Clashing interests: US threatens sanctions over Iran gas deal
The United States has renewed its opposition to the multi-billion-dollar Iran-Pakistan gas pipeline, warning that Islamabad’s continuous pursuit of the plan may invoke US sanctions.
The issue was raised during the fourth round of Pak-US strategic dialogue on energy that concluded in Islamabad on Thursday without any major tangible gains.
Officials familiar with the development told The Express Tribune that the US Special Envoy for International Energy Affairs, Ambassador Carlos Pascual, ‘advised’ Islamabad to abandon its plan to import gas from Iran. He proposed instead that Pakistan pursue the TAPI project, a gas pipeline through Turkmenistan, Afghanistan, Pakistan and India.
Pakistan has reservations about the TAPI project due to security concerns about Afghanistan and unsettled issues relating to gas prices.
The South Pars gas field in Iran is the largest in the world, meaning that its production costs for Iran are significantly cheaper than those for gas extracted from smaller fields in Central Asia, including the Caspian Sea fields to which Turkmenistan has access.
(Read: Central Asia, making up for lost time)
A US embassy spokesperson confirmed that Washington is concerned with Pakistan’s current direction, and the issue was raised in Ambassador Pascual’s meetings. “The proposed Pakistan-Iran pipeline, if built, could raise concerns under the Iran Sanctions Act. We are encouraging Pakistan to seek alternatives”, read a terse response from the US embassy.
The renewed opposition from the US came just days after high level talks between Pakistan and Iran, where the two neighbours vowed to go ahead with the project that would bring its first gas flow by 2014.
Water and Power Minister Naveed Qamar, who co-chaired the meeting, denied to The Express Tribune that such a discussion took place.
However, another senior government official said that despite opposition from the US, Pakistan would not abandon the project, as an agreement has already been signed with Tehran.
The two-day strategic talks ended without any significant developments, despite initial high hopes. The US seems reluctant to provide significant investment in Pakistan’s financially crippled power sector.
A senior government official told The Express Tribune that the US special envoy has informed Pakistani authorities that it would be naïve to expect large support from Washington in the power sector until there is an institutional overhaul in the way the energy sector is regulated and managed.
He said that the US has urged Pakistan to introduce major reforms by scrapping redundant policies and implementing new regulations. The latest US stance highlights the urgency to reform the sector that has stalled economic growth. Despite special cabinet committees, the government has failed to carry out reforms over the past three years.
According to a US embassy handout, Ambassador Pascual reaffirmed the United States’ long-term commitment to working with Pakistan to establish a commercially viable and sustainable power sector. It further stated that, during the talks, Pakistan underscored its will to strengthen energy sector governance and efficiency, pursue regulatory reforms, improve financial management, and create a business climate that helps drive investment.
The US, welcoming these plans which were elaborated in the Integrated Energy Sector Report, maintained that these measures will help develop a stronger foundation for investment. Both sides agreed to continue technical exchanges in areas that can help improve power availability.
“As all Pakistanis know, reliable and affordable energy is critical to Pakistan’s prosperity,” said Ambassador Pascual. “Without it, businesses can’t operate and families can’t light and cool their homes. Pakistan’s future depends on power.”
The US also welcomed Pakistan’s continued engagement with international financial institutions and the private sector to assess the feasibility of viable hydropower projects, a reference to the $12 billion Diamer Bhasha dam, for which the Asian Development Bank has agreed to provide funding.
Published in The Express Tribune, September 16th, 2011.
COMMENTS (77)
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Beware the NONSTOP SPECULATIVE Propaganda Campaign of lies and nonsense for War against Islamic Republic of Iran
This is all nonstop propaganda lies of nonsense like in IRAQ with WMD by zionist US aggressor from Iraq, Afghanistan to Libya. Iran has no nuclear weapons program and has been consistent all times. For about 12 years, Israel has claimed that Iran will have a nuclear bomb within 6 months or a year. The USA constantly issues accusations about Iran's "nuclear weapons" but to this day, has not produced one shred of evidence to support those accusations. So, why should one believe anything they say now? any potential delay in it is just imaginary. Iran wants to enjoy the benefits of NPT for peacefull nuclear energy that's why Iran is to remain in NPT Otherwise, Iran has quit from NPT a long time ago.
