Pipeline politics—A study of India′s proposed cross border gas projects

Energy Policy 62 (2013) 145–156

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Pipeline politics—A study of India′s proposed cross border gas projects Hippu Salk Kristle Nathan n, Sanket Sudhir Kulkarni, Dilip R. Ahuja National Institute of Advanced Studies (NIAS), Indian Institute of Science (IISc) Campus, Bangalore 560012, Karnataka, India

H I G H L I G H T S








We We We We We

justify the need for cross border energy trade through gas pipelines for India. examine prospective pipeline projects—IPI, TAPI, MBI and their security issues. develop scenarios and analyze role of actors, their positions, and strategies. discuss technology and policy options for realizing these gas pipelines. propose energy induced mutually assured protection (MAP) for regional security.

art ic l e i nf o

a b s t r a c t

Article history: Received 17 November 2012 Accepted 18 June 2013 Available online 15 August 2013

India′s energy situation is characterized by increasing energy demand, high fossil fuel dependency, large import shares, and significant portion of population deprived of modern energy services. At this juncture, natural gas, being the cleanest fossil fuel with high efficiency and cost effectiveness, is expected to play an important role. India, with only 0.6% of proven world reserves, is not endowed with adequate natural gas domestically. Nevertheless, there are gas reserves in neighbouring regions which gives rise to the prospects of three cross border gas pipeline projects, namely, Iran–Pakistan–India, Turkmenistan– Afghanistan–Pakistan–India, and Myanmar–Bangladesh–India. This study is a political analysis of these pipeline projects. First, it provides justification on use of natural gas and promotion of cross border energy trade. Then it examines these three pipeline projects and analyses the security concerns, role of different actors, their positions, shifting goals, and strategies. The study develops scenarios on the basis of changing circumstances and discusses some of the pertinent issues like technology options for underground/underwater pipelines and role of private players. It also explores impact of India′s broader foreign relations and role of SAARC on the future of pipelines and proposes energy induced mutually assured protection (MAP) as a concept for regional security. & 2013 Elsevier Ltd. All rights reserved.

Keywords: Cross border energy trade Gas pipeline projects—IPI, TAPI, MBI Political analysis

1. Introduction 1.1. India′s energy crises India′s energy situation is at crossroads. It is characterized by increasing energy demand, high fossil fuel dependency, large import shares, and significant portion of population deprived of modern energy services. From 2000 to 2010, India′s primary energy consumption increased at a compound annual growth rate (CAGR) of 5.9%, while global consumption rose at a CAGR of 2.5% as a result of which India transitioned from being the world′s seventh largest energy consumer in 2000 to the fourth-largest within a decade (Ernst and Young, 2012). With total primary energy consumption of 559.1 Mtoe (4.6% global share) in 2011, India

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comes next to China, United States, and Russia, whose global shares are 21.3, 18.5, and 5.6%, respectively (BP, 2012). With the rising population and increase in economic activity, India is projected to become the third largest energy consumer in the world by 2020 (Alstom, 2012). By the International Energy Agency (IEA, 2010) estimates, India′s total primary energy demand will rise to 1285 Mtoe by 2030. India′s energy demand is primarily met through fossil fuels. As per the latest statistics, coal, oil, and natural gas together meet 91.7% of the India′s primary energy consumption (BP, 2012). Coal is the key fuel in the energy mix accounting for more than half (53%) of the primary energy share. Oil and natural gas have shares of 29 and 10%, respectively. Insufficient indigenous hydrocarbon resources have led India to import a growing share of its energy (IEA, 2010). India, with 17% of world population, has only 7, 0.3 and 0.6% shares of world′s proven reserve of coal, oil, and natural gas, respectively (BP, 2012). India′s reserve to production (R/P) ratios for coal, oil, and natural gas are 103, 18.2, and 26.9 years,

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Table 1 Production and consumption of different fossil fuels in India in the year 2011. Source: BP (2012). Fuel

Production Amount (Mtoe)

Coal Oil Natural gas

222.4 40.4 41.5

Consumption World share (%)

Amount (Mtoe)

5.6 1.0 1.4

295.6 162.3 55.0

World share (%) 7.9 4.0 1.9

respectively, whereas the corresponding figures for the world are 112, 54.2 and 63.6 years. If India is to use own reserve fossil fuel at the present consumption rate, then coal, oil, and natural gas would last for 77, 4.5, and 19.6 years, respectively. The production and consumption values of these three fossil fuels for India are given in Table 1. Since the consumption in the above fuels is more than production (see Table 1), the balance is met through imports. India imports about three-fourths of the crude oil, and this share is going to increase to more than 90% by 2030 (Kumar, 2005; TERI, 2006; IEA, 2007). Though India has the fifth largest coal reserve in the world, most of country′s coal (i.e. 84%) is non-coking type (i.e. suitable for thermal power) of which 64% are of grade E–G, which have high ash and moisture content and low calorific value (Ernst and Young, 2012). For this, high quality coal needs to be imported, which are blended with domestic coal in power plants to improve the overall calorific value. India′s import of coal, which is about 13%, is projected to increase to 25% by 2030 (IEA, 2007; Reddy and Nathan, 2011). Natural gas consumption in India has more than tripled in the last two decades, with liquefied natural gas (LNG) imports starting in 2004. In 2009, net imports of natural gas reached 15 bcm, i.e., about 30% of total consumption, and is expected to rise to 55% by 2030 (IEA, 2007, 2010; Reddy and Nathan, 2011).1 Increases in fossil fuel energy demand and import shares are not the whole story of India′s energy scene. India suffers from energy deprivation as well. More than one-third of India′s population, i.e., 0.40 billion people do not have access to electricity; and about three-fourths, i.e., 0.85 billion rely on the traditional use of biomass for cooking (BP, 2012). As per the last national sample survey on energy use, 45.1% of rural and 7.8% of urban households were without electricity, and 90% of rural and 33% of urban households do not use clean cooking fuels (NSSO, 2007). The energy disparity and deprivation makes India′s per capita primary energy consumption one of the lowest in the world. The global average per capita consumption is 1747 kg of oil equivalent (kgoe), while India′s per capita consumption is merely 447 kgoe (Ernst and Young, 2012). This low value reinforces the fact that as India continues to move on a high economic growth path, and income level rises, the households move up in the energy ladder and there will be increased energy consumption in the years to come. The international energy situation compounds the energy crises in India. The 1973 oil crisis and also the turbulent times faced by India in the aftermath of Gulf War of 1991 made India realize the need for diversifying its energy supply base. The energy crisis of 2000s – characterized by rise in oil prices – is due to continued increase in demand of oil both by developed countries

