Our energy options
By Asif Ezdi

Buried in the 2,500 words of the Pakistan-US joint statement issued after Prime Minister Nawaz Sharif’s visit to the US last month is a sentence saying that the US president “welcomed steps taken by Pakistan and India to improve their economic relations, including by exploring electricity and gas supply agreements, developing a reciprocal visa regime, and expanding bilateral trade”.

Obama’s support for “electricity and gas supply agreements” between Pakistan and India is a reference to an Indian offer to supply electricity and gas to Pakistan, which the Nawaz government would like to accept if it can sell the deal to a sceptical Pakistani public.

India has been pressing Pakistan with great persistence to accept that offer despite the fact that Delhi has suspended the regular bilateral dialogue between the two countries. India’s keenness to supply electricity and gas to Pakistan is all the more remarkable because India itself faces a domestic power shortage and the gas that it would like to export to Pakistan has not been produced indigenously but imported from another country.

Clearly, the Indian offer and US support for it are part of a joint Indo-US strategy for the region. Delhi, as is well-known, has long been urging that Pakistan and India should concentrate on building economic and cultural ties, while putting Kashmir and other political issues on the backburner. This is a line that Washington has also embraced enthusiastically, especially as it prepares to withdraw the bulk of its forces from Afghanistan next year.

The reason, quite simply, is that in the post-2014 scenario, the US would like India to play a larger political and economic role in Afghanistan and Central Asia, exactly as Delhi has long yearned for.

A major obstacle to the realisation of those plans is that Pakistan, for very good reasons, has refused to allow the use of its overland transit routes to India – so far, at least. But with Nawaz in power, Delhi and Washington now see that there is a good chance that Pakistan could modify its longstanding position on the issue.

Nawaz himself has repeatedly spoken of his wish for the opening of transit routes between South Asia and Central Asia but he has had a difficult job selling to the Pakistani public the idea of giving India access to Afghanistan through Pakistani territory, given Delhi’s record of trying to export subversion and instability to Pakistan from Afghan soil.

The calculation in Delhi and Washington now is that if India provides some much-needed electricity and gas to Pakistan, Nawaz might have an easier time overcoming domestic opposition to the opening of the country’s transit routes to India.

Reservations on the import of electricity from India were expressed forcefully at a meeting of the Senate’s Standing Committee on Water and Power last September. Members of the committee pointed out that India would be in a position to discontinue electricity supply at any time and could use that option to harm Pakistan’s economy, or to exert political pressure on the country. The committee, therefore, urged the government to turn down the Indian offer of electricity.

The same considerations that militate against the purchase of electricity also apply to gas supplies from India. This should not surprise India because when it quit the Iran-Pakistan-India (IPI) gas pipeline project in 2009, one of the reasons it cited was that Pakistan could cut off supplies in a crisis.

Some circles in Pakistan have also pointed to the danger that an agreement to buy electricity from India could make it difficult for Pakistan to raise objections to the proposed construction of several hydro-electric power stations by India on the three western rivers which have been allotted to Pakistan under the Indus Waters Treaty. This argument cannot be dismissed lightly, because even if Pakistan’s legal rights under the treaty will not be affected, India could still claim a measure of political legitimacy for its breach of the treaty if Pakistan were to enter into an electricity purchase agreement.

Despite all these weighty grounds against the purchase of electricity and gas from India, the Nawaz government is going full steam ahead. Although Nawaz approved the purchase of 500MW of electricity from India last September through a transmission line from Amritsar to Lahore, the government has withheld this information from the public.

The story on gas purchases is similar. Talks are underway for the supply of five million standard cubic meters per day of gas by GAIL, India’s state-owned gas company, through a newly-laid 110-km pipeline from Jalandhar in India to the Pakistan-India border near Wagah. The gas to be exported to Pakistan would be purchased by India from Qatar in the form of liquefied natural gas (LNG).

The main beneficiaries of the proposed electricity and gas purchases from India will be Nawaz’s political constituency in and around Lahore, while the long-term interests of the country will suffer. But he seems more interested in boosting his own popularity in his political stronghold in Punjab.

As Shahid Khaqan Abbasi, minister for petroleum and natural resources, told a seminar last Monday, there are other more attractive options available to overcome the energy crisis: LNG imports and two gas pipeline projects, namely Iran-Pakistan (IP) and Turkmenistan-Afghanistan-Pakistan-India (Tapi).

The IP project has been stymied by US opposition, financing problems on the Pakistan side and the uncertain law-and-order situation in Balochistan. None of these difficulties is insuperable if the government were to get really serious about it, but it will take time. The main problem is that the Nawaz government does not want to be at odds with Washington over this issue.

About two weeks ago, Iranian Oil Minister Bijan Zanganeh said there was “no hope” of exporting gas to Pakistan because the financing was not there. That does not mean that Iran regards the project as dead, much though a few countries would like that to happen. Iran remains interested and the project could still go ahead if the necessary funding is arranged.

The rival project that the US and India are promoting for strategic reasons of their own is Tapi. It was initially proposed in 1991 for shipping gas from Turkmenistan via Afghanistan to Pakistan. India joined the project in 2008 and sees it as a way of expanding its economic presence in Central Asia.

The importance that Washington attaches to Tapi is evident from the fact that Obama himself sent a letter last month to the President of Turkmenistan to convey his support and express his desire that a US firm should construct it. The US expectation is that Tapi would give a much-needed boost to its ‘New Silk Road’ project for the region. Pakistan also has a strong interest in Tapi because it will help stabilise the Pak-Afghan border, besides helping Pakistan overcome its energy shortage.

Since the IP and TAPI projects will take time, Pakistan needs to push ahead with LNG imports as the short-term option. Negotiations with Qatar for the purchase of LNG, which were started some time ago, should be brought to an early conclusion and the construction of an LNG terminal at the Karachi port should not be delayed. According to Abbasi, the country is incurring an annual loss of $2 billion because of the delay in the import of LNG. But he has blamed the courts and the media for it. This is an unacceptable excuse.

The direct import of LNG from Qatar would be a far better option than the purchase of electricity or Qatari gas from India. But the Nawaz government has other plans. Tariq Fatemi, the prime minister’s special assistant on foreign policy, said last week, “We believe there can be no peace and development in Pakistan unless it has a cooperative relationship with India.”

This is completely wrong. Pakistan’s future depends entirely on its own people and leaders and on the policies of the government, not on the cooperation of any other country, much less that of our eastern neighbour.

The writer is a former member of the Pakistan Foreign Service.

Email: asifezdi@yahoo.com