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Iran-Pakistan Pipeline is Iran's New Lifeline

June 1st 2009

Energy Topics - Iran-Pakistan pipeline

While the world’s eyes are focused on Iran and Pakistan, little attention has been paid to the two countries’ decision from last week to move ahead with their plans to connect their economies via a natural gas pipeline. What may seem like a standard energy project could have profound implications for the geopolitics of energy in the 21st century and for the future of south Asia, as well as for America’s ability to check Iran’s hegemony in the Persian Gulf.

For both Iran and Pakistan, the pipeline project would be highly beneficial. Iran sees in the pipeline not only an economic lifeline at a time when the United States and its European allies are trying to weaken it economically, but also an opportunity, should the pipeline be extended to India, to create an unbreakable long-term political and economic dependence of one billion Indian customers on its gas.

Pakistan, for its part, views the pipeline as the solution to its energy security challenge. Pakistan’s domestic gas production is falling and its import dependence is growing by leaps and bounds. By connecting itself with the world’s second-largest gas reserve, Pakistan would guarantee reliable supply for decades to come. If the pipeline were to be extended to India it could also be an instrument for stability in often tense Pakistan-India relations as well as a source of revenue for Islamabad through transit fees.

For the Obama administration, the signing of the pipeline deal is a diplomatic setback which could undermine its policy of weakening Iran economically. Unlike the Bush administration, which vocally opposed the project, the Obama team chose to remain mute, either in order to facilitate rapprochement with Tehran or due to its reluctance to burden U.S.-Pakistan relations at a volatile time when the Taliban is at Islamabad’s gate. Should the worst happen and a Taliban-style regime take over Pakistan, the economies of the world’s most radical Shiite state and that of what could be the world’s most radical Sunni state would be connected to each other for decades to come, like conjoined twins.

But all’s not lost for the United States. Years would elapse between the signing of the deal and the actual running of gas in the pipe. Baluchistan, where the pipeline is supposed to run, is one of Pakistan’s poorest and most restive provinces. In recent years it has been a battleground of militias belonging to Baluch tribes who hate the government of Tehran as much as they hate the one in Islamabad. Taliban or Al Qaeda members who have reportedly moved from the tribal border region to Baluchistan and who are known for their dislike of both governments may find common ground with the Baluch.

One can rest assured that the Baluch Liberation Army (which for years has conducted sporadic attacks against water pipelines, power transmission lines and gas installations), and Al Qaeda members (who perfected the art of pipeline sabotage in Iraq) would not spare the Iran-Pakistan pipeline, causing delays in construction and perhaps even termination of the project altogether.

Open U.S. support for those opposition groups is unthinkable, as any collaboration—overt or covert—would severely cripple our relations with Islamabad. What the United States can do is minimize the pipeline’s damage to its strategic objectives by ensuring that it ends in Pakistan and does not extend further into India, as both Iran and Pakistan wish. To date, India has been hesitant to join the project and entrust its energy future in the hands of its unstable neighbors. The deterioration in the India-Pakistan relations following the terror attacks in Mumbai has effectively taken the project off the table. But this could easily change in the future as India’s energy crunch deepens: some 400 million Indians already suffer from energy poverty. This is what the Obama administration should preempt today, by increasing energy cooperation with India. Pressure on India to curtail its use of coal for power generation may help reduce carbon emissions, but it could force India to shift to cleaner burning natural gas and hence drive it right into the welcoming arms of Iran.

It is in the interest of the United States to help India increase its share of nuclear power and renewable energy while constructing liquefied natural gas terminals along the coasts of the Indian subcontinent to allow diversity of supply. Without active U.S. participation in the effort to alleviate India’s energy poverty, Iran could soon become to India what Russia is to Europe.

Gal Luft is executive director of the Institute for the Analysis of Global Security.

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