In principle, however, nothing in international law or in the Nuclear Non-Proliferation Treaty forbids the enrichment of uranium. Besides Iran, several other countries, parties or not to the treaty, enrich uranium without being accused of "threatening the peace." And in Iran, this activity is submitted to inspections by the International Atomic Energy Agency. These inspections, it is true, are constrained by a safeguards agreement dating from the 1970s. But it is also true that the IAEA has never uncovered in Iran any attempted diversion of nuclear material to military use.
While the US possesses and has used nuclear weapons in the past, Washington, in a politically-motivated move, is imposing unilateral sanctions against Iran, which does not possess nuclear weapons nor does it seek to develop such weapons. WikiLeaks – A fabricated conspiracy of nonstop propaganda lies to isolate Iran from other Muslim nations for US's benefits on behalf of unbreakable bond Israel.
Pakistan is in dire need of energy for keeping its economic engine alive and for keeping its humanity alive. This need should be fullfilled without any further delays or questions. This is Pakistan's leadership's responsibility to take care of its humanity that is suffering and dying everyday!!! Pakistan take care of your Humanity now immediately . . . no time for dancing around!! Take care of the energy crisis now!!
I think the people here are allowing their jingoism to triumph over the awareness of the economy.....
The fact is.....Pakistan cannot survive even for a day with US and UN sanctions !
@Subhash: we need gas for industries in karachi and faisalabad and america to bomb waziristan i wonder what is more beneficial
@John B: iran gas is cheaper and safer and it does not include india
@Punjabi: Read my comment as well to compare the views.
@rehmat: Do tell me about those wheat shipments when we were starving please my friend. My sister [ who is no more-May her soul rest in peace] used to talk about it.
@Blithe: In future India is going to pay Iran in Indian rupees. I have googled it and have read posts that the Americans have become jittery about this! The reserve bank of India has given permission for this and the American people are very angry about it and some have even suggested that the US should invade India now!
@Col(R)Bhutta: Well said sir... well said... Makes Sense!!
@Adil: "US gave India over 65 nuclear reactors with guaranteed fuel for 50 years in order to convince India out of the IPI project"
What is the source for this information? In fact US wants to sell nuclear power plants to India but is unable to do so due to India's liability laws. Since France and Russia do not have a problem with India's liability laws, India is signing commercial contracts with these 2 countries for nuclear power plants. IT is actually something that US complains about.
India has not received aid from the US in the last 45 years after the wheat shipments in the 60s during famines. This is the reason it has been able to pursue an independent foreign policy.
regarding getting cheap gas from Iran will definetly benefit pakistan but also we have to realize that the gas line will be a security concern with all the terrorist attacks so its not going to be in our interest so we have to analyise whats best for pakistan also we need better relations with Iran as they are our neighboring country.
TAPI Project is a trap .... as then, India will be controlling our Gas too, along with water. Getting gas from Iran is the right thing to do.
Pakistan has been brought down to its knees by the Americans. For the last ten years the war on terror has drained the Pakistani economy. Al Qaeda and the Taliban were intially the proxies of both the Americans and Pakistan in the war in Afganistan. America provided billions of dollars to fight the war. The money was spent on ARMS and not INFRASTRUCTURE. Today both America and Pakistan are bankrupt countries. The Al Qaeda and Taliban has won the war on an ECONOMIC basis. Now the Americans threatens Pakistan with possible sanctions. The only thing that the Americans can do successfully today is PRINT dollars on a daily basis and fool the word with their 1% inflation rate. Therefore it is time for the government in Pakistan to rethink their POLICIES.
Pakistan should take firm stand now otherwise the cost of gas and this project both will rise if we waste more time.
US should help Pakistan otherwise this threatening attitude of US will lose its remaining support in masses.
China can veto best case scenario, worst case we eat what we grow so no more cowering from US anymore.
The national interests of Pakistan's 180 million people must be put first, before the whims of any declining international power. Pakistan must now have an independent energy policy. Times are changing. Pakistan must sense the direction of the wind, and seize the opportunity. This pipeline must go ahead.