1 Here, we have limited the discussion to fossil fuels and did not go into nuclear and other renewable as fossil fuels form nearly three-fourths of country′s total primary energy demand (TPED), and the share of fossil fuel in TPED is going to rise from 73 to 77% during 2009 to 2035 (IEA, 2011). Moreover, the focus of this paper is on natural gas, hence we have limited the discussion to the same.

like USA and emerging economies like China and India. With the increase in global demand for energy and supply uncertainties, it has become a challenge for countries like India to assure provision of petroleum and hydrocarbon resources to sustain growth in industrial and economic activities. 1.2. Importance of cross border energy trade Trade is an economic activity. Cross border energy trade, fundamentally follows the same economic principles of trade of any other goods and services across the borders. Excess demand in one side and excess supply of energy at the other side of border opens up increased cooperation between neighbouring countries to trade in energy (Reddy and Nathan, 2011). Energy being a strategic sector, cross border energy trade necessitates political commitment. Cross border energy trade has four-prong benefits. First and foremost, cross border trades may lead to the reduction in energy inequality in the region in question. Second, it creates a win–win–win scenario for the exporting country (by bringing in revenues), for the importing country (by reducing energy poverty), and for the transit countries, if any (by generating revenues through transit fees). India–Bhutan electricity trade is an example where India could offset some of its electricity deficit due to this trade, and Bhutan is all set to propel itself to middle income status from the current LDC status partly due to energy export earnings (UNDP, 2007). Georgia is an example of transit country, where development of the East-West Energy Corridor has become one of the main engines for its economic development and political stability (Revenue Watch Institute, 2012). The third benefit of cross border energy trade is that it necessitates infrastructure development across border areas, which are usually remote, in difficult terrain, and away from important cities and mainstream economy. Infrastructure for cross-border energy trade connects inaccessible areas stimulating economic activities. Last, but not the least, cross border energy trade facilitates improved political relationships among the trading and transit countries. For instance, the cross border energy trade among ASEAN (Association of South East Asian Nations) countries has lead to greater cooperation in the region. The politics of cross border trade is worth examining, not only because it is one of the least explored geopolitical issues, but also has potential for spillover effects to increase cooperation among countries. It involves coordination between various bureaucracies and cost-sharing between countries. Participating countries face different political and economic circumstances and cycles, and often have starkly contrasting abilities to negotiate and implement specific projects (Ferroni, 2002). 1.3. Choice of natural gas—Why is it so natural? Natural gas is the cleanest among fossil fuels and can be used with high efficiency. Its CO2 emissions are 60 and 42% less than that of coal and oil respectively; and it saves up to 30% of energy in most applications (Mahalingam, 2006). Natural gas acts as a substitute for coal in power generation and industry and to oil in transportation. Natural gas is also needed for feedstock, the fertilizers and petrochemical industries (Kumar, 2005). Because of high quality, convenience of use, cost effectiveness, and environmental benefits, natural gas is promoted as much as possible. Extensive use of natural gas in industry, electricity generation, for transportation, and for residential use could make an important contribution in improving air quality in the cities and rural homes (Siddiqi, 2007). This will have positive impact on human health. In this paper, cross border pipelines for India′s natural gas sector have been studied. First, the political nature of natural gas pipelines is discussed. Then, the prospect of such pipelines for

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India is contextualized highlighting country′s energy situation, natural gas endowments in neighbouring areas, and global competition for these resources. The study considers India′s three proposed international natural gas pipeline projects, namely, Iran– Pakistan–India (IPI), Turkmenistan–Afghanistan–Pakistan–India (TAPI) and Myanmar–Bangladesh–India (MBI). For each of these pipelines, the stakeholders and their shifting positions and strategies are analyzed. Also, the future of each of these pipelines under different scenarios is presented.2

2. The political dynamics of pipelines

3. India′s prospect of cross border trade in natural gas 3.1. India′s gas sector The natural gas sector in India is fastest growing among all the fossil fuels. Fig. 1 depicts the consumption of natural gas in India since 1970s and its share in fossil fuels. The CAGR for natural gas between 1970–1971 and 2009–2010 is 11.32%, while the corresponding figures for coal and oil are 4.83 and 5.56%, respectively. In case of India, the share of natural gas, unlike oil, is significantly lower than the global average (Ernst and Young, 2012). Natural gas accounts for 10.6% of primary energy mix in 2 These scenarios have been developed with the assumption that these projects are in India′s interest.

Fig. 1. Consumption of natural gas in India. Source: MOSPI (2011).

200 180

Natural Gas (in bcm)

Energy resources, be it oil, coal, or natural gas are unevenly distributed among different geographical locations. This uneven distribution explains the dynamics and geopolitics of all fossil fuels. Natural gas is not an exception. The politics in pipelines are well described in the following words (Dietl, 2005). “The energy pipelines, carrying oil and gas from the production sites to the consumer centers, often run through two or more states. In the process, they create strategic geography. The route, direction, volume, length, thickness and width of the pipelines are not just the technical and commercial decisions. They are political ones. Their impact, beneficial or otherwise is determined accordingly”. As per Dietl (2005) the study of gas pipelines bears more importance compared to the study of oil pipelines for the following reasons. The gas deals are more of bilateral or multi lateral nature unlike oil trade which is centralized due to presence of bodies like Organization of the Petroleum Exporting Countries (OPEC). The calculation that goes into building gas pipelines is much more rigorous than oil counterparts as the former involves long-term agreements involving large-scale investments. The pipelines are costly to build because of the investment in land rights, very large compressors, and huge amount of high-strength, large-diameter pipes. Another cause of dynamism comes from the fact that gas is the energy option of future; the oil has already peaked in first decade of twenty first century, but gas will peak after several decades. The gas pipelines are vulnerable to attacks; hence in certain circumstances they assumed a critical role in international security affairs (Dietl, 2005). The Baku-Tbilisi-Ceyhan (BTC) pipeline which carries oil and gas from land locked Central Asian states to western consumers is a case in point, where US has deep interest and provided the required security (Dietl, 2005). The interconnection of pipelines leads to more efficient use of gas resources. The vision 2020 of ASEAN is one such example where the countries of the region propose to interconnect the natural gas market to the supply points in the region, where seven gas pipeline connections have been identified requiring an investment of US$7 billion (Medlock et al., 2004).

Demand

160

Production

140 120 100 80 60 40 20 0 2009

2015

2020

2025

2030

2035

Year Fig. 2. Projected demand and production of Natural Gas in India. Source: IEA (2011).

