Not a pipe dream

Ordinary citizens are well aware of the shortfalls in power supply that reportedly anguished IT baron Azim Premji recently. It is a daily pa...

Ordinary citizens are well aware of the shortfalls in power supply that reportedly anguished IT baron Azim Premji recently. It is a daily part of their lives, that is, except where there is no electricity at all, as is the case with 44 per cent households. We are well aware that as much as 40 per cent of the electricity generated is lost, wasted, stolen or unpaid for. We also know that as much as 45 per cent of the goods rolling stock on one of the largest railway networks in the world is tied up conveying coal for power stations and that building renewable sources of energy could be given greater impetus only if we could get down to it. What some of us know is that oil production worldwide is expected to peak by 2030 and hence the “great game” to control oil and gas, not the least in the war against Iraq and a quarter century of wars in Afghanistan. What perhaps few know is that our energy dependence on imports and possible vulnerabilities have been rising rapidly and will continue to do so in future.

It is in this context that we need to see the issue of supply of natural gas, the preferred energy source, from Iran, Persian Gulf and Central Asia. Fortunately the discovery of natural gas reserves in the eastern basin has promised some reduction of our dependence on imports. But the projected increase in consumption, even at a nominal 6 per cent growth rate, requires an almost similar rate of increase in power generation if not in total commercial energy. The best techno-economic method of supply of natural gas from the huge reserves of these areas is by an overland pipeline. The other options, of offshore transportation of natural gas, whether by surface ships, by sub-surface pipeline in shallow waters or those laid in deep sea, would be costlier to build by 30 per cent or more, and to maintain and repair. But an overland pipeline of necessity must transit through our not-so-friendly neighbour Pakistan.

In spite of obvious techno-economic advantages in favour of the overland route, political and security considerations are delaying progress. Politically, Islamabad and New Delhi were somewhat out of sync: When India favoured the overland route (as in the early 1990s), Pakistan refused; and when Pakistan showed willingness, India started to rethink and find ways to by-pass Pakistan. The worsening of relations after the Kargil war has only made things more difficult.

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Some fallacious arguments are made to say that Pakistan would plough back the $600-odd million earnings from the pipeline into terrorism, as if it does not have the means to do what it has been doing for two decades! But if a long-term view were taken, the rational approach to policy would be to try and build mutual interdependence. Such an approach would start to build stakeholders on both sides to exert pressures for co-operative peace rather than search for ways of bleeding through whatever number of cuts. This is also where the international community could play a constructive role.

But the concerns about security of supplies reinforce the political difficulties. Unfortunately, this is one area where emotive intuitive judgements, often without examining the facts, tend to cloud the vision of even eminent people. Security threat to supply routes of oil and gas could occur at the time of war, during prolonged crises and confrontation (like the one last year), and/or interdiction of supplies and sabotage of pipelines by terrorists. Conventional wisdom would have us believe that overland pipelines would be most insecure and vulnerable to such security threats. An objective study would indicate otherwise.

An agreement to build a pipeline for transportation of natural gas would not be a bilateral issue between Pakistan and India. It would require the participation of the producer country, any other transit country (like Afghanistan), international financial institutions (like World Bank and Asian Development Banks who have indicated their interest in funding such projects), Pakistan and, of course, India. All these players would have to invest in the project and hence would have a stake in its continued efficiency. Pakistan’s own investments would be adversely affected in case of supply disruption. Above all, there are international precedents, potentially binding legal arrangements and safeguards available to guard against supplies being cut off. And it is not as if the overland route would be more vulnerable.

An undersea pipeline (whether in deep sea or in shallow 50 metres depth close to the Pakistani coastline) could be blown up by an enemy with few, if any, safeguards available to India; the time for repairs and their costs would be highest for the undersea route and the least for overland pipelines. Disruption in case of war would affect all options. Offshore routes would actually give a free hand to the ISI to wreak havoc on our economy. Contrary to popular belief, liquefying natural gas, transporting it on special tankers, de-liquefying it on our shores and then pumping it across the land mass would not only be costly, but would remain vulnerable. Pakistan’s geography allows it adequate opportunity to interdict such traffic easily from bases on the Makran Coast. And it has built up one of the largest maritime strike capabilities in the Indian Ocean. The problem during war and prolonged crisis would be acute as the tanker war in the Persian Gulf during 1986-88 showed. Terrorist attacks like the one on USS Cole with small boats would pose additional risks without the safeguards available in the case of overland pipelines.

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Compared to that, Pakistan would have to provide access to regular surveillance and monitoring of the overland pipeline by a multinational agency and immediate access to assess and repair any damage. There would be residual risks; but damage to gas pipelines overland are normally repaired within 2-7 days. Discoveries of gas reserves on the eastern seaboard would help reduce the dependency on the western routes reducing somewhat their value as targets for interdiction.