Kick the Yankee out and look for your own and regional interest. Just have courage to stand in front of US. She will move out. She is putting pressure tactics for her own interest.
But current leaders in Govt or out of Govt have no stake in Pakistan, every thing is in Western banks, wives, kid and businesses are in west and US gave them the collateral guarantees for protection and continues support. Hope is dying that they will stand for the interest Pakistan and its public (an animal farm).
Why are we looking around for gas? Thar Coal fields have over 20 TFC recoverable Coal Bed Methane (CBM) according to USGS estimates and in March 2007 a Canadian company had signed a CBM exploration and production agreement with Sindh Government. This company expected to work on recovering 3 to 5 TFC of CBM, which could be easily added to the national grid or used in gas to liquids but thanks to our bureaucrats this project has been side lined. No international donor will fund Thar because private equity is available for this energy project and we are ignoring the good opportunity. By the way CBM production process will also provide Thar with over 50 millions gallons of water every day. The same Canadian group was engaged by USGS in Afghanistan and guess what they found! The largest lithium deposit, substantial gold and copper deposits and 1.3 billion barrels of OIL. Starting from October 2011 international tenders will be floated while we look around for hand outs.
This is just amazing. No you cannot import cheap gas from right next door. No we would not help you get gas another way. Yes your 180 million population will suffer the scorching heat as a result.
The national interests of Pakistan's 180 million people must be put first, before the vagaries of any declining international power. Pakistan must now have an independent energy policy. Times are changing. Pakistan must sense the direction of the wind, and seize the opportunity.
The Iran-Pakistan pipeline is a an obvious solution to Pakistan's problems. It is low cost compared to TAPI, and will result in many spin off industries. It will also alleviate the electricity crisis to a great degree.
Iran's South Pars gas field is the single largest in the world. Pakistan may become a transit point for gas exports to the Far East. It is also highly probable that India may join the pipeline later on, in order to purchase low cost gas reliably. Even if India does not, China likely will.
So in time, the IP pipeline could become an IPC or IPI pipeline.
All this presents massive economic opportunities for Pakistan. Pakistan's people should press their leaders to go ahead with the pipeline.
Mind your own business,USA...
This Iranian pipe line is transparent strategy to extract economic concessions from the Americans who know that beggars can't be choosers.
@ik: Ever wondered why the US would want to do that? Throwing crumbs (forever) doesn't seem like a pleasant task.
@Long Live Pakistan: Why do Pakistanis behave like jilted lovers, hurt and pouting, when it comes to Pak_US relations. Why do we not understand that there are no friends or foes in international relations. It's simply a matter of convergence or divergence of interests.
@Subhash I think the over whelming opinion expressed here says it all and to borrow a phrase; with friends like the US, who needs enemies?
@Khawaja ji: Who asked you people to nurture terrorists in the first place? All those fake numbers that are quoted does not impress anybody. You spilled the 'raitha', it is up to you to clean it up. Don't expect sympathy from the rest of the world.
And this is our ally lol.......
@ Pragmatist,
No, sir. I guess you have not heard about the power of Pakistani army. If the pipeline is built, it will most probably be handed over to Pakistan for security which will build military posts all along its route and keep an eye on it using CCTVs and milimeter radars as well as armored patrols. Your twisted logic that terrorist will attack the pipe line does not stand up to the reality on the ground. Already the Pakistani produced gas comes from the same province and place where IP pipeline is to be built. Further more there are tens of thousands of kilometers of pipe lines in Pakistan. Never, and I repeat never a explosion has caused disruption of supplies in Pakistan. IP pipeline is feasible, economically and security wise.