India, whereas globally the figure is 24%. In per-capita terms, global consumption of natural gas in 2010 is at 461 cm (cubic meter); the corresponding figure for India is 53 cm (Ernst and Young, 2012). The Indian gas market is expected to be one of the fastest growing in the world over the next couple of decades (Corbeau, 2010), and as per latest IEA (2011) statistics,3 natural gas demand will increase from 49 Mtoe (i.e., about 59 bcm)4 to 154 Mtoe (i.e., about 186 bcm) by 2035 at a CAGR of 4.5%. The domestic production in the same time period increases from 46 to 120 bcm at a CAGR of 3.7%. The demand and production of natural gas in India are shown in Fig. 2. These forecasts of demand and production imply a supply gap of 21 bcm by 2020, increasing to 45 bcm by 2030 and 66 bcm by 2035. In the absence of pipelines, all the gas currently imported is in the form of LNG and current operational import capacity is 18 bcm (Corbeau, 2010). This necessitates substantial improvement in LNG import infrastructure and also makes the case of cross border gas pipeline trade. Complete reliance on LNG imports is an expensive and energy intensive option compared to gas pipelines.5 This is because LNG option depends on expansion and addition of re-gasification

3 This demand forecast is based on IEA′s New Policies Scenario, in which recent government policy commitments are assumed to be implemented in a cautious manner—even if they are not yet backed up by firm measures (IEA, 2011). This scenario forms the central scenario of world energy outlook reports since 2010. 4 IEA (2010) Conversion factor used—1 Mtoe¼1.2125 bcm (Dilaver et. al, 2011). 5 Given the geographies, pipeline imports of gas could be the most economical way for India (IEA (International Energy Agency) 2006).

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capacity (Jain and Sen, 2011); this is more capital and technology intensive (as it involves development of reserves, pipelines, liquefaction/re-gasification units, compressors and power plants) and not sustainable in long run (Dietl, 2005; Kumar, 2005). So, in order to tap the global natural gas market and satisfy its domestic demand, India needs to supplement and substitute (wherever possible) LNG imports with pipeline trade. China, for example, is poised to meet its rising gas import with LNG imports and gas pipelines together.6 The need for India′s import of natural gas through cross border trade with neighbouring countries can be discussed in the context of oil and coal the other two fossil fuels. The share of oil in India′s primary energy mix is at par with the global average (Ernst and Young, 2012), and the country is already importing about threefourths of its oil. Additionally, global oil production in future is likely to decline. Though coal is relatively more abundantly available, it is very lopsidedly located in eastern part of the country entailing high transportation costs (Kumar, 2005). Also, as discussed earlier the low quality of indigenous coal has necessitated import of high quality coal in recent years. This gives the incentive to explore the natural gas option as an alternative. 3.2. Natural gas in India′s neighbourhood India′s immediate and extended neighbourhood is endowed with abundant natural gas reserves which can play a crucial role in the country′s economic activities. Table 2 gives the proven reserves for natural gas for the countries which have the highest endowments. Iran has the second largest natural gas reserves in the world (next to Russia) with a global share of 16% (BP, 2012). Turkmenistan, with a global share of 11.7% stands at fourth position. Bangladesh and Myanmar have relatively less gas reserves, but the same is surplus for these countries current need, which can potentially cover up some of the shortages in India. In India′s neighborhood the use of natural gas has been growing rapidly. Natural gas supplies about two-thirds of the total commercial energy in Bangladesh and about half of the total in Pakistan (Siddiqi, 2007). The relatively low consumption of natural gas in India is attributed to supply side constraints—limited availability and inadequate infrastructure. From international competitiveness point of view, cross border gas pipelines are imperative as India faces tough competition from China, which is more aggressively pursuing long term contracts both for oil and gas imports from Central Asia and Middle East. There is a proposal to have the world′s largest natural gas pipeline from Turkmenistan to China and continuing onward to Japan (Dietl, 2005). Also, three-fourths of the gas supplies from Myanmar go to China (Kumar, 2005). Given the large demands from Europe and USA, and China, it behooves India to materialize the gas pipelines at the earliest.

4. India′s three gas pipelines options The study considers India′s three prospective pipelines, viz., Iran–Pakistan–India (IPI), Turkmenistan–Afghanistan–Pakistan– India (TAPI) and Myanmar–Bangladesh–India (MBI). The first pipeline is to get natural gas from Iran via Pakistan. An alternative way to access the gas is by constructing an underwater sea pipeline bypassing Pakistan. The second pipeline, i.e. TAPI, which 6 By 2035 China becomes the second-largest import market in the world after Europe. China′s import requirement grows from less than 10 bcm in 2009 to 125 bcm in 2020 and over 210 bcm in 2035. China′s imports come from a variety of sources, by pipeline from Central Asia, Russia and also from Myanmar, and as LNG from a suite of global suppliers (IEA, 2011).

will run from Turkmenistan via Afghanistan and Pakistan, is to tap the enormous natural gas potential of Central Asia. The third cross border gas pipeline option is to get natural gas from Myanmar via Bangladesh. Two alternative routes for this pipeline option are—either directly from Myanmar to India through North East or via the sea route. The basic characteristics of the three pipelines are given in Table 3. This shows at the most favorable scenario, when these proposed pipelines fructify, India gets natural gas of 59 bcm/year, which is about one-third of India′s projected demand in 2035 and 90% of India′s gas import requirements. The total investment for the three projects is $16.5 billion, which the participating countries will share. However, these pipelines once commissioned have rich economic dividends. For instance, the IPI is expected to save India US$300 million a year in energy transport costs, while Pakistan would get an estimated US$700 million in annual transit fees (Verma, 2007). Similarly, in case of MBI pipeline, Bangladesh could earn about $125 million annually in transit fees (Maitra, 2005a). Conducive political climate – both at intra- and inter-country level – is a prerequisite for cross border energy trade (Reddy and Nathan, 2011). India′s three transnational pipelines are under negotiation for more than a decade. However, these projects could not be realized because of uncertainties arising out of unstable political climate in the linking countries. These pipelines face threats of sabotage from both state and non-state actors. Also the bilateral relations between India and Pakistan are prone

Table 2 Countries with highest proven reserve of natural gas (top five) and for Myanmar and Bangladesh (at the end of year 2011). Source: BP (2012). Countries

Amount (tcm)

World share (%)

Russian Federation Iran Qatar Turkmenistan USA Bangladesh Myanmar

44.6 33.1 25.0 24.3 8.5 0.4 0.2

21.4 15.9 12.0 11.7 4.1 0.2 0.1

Table 3 Basic characteristics of the three cross border gas pipelines projects. Source: The values in this table are indicative. They may slightly vary from source to source. The exact sources from which the values are taken are the following. Pipelines

Length (km)

Cost Maximum ($billions) capacity (bcm/year)

India′s share in total capacity (bcm/year)

Iran–Pakistan–India (IPI) Turkmenistan– Afghanistan– Pakistan–India (TAPI) Myanmar– Bangladesh–India (MBI)

2700a

7.4a

55b

33b

1800c

7.6c

33c

15d

900e

1.5e

11e

11e

a

Verma (2007). Nakano et al. (2012). c ADB (Asian Development Bank) (2012). d Petromin (2011). (Note: Both India′s and Pakistan′s in TAPI share is given as 12.5 bcm/year for an initial 27 bcm/year capacity, rest 2 bcm/year going to Afghanistan; for a full capacity of 33 bcm/year, India′s share can be assumed 15 bcm/year). e IEA (International Energy Agency) (2006) (note: This capacity and India′s share has remained a question after China went ahead with a pipeline in 2009 and got gas from Myanmar at 12 bcm/year). b

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Fig. 3. Iran–Pakistan–India (IPI) pipeline. Source: Pandian (2005).

to rapid changes, which make the construction and operationalization of the IPI and TAPI pipelines complicated. The following sections describe politics of these three pipelines in detail.

