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March 7, 2012

Energy shortage: an unfortunate menace for Pakistan

 
March 7, 2012

Today, energy security is not only the principal driving factor behind the economic development of any state but also the most contested field among states as well. Faced with acute energy crisis Pakistan, too, stands in the same queue. Presently, Pakistan is fulfilling its energy needs through the consumption of gas, oil, and coal. Of these, natural gas is the primary energy source, which accounts for 43.7 percent in total energy consumption of Pakistan. Decades long neglect, mismanagement and lack of investment in energy development sector has made the intermittent gas and electricity outages the order of the day in recent years. Consequently, daily life has been crippled across the country, leading towards the closure of hundreds of industrial units while leaving millions of people unemployed.
Recent years have seen significant gap between supply and demand of gas i.e. nearly one billion cubic feet per day (BCFD). According to the estimates of Ministry of Petroleum, natural gas shortfall against committed supplies remained around 1.1 million cubic feet per day (MCFD) in January 2012 and will swell to 1.4 MCFD in February before easing down to 726 MCFD in March. The energy scarcity in the country is likely to worsen in coming years with gas shortfalls estimated to reach 2.5 BCFD in 2014-15, 3 BCFD in 2015-16 and 3.5 BCFD in 2016-17. Hence, the gap is likely to shoot up to 5 BCFD in 2020-21, unless major gas discoveries and field developments are made.
Energy shortage, particularly due to the scarcity of gas, has become an importunate menace for Pakistan. Since 1990s Pakistan has been trying to materialize the TAPI and IP gas pipeline projects. The Turkmenistan, Afghanistan, Pakistan, India (TAPI), is a $7.6 billion gas pipeline project, stretching over 1680 kilometres from Turkmenistan’s gas fields to Afghanistan, Pakistan and ending at the Indian town of Fazilka. Whereas, the Iran-Pakistan (IP) gas pipeline is committed to bring 21.5 million cubic

meters of the Iranian natural gas, per day to Pakistan covering a distance of 2100 kms. The sad part of the story is these attempts remained hostage to continued American objections to Pak-Iran cooperation as well as to the political insecurity and the resultant instability in Afghanistan and some parts of Pakistan.
The IP gas pipeline is imperative for addressing the worsening energy crisis, confronting Pakistan. Iran has the second-largest gas reserves in the world and aims to export 8.7 billion cubic meters per year of the Iranian natural gas to Pakistan under the multi-billion-dollar Iran-Pakistan gas pipeline project. The project will be funded through public-private partnership and will benefit Pakistan immensely. Maximum daily gas transfer capacity of the 56-inch pipeline has been given at 110 million cubic meters and power generation capacity projected at 5,000 megawatts — roughly equivalent to Pakistan’s recent energy shortfall. Iran has completed the construction of 900 km out of the 1100 km of the pipeline on Iranian soil at a cost of $700 million, while Pakistan’s share of the approximately 1000 km is yet to be built.
Initially, this project also included India and was termed as Iran-Pakistan-India (IPI) pipeline project but withdrew in 2009 on the pretext of insecurity and high gas pricing concerns, which is not true. In reality, following a civilian nuclear deal with the US and the ensuing American pressure prompted India to withdraw from the deal. At one hand the US administration succeeded in preventing India from becoming part of the IPI project and attempted to dissuade Pakistan from the project on the other hand. The energy-starved Islamabad, however, stood its ground and continues to stick to it despite new American sanctions against Iran.
As a matter of fact, it would have never bothered Washington had it not been for its current obsession to isolate Iran and inflict as much damage as possible to Tehran to force them to forego their nuclear programme. For that matter, the United States not only tightens the screws on Iran, but also continues its pressure tactics to keep Pakistan away from its gas pipeline venture with Iran as well. Despite being well aware of the problems Pakistan is facing due to aggravating energy crisis, the US has repeatedly illustrated its opposition to the project. Along with pressing hard to prevent it from partnership with Iran in the pipeline deal, Washington has also offered to finance the multi-billion dollars TAPI gas pipeline in order to lure Islamabad away from the IP gas pipeline deal. The Obama administration wants Pakistan to pursue TAPI as the preferred option notwithstanding the IP project promises four times cheaper energy as compared to TAPI pipeline project. That is why whenever Pakistan makes a move for securing more energy, the Americans move to oppose, if not obstruct, it.
Pakistani authorities, however, have decided to press ahead with the project. On January 27, 2012 Foreign office spokesman Abdul Basit clarified that “Both countries are engaged with each other and there is no concept of disengagement and there is no change in our stance and we are working to complete the project by 2014. We believe that this project is beyond the scope of the relevant UN resolutions, which we are obliged to comply with like all other member states
The IP gas pipeline project sounds like an ideal deal for the energy-starved country, but US opposition to the project is the key hurdle in the accomplishment of the project. The US’ peddling to the TAPI pipeline project, as an alternate to the IP, is actually an effort to bypass the US adversary Iran for supplying gas from Turkmenistan via Afghanistan to Pakistan and India. But ongoing insurgency in Afghanistan is the major stumbling block impeding the progress on this project. The fact that the project will have to cross not one, but two nations suffering from armed insurrection, Afghanistan and Pakistan, makes the foreseeable future of the project hazardous and risky. Therefore, investing billions of dollars in the TAPI pipeline is fraught with risks.
In a nutshell, declaring the IP a hypothetical and bad deal is a clear manifestation of the fact that the US wants Pakistan to abandon its cooperation with Iran, without offering much in real substance. In retrospect, one finds that US is always around Pakistan as long as its interests are at stake. Once those interests are served, the administration in Washington turns its back on Islamabad, stating its own domestic political handicaps, or limitations in the face of the Congress. For Washington, Pakistan’s pressing energy requirements hardly matter when it comes to its antagonism with Tehran. In the same fashion, Pakistan should prioritise its own interests first and forge ahead with the proposed pipeline from Iran to fulfil its energy needs rather than cater for US wishes and aspiration.