This is not about Iran anymore. US gave India over 65 nuclear reactors with guaranteed fuel for 50 years in order to convince India out of the IPI project. So far US has offered Pakistan only the false dream of TAPI which will never be built as it passes through Afghanistan a country that has not seen peace since the time of Alexander the great. Besides the price tag of TAPI is twice that of IP. The other offers of a million dollars here and a few million there are just peanuts and will never solve Pakistan's energy problems. We have to also remember that gas provides for over 50% of Pakistan's energy needs from transportation to industry to home cooking. Beside energy natural gas is the only compound that can economically be converted chemically to artificial fertilizers which is very important in an agricultural country like Pakistan. Pakistan needs this gas badly. If US is serious to prevent it then they should come forward and offer Pakistan 65 high tech nuclear reactors each of 1000 MW capacity similar to the deal they have given India with 50 years of guaranteed fuel. Other wise, US opposition to this pipeline shows that US is not against Iran on this issue rather it is against Pakistan. This would show that US has plans to destroy Pakistan and economically choke it. We have to remember that Pakistan is a poor country with a per capita GDP of just under 1000 dollars, while US per capita GDP is something like 40,000 and Iran's 6,000. It is clear that in this game Pakistan is the loser being the most vulnerable economically. US opposition to this deal would damage Pakistan much more than Iran. It is an irony to see US sacrificing one of its oldest ally, a nation that fought a covert war against US enemies for decades just to minimally damage Iran. If IP is not built, Iran will go on just like ever having lost an export opportunity. The total value of gas pumped through this pipeline is going to be lesser than 1% of Iran's GDP, a minuscule amount for Iranians. But if IP is not built Pakistan's economy will cease to exist and close to 200 million people in Pakistan will suffer the consequences of economic melt down, energy starvation, political instability and insecurity. Already the signs are there that the energy starvation is pushing the boundaries of society and fractures are occurring. Five years down the road with no IP, Pakistan will not be able to survive.
I am just not agreeable to another country telling my country what to do. Iran is the latest bogeyman in the West presumably for their designs on international energy sources before China, Russia and India can get their hands on this energy. It is as simple as that. Newspapers are full of rhetoric spewed out by the Iranian leader who presumably, says that Israel should be removed from the map of the world, I ask you "Has anyone actually heard what the Iranian leader has said????" Israel has a right to not only exist but to exist in security and the Palestinians too must share that dream. It is time to move forward in that part of the world as well. Pakistan, however, must do what is in it's own National interest, it is time we put our feet on the ground and stop lying down each time our tail is twisted.
PAKISTAN should go ahead with its project with IRAN. as US only looks after its own iterests so PAKISTAN should do the same . They have signed a nuclear deal with India and said its not possible with Pakistan so who they are now to oppose this deal ?
@Mian: Sir, Like you have your own interests, so do other nations have their's. That means you have to choose between Iran & the USA, weigh the pros & cons and then take the call.
US policy is to enslave Pakistan - to keep it on its knees so that US can keep throwing crumbs. Its time for Pakistan to stand up & go hungry if it has to but keep its dignity (whatever left)
US never want to see Pakistan progress and not able to see the people of Pakistan in peace. Please Government officials go for this deal.
@Hasan: @Cautious: You must have felt the pulse of Pakistani inspirations. USA should first win war in Afghanistan, stabilize it and then offer the TAPI project deal , a gas pipeline through Turkmenistan, Afghanistan, Pakistan and India. USA wants Pakistan to defer its energy needs for at least three decade minimum. By then the industry would have come to a halt and the wheel of progress would have stopped. Then there would be no need for sanctions as the act would have done the trick. As a matter of fact, TAPI is not workable and in itself is sanction on Pakistan.
To hell with America!
pakistan should go ahead with iran gas project ... it will help them grow their economy fast !
U try to do something good for Pakistan and they dont let u !
GO FOR IT PAKISTAN !!! Allah will be with you Economically, Politically and otherwise !
Sanctions please... But unfortunately our corrupt and pathetic, evil leaders will never disobey their masters! The Untied States needs us much more than we need them.
I offer my comments based on experience.. US would always pursue TAPI projects for following reasons:- 1. It is in line to their hegemonic design. 2. It would serve the purpose for India whom US wanted to give most leading role in the region and specially after exit of NATO / ISAF from Afghanistan. 3. It would ensure strategic presence of US / UN forces in the region & allow continued drum beating of terrorism along with sanctions against countries harboring terrorists which would keep main supply route of TAPI flowing. 4. This would serve their economic reasons which now have gained alarming priority. Pakistan must continue IP project and should also explore supply of other petroleum products as it would cost them much less than what it is paying now.As for as central Asian oil & gas supply is concerned it will only be possible if China plays an important role in it.
Sanctions are great. No funds for military,no useless F-16's and military hardware. only military establishment will not be happy with sanctions.