4.1. Iran–Pakistan–India (IPI) gas pipeline project 4.1.1. Background Though the IPI pipeline was originally conceived in an article in 1950s, the project was conceptualized only in 1989.7,8 However, the project could not be realized because of the adversarial relationship between India and Pakistan, Pakistan′s failure to take a firm political decision in favour of the Indo-Iran overland pipeline, and technical challenges involving the under-water option (Pandian, 2005). After signing a civilian nuclear deal with the United States in 2008, in March 2009, India withdrew from the project over pricing and security issues (Haq, 2010). Since then Iran and Pakistan have gone ahead. Iran has almost completed its side and the project got inaugurated by presidents of both countries in March 2013 to mark the start of construction on the Pakistan′s side of the pipeline (BBC, 2013; The Nation, 2013). Looking at Pakistan′s seriousness in construction of the pipeline, India has shown renewed interest and initiated negotiation in joining the project (Global Research, 2013; Tehran Times, 2013). The total length of the proposed IPI pipeline is around 2700 km (Dadwal, 2005; Verma, 2007). From Iran it starts from Asalouyeh to Iranshahr. From Iranshahr it runs into the Iran–Pak border and traverses through the restive provinces of Balochistan and Sindh towards Multan, from which it would enter India and end at Delhi (Shahid, 2011). Fig. 3 gives the map of the proposed pipeline, both overland and under-sea routes. 7 This article by Lt. Col. Malik Aftab Ahmed Khan was entitled as ‘Persian Pipeline’ and was published by Military College of Engineering, Risalpur (Haq, 2010). 8 The project was conceptualized by the then Chairman of the International Association for Energy Economics Dr R K Pachauri with Ali Shams Ardekani, former Deputy Foreign Minister of Iran (Pandian, 2005).

4.1.2. Security concerns Because of the troubled location of the pipelines, the security of proposed IPI has always been a concern,9 particularly for India (Pandian, 2005).10 A significant portion (at least 750 km) of overland pipeline is to traverse through Balochistan—a province of Pakistan which has remained unstable with the presence of militias and organizations inimical to Pakistan′s interests (Dadwal, 2005).11 On earlier occasions Pakistan′s domestic pipelines have been targeted by Baloch insurgents,12 for which the ability Pakistan to guarantee security of IPI pipeline has become questionable (Dadwal, 2005; Fazl-e-Haider, 2010). Also, the Balochis′ stand towards the safe operationalization of IPI pipeline has remained uncertain (Baloch, 2010; Shahid, 2011). 4.1.3. Position of stakeholders Iran: The Iranian position since the origin of this IPI pipeline idea has been to accommodate as many countries in the pipeline as possible. Having been under close to three decades of isolation and sanctions by the international community, Iran considers this project as a political, strategic and economic breakthrough (Sahay and Roshandel (2010)). Strategically, Iran, to counter the growing US presence in the region and to regain its regional influence, is in search of partners to trade its natural gas resources (Pandian, 2005). Economic and technical feasibility being the main criteria in deciding the routes of the pipeline project, Iran prefers an overland project with involvement of both India and Pakistan so as to maximize its revenue from the project. Iran has also offered China to join the IPI gas pipeline project (The Economic Times, 2008) and 9 This concern has been expressed even in the original article by Lt. Col. Khan (see footnote 3), who had suggested method of protection of the pipeline by establishing mini-battalion size cantonments along its proposed route through Balochistan and Sind (Haq, 2010). 10 India′s concern for the safety and security of the pipeline projects takes precedence over the economic viability and technical complexity (Pandian, 2005). 11 Balochistan is also facing problems because of influx of Pashtuns from neighbouring Afghanistan and has also become a staging ground for Taliban activity (Walsh, 2009; Zambelis, 2009; Ullah, 2010; Kupecz, 2012). 12 As per the statistics of South Asian Terrorism Portal (SATP, 2013), since 2005 till May 5, 2013 there have been 199 attacks on gas pipelines in Balochistan.

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has also invited Russian gas giant ‘Gazprom’ to be a part of the project and help build and finance a part of the project (Haq, 2010). Pakistan: Pakistan′s interests in IPI are threefold—geostrategic (use of territory as a transit route to export natural gas), economic (millions of dollars in transit fees), and demographic (cater to the energy demand of rapid population increase in the region) (Sahay and Roshandel, 2010). Considerable US pressure has been there but Pakistan has still decided to go ahead with the deal (Munir, 2006). Pakistan has also expressed its eagerness to include China in the project for economic and strategic reasons (Blank, 2010). Despite instability in the Af–Pak region and Balochistan, Pakistan seems confident about pushing ahead with the deal. From Pakistan′s point of view it can be argued that IPI pipeline project will increase India′s dependence on it, and thereby make India more accommodative of Pakistani interest in the region. India: India′s primary interest in joining the IPI pipeline comes from satisfying its growing energy demand in a cost effective manner. Supplying of gas via pipeline could save India an estimated US$10 billion over 25 years (Pandian, 2005). However, India′s official position on this project has changed more than once.13 The reason for the changes in position can be three-prong. First, US has been encouraging New Delhi to remain non-committal over the issue (Haider, 2010). Second, given the edgy bilateral relationship with Pakistan, India is not confident on the security of the pipeline, which is India′s prime concern.14 Lastly, India is uncertain of the consequences of emergence of another nuclear weapon power in its neighbourhood (Pant, 2007). Saudi Arabia: The Sunni-dominated Arab state feels threatened with the emergence of a nuclear-weapon state like Iran in its neighbourhood (Albawaba Business, 2012), with whom it has religious and ideological differences. Hence Saudi Arabia resists any venture which might economically and strategically benefit Iran thus, fostering its nuclear weapons programme. It tried dissuading Pakistan from joining the project by offering an alternative package such as a financial loan and oil facility to meet its energy and economic needs (Price, 2012; Siddiqui, 2012). USA: USA is against Iran for its non-compliance over the Nuclear Programme. The IPI project has faced criticism from USA as well as many other western countries. This opposition is in line with the exclusionary policy towards nuclear noncompliant countries. USA throughout the process has been trying to pressurize both India and Pakistan to back out from the deal. Instead it has been promoting to both the countries the gas pipeline project from Turkmenistan i.e. the TAPI pipeline. By doing so, USA targets two objectives—first, to break Russian infrastructure monopoly in transportation of Central Asian gas by opening alternative routes and secondly, to promote TAPI as an alternative to the IPI pipeline as a source of energy for both India and Pakistan (ToI, 2011). But a

