his discussions with Indian Prime Minister Manmohan
Singh and Indian President Pratibha Patil, "discussions are set to
cover a number of sectors from energy, the slow moving
Iran-Pakistan-India gas pipeline project to bilateral investment to
civilian nuclear energy".

The Indian media, on the other hand, have reported that last week
Indian External Affairs Minister Pranab Mukherjee sent a letter to
Tehran asserting that India "pursues an independent foreign policy",
thus assuring Tehran that Delhi's recent "standing up to Uncle Sam"
with respect to Iran is not a one-off, but rather a manifestation of
India's "foreign policy realism".

Concerning the latter, Indian National Security Advisor M K Narayanan
recently told a conference in New Delhi that India did not want to be
part of a "compact" dealing with Iran's nuclear issue, that India felt
it was "better placed" to deal with Iran than many other countries,
partly because "we have the second-largest Shi'ite population, so it's
not only a foreign-policy issue, but a domestic issue".

There is a great deal on the India-Iran plate nowadays, and Narayanan
made a point of revealing that "a great deal is taking place between
India and Iran which is not on the public realm".

Notes
1. According to Sri Lanka's official reports, Iran "would cover 70% of
the required investment for the refinery's expansion, in the form of a
10-year loan, with a five-year exemption". Iran is expected to yield
noticeable benefits from its investment, barring unforeseen
developments, such as sabotage and further instability in Sri Lanka
from attacks by Tamil separatists.
2. For more, see the author's interview with Mottaki in
www.thepeoplesvoice.org, September 27, 2006, Saving the Peace
Pipeline, www.agenceglobal.com, August 17, 2007.

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.
-- 
Yoshie
<http://montages.blogspot.com/>