Pakistan, Iran defy US Sanctions to Inaugurate Gas Pipeline

Iran’s president Mahmoud Ahmadinejad and Pakistani president Asaf Ali Zardari on Monday inaugurated a gas pipeline that will supply Pakistani cities with Iranian natural gas. The pipeline has been largely completed on the Iranian side, but Pakistan had problems getting the international financing to complete its leg, which will cost $1.5 billion. Iran is loaning Pakistan $500 million, and Pakistan is putting up the other billion from its own resources. They plan to complete the project by the end of 2014.

The United States has threatened unilateral third-party sanctions against companies and countries initiating big economic enterprises with Iran. The Pakistani stock market lost a few points on fears that the US Department of the Treasury will come after Pakistan for its defiance.

Pakistan, a country of 180 million, is the sixth largest in the world and it faces a severe energy crisis. It has few hydrocarbons of its own. It has enormous potential for solar and wind, but has not developed alternative energy sources– and lacks both the investment capital and the know-how to make quick strides in that area. The energy crisis is so bad that major urban populations suffer with frequent electricity outages (try running a factory that way) and brown-outs. In the punishing summers, the brown-outs or ‘load shedding’ can be deadly to certain populations, including the elderly and infirm. There have actually been electricity riots in large cities such as Lahore.

The original plan for the pipeline had an Indian leg. Whether India will in fact join in is now in doubt. But Iran may calculate that energy-hungry India won’t be able to resist hooking into the pipeline once it reaches Lahore, only 60 miles from the Indian border. Because severe US sanctions on Iran are just made up by the US congress and the Department of the Treasury and have little international backing, it is likely that they will increasingly be defied by an energy-hungry world– I.e. Pakistan’s defection on this issue, and China’s refusal to cooperate, are probably bellwethers for other countries not deeply beholden in some way to the US.

That Pakistan needs the gas, and can’t get it on such favorable terms elsewhere, is inarguable. But the two countries are calling the pipeline the ‘Peace Pipeline’ and it seems likely that the Zardari government is seeking it in part in hopes of improving relations with Iran at a time when America is disentangling itself from the region. Pakistan may want Iran’s help with stabilizing Afghanistan as the US leaves, and may want to avoid an India-Iran (Shiite-Hindu) alliance against (Sunni) Pakistan. Zardari’s Pakistan People’s Party is facing elections soon, and he may want to signal his independence from the US, which is extremely unpopular in Pakistan, in part because of its drone strikes and violation of Pakistani sovereignty. It is also possible that the civilians around Zardari are attempting to firm up relations with Iran as a way of offsetting the alliance of some hard liners in the officer corps with Saudi Arabia and with elements of the Taliban.

Euronews reports:

The USG Open Source Center translates an interview on the issues around the pipeline by Ikram Sehgal (former military officer and now head of a private security firm), appearing on the Geo TV satellite station in Urdu:

“(Begin live relay) (Unidentified anchor) The Iran-Pak (IP) gas pipeline project has been formally inaugurated by the presidents of Pakistan and Iran. We have been joined by analyst Ikram Sehgal to discuss the project. Sehgal, do you think the project will help Pakistan overcome the energy shortage?

(Sehgal) It is a major as well as positive development because Pakistan is an //energy-starved// country. Due to the shortage of energy, our factories were getting closed and services were being suspended. Unemployment and price-hike were increasing, which could lead to eruption of anarchy in the country. I had been a critic to this government but it is their //very brave// and //courageous// decision. It was also necessary. Also, Iran is our good neighbor. We have got the gas at good rate. It is necessary that the project has positive effects on other areas as well. Obviously, the United States is not happy with it, but we will have to convince it that we direly needed the project for being an energy-deficient country. India imports oil from Iran but there are no sanctions against it. The United States has also signed energy pact with India, under which the later can import nuclear equipment from several countries. The United States must realize that if anarchic situation develops in Pakistan and peace and stability is disturbed within the country, it will have effect on the region. Hence, the United States should take long-term view of the project.

(Unidentified anchor) Sehgal, do you think the upcoming government would also be able to bear the US pressure on the project?

(Sehgal) Since the entire nation is united on the project, there would be no issue for the coming government. Also, the next government will not have to face such level of pressure. The incumbent government should be lauded for initiating the project. (end of live relay)”

22 Responses

  1. The BBC article on the subject probably has the right map. The pipeline is more likely to be built along the Makran coast of the Arabian Sea than go through the interior of Baluchistan. The biggest threat to the pipeline is likely to be Baluch separatism, with terrorists blowing up the pipeline. Such separatists are likely to be supported by the US. Building it just south of the Makran Coastal Highway mitigates the risk.