13 India signed a preliminary agreement with Iran in February 1999 (Chaudhary, 2001). But later on, in 2009 over pricing and security related issues, it decided to back out from the agreement (UPI, 2010). However, recently India yet again expressed its interest in joining the project (Tehran Times, 2010; Tribune, 2011), particularly after the inauguration event of the construction works on the Pakistani section of the pipeline (Global Research, 2013; Tehran Times, 2013). 14 On the issue of disruption of gas supplies, a few analysts say that Pakistan cannot resort to such action as it would entail inviting pressure from Iran. Also in this context, Dadwal (2005) has drawn parallels between the proposed IPI Gas Pipeline and the Indus Water Agreement. The author has argued that as the Indus Water agreement between India and Pakistan, which was signed in the 1950s, survived the three wars of 1965, 1971 and the 1999, the IPI gas pipeline project can survive any future conflict. However, it needs to be taken into consideration that cutting off water supplies to an enemy nation is perceived unethical and can invite severe international pressure but on the other hand creating disruptions in energy supplies is seen as an essential war strategy as such an action severely restricts the war fighting capabilities of the belligerent nation.

review of stances of both Indian and Pakistani governments shows that both are unlikely to give in to US pressure. 4.1.4. Possible scenarios India and participating countries must be prepared for various scenarios which might crop up in future. Some of the possible scenarios are discussed below. Changing relationship between India and Pakistan: Many analysts fear that in the event of tensions building up between India and Pakistan, the pipeline project may become a soft target (Kesava Chandra, 2012a), and Pakistan may cut off gas supply to India. However, in one of the Gas Supply Purchase Agreement proposals, to address India′s concerns, Iran has assured to India that if Pakistan resorts to such tactics then it would cut-off supplies to Pakistan (ToI, 2008). On a positive note improved bilateral relationship between India and Pakistan would accelerate the realization of IPI pipeline. Emergence of extremists in Pakistan: In case of emergence of fundamental elements in Pakistan′s polity, the anti-India lobby would not allow the IPI pipeline to materialize in the first place. Also, once constructed, this scenario would increase the possibility of sabotage of the pipeline by non-state actors.15 Another scenario that can possibly emerge is disgruntled elements within the Pakistani military establishment conducting sabotage without the consent of the civilian and military leadership.16 Given this scenario, India must be prepared and make provisions with Iran to deal with such situations. Such a move if agreed upon by Iran will also pressure Pakistan to be more vigilant and sincerely fulfill its security obligations. Trilateral security cooperation among Iran, Pakistan and India: The IPI pipeline offers a remote, yet distinct possibility of the three participating countries of, viz., India, Pakistan, and Iran to cooperate in the field of security and intelligence.17 Such cooperation among the three nations will also enhance trust and confidence and will help in energy integration and fostering regional security in Asia in the long run. 4.2. Turkmenistan–Afghanistan–Pakistan–India (TAPI) gas pipeline project 4.2.1. Background TAPI has been conceptualized by USA as a key part of its Afghan policy, wherein USA strategizes to break the Russian monopoly in gas-infrastructure and project TAPI as an alternative to IPI (ToI, 2011; 2012). Negotiations for the pipeline began way back in 1995 with the Turkmen government by an American Company UNOCAL, which considered single Taliban regime in Afghanistan as a guarantor to safe passage of oil and gas supplies (Monbiot, 2001). However, after bombing of the American embassies in Nairobi and Daar Es Salam negotiations broke down.18 After the overthrow of the Taliban regime, the project has moved forward 15 Given the capabilities of terror outfits like Lashkar-e-Toiba, Jaish-eMohhammed Harkat-ul-Mujahideen and other such outfits, it is quite clear that these organizations may try and create problems for the installation and operationalisation of pipelines. 16 The confessions to the police of Abu Jindal, a terrorist recently caught by Indian agencies, has clearly revealed the hand of some serving as well as retired military officials in the 26/11 attacks (Ali, 2012). 17 Instances of issue based cooperation among intelligence agencies has been cited in Raman (2007, p20). In the author′s own words—“…the curious spectacle of US intelligence colluding with the ISI in assisting the Khalistan movement in Indian Punjab, with the Chinese intelligence for preventing a break-up of West Pakistan by India and with India′s intelligence for preventing a possible Chinese take-over of North Burma. This may appear strange and incomprehensible, but such things are normal in the intelligence profession.” 18 The American embassies in Nairobi and Daar Es Salam were bombed and investigations pointed to the involvement of Osama Bin Laden (BBC, 1998).

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Fig. 4. Turkmenistan–Afghanistan–Pakistan–India (TAPI) pipeline. Source: Adapted from Sieff (2011).

and in 2012, all the concerned parties including India have inked an agreement (The Hindu, 2012). The route for the TAPI pipeline (see Fig. 4) would start from Turkmenistan′s Yoloten–Osman gas field. It would run through Herat and Kandahar province of Afghanistan, before entering Pakistan. In Pakistan, it will reach Multan via Quetta before entering into before ending at Fazilka (Punjab) in India (Mehdudia, 2012). 4.2.2. Security concerns The feasibility study of TAPI was conducted by Asian Development Bank (ADB) in 2005, which rendered the project possible (D′Souza, 2011). Though participating countries have held numerous high-level planning meetings during the past eight years, with ADB sponsorship and multilateral support, when construction will start is uncertain because security in Afghanistan and the tribal areas of Pakistan remains a problem (Foster, 2010). However, in 2012, all the four participating countries signed gas sale purchase agreement for the TAPI gas pipeline (The Hindu, 2012). Nevertheless, the security issues of the pipeline cannot be overlooked given the pipeline goes 735 km in Afghanistan in addition to 800 km in Pakistan (D′Souza, 2011). 4.2.3. Position of stakeholders The different countries involved in TAPI project are the Turkmenistan, Afghanistan, Pakistan, India and USA. As a supplier Turkmenistan naturally intends to diversify its export portfolio, hence favors the project (Afonin, 2011). Afghanistan and Pakistan, as transit countries, are to gain economically from the deal, hence look forward to TAPI getting implemented. In order to address the shortage of energy, India expects for an early operationalization of the project. As mentioned earlier USA considers TAPI pipeline project as a part of its Afghan policy and also regards TAPI deal as an economic opportunity for war-torn Afghanistan. Also, the USA had a longstanding strategy where it wanted to use Afghanistan and Pakistan to bring the resources of Central Asia (Monbiot, 2001). 4.2.4. Possible scenarios Various scenarios which might crop up after the US and NATO withdrawal from Afghanistan are described below.19 Continued rule of the current government: There is a distinct possibility that the current government will be able to continue its 19 A similar scenario analysis in Afghanistan in the post-2014 phase has been done by Chandra (2012) where the author has considered three scenarios, (i) a highly destabilized Afghanistan, (ii) fragile but relatively stable Afghanistan and, (iii) a Balkanized Afghanistan.

