Pipe Dream Still

India’s current economic woes largely stem from total dependence on imported oil to keep the wheels moving. The authorities have so far failed to locate new reserves while refusing to take advantage of importing cheap oil from some friendly countries like Iran due to American sanctions ‘Bombay High’ is an old story and the much talked about Cauvery and Godavari basin ‘discoveries’ don’t mean much in terms of demand and supply. No country can flourish by importing energy resources eternally. In truth India’s ambitious plan to maintain a high growth rate is a myth, not to be achieved even in distant future because of global energy crunch. America is now all set to export oil—from an importer to exporter. Also, they no longer depend solely on Saudi oil. They have already diversified their sources of import while improving domestic production as well. Beijing, being the voracious consumer of energy for its dynamic economy, has too many options to explore, notwithstanding ever rising oil demands. What is more the days are not far when China may be crowned with the title of new oil Sheikh of Asia because its vast proven reserves have remained untapped. India remains vulnerable to slight fluctuation in international market. Then its mythical bureaucracy and leaders having no national spirit stand in the way of self-sufficiency

Now progress in India’s transna-tional gas pipelines has been inadequate. Transnational pipelines involve different countries with different economic and political interests. They pass through different terrains, as also politically and environmentally sensitive areas. Mobilisation of huge financial and technological resources are required. Gas imports from Iran, Turkmenistan and Myanmar, through transnational pipelines have been under consideration since 1989 without much movement in real terms.

The Iran-Pakistan-India gas line was conceptualised in 1989. The pipeline was expected to carry 8.7 billion cubic metres of gas by 2013. India withdrew from the project in 2009, citing security concerns and price of gas, as reasons. The real cause was America. New Delhi bowed down to Washington pressure. However, Iran and Pakistan have gone ahead with the project. And Pakistan stands to gain enormously from this project.

The Turkmenistan–Afghanistan–Pakistan–India project has been in discussion for almost about 23 years. The 1680 km TAPI pipeline will cost $7.6 billion, and carry 38 million standard cubic metres of gas, for India and Pakistan, each day from 2018. Still issues relating to price, security and gas certification remain unresolved. Given the slow progress in developing infrastructure, it is unlikely that the pipeline will take off on time.

The 900 km Myanmar–Bangladesh–India gas pipeline was mooted in 1997. Gas was to be sourced from Myanmar and Bangladesh for supply into India. New Delhi reached an agreement with the two countries in 2005. However, Bangladesh withdrew from the project, after India refused to accept additional conditions. The gas line from Myanmar has subsequently been rerouted through Mizoram, Tripura and Assam into Kolkata.

In plain language India cannot expect much from these would be projects. In other words oil, rather oil and gas imports, will continue to devastate the Indian economy for years to come.

Meanwhile, another bout of steep hike in the prices of diesel, kerosene and LPG domestic cylinders is in the offing as the much awaited Kirit Parikh Committee report is out now. If the union cabinet gives its nod to the recommendations of Parikh Panel, the possibility of which seems negative at the moment, in view of coming parliamentary elections, inflation coupled with price hike of all essential and basic commodities will force small enterprises to shut down and ruin drastically whatever little purchasing power low and middle income groups still have. Yet, nobody is serious enough to strictly implement the policy of energy conservation and reduce abysmal dependence on international oil market.

Frontier
Vol. 46, No. 19, Nov 17 - 23, 2013

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