    • “The biggest threat to the pipeline is likely to be Baluch separatism, with terrorists blowing up the pipeline. Such separatists are likely to be supported by the US.”

      Would you please provide evidence for your contention that Baluchi separatists would “likely be supported by the US”? The US has never supported separatist movements in Pakistan. An elementary understanding of the dynamics at work in the region reveals why; any breakup of Pakistan makes securing US interests in the region much more difficult. And the US is not going to support “blowing up the pipeline” as part of its Iran sanctions regime. Blowing up a pipeline that can be easily repaired is a pinprick; the US wants to cast the net wider via sanctions.

      • Bill,

        Please look up the entire Dana Rohrabacher episode. Here is a starting point: link to tribune.com.pk

        Of course, the actions of one senator do not represent US foreign policy, but it does give an idea of sentiments in Washington.

        • Rep. Rohrabacher’s bill for support is a moral support to persecuted peoples anywhere in the world that the United States government provides. The US policy no matter which party is in majority has been to stand with liberty and it is natural that the persecution of Baloch people by the Pakistan military and the ethnic Punjabi majority that dominates all upper echelons of military power, would engender moral support by US.

        • “Of course, the actions of one senator do not represent US foreign policy, but it does give an idea of sentiments in Washington.”

          The actions of Dana Rohrabacher do not even represent the sentiments of the Senate, much less those of the US Government. You completely misread Washington if you think his approach to Baluchistan represents Washington thinking. I repeat, there is US interest in seeing Pakistan dismembered. To think otherwise is to join the ranks of the conspiracy theorists.

        • To correct my typo: “I repeat, there is NO US interest in seeing Pakistan dismembered

        • This is a reply to DesTex.

          US support for oppressed people?

          You mean 400,000 Indians murdered by Guatelmala’s pro-US oligarchs? 600,000 Chinese and leftists murdered by the supporters of Suharto’s junta in Indonesia, which the US became very friendly with, followed by hundreds of thousands more dead in East Timor and other Indonesian suppressions? Or all the people killed by the European empires that the US maintained business relations with – reciprocated by their ignoring our bloody conquest of the West and the Philippines?

          Tell me how many Baluchis have been killed by the Pakistani military – while the US showered it with aid after it beheaded a leftist elected president?

          I think your definition of liberty is very different than mine.

        • Dana Rohrbacher, aka “Taliban Dan,” does not in any way representing the thinking of mainstream Washington, or even anyone other than Dana Rohrbacher.

          You might as well quote Mike Gravel as proof of American intentions.

  2. An extremely interesting article about the relationships between countries like Iran and Pakistan and how they might help stabilize Afghanistan. My guess is they will not intervene militarily and become the latest invading force to face defeat.

    According to a new report this nations schools need about half a trillion dollars to repair our decaying schools. It is interesting in that a half trillion dollars is just about the amount we have squandered in Afghanistan alone. If only Bush could have airlifted pallets of money to our schools instead of Iraq.

    • Consider the idea that there are people who wanted our public schools ruined and replaced by private institutions they could control, and then you see that the right-wing support of funding war has grown to justify the defunding of those parts of government that help the people it hates.

  3. This illustrates what may happen if people are left to their own devices. External forces and agencies antagonise some and sponsoring others – often the worst elements. Without this there is sufficient enlightened self interest in the region to sideline the hotheads. Potential extremists and quislings exist everywhere. The problems arise when they are sponsored and cultivated.

  4. The world continues to see that despite sanctions–and the desires of the Sunni Gulf states and the US–Iran, for many reasons, is a dominant player in the region. While the mainstream media relentlessly points to its supposed obscurantism, that same media continues to ignore elements of its modernism. Consider:
    “Which country’s scientific output rose 18-fold between 1996 and 2008, from 736 published papers to 13,238? The answer – Iran – might surprise many people, especially in the western nations used to leading science. Iran has the fastest rate of increase in scientific publication in the world. And if political relations between Iran and the US are strained, it seems that the two countries’ scientists are getting on fine: the number of collaborative papers between them rose almost fivefold from 388 to 1831 over the same period.” “In 2012, Iran has the twenty-fifth-largest economy in the world according to the CIA and the IMF. With a per capita income of roughly $11,000–comparable to that of Brazil, South Africa, and several former communist states in Central and Eastern Europe–its status as a middle-income developing country is well established.”
    link to detailedpoliticalquizzes.wordpress.com

  5. It is highly ironic: when the Arabs attempted to impose secondary sanctions on Israel, preventing THIRD PARTY companies from doing business with the Arabs if they also did business with Israel, the US was adamant that such secondary sanctions were illegal and constituted an attempt by the Arabs to “impose sovereignty” on such third parties, and the US even passed laws that explicitly forbad abiding by the Arab Embargo.

