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John Daly

John Daly

Dr. John C.K. Daly is the chief analyst for Oilprice.com, Dr. Daly received his Ph.D. in 1986 from the School of Slavonic and East European…

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Pakistan's Pragmatic Energy Policy Unsettles Washington

Pakistan's Pragmatic Energy Policy Unsettles Washington

Pakistan is the front line in supporting U.S. military efforts in Afghanistan. Logistics shipped up from Karachi through Chaman and Torkham still provide the majority of supplies for U.S. troops operating in Afghanistan, but Washington, narrowly focused on Pakistan’s utility as a logistical corridor, has been increasingly pressuring Pakistani Asif Ali  Zadari to do more to combat guerilla units that use Pakistan’s largely lawless Northwest Frontier Provinces as a sanctuary for cross-border raids.

Washington’s policies overlook the internal dynamics of Pakistani politics and the Zadari administration is caught between mollifying its American patron and addressing the needs of its increasingly restive population, weary of the chronic energy shortages that plague the country.

Washington might take a cool, dispassionate overview of Pakistan’s energy policy and adjust its policies accordingly. Pakistan’s indigenous energy requirements have been thrown into the larger crucible of U.S.-Iranian relations, and warped Islamabad’s strategic concerns, which focus on arch-enemy India.

For Pakistan, the energy crisis is bad and getting worse. For the last five years Pakistani energy analysts have warned of an impending energy crisis, which has now come to pass. Pakistan’s government has implemented rolling nationwide blackouts and earlier this year officials announced that it will take at least seven years to build up electrical generation capacity to support the entire country.

Possible savior – Iran.

And the situation is dire. According to the Pakistani media, earlier this month, as energy shortages causing over 16 hours of blackout in major cities and rising protests, government officials are considering imposing an “energy emergency,” which would be overseen by a committee of ministers, bureaucrats and the representatives of private sector to resolve the nation’s endemic energy problems by 2013.

The proposed committee, according to an official, involved in the discussions but speaking off the record, would see the country’s energy shortfalls treated as an energy emergency, similar to a financial or disaster crisis, but bureaucrats are currently debating legal implications of such an act, such as which law would allow imposing the state of emergency if it could be done legally and constitutionally.

If the committee as envisaged was established, it would include ministers for finance, petroleum, and water and power and senior officials of the relevant ministries concerned along with influential businessmen drawing up a national policy on reviving the energy sector, with committee decisions binding across the country once implemented.
So, where does Iran fit into this scenario?

Simple - in June 2009 Iran and Pakistan signed a 25-year agreement whereby Iran agreed to export 7.8 billion cubic meters of natural gas to Pakistan annually through a pipeline beginning in February 2014 and Iran's Ambassador to Pakistan Mashallah Shakeri stated that Iran has already prepared the necessary infrastructure to begin natural gas exports to Pakistan, waiting for Islamabad to complete the necessary similar infrastructure for importing 110 million cubic meters of per day of Iranian natural gas.

Last week Pakistani Prime Minister Yousuf Raza Gilani met in Tehran with President Mahmoud Ahmadinejad following the Iran-Pakistan Joint Economic Commission meeting and the pair agreed to develop their current bilateral trade from $1.2 billion a year to $10 billion.

Any bets as to what Iran’s exports to Pakistan will be?

Or Washington’s reaction?

Another meeting occurred in Islamabad parallel to the Iran-Pakistan Joint Economic Commission, the fourth round of Pakistan-U.S. strategic dialogue.

Abandoning subtlety for veiled threats, U.S. Special Envoy for International Energy Affairs Carlos Pascual "advised" the Pakistani government to abandon its proposed natural gas imports from Iran, as the Pakistan-Iran pipeline, if built, could come under sanctions from the 1996 Iran Sanctions Act.

In a surreal effort at rapprochement Pascual then advised his hosts, "As all Pakistanis know, reliable and affordable energy is critical to Pakistan's prosperity. Without it businesses cannot operate and families cannot light and cool their homes. Pakistan's future depends on power."

Washington is pressing Zadari’s government to choose between its domestic programs to mollify its population, who would like reliable power, and its commitment to the U.S. war effort in neighboring Afghanistan, where U.S. intervention is increasingly unpopular, due to the Pentagon’s increasing drone strikes in Pakistan itself, fuelling rising resentment against the arbitrary regional U.S. military power.

In the battle for Pakistani hearts and minds, the ultimate weapon may be a light bulb, and as Washington has turned a largely blind eye to rising Turkish imports of energy from Iran, its best policy at this point might be to allow Pakistan discreetly to import Iranian natural gas to alleviate those endemic power shortages.

The final weight in the equation as opposed to U.S. policy towards Turkey is that Pakistan is a nuclear power. And for U.S. interests, light bulbs are infinitely preferable to IEDS. As such, the pipeline may well prove a wise investment in stabilizing Pakistan, however it might enrich Tehran and produce concomitant annoyance in Washington.

By. John C.K. Daly of Oilprice.com

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