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rule with sporadic attacks across Afghanistan taking place. If the development and democratic initiatives in Afghanistan are continued and the Afghan National Army is strengthened, there are chances of Afghanistan not falling prey to Taliban takeover. The US, India and other regional players will have to cooperate in ensuring that the democratic process survives in Afghanistan. Even if a Taliban government reemerges in Afghanistan it is quite possible that it will not act as it did before 2001. Analysts have already made a distinction between the good Taliban and the bad Taliban. Even speculations are rife that the US government is in negotiations with certain elements of Taliban (Fishel and Henry, 2012). Moreover an attempt should be made by the participating countries to win over those terror groups which are inimical towards the coalition forces and India. This suggestion may sound outrageous but a closer analysis of these terror groups have shown that these groups will shed their ideological differences if there are economic stakes involved.20 Moreover, in order to ensure the security of the TAPI gas pipeline, the services of the Afghan warlords will have to be commissioned.21 The above scenario is the most preferred one for successful implementation and sustenance of the TAPI pipeline. With greater democracy in Afghanistan, pipeline would get protection from state military, and security cooperation from other stakeholders, such as, Turkmenistan, India, and the USA.22 Occurrence of civil war: There is a possibility of civil war in postNATO troops withdrawal, where a partial takeover of Afghanistan by the Taliban in the Southern Areas. Under such circumstances the Taliban will emerge as a stakeholder to TAPI project. All future negotiations would include Taliban as a party to the project, where they may act as spoilsport. Emergence of Taliban regime (Pakistan sponsored): There is a chance that a complete overthrow of the Afghan government may occur with Taliban controlling the State resources. Pakistan would play a key role in this scenario once NATO troops withdraw from Afghanistan. But considering the constant US efforts and monitoring in the region it is also possible that Pakistan may show some restraint. However, a close analysis of the Civil war in Afghanistan after the Soviet withdrawal shows that Pakistan was complicit in the overthrow of the Najibullah government of Afghanistan by aiding Taliban (Raman, 2001), and subsequent installation of the Taliban regime. Pakistan considers Taliban as a strategic asset and considers a compliant, pro-Pakistan regime in Afghanistan as crucial in building for itself a secure strategic depth (Kanwal, 2010). With US withdrawal from Afghanistan nearing, the possibility of a Pakistan backed regime emerging in Afghanistan is high (Chandra, 2012). In this scenario, TAPI project may go in either direction. As explained in first scenario, Taliban may cooperate in the smooth

20 According to Balachandran (2005), “The main complaint against the Afghan Mujahideen leaders who were assembled by CIA/ISI on religious grounds was that they were spending too much time in business in Pakistan instead of fighting the Soviet Army!”. According to Brigadier General Muhammad Yousaf, “Many Pakistani tribesmen liked to have a foot in both camps. Thousands participated in the Jehad and supported the Mujahideen, but these same people could just easily give succour to the enemy if there was profit to be had” (Yousaf and Adkin, 1992). 21 Afghanistan is a country where a majority of hinterlands are controlled by warlords. These warlords are influential figures who have a major influence on various aspects of the Afghan society. From trade, transportation to ensuring security of supply routes and internal affairs of the areas of their control, they have played an important role. According to Fisher (2009), “By working with these leaders to establish and train local militias and police, rather than troubled and mistrusted national forces, the U.S. could find its route to Afghan stability and exit”. 22 Post-2014, US and some western countries may retain a limited military presence in Afghanistan leading to financial, strategic, and advisory support provided by the international community to Afghan National Security Forces, which will help preserve the current regime in the country despite the potential rising levels of insurgent attacks (Sharifi, 2012).

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Tripura (Infraline, 2012). In Mizoram the insurgency has been completely reduced and the state has undergone a very smooth transition from conflict-ridden to peaceful. The state of Tripura has also seen a reduction in violence. However, there are instances of India′s domestic pipeline being targeted by North Eastern insurgent groups (Talukdar, 2006; ToI (Times of India), 2006). In Bangladesh, there has been increase in radical elements over the past few years. It has also become a staging ground for insurgents and terrorist groups who are not well-disposed towards India.23 Under these circumstances the major security concern will emanate from these groups who may try to disrupt gas supply to India.

Fig. 5. Myanmar–Bangladesh–India (MBI) pipeline. Source: Adapted from Maitra (2005b).

operation of the pipeline considering the financial and economic dividends and may like to take the credit of operationalizing the pipeline and reap political mileage. However, there is also a distinct possibility of Taliban reverting back to its original position of anti-western and anti-Indian ideologies and block the installation of TAPI. The USA and other parties, including India, must plan contingency for such a scenario. 4.3. Myanmar–Bangladesh–India (MBI) gas pipeline project 4.3.1. Background The proposed project was first mooted by Mohona Holdings Ltd., a private company from Bangladesh (Natural Gas Asia (2011)). After initial formalities, the project was officially approved by the government of Myanmar and India. The Right of Way which was essential for the safe passage was also sought from Bangladesh. The route map of the proposed pipeline has been shown in Fig. 5. The project was to be implemented by an International Consortium company (ICC). The ICC was to be comprised of GAIL and WBIDC from India and GTCL, a subsidiary of Petrobangla (Infraline, 2012). One of the reasons for this pipeline project not taking off is the inconsistency of bilateral relations between India and Bangladesh. Moreover, there has been an opinion that there were presence of radical elements in previous Bangladesh government (during 2001–2008), who were not well disposed towards India (Kesava Chandra, 2012b). With the change of government in Bangladesh in 2009, the negotiations on the pipeline project have once again fallen on track (Kesava Chandra, 2012a). Bangladesh has also expressed interest in joining the TAPI Gas Pipeline Project (Energy Global, 2012). However, the project has still not been implemented primarily because of the competition from China, which has struck successfully a gas pipeline deal with Myanmar (Kesava Chandra, 2012a). Nevertheless, MBI pipeline has chances of revival in case of new discoveries of natural gas reserves in Myanmar (Kesava Chandra, 2012a). 4.3.2. Security concerns Like the last two projects, the security aspects of the pipeline need to be taken into account. Unlike IPI and TAPI projects, the MBI project does not pass through hostile territory. However, the pipeline will pass through the Arakan state in Myanmar, where in the past the local people have protested against the construction of the pipeline (Mahalingam, 2005). The pipeline would then pass through Bangladesh and North-Eastern states of Mizoram and

