Energy security, diplomacy and pipeline corridors in EURASIA

Energy security, diplomacy and pipeline corridors...all over EURASIA


The high probability is that United States President Barack Obama's Muslim speech on June 4 from Cairo will not contain specifics. Most wise men underscore that the charismatic statesman should stick to values rather than waste breath on substance.

True, that is a safe route for a great orator like Obama. Values resonate in Obama's magnificent voice. Grand speeches, after all, can hardly be a good platform for policy-making.

However, substance, fresh substance, and lots of it - that's what Middle Easterners impatiently seek to hear from the youthful president. With native Levantine wisdom dipped in wit, prominent columnist Rami Khouri wrote, "No offense, but nobody in the Middle East really cares about Obama's ancestors or youth years, or his views on other religions. What we care about - and what the US president should explain on this trip - is whether the US government believes that habeas corpus and the Fourth Geneva Convention, for example, apply with equal force to Arabs as well as to Israelis.....and to American Forces worldwide....and about the ICC double standards....."

Equally, for southwest Asians tuning into the Cairo speech, the big question is what the US president can offer by way of renewed momentum to his AfPak strategy, which vacillates between failure and avoidance of failure. What the US needs is a grand idea that can decisively propel the AfPak strategy over the barren, stony, steep ridge onto the lush green valley that lies beyond. Cairo could just be the platform from where to introduce such an idea.

It won't happen, but the idea exists. It has been around and may seem a hackneyed idea but it is still a workable one, which, if fleshed out, could potentially become a solid underpinning of the AfPak strategy. The fantastic thing about it is that in a manner of speaking, it is also a "Muslim idea", as it engages the US with two countries in the topmost rungs of the Islamic world.

It is not only cost-effective but also eminently profitable, as it concerns the priceless commodity of natural gas. Most important, it creates a geostrategic matrix involving some of the key countries that can make all the difference between success and failure of the AfPak strategy - Iran, Pakistan, India and China.

The time has come for the US to take a serious look at the idea that it should be the promoter of a natural gas pipeline project leading from Iran's gigantic, untapped South Pars fields to Pakistan and further on to India and possibly extending all the way to China's heavily populated southeastern provinces.

As the US's direct engagement of Iran gets going after the presidential election in Iran later this month, Obama will come across the dilemma of prompting Iran to think on the "right track": how to make Iran a "stakeholder" in the region? Offering hot dogs to Iranian diplomats at garden parties on Independence Day in the sprawling American chancelleries is one way of doing it, but Iranians have sharp bazaar instincts and are unlikely to be impressed. Releasing spare parts for Iran's aging fleet of Boeing aircraft could be another way, or the opening of an Interest Section in the Iranian capital, but Persians aren't rabbits nibbling at carrots. Persians settle only for grandiloquent, sweeping conceptions.

No doubt, the moveable feast of US-Iran engagement needs a tantalizing confidence-building measure as an "appetizer". Iran's archaic energy sector could just provide the right quarter. Iran's oil industry desperately needs technology and modernization. And income from oil is Iran's lifeline. Iran's managerial cadres and technocrats have a high opinion of American oil technology. Big Oil needs no introduction to Iran, either. The Chinese would say this is a "win-win" situation.

Provided, of course, Big Oil moves fast. The Europeans are ahead of it, and so are the Russians. The race for Iran's South Pars promises to be a photo-finish. As a perceptive American expert put it, the signing event of the Iran-Pakistan gas pipeline project in Tehran on May 24 by Iranian President Mahmud Ahmadinejad and his Pakistani counterpart Asif Ali Zardari "illustrates the obsolescence and, increasingly, the futility of an 'isolation' policy that tries to keep Iranian gas locked in the ground".

Russia's Gazprom is poised to join the Iran-Pakistan project, no matter the US sanctions. "We are ready to join as soon as we receive an offer," Russia's Deputy Energy Minister Anatoly Yanovsky said. That offer may well be made to the Russians on the sidelines of the Shanghai Cooperation Organization (SCO) summit meeting scheduled to take place in Yekaterinburg in Russia on June 15, which brings together the leaders of Iran, Pakistan and Russia (and China and India). The Iran-Pakistan gas pipeline meshes with the grand idea that former Russian president Vladimir Putin (now premier) floated four years ago - a SCO "energy club".

Gazprom executives have done their homework. According to Kommersant newspaper, Gazprom can act as a contractor for the pipeline construction work and as the operator of the pipeline even after its completion. Also, Gazprom is keen to get access to gas volumes from South Pars which it could then sell to India.

