Vol. 12, No. 2,856W - The American Reporter - March 18, 2006

The Angle

by Angelique van Engelen
American Reporter Correspondent
Amsterdam, The Netherlands

AMSTERDAM -- Pipelines across several countries are often played up to be as opportune as their locations are strategic. You wonder if international terrorists have cottoned on to that fact, because an attack on one would earn a place in any important study of how terrorists do their work. For them, an attack on a major oil or gas pipeline might be rather logical.

Just so, last weekend's high-profile bickering over the 1,655-mile gas pipeline supposed to run from Iran through Pakistan to India might set the scene rather perfectly.

Plans for the gas pipeline do not have American approval because they involve Iran. Iran, meanwhile, is asking for a high price to transport gas to India. India, in turn, could be accused of using any trick in the book to negotiate not only a bargain price but also safe passage through Pakistani territory, which is generally hostile to India. Iran, in keeping the price of its export product artificially high, may have made the Indians more friendly to American foreign policy initiatives of late.

As a matter of fact, the Baluchi province in Pakistan which the pipeline is crossing is the active target of the Baluchi Liberation Front, which over the past six months has launched a number of attacks on major gas exploiting businesses.

On the face of it, Indian Prime Minister Manmohan Singh's comments in Washington last weekend undermined the pipeline project in ways that make you wonder if this man's senses might have departed from him, save to please the Bush administration (which strongly objects to the project).

Normally, saying that the pipeline is "fraught with risks" might have passed for a calculated assessment of any plan for a pipeline passing through three problematic countries, but the Indian PM's subsequent claim that he wasn't sure that financing of the pipeline would actually emerge left little doubt that India's view of the project is inspired by a realistic motive.

Most likely, that involves something nuclear on the agenda of the ongoing negotiations between the three countries involved. That's not to say that safety concerns surrounding the pipeline aren't unsettling and of real concern to India, but more on that in a moment.

The Baluchistan-Punjabi border has been the scene of a several attacks over recent months. Baluchistan is one of poverty-stricken Pakistan's poorest areas, and that poverty has inspired a number of private militias belonging to Baluchi tribes. Their fighting has concentrated on the vital assets, namely water pipelines, power lines and gas installations.

Once the international pipeline comes onstream, Pakistani officials say, they won't be able to guarantee its safety. The Baluchi tribes that have taken up arms have rarely seen a penny in return for the depletion of their resources, and are rather miffed about it toward the regime in Islamabad, Pakistan's capital. The tribes oppose any energy projects in their area.

The Pakistani press quotes national officials saying that the motive for the Indian prime minister's comments is the desire to dictate favorable pricing from Iran. At the same time, however, Islamabad is not willing to offer safety guarantees that match international standards.

In the meantime, the Iranians have confirmed that India is playing for lower gas prices - which is likely the case. India complains that Iran is not offering any subsidies on the gas that will be transported through the pipeline to India upon completion of the project.

That is something that is really not done in most such projects, where deals are based on both ownership structure and issues such as the extent of national territory crossed. So, the Indians are bargaining for a deal that will be tough to negotiate. But perhaps they need to negotiate just as hard to ensure their gas flows safely across Pakistan to them, too.

But thecomments made in Washington reveal wider international implications of the pipeline venture. They follow in the wake of a nuclear power deal between India and the United States, under which America will transfer technology necessary for India's civilian nuclear energy program in exchange for meaningful constraints on India's nascent nuclear weapons program.

Both parties proclaim that the deal is consistent with India's declared policy of wanting not an ICBM but a CBM - a "credible minimum deterrent."

Contentious words. But the deal has nevertheless been described as just about the best example of how selectively and unilaterally, without much regard for rules that apply to everyone, Non-Proliferation Treaty (NPT) matters are handled by the Bush administration and American policy-makers who were itself the architects of the treaty.

This development does not really signal a change in American or Indian policy. The Indians managed to get on the right side of the Washington policy makers seven years ago by pointing out the greater dangers of China, an assertion to which the United States subscribed then and now. But the NPT allowed China to develop its weapons arsenal rather easily, and well ahead of India. India, however, has been told to get out of the international club.

The rationale for America not to insist that India join the NPT as a non-nuclear-weapons state is seen as a strategic ploy. "The U.S. has, for much of the past seven years, tried to work out a genuine compromise," writes Strobe Talbott, president of the Brookings Institution, in a recent article.

No wonder the NPT - originally an American idea that depends on unstinting American support - is in jeopardy. And no wonder the world has been watching warily to see how the United States handles India and other outliers of the NPT," he adds.

Whatever America's intentions in assisting India with the new technology, they either are failing to be effected or they really are - as Indian officials have been saying over recent days - "disconnected" from the oil pipeline.

Even with as much tension as the bickering has caused, the pipeline is not likely to be soon abandoned. Rather, the "negotiations [with Pakistan and Iran] at present are at a preliminary stage," Indian Petroleum Minister Mani Shankar Aiyar said recently. He says that what is discussed are financial, technical, commercial, legal and related issues to the pipeline.

The increase in safety concerns - largely Pakistan's prerogative - will draw more attention to the pipeline than many others, especially since Pakistan is seen as a hotbed of all sorts of terrorists, who might be prone to attack this kind of target if only for practice.

What has emerged from the tripartite negotiations is a sense that Iran is unwilling to reduce the ultimate delivery price, which is higher than it charges the home market. That stance has its risks - what are now only rumors indicate that the international consortium involved in the deal has already withdrawn its support from the $7.4-billion pipeline and that plans are in the making to replace the usual host of international underwriters with the natural gas ministries of the countries involved. This would not be unique in the gas world, but it does signal a lack of trust.

Even though the Indians are now saying that the United States has not by any means asked them to abandon the plan, the stage has certainly been set for alternatives. If none emerge, other dangers lie in wait.

Angelique van Engelen is a freelance reporter at www.contentclix.com, her Amsterdam-based news agency. She writes on international topics.

Copyright 2006 Joe Shea The American Reporter. All Rights Reserved.

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