So it's true, 'If you are enemy of US, it's terrible but if you are its friend, it's a disastrous'. As said by Henry Kissinger :)
Cheap energy is future requirement of this nation, Pakistan. From the very begning usa using pakistan as a tissue paper giving the name of strategic partner, and usa is also planning for the complete failure of pakistan. If we are pateriot towards our nation and country we have to decide and plan for our future genrations as well as for the future of this country. we can only achive our targets by confining americans up to embassy.
@Cautious: I wonder what would happen you your Indian Interest later on with I--ran!
Pakistan must safe guard its national interests - albiet by adhereing international treaties - and find ways to push forward at this project. There are no alternatives to cheap energy.
and they say that they are our friends.pathetic
This is what will happen to mercenaries, they cannot take decision on their own, they need to abide by their master's order. Personally I think this(Pipeline project) is a blackmail game by establishment to keep US on their toes, but they may end up with a losing cause.
Please understand that the United States is providing notice that it may invoke sanctions against Iran and if this was to occur it may not be in Pakistan's interests to rely on imported gas from Iran. All countries have interests; Pakistan's interest lies in securing a reliable source of gas; the United States is interested in regulating the proliferation of nuclear weapons. Countries like Iran pose a potential threat to all neighboring countries (including Pakistan).
Does anyone tell me about any project in Pakistan started by the support of US in energy sector in 10 last 15 years.
I think let the Americans put sanctions on us. It would be good wake-up call for us to stand up on our feet instead of depending on the handouts of any nation in the world. We need to decide on our own what we can do or what we should not do. Only problem is that we wok on the principle of beggars can't be choosers so that is why Americans want their way. To be honest why shouldn't they as they are giving us money, charity, loans, financial aid, etc so why shouldn't they question us as to what we are doing and what no. So bring the sanctions on so we start to depending upon ourselves only.
american sanctions on pakistan would mean prosperity, progress and peace for pakistan... i think pak shd side with iran but surely the puppet establishments likes the taste of cowboy's shoes......
Hahahaha. Our best friend, The USA.
Iran has been against U.S for the past 30 years and we have been friends of America during that time. Just compare where they stand and where we stand. I don't even have the courage to think about the catastrophe we are in, it's too painful. Now we are scared to go against the whims of country for a gas pipeline we so desperately need. Thanks a lot for your unconditional support America we have been doing great since we became your ally.
After September 11 2001: 3486 bomb blasts in Pakistan, 0 in U.S 283 major suicide attack in Pakistan, 0 in U.S 21672 civilians lost their lives or got serious injured in Pakistan, 0 in U.S 3.5 million displaced due to America's war which we're fighting $68 billion loss to the national economy
Oh payiee. If instead of Pakistan it were China importing gas from Iran, would the US have the guts to say anything. And everyone knows how many Indian businessmen do projects in Iran. Why does America not say anything to them?
Anyway in the current situation Pakistan should just ask America to foot the gas bill or at least the differential from importing from Iran or get Qatar to extend the Dolphin pipeline to Pakistan immediately.
The pipeline is a waste of money. Once commissioned it would be the most tempting target for terrorists. They will blow up sections of the pipeline every single day. Eventually the cost of maintenance will be so prohibitive that the project will have to be shelved.
We need to prepare ourselves for the future. The American influence in the region is dwindling an apart from Afghanistan, they really have no say. We should develop better relations with our neighbors who are also the powers of tomorrow. In 20 years we will ask ourselves: who was America?
None of the accused in 9/11 was pakistani, 9/11 attacks were not planned, financed or orchestrated in Pakistan, yet America threatened to bomb pakistan into stone age if it did not cooperate in war on terror. The countries which were involved were not bullied. Now, instead of going against Iran, US is threatening us. The reason is that we have made ourselves an easy target.
Pakistan may face anarchy due to perpetual shortfall in energy supplies which has caused its industry to shut down and contributing towards abnormal unemployment levels. The United States if faced with such problems will not hesitate even to invade soveriegn countries to ensure its supplies but is threatning us. This should not be accepted under any pretext and Pakistan must go ahead with this venture.
