Energy, Pakistan and a new Vision

[muse]

Talking energy at a time of outages
Gulfnews: Talking energy at a time of outages

06/13/2008 12:03 AM | By Tanvir Ahmad Khan, Special to Gulf News



High ranking energy experts and officials from the South Asian Association for Regional Cooperation (Saarc) countries and Japan have recently concluded a two-day symposium on energy security in Islamabad, Pakistan, and made some far reaching recommendations for enhanced collaboration and connectivity.

It was interesting to note that while South Asian governments are taking their time to translate the dream of regional cooperation into a reality comparable at least with the Association of Southeast Asian Nations (Asean), if not the European Union, independent analysts have become increasingly convinced that progress in several areas including energy security depends on South Asian countries addressing them together.

Only a couple of weeks ago, I sat with academics of repute from Pakistan, France and Germany to listen to why historic events such as Franco-German reconciliation provide some seminal ideas for a grand rapprochement also in South Asia.

Asia is undergoing an epoch making transformation and already represents an important locus of global economy. There are success stories in South Asia but over them hang clouds of uncertainty such as very low intra-regional trade (5 per cent for Saarc compared to 23 per cent for Asean and 61 per cent for the EU) and a growing energy deficit that would make it difficult to sustain high growth rates.

Pakistan's GDP growth rate has already slipped from 7.5 per cent to less than 6 per cent. India is still a fast growing economy. But in both cases the gap between energy supply and demand is widening rapidly. With the sole exception of Bhutan, every Saarc country faces an energy crunch heightened by escalating cost of oil imports. Even without the recent phenomenal leap in oil prices, South Asia was struggling to emerge from a low base line. Its 1.5 billion people have a combined GDP that is not even 3 per cent of the world's GDP and their share of global trade is 1.2 per cent. In South Asia, the installed power generation capacity (0.1 kw/capita) is six times less than the world average and thus constitutes a major constraint on accelerated development.

South Asia's potential for a dramatic increase in power generation depends on major investment and application of latest technologies in several sectors. The hydro potential by itself is most impressive. India's hydro potential is 150,000 megawatts, that of Pakistan 30,000, of Nepal 42,000 and of Afghanistan 23,000. But there are constraints of capital, technologies, environmental factors and internal political issues.

Coal is available in abundance. The Indian reserves are of the order of 102 billion tonnes while the figure for Pakistan is 1,929 million short tonnes. India produces substantial power from coal while Pakistani coal, concentrated in the Tharparkar desert of Sindh awaits a full-blooded government commitment even though the Chinese have done some valuable pioneering work.

The current dependence on imported oil is heavy in the entire region. Pakistan meets a mere 18 per cent of its needs from domestic production and in the past has been able to cushion the impact of stressed market conditions with occasional availability of concessional prices from the Middle East. India and Pakistan rely greatly on natural gas. It accounts for 50 per cent of Pakistan's energy consumption. Portfolios of strategies for future show similarities in most of the South Asian countries though Pakistan is particularly keen to promote gas imports from Iran, Qatar and Central Asia for its own use and for further transmission to India. The proposed Iran-Pakistan-India gas pipeline, the Turkmenistan-Afghanistan-Pakistan pipeline and Qatar-Pakistan link - pipeline or LNG - are the major projects under consideration. India is pursuing Myanmar gas through Bangladesh.

Opposed

The United States is opposed to projects based on Iranian resources but is keen to support hydel power supply from Tajikistan and Kyrgyzstan to Pakistan and beyond. India is now connected well to Bhutan and also to Nepal for the hydel power produced in these two countries. Experts dream of an energy ring as indeed of agreements and treaties for assured regional sharing in future. They talk of integrated resource mapping and planning in the region, creation of a Regional Petroleum Strategic Reserve and a Saarc compensatory oil finance facility.

The Islamabad symposium also showed special sensitivity to the availability of energy to all the regions and social classes. The experts also surveyed the potential of wind and solar energy in the sun-baked wind-swept plains and long coastlines of South Asia. When it comes to nuclear power, India alone seems to be capable of adding it in substantial quantities to the national energy pool, particularly if its proposed agreement for cooperation with the US goes through. Pakistan at the moment has only 2.3 per cent of its needs met from nuclear sources though it has plans for a follow-up of the Chashma nuclear power generation project. Be it as it may, the energy scene in South Asia should attract much attention in the oil rich states of the Gulf. It seems to provide great opportunities of investment in its energy sector.

There was much self-confidence when it came to matching material resources with human resources. The only uncertainty is if the political leaders can move fast enough to make Saarc and other existing or futuristic institutional arrangements, including trans-national power grids, an achievable goal in a time line appropriate to the current challenges.

Tanvir Ahmad Khan is a former foreign secretary and ambassador of Pakistan. He is currently Director General of Institute of Strategic Studies, Islamabad.