Russia is keen that Iranian gas is diverted to the Asian market. Kommersant quoted a Russian official as saying, "This project is advantageous to Moscow since its realization would carry Iranian gas toward South Asian markets so that in the near future it would not compete with Russian gas to Europe." Moscow is enormously experienced in the gas market. It anticipates that gas demand in the Asian market is bound to go up exponentially once the current recession is over.

In political terms, Moscow visualizes that once the US engages Iran directly in the very near future, the enforceability of US sanctions will dissipate overnight and therefore, it is necessary to strike ahead of potential Western competitors.

To be sure, from the US perspective, there is a lot more to the South Pars area than highly lucrative business. The Iran-Pakistan pipeline project is one of those rare business deals where geostrategy comes into play from day one. Consider the following.
Making Iran a stakeholder in regional stability will immeasurably strengthen the hand of the US's AfPak special representative Richard Holbrooke when he negotiates a "grand bargain" with Tehran for Afghanistan's stabilization. In short, the gas pipeline project can be a vital component of Holbrooke's "regional initiative". Diplomacy gains in momentum when it deals with tangibles.

Holbrooke should also speak to the Indians to shed their reservations about participating in this project. Delhi is presently holding back for two or three reasons, which seem tenuous at best. One, Indians are wary of having anything to do with a capital-intensive project that involves Pakistan. They say Pakistanis are an unpredictable lot and might cut off the gas supplies, which could put in jeopardy billions of dollars worth of downstream investments in the Indian economy.

They say the ground situation in the Pakistani province of Balochistan through which the pipeline passes is highly volatile and disruptions in supplies can ensue. Finally, Indians are ostensibly unhappy with the price structure offered by Tehran. At the back of it all, there are unspoken considerations. First, Delhi is upset that Tehran retracted on a massive gas deal that Delhi thought it had wrapped up in 2004.

Second, Delhi is petrified as to what Washington would think if it stepped out of line and dealt with Iran so long as the US-Iran standoff continued. Then, there is the increasingly influential pro-Israel lobby within the Indian establishment. On top of it all, there are powerful Indian energy conglomerates that are the driving force behind the government's energy policies and who fear the price for gas in India's opaque gas market will be affected once Iranian gas enters the Indian grid.

But Obama can easily wade through this South Asian mumbo-jumbo. Arguably, he is the only man under the sun today who can do so. The Indian strategic community would be hard-pressed to say "nyet" if he proposed. Therefore, Washington should step forward as the guarantor of an Iran-Pakistan-India gas pipeline project. At one stroke, that takes care of the Indian elite's angst.

Obama should tell Indians that the huge gas pipeline project is the right thing to do for stabilizing the India-Pakistan relationship and for putting it on a predictable footing. The relationship is inherently brittle because it lacks content. Content engenders mutuality of interests, creates leverages and locks partnerships. Washington's regional policies stand to gain if the India-Pakistan relationship is stabilized and therefore, Obama is an interested party.

Big Oil should also play a part in the project on the lines Gazprom offered. In fact, one of the biggest energy markets in the world opens up in the Indian sub-continent in terms of activities such as developing a South Asian gas grid, retail trade and petrochemical industries.

China will be eager to join the South Asian gas pipeline project. In strategic terms, the US has an opportunity to get Iran, Pakistan, India and China on board on one single project. The strategic implications for US regional policies are far-reaching. The Cold War experience on the European theater is that mega-pipeline projects can act as stabilizers in East-West relations.

If German policies toward Russia are transforming so visibly today, the principal reason is the bond that ties them together via energy deals. The proposed North Stream project will accentuate the trend in German-Russian ties; Russian-Italian relations gain from the South Stream and Russian-Turkish relations from the Blue Stream pipeline.

In the ultimate analysis, the answer to South Asian region's severe instability lies in economic development. An editorial in Pakistan's Dawn newspaper said: "Fears have been expressed that the turmoil in Balochistan will threaten the security of the pipeline since a great length of the 1,000 kilometers inside Pakistan passes through that province which borders Iran. Islamabad could convert this factor to its advantage if it can ensure that in the construction of the pipeline indigenous labor is hired and the gains of the economic activity generated by projects of such magnitude are focused on Balochistan for the benefit of its poverty stricken people."

Obama would know that according to hearsay, the troublesome, one-eyed Taliban leader Mullah Omar got onto a motorbike and rode into the night towards these very same poverty stricken people of Balochistan for shelter when he was driven out of Kandahar in the winter of 2001.