The US proposal must accompany with incentives such as India-like civil nuclear cooperation, drone technology etc. From the dry proposal, it looks like the US is not interested in the prosperity of Pakistani citizens and that they want us to live in the darkness.
Interesting developments. Iran missed the opportunity when Obama extended his olive branch via you tube. This pipeline is dead until Iran lets in IAEA inspectors. With election coming next year and unrest in middle east neither party in US wants to look weak on Iran until Iranian president steps down. So another five years. PAK has a hard choice.
Caspian pipe line comes with two goals. Stability in Afghanistan under PAK support ( minus haqqani network) plus gas. Caspian pipe line is a win- win for both NATO and PAK. Iran pipeline is in conflict with UN resolution and US interest.
US sanctions if Iran pipe line continues? Very likely after NATO transfers security to Afghanistan. I thought US would say ok to the pipeline deal due to recent thawing relations with PAK and impending release of US hikers by Iran. But now with Egypt and Turkey at odds with Israel, concessions to Iran is unlikely. Should wait and see if the hikers will still be released by Iran.
Sometimes PAK should look only her national interest. Gas is a gas, wherever it comes from. Get rid off Haqqani network, stability returns to Afghanistan, and caspian pipeline no longer under threat and all are happy. 10 years from now Iran pipe line may be a reality and PAK benefits both ways.
PAK foreign policy always picked a wrong side in conflict. Haqqani and Iran Vs NATO and Afghanistan. PAK should make a choice for her gas.
India and china do not care from which pipeline they get their gas.
Pakistan can't survive without doing business with its neighbors, Iran gas project is only logical.
US would never allow Pakistan to come closer with Iran and also never permit us to curtain our energy crises as they claim to be our friends. And by virtue of thretening Pakistan they prove to be our friends.
@Cautious: You are right about United Nation of America sanctions. Looks like back in the day Iran didn't take a dictator installed by CIA lightly either. Remember Iran was once a secular democracy before Shah was installed with CIA backing.
Pakistan has already paid a high price running into billions of dollars due to American interference in the two gas projects. Had these projects been implemented on time and when initially considered, the total cost would have been less than half the present day cost. The USA and her allies are interested only in pursuing their interests and agenda. It is high time to ignore threats from USA and move forward with the PI and TAPI gas projects.
America is our friends according to people of questionable intellect, dubious organizations and subversive press.
This sanction threat shows you how America is stifling Pakistan energy needs. I don't know what the national security agencies and economic managers are doing?
America should provide a Lower Cost Alternative to Pakistan than this deal instead of threatening Pakistan.
US should help Pakistan solve power crisis now! Maybe it should get first dibs at the sweet oil Libya has first!
I'm no fan of Iran or Iranians in general but USA should offer Pakistan an alternate if it's so damned concerned about Pakistan trying to meet it's energy needs.
Pakistan should go with the Iran gas project, let Americans put sanctions. They are doing everything to just break, bribe leaders or bomb Pakistan. Gas pipeline and dams both are essential to Pakistan's common man. Gas from Iran would provide our industries new lifeline. Dams would generate electricity as well new land would be irrigated. New Dams would built all over Pakistan new Indus water system and it could irrigate even as far as Tharparkar and far areas in Baluchistan. Iran is our neighbor and in future we should even built world biggest refinery to refine Iran crude oil and other petroleum products so it could grow our GDP and create millions in job. Let Americans put sanctions on us already there are bombing us.
Iran is a country that has chanted "death to America" for over 30 years - that's not something American's take lightly - especially after 911. You have a difficult choice to make --- the American have the clout to back up their threats and US sanctions could easily become UN sanctions.
West, under the leadership want to crush the people and the country of Pakistan. Media is their right arm in this effort.
"According to a US embassy handout, Ambassador Pascual reaffirmed the United States’ long-term commitment to working with Pakistan to establish a commercially viable and sustainable power sector." But it will oppose the cheaper IP Gas project. When do our rulers understand that US only see its own interests and never dare even to drop atomic bombs. Its our rulers turn to have a look at the worst economic condition of Pakistan and its poor people and be firm on its decision to built the pipeline. Not only pipeline, there are many more fields which can be explored between Iran for the prosperity of this beloved country.