March 11, 2005 ☼ Foreign Affairs
This is an archived blog post from The Acorn.
David Mulford, the American ambassador to India, met India’s ambitious petroleum minister and advised him to hold off signing a gas pipeline deal with Iran for at least another six months.
While it is easy to see Mulford’s advice as part of the United States’ combative strategy to contain Iran or even as its attempt to corner Middle Eastern energy supplies, it should give the Indian government pause, as it proceeds, enthusiastically but recklessly, to embark on an very unwise venture.
Most of the previous arguments against the pipeline have dealt with the implications of its transit through Pakistan — from Pakistan’s inability to guarantee its safety to its ability, nay inclination, to use it as a tool for coercive diplomacy. Giving Pakistan the ability to throttle the Indian economy and then expecting it not to do so is not the best of ideas to ‘secure’ India’s future energy supplies.
This does not, however, mean that there are no concerns about ‘supplier risk’. Iran’s relationship with the United States is in a state of flux, and its nuclearisation, should it happen, has profound implications for India too. As long as the Iranian regime remains at loggerheads with the United States, it is not prudent to enter into deals that require investment in long-term fixed infrastructure. That does not mean India has to yield to American pressure on how it conducts its relations with Iran.
The best alternative India has at this moment is to invest in gas terminals that can receive and process tanker-based supplies. The investment in these terminals is supplier independent. So while they can be used to process liquified natural gas (LNG) that arrives by sea from Iran, they are not restricted to that source alone. This makes sense even as India goes further afield in search of energy.
The Iran-Pakistan-India gas pipeline is an idea whose time has not yet come. India’s loony Left lives up to its description when it argues that India must push ahead with the project simply because America is against it.
Even as relations between India and United States improve, it may not be always wise to do America’s bidding, but it would certainly unwise not to heed its warnings on Iran.
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