 

[nitesh]

Good thought, but the political scenarios does not permit such radical steps.

 

[muse]

Readers will recall Pakistan signed a US$ 5.00 Billion deal with TOTAL of France - nothin was allowed to come of it -- and now this:

US offers energy package
By Baqir Sajjad Syed

ISLAMABAD, July 19: The United States on Saturday assured Pakistan of increased cooperation in the energy sector to meet its growing energy needs.

The assurance was given by US Under-Secretary of State for Economic, Energy and Agricultural Affairs Reuben Jeffery during a meeting with Foreign Minister Shah Mehmood Qureshi.

A formal agreement to this effect will be signed between the two countries when Prime Minister Syed Yousuf Raza Gilani visits Washington later this month. Mr Gilani will also meet US Secretary of Energy Samuel Bodman.

The agreement will encourage new energy investments and support energy development opportunities in Pakistan.

The under-secretary met Prime Minister Gilani and a number of senior officials and discussed possibilities to promote new investments in Pakistan’s energy and infrastructure sector

We have been saying for the last 8 years that availablity of oil and gas in Pakistan is not the problem - the war is - and it is a war - over who will get to "provide" it to Pakistan.

 

[muse]

To any, all readers, please do read comments the post above this one


From Business Recorder

Conflict is about economic resources

EDITORIAL (July 22 2008): President of the New York based Asia Society, Dr Vishakha Desai, stated an important but often ignored truth when she said at a gathering in Karachi the other day that "the struggle between the East and the West is all about possession of resources and the regulation of their demand and supply."

She also pointed to a significant emerging reality as she averred, "it is in this effort and the realisation of a forthcoming post-American era that the US is repressing the Asian predominance. Its advent may be delayed but 21st century will be witnessed as the Asian Century."

The event in Karachi coincided with the concluding day deliberations of a high profile inter-faith conference in Madrid, where representatives of the three monotheistic religions - Islam, Christianity and Judaism - called for a UN special session to promote dialogue and prevent 'a clash of civilisations'.

Thus what is essentially a conflict about economic dominance was presented as a religion related fight, and the real motives of the perpetrators of the 'clash' kept under covers.

It is an open secret, though, that the US invaded and occupied Iraq not for the reasons it stated at the time, but because that unfortunate country owns the second largest oil reserves in the Middle East. It was also meant to strengthen the regional hegemony, Israel - an extension of the US itself.

Israel enjoyed an important place in the context not only because of the immense influence of the Jewish lobby in America, but also due to its demonstrated ability to overpower the Arab countries' weak armies, and hence to act on America's behalf to keep the Arab nationalist regimes from causing any harm to Washington's interests in the region.

It is widely known that long before 9/11 happened the US had been eyeing Afghanistan's potential as an energy route. Unocal - since merged with Chevron Corporation - a major energy explorer and marketer, had been actively engaged in pursuing a Trans-Afghanistan gas pipeline project that was to extend from the Central Asian States via Afghanistan and Pakistan to the Indian Ocean.

Interestingly, Unocal actually struck a deal in 1997 with the Taliban region, however, it fell through due to differences over modalities. Even more interesting is the story that the CIA and Unocal colluded in providing weapons and money to some Taliban at the time they were fighting for control of Kabul in 1996.

Given that background it may not be wrong to say that the ongoing war in Afghanistan is as much about al Qaeda's terrorism as it is about control over a potentially important energy route. It also needs to be said that had the Muslim countries not possessed oil, no one would have felt it necessary to talk of preventing 'a clash of civilisations'.

What may be a source of solace to many in this otherwise sad scenario is the fact, as the visitor pointed out, that the power of the US is on the wane. The 20th century, also known as the American Century, is about to become the Asian Century as China and India are in the ascendancy.

Together with some East Asian nations, they are fast on their way to grab the much-coveted title for Asia. The trends are more than obvious. The US economic slowdown is deepening. While layoffs mount, country's financial markets are in turmoil.

The business class is losing its confidence. The trend is unlikely to reverse itself in any significant and long-lasting manner. China and India, who between them share a little less than half of the world's population, have been showing impressive rates of economic growth. They are pursuing progress and prosperity with great enthusiasm and are set to become the leaders in industrial production and services sectors, respectively.

Pakistan certainly has the potential to be a prominent player in the developing Asian Century, if only it can exorcise its internal demons that have landed it in a state of political uncertainty and economic difficulties. It must also find an effective way to deal with the dangerous blow-back it faces from the war in Afghanistan.

 

[Majnun]

From more than 7.5 to less than 6 percent. Rupee's worth going from 56 constantly to touching 70. The country, which was rising from 1999 to 2007 is going back down.

If you look at Pakistan's history since 1951 (LA Khan's death), its best periods have come from 1958-68, 1979-88 and 1999-2007, all times that the Army was ruling.