The US's regional policies must, therefore, refocus. Whereas today India and Pakistan are locked in a deathly dance - with Indians determined to become the pre-eminent military and nuclear power in the region and Pakistanis ensuring that doesn't happen - Obama can gently initiate them into the Third Way.

No American president in living memory has had Obama's measure of humanism. Cairo could have been the platform from where Obama spelt out an "AfPak dream", to use the words of Dr Martin Luther King....

This is the time for Islamabad to exploit Washington’s desperation. SecDef Robert Gates is pleading Asia to support America’s failed Afghan project, while his colleague the U.S. Treasury Secretary is begging China to continue financing the U.S. government. The Americans are behind a Sunni militant group fighting for secession in Iran’s Baluchistan and another ethnic militia in Pakistan’s Balochistan. The U.S. media leak on American weapons going to Afghan militants is a cover-up meant to hide what the Pakistani Army has discovered in Swat, that terrorists are using sophisticated American [and Indian] weapons to kill Pakistanis. Islamabad needs to end the American highhandedness, beginning with limiting CIA outposts in Pakistan.

—The latest scare story on Pakistan’s nukes is a breath of fresh air. Instead of the unnamed sources, which have been the basis for the anti-Pakistan demonization campaign in the U.S. media, this time we have no less than President Obama’s point man on South Asia, M. Bruce Riedel, coming out with an op-ed that leaves little mystery in the debate over whether Washington is exploiting terrorism to target Islamabad’s nuclear weapons arsenal.

Mr. Riedel is one of the key proponents of the theory that the Pakistani military needs to be transformed into a little more than a glorified local police force watching out for U.S. interests. It is pointless to counter the arguments of such determined imperialists who are shamelessly interfering in Pakistan. What is more important at this stage is to understand how our supposed ally has taken us for a ride and how we need to exploit the new American desperation in the region to get a better deal than the one currently in hand.

There is a growing body of evidence that the U.S. is supporting terrorism in our region to further its strategic objectives. In Iran, a secretive sectarian group is trying to rally the people of Iran’s Sistan-Balochistan province for secession from Tehran. In Pakistan’s Balochistan, an ethnic group has risen from the dead to campaign for secession. The only thing common to both groups is that they emerged after the U.S. landed in Afghanistan and turned that poor country into a source of region-wide destabilization. So much for fighting terror.

The Pakistani military has also admitted over the weekend what Pakistan’s pro-U.S. government has been hiding for months. The weapons that the terrorists – the fake Pakistani Taliban – are using to kill Pakistanis are coming primarily from U.S. and India. The Pakistani military leadership first confronted Adm. Mullen and CIA Deputy Director Stephen Kappes about this in a secret meeting in Rawalpindi last July. As in all insurgencies, the terrorists in our northwestern belt are a mix of local elements bolstered by professional fighters from U.S.-controlled Afghanistan. The Pakistani military has squeezed these terrorists so hard now that there is little doubt where the support for this anti-Pakistan terror campaign is coming from. To avoid embarrassment, Washington quickly ‘leaked’ a story that U.S. weapons meant for the Afghan army have reached insurgents. The timing of the leak conveniently coincides with the Pakistani army catching the American double game pants down.

Some members of the Karzai puppet regime have privately confirmed to Pakistani officials that they are incapable of stopping Indian terrorist activities on Afghan soil.

None of this will stop unless Pakistan firmly puts the leash on CIA outposts inside Pakistan. There is no question that CIA and Pakistani spy agencies were allies during the 1980s. But let us not forget that the CIA station in Pakistan recruited twelve insiders and used them to plan sabotage from within before being busted by chance in 1978.

Now the U.S. strategic interest in the region is largely divergent from that of Pakistan’s. U.S. officials, like Mr. Riedel, have little respect or appreciation for Pakistan’s right to have its own national security perspective and not rely on U.S. think tanks to adopt one. Today, Pakistan is paying for the blank check that our government and intelligence agencies gave the Americans on the ground in Balochistan and the tribal belt.

America is desperate in Afghanistan. U.S. officials have launched a fresh charm offensive to pacify the alienated Pakistanis. A panicked and bankrupt Washington is also trying to scare Asia into doling out money to save America’s failed occupation in Afghanistan. This is the time for Islamabad to demand Washington cease all the propaganda about Pakistan’s nukes, about the fabled ten billion dollars in aid, and stop turning the world against Pakistan. The elected government needs to muster some guts to confront Washington on this instead of leaving all the tough talk to Pakistani military leadership.

There is a golden opportunity out there to put a leash on CIA activities in Pakistan which we had consented to after 9/11. The American goal posts have shifted. Pakistan is no longer bound by the same deal....