If political pundits of the Left camp in New Delhi are to be believed, Mani Shankar Aiyar was shifted from the ministry of petroleum because he had annoyed the Americans with his vigorous championing of a gas pipeline project that is supposed to bring natural gas from the ‘evil’ state of Iran to energy-hungry India via Pakistan. Indeed, he was an ardent supporter of the gas pipeline idea. But regardless of the unnecessary and deplorable US ‘intervention’ in the proposed tripartite gas deal there are some other factors that make the deal look at the moment incapable of moving beyond an idea.

Not the least of the hurdles comes from the frequent fluctuations in Indo-Iran relations and the very determined American attempts, covert and overt, to scuttle the project before it progresses any further. The Left lobby in India says that Iran has linked its decision to supply gas to India on the latter’s stand on Iran’s nuclear programme.

Then, there is this growing restiveness in Pakistan’s western region where the angry Balochs and the tribals in the Waziristan region have been attacking Pakistani security forces as well as Pakistani assets, including a natural gas line that starts from Sui in Balochistan but serves the demands of the privileged province of Punjab. Having once taken the unusual step of commenting on the Balochistan situation, India should know very well that there can be no guarantee of the safety of any pipeline and regular supplies that passes through the region.

India and Iran may have drifted too far apart in view of their differences over the nuclear issue with India seeking de facto recognition as a nuclear state and Iran opposing it. If the gas pipeline project is not de-linked with the nuclear issue it can be considered to have died already. India in any case will be very chary of seeing Iran developing its ‘secret’ uranium enrichment programme reach its climax with a nuclear bomb.

When bilateral talks on the gas pipeline between India and Iran began there were no signs of a future serious disagreement between the two countries over the nuclear issue. In any case, they are nowhere near finalising the proposed pipeline project. Iran will turn hostile towards India if India continues to tow the US line on Tehran’s nuclear issue. However, there is also a possibility that after a period of cooling off, an increasingly isolated Tehran might again come round to seeking Indian interest in the gas pipeline project to enrich its depleting coffers. Iran will need plenty of money not only for the welfare of its people but also to refurbish its oil and gas infrastructure if its is to earn money from these two resources—openly or clandestinely

Two things that have not been so far sorted out in black and white by Iran and India are the price of gas that Iran expects India to pay and a trilateral understanding about the finances for the project that may cost up to $7 billion. Tehran has been wavering on the issue of price for reasons that could be either economic or political, or both. It may have drawn some lessons from what happened in the month of January between Russia and some of the European countries that buy natural gas from Russia.

A series of interruptions in gas supplies from Russia to parts of Europe in January, the coldest month in northern hemisphere, had caused much concern in western capitals. Some analysts said that the Russians had deliberately created the problem to use their rich gas and oil resources as a political leverage to re-establish their eminence as a world power and boost revenues.

The break in gas supplies to parts of Europe had come at a time when the continent was facing the severest winter in decades. The countries that faced sudden stoppage of supplies included many that were once part of the former USSR. But a highly industrialised nation like Italy had also reported drop in gas supplies from Russia, as did Georgia, Ukraine, Croatia, Hungary and Moldova. Germany too was worried as it also receives gas from Russia.

Ukraine found its gas supply shut out for three days and the matter was sorted out after intense bargaining that ended with Ukraine agreeing to a considerable enhanced tariff for the Russian gas supplies. Russia wanted to more than double the price but settled for a price of $95 per 1000 cubic metres (up from $50 per 1000 cm). But this bargain created an internal political crisis in Ukraine with its parliament seeking dismissal of the government for bowing before the Russian ‘blackmail’.

The Russian monopoly gas company, Gazprom, blamed Ukraine for the temporary gas shortage in Europe, accusing it of drawing from a key gas pipeline to Europe more gas than it has contracted for. Most of the Russian gas reaches Europe via Ukraine. And Russia meets nearly 20 percent demand of natural gas in Europe—and 30 percent of oil supplies.

Another former USSR state, Georgia was also hit in January by a sudden drop in gas and electricity supplies from Russia following two explosions in the gas pipeline in southern Russia and damage to a high-voltage power line. The Russians said the accidents were the work of saboteurs. Georgia said that the Russians were lying because the country was getting closer to Europe. President Mikhail Saakashvili of Georgia is not seen as a pro-Russian leader.

Assuming that the gas pipeline from Iran does materialise one day, problems similar to the ones faced by the receivers of the Russian gas can also be foreseen in India. If Russia can open and shut the gas taps to meet its political or economic goals why should Iran not do likewise? With the demise of the Saddam Hussein regime in Iraq, Iran certainly sees itself as a regional power and because of stiff American opposition Iran with its weakening economy will always be looking for ways to earn more money.

The trouble in the Russian supplies to countries like Ukraine and Georgia arose after Moscow virtually disowned an earlier price agreement with Ukraine and had found itself helpless in arresting the pro-European and anti-Russian drift in its former ‘colonies’. Such strong-armed tactics may not succeed but they do cause a lot of problems, both economic and political, in the short term.


Courtesy : Syndicate Features

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