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India going places in search of energy
India is a large consumer of energy and it has various options to curb the energy crisis. But all these options pose serious problems- economic, strategic and security related. One of the options is the IPI gas pipeline; talks on which have resumed.
TRILATERAL TALKS for Iran-Pakistan-India (IPI) gas pipeline have started again and construction work on this project will commence in 2009. India has joined the Turkmenistan-Afghanistan-Pakistan pipeline project construction, which is scheduled to start in 2010. India is also looking forward to get oil and gas from the Black Sea and Caspian sea, through an Israeli pipeline.

All these developments reflect the desperation of the Indian government, which is fighting the skyrocketing inflation. Energy import bill is swelling up as international crude oil prices are touching a new high everyday. India with rapidly growing economy is looking for energy, wherever it could find it.

Gas from Bangladesh seems a far fetched dream, given the sour relations between the two countries because of the continuous infiltration of terrorists into India, through Indo-Bangladesh border. It would be difficult for the Indian government to escape international scrutiny if it overlooks the situation in Myanmar and forges an energy deal - it would be something similar to what China is doing in Sudan. Moreover, China commands a strategic hold over the region.

The Iran Pipeline Dilemma

The project, which was conceptualised by the current Intergovernmental Panel on Climate Change (IPCC) chief, Rajender Pachauri, has been delayed several times due to various reasons. The project would supply natural gas from the South Pars gasfield in Iran on a 50-50 sharing basis, between India and Pakistan and would supply 2.06 billion cubic feet of gas per day.

Participation of India in the project is essential for it to be a profitable one. Due to American pressure, India had to put the pipeline project on the backburner but Iran threatened to include China if India wasn’t interested. This is the reason given for the resumption of the trilateral talks, however, India’s petroleum minister cited economic reasons for the same. Lack of consensus over the nuclear deal and the rising oil prices, added with possibility of losing to China on the energy front, once again, made the government rejoin the trilateral talks.

Pricing of the gas and the transit fees, in addition to the security threat from the Baluchistan Liberation Army (BLA) are some of the tricky issues that the three parties are currently trying to solve. Transit fees increase the gas price by 42 per cent and given the history of attacks on Pakistan’s pipelines in the region, India is finding it difficult to go by the high price.

The TAPI Solution

India enjoys some leverage over this project. The Asian Development Bank has long been pitching for India’s participation in this pipeline, since it is essential for the profitability of the project. Although, India can have its way, to some extent, over the pricing of the gas but the threat of sabotage by Taliban is a serious issue, one that hasn’t been dealt with yet.

The Trans-Afghanistan Pipeline (TAPI) has the backing of American government, which happily presents it as an alternative to the IPI pipeline. Moreover, there is a low possibility of China nudging India out of this project, given the friction between the two countries. The issue of contention between the two countries is the the East Turkestan Independence Movement, which advocates for the establishment of an independent and self-governing Xinjiang. Currently, the area is an autonomous region in China.

Oil Through Israeli Pipeline

India has been approached by Eliat-Ashkelon Pipeline Company to participate in a multi-billion dollar crude oil pipeline project. The company once used to be a joint venture between Israel and Iran. Once this project is completed, India would get access to the vast oil reserves of the Black Sea and Caspian Sea. India did not have access to these reserves since heavy oil and gas carriers cannot pass through the Suez Canal.

This pipeline, although costlier, would be more secure than the other options. It would also open up oil reserves of Algeria and Libya where the state-owned company, Oil and Natural Gas Corporation (ONGC), has been trying to acquire oil fields. A pipeline through this region is preferable, since it is a major choke point in global oil routes and would obviate the high shipping costs, bringing down the oil import bill.

On the face of it, India seems to have plenty of options to get the crucial energy supply for its booming economy but each of these option pose serious problems - economic, strategic or security related. India, being a big geo-political player and a huge consumer of energy, should take whatever legitimate leverage it could get to ensure a cheap, secure and uninterrupted energy supply.

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