The US State Department spokesman, while replying to a question during the daily briefing to the media on 26th February in Washington, said that the US was monitoring the Iran-Pakistan gas pipeline closely and warned that it was in Pakistan interest if it did not pursue the project with Iran.
He also cited American assistance in rehabilitation of certain projects that would add 900 Megawatts of electricity to the national power grid, benefiting at least 2 million people. Earlier in February 2012, the then Secretary of State Hillary Clinton, while addressing the House Appropriations Subcommittee on Foreign Operations in Washington, said that the US had made it clear to Pakistan that if it went ahead with the proposed Iran-Pakistan pipeline, it could face consequences as underlined in the Iran Sanctions Act.
The ex-US ambassador to Pakistan, Cameron Munter, while being in office in Islamabad, had also stated that the project was not in Pakistan’s interest, writes Osman Khan.
Energy is a prerequisite for economic development in a country. Pakistan is facing severe energy crises fatally affecting its industries and power generation capacities. Pakistan’s largest energy source is natural gas. There is a gas shortfall of 2 billion cubic feet per day. The country remains in the dark for up to six hours on an average because of loadshedding. At present, 49% of Pakistan’s energy needs are being met through natural gas and Pakistan looks to Iran and Turkmenistan to replenish its fast depleting gas reservoirs and meet Pakistan’s fast growing energy needs.
The Iran-Pakistan gas pipeline was conceived 10 years ago. India also came aboard later and joined the project. Pakistan and Iran have agreed on pricing formulas whereas price negotiations between India and Iran are in the limbo since India does not want to lose the US-India nuclear deal.
Meanwhile, Iran has also agreed to provide Pakistan with $500m for construction of 1/3s of the total length of gas pipeline by an Iranian company on Pakistani side. President Zardari already visited Tehran for signing the loan deal. Iran has also hinted at providing 10,000 tonnes of LPG to Pakistan and also setting up of an oil refinery with capacity of refining 400,000 barrels of oil per day at Gwadar. The president also discussed these offers as these opportunities were too good to lose for Pakistan’s economy.
The US is assisting Pakistan through large scale funding in the power sector that, by end 2013, is expected to add only 900 megawatts to the national power grid. That would suffice only 20% of Pakistan’s existing energy shortfalls. Pakistan is not only looking to enhance its existing power generation capabilities but also looks much beyond to meet its future energy needs.
Pakistan is believed to have informed the US that it was not possible for it to abandon the project because of acute energy crises in the country. In all the likelihood the deal with Iran is going to affect the bilateral relationship between Pakistan and the US. But for reluctance of international community to engage Pakistan mainly because of poor security conditions, Pakistan is left with no option but to go ahead with the Iran-Pakistan gas pipeline.
Some in Pakistan have cited the progress on Iran-Pakistan gas pipeline as an election gimmick of Pakistan People’s Party to win forthcoming elections and that all discussions and agreements would turn out to be cosmetic.
When Pakistan is fast losing friends, can it afford to antagonise its neighbour Iran? That would be a disastrous preposition for Pakistan as Iran would always remain a neighbour whereas US frequent engagements with Pakistan have been short lived and sometimes detrimental. For long term bilateral and economic purposes, Pakistan cannot afford to turn its back on Iran.
This is an opportunity wherein Pakistan would need to tailor its policies to serve its own national interests. It must be remembered that US has permitted few countries to continue to import oil from Iran despite its Iran Sanctions Act. Japan is one amongst other few countries. Then why cannot Pakistan benefit from immense energy resources that are available across the border and the Iranian leadership willing to fulfil Pakistan energy needs.
Pakistan needs to enter into a serious diplomatic discourse with the US to try to convince how important it is for Pakistan to avail Iran’s energy needs for giving a new lease of life to Pakistan’s industrial sector and meet power shortages.
With the changing attitudes of American administration towards Iran indicating a softening of stance, there is a likelihood that in the next two years, Iran and the US would come closer on conflicting issues and we may see the two agreeing on developing positive relations.