4.3.3. Position of stakeholders Myanmar: Myanmar considers both India and China as potential buyers for its surplus energy resources. However, given the current proved reserve, Myanmar is not in a position to accommodate the energy requirements of both India and China. Since the proposed MBI pipeline could not take off due to delay in negotiations Myanmar decided to go ahead with an agreement with China, and hence new discoveries of natural gas reserves in Myanmar could once again revive the MBI pipeline project (Kesava Chandra, 2012b). Bangladesh: The position of Bangladesh has not been consistent with regard to the proposed pipeline. In an earlier proposal to export Bangladeshi gas via pipeline to India′s East and North East, were not accepted by Bangladesh (PACOM, 2007). With regard to MBI pipeline, initially, before becoming party to the project, Bangladesh decided to set three conditions before India (MEA, 2005; Infraline, 2012), which were—(a) to allow a passage for importing electricity from Bhutan and Nepal when available; (b) provide a corridor for Nepalese goods to Bangladeshi ports; and (c) to reduce trade imbalances. These conditions were not acceptable to India, for which Bangladesh showed indifference for the pipeline project. But in 2007, Bangladesh performed an about turn and showed increasing willingness to join the tri-nation pipeline project as it realized the impending energy crisis at home (Kesava Chandra, 2012b). India: India rejected the bilateral conditions set forth by Bangladesh so as not to set forth a precedent of attaching unrelated conditions to future bilateral energy negotiations (Kesava Chandra, 2012b). India has also played with the idea of bypassing Bangladesh completely and constructing a pipeline directly from Myanmar (Kesava Chandra, 2012b). China: China′s intention is to capture the surplus available energy resources in Myanmar as far as possible and it has been succeeded in signing trans-border energy projects. It considers India as a competitor in this regard. So, it would influence Myanmar not to proceed with a pipeline with India by offering better deals. 4.3.4. Possible scenarios Following section outlines some of the possible scenarios with regard to the prospect of pipeline. Rise of radical forces in Bangladesh: A change in regime in future can lead to rise of radical forces in Bangladesh government which might impinge the implementation of the proposed pipeline. Moreover, the project if carried out runs the risks of being sabotaged by radical forces within Bangladesh Army and intelligence and various terror outfits. There can be two-pronged strategy to deal with such a scenario. First, efforts should be made to improve the security cooperation between India and 23 Bangladesh has been a staging ground for certain North-Eastern insurgents groups. Also, there has been reports on evidence of presence of terror outfits like HUJI which is responsible for executing blasts in India (Vaughn, 2010).

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Bangladesh. Second, a proactive and preventive way to handle such scenario would be to increase India′s goodwill in Bangladesh by sponsoring development projects leading to change in attitude towards India. Energy integration of Bangladesh with India: Unlike the cases of IPI and TAPI, in this project India does not enjoy the support of third countries like Iran and USA to prevent any non-compliance by the participating countries. The only way India can expect to create leverage vis-à-vis Bangladesh will be to make the latter dependent on India. India should accept the bilateral conditions that were set forth by Bangladesh (Bose, 2007), particularly allowing Bangladesh a passage for importing electricity from Bhutan and Nepal. India may also consider inclusion of Bangladesh in the TAPI project. This way both India and Bangladesh can become interdependent in energy, which in turn acts as a deterrent to any disruption in gas supplies to India. Bypassing Bangladesh: This scenario has been discussed in different literature (TERI, 2008; Kesava Chandra, 2012a; MoPNG, 2012). Given the shared border between India and Myanmar, it would be prudent for India to explore the possibility of dealing with Myanmar directly bypassing Bangladesh. The argument of inclusion of Bangladesh in the pipeline comes from the fact that there is a high demand of energy in West Bengal (Infraline, 2012). In order to meet this demand it is optimal for the pipeline to pass through Bangladesh territory. However, bypassing Bangladesh will not be a bad idea considering the underdevelopment and energy needs of North East (Kesava Chandra, 2012b). A direct pipeline from Myanmar to India through North East will be instrumental for the development of the North-East region. This direct pipeline can emerge as a branch pipeline to the ongoing Myanmar–China gas pipeline project (see Fig. 6). Such a pipeline promoted by Govt. of India for the people of North-East will help in further economic integration of the region with the mainland. This in turn will strengthen the ongoing peace process between Govt. of India and insurgent groups of North-East region. However, the technical feasibility of such a pipeline needs to be evaluated considering the distinct geographical factors of

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Myanmar and North-East. Apart from technical aspects, the region of Northern Myanmar and a few states of North-East India are prone to incidents of sporadic violence and instability. Looking from another view, a pipeline in the region might speedup the peace process.

5. Some issues related to pipelines 5.1. Underwater and underground technology The two of the three pipelines discussed in the previous section, viz., the pipeline from Iran and Myanmar have the option of being constructed under water. However, under water option requires huge investment and it is technologically challenging (Dadwal, 2005). For the IPI pipeline, the under the sea technology may not be suitable because of the Indus flow and steep drop (Kumar, 2005). Similarly, gas from Myanmar cannot bypass Bangladesh as bringing a pipeline down from Yangon and Yeravati delta and bring it up again at Bay of Bengal, though may be technically feasible, but does not appear to be economically a viable option (Kumar, 2005). Also, in overland route the ‘permanent’ infrastructure of pipelines brings positive spillover effects, creating lasting incentives for cooperation on broader economic and security concerns (Ali, 2010). So, given the current scenario, it is better to opt for land route for the proposed pipelines and go for underground pipeline as a last option.

5.2. Role of private players Some of the authors argue that big MNCs need to be encouraged to manage pipeline projects so that state has minimal role and market takes over (Kumar, 2005). Though this model has succeeded in some other countries, in case of India, this might not be a prudent option as private players cannot resort to any action in the event of tensions apart from seeking legal recourse. So, instead of exclusive private players, if state sponsored companies are involved in the gas pipeline projects or private players participate as partners with government then the state can use its diplomatic and military resources for confronting and preventing any disturbance and disruption in gas supplies. Hence, installation and operationalization of the pipeline need to be taken up as government′s primary responsibility.

5.3. India′s foreign policy The three cross border pipelines have direct bearing on India′s foreign policy. Apart from improving bilateral and multilateral relations between the countries, the pipelines might affect India′s relations with the United States and Russia. It is of USA′s interest that TAPI pipeline is opted instead of IPI. On the contrary, a choice of IPI over TAPI might be favourable to Russia,24 though Russia has never expressed its dissatisfaction over the TAPI deal. Pakistan is also facing pressure from the United States to withdraw from the IPI project (Iqbal, 2012). India will have to play a balancing act with respect to Russia and the USA. It should make clear in its negotiations with both USA and Russia that this pipeline project is meant to serve India′s own energy interests. Fig. 6. Myanmar–India pipeline as a branch from Myanmar–China pipeline. Source: Adapted from Jain (2006). Note: the branch pipeline location is indicative.