    Now, the US is the one imposing secondary sanctions, in violation of the same WTO rules that the US sponsored and championed.

  6. I’ve been reading announcements of the inauguration of various versions of this pipeline for almost as long as I’ve been studying Iran and Pakistan — nearly 3 decades..

    Everything you write makes sense, all “rational.”

    Yet then I remember all the past announcements, all the false starts, and I wonder if this one too is yet another “pipedream.” What’s different about this time?

  7. ” It has enormous potential for solar and wind, but has not developed alternative energy sources– and lacks both the investment capital and the know-how to make quick strides in that area”

    Maybe instead of threatening Pakistan, shouldn’t the USA should assist that country with the development of its enormous solar and wind potential?

    increase green Jobs in the USA, promote clean energy independence in Pakistan, and reduce oil consumption, with one stroke.

  8. The groundbreaking ceremony of the Iran-Pakistan gas pipeline project performed jointly by President Asif Ali Zardari and President Mehmoud Ahmadinejad at Gabd, located in Iran close to Pakistan border, on Monday was, by all logic, a giant leap in history. For the Pakistan government that has not, at least during the past five years or so, been known much for disregarding the US command or counsel to suddenly ignore the threat of sanctions is an act of no small courage. Overwhelmed by financial constraints, it looks up to Washington for relief through international financing institutions like the IMF to which it is at present heavily indebted and might have to have recourse for another package to bail itself out. Sanctions at this stage would further hamper the already crippled economy to get reactivated. Going ahead with building the pipeline signifies that Pakistan has finally realised that its salvation lies in aggressively pursuing a policy of fulfilling energy requirements. Economic networking with Tehran and through Gwadar with Beijing would make for regional cohesion of common interests and would largely go towards enabling us to meet the challenge emanating from our eastern border. Viewed from that angle as well, the decision to pursue the long-delayed project was a strategic move of sterling significance for Pakistan and stability in the region. And that might also persuade the leadership in New Delhi to see the advantages of living in harmony with neighbours, respecting their right of sovereign status and eschewing its hegemonic ambitions. No doubt, it would also have a positive impact on integrating Central Asian States with this region. President Asif Ali Zardari indeed deserve a big hand of applaud.

  9. The rapidly deteriorating energy problem, besides some other equally grave issues like massive electricity shortage, miserable law and order situation and the horrendous menace of terrorism, has taken a heavy toll on the economy of Pakistan. Industries and businesses are winding up. They are moving to countries that do not have such problems, and offer a congenial atmosphere with far better business prospects than Pakistan. The situation is indeed alarming and depressing. In the prevailing critical situation the news of implementation of the Iran-Pakistan gas pipeline truly comes as breath of fresh air. The long-pending project — a joint venture of neighbouring Iran and Pakistan — if it is able to see the light of the day, will significantly help in reducing the massive gas shortage Pakistan faces today. It would perhaps also help in rejuvenating the country’s industries that have almost come to a halt due to inadequate gas supply, and revive industrial production. Bravo President Asif Ali Zardari for this historic step.

  10. On one level,
    the US invasion of Afghanistan was punishment in response to Taliban recalcitrance on approving the TAPI pipeline, which would have skirted around Iran’s Eastern border, bringing Turkmeni natural gas through Hirat, Farah, Helmond and Kandahar Provinces, into the Baluchistan Province of Pakistan, and to the coast between Gwadar and Karachi. From there, on to India.
    Before assuming his current duties, that TAPI pipeline is what Hamid Karzai worked on for UNOCAL for 20 years.

    So, if the Afghan war was initiated in order to push the TAPI pipeline through,
    would it be fair to say that we have now lost that war,
    and that Iran beat us ?

    ________ ________

    As for the assertion that the USA stands in solidarity with oppressed minorities, bringing freedom and liberty in our wake,
    there is an interpretation of that same Afghan war that views it as a race war, black vs. white, “Northern Alliance” vs. Pashtun,
    and that US forces are fighting to impose the subjugation of Pashtuns under the tyranny of Tadjik, Uzbek and Hazara domination. Check, for example, how many Pashtuns not of Karsai’s Popalzai clan are in the Afghan government, army and police forces. Check where US forces were fighting to suppress the civilian ppulation, before mostly being withdrawn to their barracks last year.

  11. Perhaps a conspiracy theory is all that it is. Check out a Pakistan Army perspective on neocon intentions of dismemberment of Pakistan, complete with a map, below. Or check out Pepe Escobar’s “Pipelinistan.”

    link to firewithin-jhb.blogspot.com

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