Energy Policy 35 (2007) 3280–3301
Energy geopolitics and Iran–Pakistan–India gas pipeline
Shiv Kumar Verma
Political Geography Division, Center for International Politics, Organization and Disarmament, School of International Studies, Jawaharlal Nehru University,New Delhi 110067, India
Received 5 January 2006; accepted 17 November 2006Available online 17 January 2007
With the growing energy demands in India and its neighboring countries, Iran–Pakistan–India (IPI) gas pipeline assumes specialsigniﬁcance. Energy-deﬁcient countries such as India, China, and Pakistan are vying to acquire gas ﬁelds in different parts of the world.This has led to two conspicuous developments: ﬁrst, they are competing against each other and secondly, a situation is emerging wherethey might have to confront the US and the western countries in the near future in their attempt to control energy bases. The proposedIPI pipeline is an attempt to acquire such base. However, Pakistan is playing its own game to maximize its leverages. Pakistan, whichrefuses to establish even normal trading ties with India, craves to earn hundreds of millions of dollars in transit fees and other annualroyalties from a gas pipeline which runs from Iran’s South Pars ﬁelds to Barmer in western India. Pakistan promises to subsidize its gasimports from Iran and thus also become a major forex earner. It is willing to give pipeline related ‘international guarantees’notwithstanding its record of covert actions in breach of international law (such as the export of terrorism) and its reluctance toreciprocally provide India what World Trade Organization (WTO) rules obligate it to do—Most Favored Nation (MFN) status. India islooking at the possibility of using some set of norms for securing gas supply through pipeline as the European Union has already initiateda discussion on the issue. The key point that is relevant to India’s plan to build a pipeline to source gas from Iran relates to nationaltreatment for pipeline. Under the principle of national treatment which also ﬁgures in relation to foreign direct investment (FDI), thecountry through which a pipeline transits should provide some level of security to the transiting pipeline as it would have provided to itsdomestic pipelines. This paper will endeavor to analyze, ﬁrst, the signiﬁcance of this pipeline for India and then the geopolitics involvedin it.
2006 Elsevier Ltd. All rights reserved.
Geopolitics; WTO; Pipeline
Iran’s proven oil reserves at the end of 2003 wereestimated to be 130,700 million barrels, representing 11.4%of world reserves and some 18.0% of those in the MiddleEast. With proven reserves of 26,690,000 million cubicmeters at the end of 2003, Iran is the world’s second richestcountry in natural gas resources after Russia, with some15% of the global and 37% of the Middle East region total,which is a major discover for Iran (Fisher, 2005). TheSouth Pars offshore ﬁelds, which is an extension of Qatar’sNorth Field, are ofﬁcially the largest natural gas reserves inthe world. In the 21st century, the most important factorsthat will decisively determine the fate of Iran gas pipelineare United States and China in the Persian Gulf. Bothare the largest consumers of oil and gas in the world.So a new Iran–Pakistan–India–China–Russia scenariobegins to emerge, which links global oil and gas securityto geopolitics. The question is: can these two issues bereconciled? This paper will endeavor to analyze theimportance of Iran as a gas supplier to east, especially,India and China. It will argue that such dependence on avolatile region like Iran and the perception of scarcerenergy resources in the South Asian region have thepotential to lead to conﬂict in both regions unless theseissues are dealt with geo-economics rather than geo-strategic calculations. However, the recent understandingbetween the United States and India seems to cancel thewhole pipeline project as long as present Iranian regime
ARTICLE IN PRESS
Tel.: +9101126104671; fax: +9101126169962.