24 So that Russia continues with its infrastructure monopoly in transportation of Central Asian gas.

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5.4. Energy-induced regional integration of SAARC The regional body in the South Asian region i.e. SAARC (South Asian Association for Regional Cooperation) has not been able to succeed as a strong regional organization like EU (European Union) and ASEAN (Association of Southeast Asian Nations). The proposed gas pipeline projects and SAARC complement each other as success of one strengthens the other. Cross border pipelines establish physical long term links among neighbouring countries, thereby actuating a realistic integration of countries in the region. Pipelines once constructed can be extended to include other neighbouring countries. Cross border energy trade through pipelines and electricity networks help the economies of in South Asia and allow overall regional energy integration.25 However, cooperation to construct and maintain these pipelines will be a challenge for the SAARC countries where there has been lack of mutual trust and cooperation. Within SAARC, India′s size and economic dimension makes it a regional hegemon, and though the smaller states in the region recognize that they need India′s help to facilitate faster economic growth, they are reluctant to work with India fearing that such cooperation will admit Indian dominance (Reed, 1997; Thapar, 2006). Pipeline gives a unique opportunity in this regard, as India is at the demand side of natural gas and smaller neighbouring countries are poised to earn revenue through transit fees. These projects, when realized would increase the interdependency in the region as well as lead to a chain of economic activities.

6. Concluding remarks Natural gas has emerged as the next big energy option worldwide. For, India it has also come out as a favourable energy source. India′s extended neighborhood is endowed with natural gas reserves which can be considered as in surplus.26 India′s three potential cross border pipelines, viz., IPI, TAPI and MBI are under consideration since a decade or two. Commissioning of these pipelines projects would at a minimum cater to the increasing energy needs of India. Realization of the three pipelines satisfies about one-third of India′s natural gas demand and 90% gas imports by 2035. However, the politics around the pipeline plays an important role in deciding the future of these projects. This study does a stakeholders and scenario analysis for each of these three projects. Better Indo-Pak relationship and stability in Pakistan can foster the progress of IPI and TAPI pipeline. Improved security conditions in Afghanistan create conducive conditions for TAPI project. An inclusive policy towards Bangladesh and new gas discoveries in Myanmar can accelerate the realization of MBI project. Instability and rise in radical elements in transit locations (Pakistan, Afghanistan, Bangladesh, and India′s North-East) can impede the progress towards commissioning of these pipeline projects. Efforts need to be made to ensure that pipelines are installed with precautionary and endurance measures to withstand any future attacks. Irrespective of the pipelines and the scenarios therein, a greater regional integration through SAARC would facilitate laying down of these pipelines. Complementarily, energy interdependence and integration helps SAARC to evolve as a cohesive and strong regional body. 25 ASEAN is an example in this regard, where ASEAN Power Grid and the TransASEAN Gas Pipeline have instrumented energy integration in the region (UNDP, 2007). In the negotiation of the Myanmar–Bangladesh–India pipeline the conditions set forth by Bangladesh to allow safe passage of hydroelectricity from Nepal and Bhutan, if met, would be an advancement towards similar energy integration in South Asia. 26 For instance, Iran′s gas reserves is enough to last for 500 years at the present rate of exploitation (Lerner, 2012).

Long-term contracts with some flexibility and regular price negotiations will remain as the backbone of natural gas market expansion (Dietl, 2005). The cross border pipeline trade like any other economic trades may have asymmetrical impact on the participating countries depending on their relative bargaining power. As discussed in the paper, success of the pipeline requires alignment of interest of the participating countries and other stakeholders. It is also worth noting that transit countries have to get out of the mind-set that they will only make money from transit fees. Once they have a pipeline, they can also be a destination in the future and their economies will benefit from a clean, efficient, source of energy. Joint-ventured, mutually-benefitting cross border pipelines can improve bilateral, trilateral and multi lateral relations between the participating countries. Hence, commissioning of the cross border gas projects increase peace and stability in the region. Creating inter-dependence in energy is a much viable and practical option than the situation of mutually assured destruction (MAD).27 Cross border energy trade in general and gas pipelines in particular will create an economic deterrence which will discourage the parties concerned from taking adverse decisions against the other. To increase energy interdependence between India and Pakistan there has been a proposal to supply of electricity to Pakistan using gas received in India (Pachauri, 2001). This kind of economic interdependence will compel nations to protect each other′s interests rather than harm them.28 Such a state of condition can be termed as mutually assured protection (MAP),29 which has a positive and constructive connotation, when compared to MAD concept. MAP needs to be advocated as a deterrence strategy for maintaining peace and security, especially among nuclear powers like India and Pakistan.

Acknowledgments We sincerely thank the anonymous reviewers for their valuable comments, which helped us to improvise the paper. We also thank Praveen Johnson of National Institute of Advanced Studies, Bangalore for his assistance in improving the picture quality for some of the figures. References ADB (Asian Development Bank), 2012. ‘Turkmenistan–Afghanistan–Pakistan–India (TAPI) Project- Phase 3’, Technical Assistance Report, Research and Development Technical Assistance (RDTA), ADB, May. Afonin S. (2011) The TAPI Gas Pipeline: Pro et Contra, International Affairs. Available at: http://www.eastviewpress.com/Files/IA_FROM%20THE%20CURRENT%20ISSUE_No. %206_2011.pdf (accessed on 18th April, 2013). Albawaba Business, 2012. Saudi is threatened by Iran′s nuclear plans, Albawaba Business, Available at: 〈http://www.albawaba.com/business/iran-ksa-nuclearthreat-428534〉 (accessed on 20th October, 2012). Ali, S.A., 2012. 26/11: Abu Jundal names same Pakistan Army Officers as Headley did, Times News Network, 3 July.

27 The acronym was used by Donald Brennan – an analyst at the conservative Hudson Institute – to ridicule the idea that in a nuclear war, or even a large conventional conflict, each side should be prepared to destroy the other′s cities and society. But the MAD proponents argued that the outcome would be so dreadful that both sides would be deterred from starting a nuclear war or even taking actions that might lead to it (Jervis, 2002). The MAD acronym, which was coined by John von Neumann (Hickey, 2012), has been developed and used as a deterrence doctrine by several military strategists. 28 Such benefits of cross border oil and gas pipelines has been highlighted by scholars like Gawdat Bahgat and İdris Demir (see, Demir, 2012). 29 This term has been used by Sugar (2004) as a doctrine of shared defense through missile. Here this concept has been used in the context of cross border energy trade. We are attempting to develop the concept further in a companion paper.

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