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Vigorous U.S. opposition to a proposal for a gas pipeline that would link Iran, Pakistan and India is a case in point. In reality, such a pipeline would (a) increase Iran's vulnerability to U.S. naval attack on the pipeline, (b) develop a military constituency in Pakistan that favors business over conflict with India, and (c) open a market for U.S. companies to be engaged in the refinement and shipment of the natural gas.
Had Washington offered India and Pakistan help with an alternative route, it would have eased suspicions that the core U.S. objective is to prevent the development of a plentiful supply of natural gas other than U.S.-controlled ones in the Middle East. Such a route exists in the form of a proposal for a gas pipeline that would link Central Asia with the Sui fields in Pakistan and onward to markets in India. This would have the strategic advantage of (1) promoting development of precisely those areas in Afghanistan and northern Pakistan that are vulnerable to jihadi recruitment of unemployed youth, (2) save at least US$3 billion in costs of construction, owing to the shorter route, (3) free Central Asian gas producers from the current necessity of selling their products to Gazprom at cut-rate prices, and (4) create a strong mercantile interest within Pakistan for friendly relations with India.
Within Pakistan and into Amritsar in India, the length of the pipeline would be less than 900 kilometers, and would pass entirely within countries friendly to the United States. In contrast, the proposed Iran-Pakistan-India route would be much longer, and pass through troubled Baluchistan, where every week the Sui pipe is getting blown up by those seeking autonomy or independence for the Baloch people. Even excluding the cost of land, the pipeline would cost US$6 billion to construct. Because a higher cost means more bribes, politicians in Iran, Pakistan and India favor this route over a more reasonable alternative, which is a sea link.
First proposed by an oil expert based in Washington, this would involve a submarine pipeline from Iran through the waters off Pakistan to Gujarat state in India, home of the giant Reliance Petrochemicals complex. The waters near the coast are relatively shallow, and up to 10 kilometers of pipeline can be laid by ocean barges. Going through sea lanes would avoid the need for land purchases and skirt the problems of insurgency in Baluchistan and disaffection among Pashtun tribes on the Afghan-Pakistan border. Of course, although the pipeline would not create any social problems, a huge "disadvantage" is that very little slush money would be generated through this option, unlike the overland route, where costs could be padded by high markups. Small wonder that few politicians in Iran, Pakistan or India are talking of an undersea route.
Such pipelines have been built before, most notably the Lagos-Ivory Coast/Ghana one built by Chevron and the Sicily-Libya pipeline built by Eni. The pipeline would commence at the Iranian port of Chahbahar and be laid eastwards at a distance of around 10 kilometers along the Makran coast, and then off Karachi to Gujarat. The total cost of the 1200-kilometer pipeline would be US$2 billion, a sum well within the financing ability of any of the three participating countries. Besides, as the Pakistan navy would have primary responsibility for safeguarding the pipeline, it would increase the influence of this more outward-looking and liberal wing of the Pakistan military over the still-jihadist army.
Among the projects that would derive immediate benefit would be the Reliance plant at Jamnagar in India, which is six minutes' flying time from the Badr Air Force base in Pakistan, and the Karachi Hub Power Company, funded by Saudi Arabia. An assured market for Iranian gas from two countries with close military ties to the United States would help ensure the reining in of extremists in Iran. This provided Washington moves away from its gunslinger approach and offers Tehran a nuclear compromise, giving it the Non-proliferation Treaty-assured right to develop nuclear energy for its own use, rather than seeking to arbitrarily change the NPT rules and make Iran as much of an international nuclear pariah as India, though Tehran has not detonated a nuclear device or demonstrated the capability of doing so.
In Iraq, the very fact that the U.S. military could have a 20-mile supply convoy on local roads showed that no rational planner within the Pentagon believed in Saddam Hussein's weapons of mass destruction. Had there been any doubt about this, such a huge flank would not have been left exposed to a WMD attack. Both U.S. President George Bush and U.K. Prime Minister Tony Blair are only now having to explain to their own people the actual reasons they went to war in Iraq.
Rather than leave the execution of the project to the three governments -- none of which is known to be particularly allergic to graft -- it would be better to create special purpose vehicles to implement the scheme and administer it. These could be wholly private or a public-private partnership, with the private interests having the majority stake. Funding could be easily obtained from the Middle East, especially if the SPV were registered in a location such as Dubai. This would open the way for local funds to participate in the costs of the operation, which would have an assured volume of profit.
The roadblock would be the United States, which is adamantly opposed to any project based in Iran unless that country succumbs to its desires. Even a liberal head of state would find this impossible, given the nationalist spirit that has dominated Iran since the toppling of Mohammad Mossadeq in 1953. The second roadblock would be the incompetence of the mullahcracy in Iran, which has no clue as to the needs of a modern economy and is as far removed from market logic as the Himalayas are from the Indian Ocean. Presently, the mullahs have been coming up with contradictory and unrealistic pricing formulas for the gas that Iran would supply, but this is a detail that can be resolved at the political level.
If George Bush is serious about wanting India to get the energy the country needs to power its growth, and for Pakistan and Iran to move away from jihad into less confrontational industries, an Iran-Pakistan-India sea link that sends gas from producer to market would be a hard formula to beat.
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(Professor M.D. Nalapat is Director of the School of Geopolitics at Manipal University.)
