Abstract
Energy is not only the engine of economic development but also an important driver of international relations. Among all options of energy interdependency, cross-border gas pipelines are unique on many counts. Physical connection of pipeline between countries through large-scale infrastructure result in an intensive technological, financial and diplomatic engagement involving multiple stakeholders and multitude of risks. The recent book India and the Global Game of Gas Pipelines by Gulshan Dietl explores the challenges and opportunities surrounding global gas pipelines with specific reference to India.
India is poised to increase its share of natural gas in the primary energy mix to 15–20 per cent by 2030 from the current level of 6–7 per cent. But with a mere 0.7 per cent of world’s proven reserves, India is not endowed with adequate natural gas. The latest BP statistical review indicates that gas production in India in 2016 was at 27.6 billion cubic meter (bcm) and consumption was almost double at 50.1 bcm and the difference is met through liquefied natural gas (LNG) imports by sea. Yet only with LNG route, India cannot move towards a gas-based economy in a significant way.
India is surrounded by gas rich neighbourhood. The three potential cross-border pipelines, namely, Iran–Pakistan–India (IPI), Turkmenistan–Afghanistan–Pakistan–India (TAPI) and Myanmar–Bangladesh–India (MBI) have been under negotiation for more than a decade or two. However, none of these pipelines have materialised till date owing to various strategic and security concerns. Under this backdrop, Dietl’s book is a timely work providing energy researchers and their partners in industry and government a one-stop reference to understand the myriad facets of this complex game of energy, politics and power.
The book exposes the topic in the most scholarly way by giving theoretical contexts of resources influencing the geopolitics of the different regions with combined impact on economy, defence and diplomacy. The book is divided into three parts and six core chapters. Every chapter of the book starts with a couple of quotes which set the tone of chapter. The first two chapters, which constitute the first part, introduce natural gas and gas pipelines touching upon their history, science, and making an analytical comparison with other resources: coal and oil, and, LNG. The author details the market dynamics of gas sector making a realistic assessment of alternative scenarios. Acknowledging the inherent nature of gas contracts and the associated risks, the author describes gas pipelines as a double-edged sword, hurting both the supplier and the buyer.
The next three chapters, which together form the second part of the book, focus on three out of the top four gas reserve countries in the world: Iran, Russia and Turkmenistan. Qatar has been rightfully excluded as it deals with LNG rather than pipelines. The three countries, Iran, Russia and Turkmenistan, are at different cross-roads of their energy diplomacy. Through an in-depth analysis, the author illustrated how Iran, despite having the largest gas reserves, has limited success in building gas pipelines because of its not so pleasant history burdened with war and economic sanctions from West. However, the author is optimistic that given Iran’s geographical position, and with gradual removal of sanctions and opening up of its energy sector, its aspiration of being the ‘energy bridge’ of the world is eminently reasonable.
In the chapter on Russia ‘The country with the distinction of largest volume of gas exports through pipelines (more than 25% share of the world total)’, three points are worth highlighting. First, there is a definite technological deficit in Russia when compared to the USA; and Russia’s influence is inevitably falling in the region as other countries diversify their trade. However, the vastness of its territory and the volume of gas allow Russia to be a potential caterer to both European market in the west and China, Japan and Korea in the east. Second, Russia’s hegemonic approach during the pipeline deals contributes to its friction with partner countries and the same is exploited by the USA to Russia’s disadvantage. Last, there has been inconsistency in Russia prioritising between strategic and economic objectives, which are often conflicting with each other. Possibly, this inconsistency can be traced to disproportionate large share of a single company in country’s gas business: Gazprom controls 80 per cent of gas production and more than 60 per cent of gas reserves in Russia.
Turkmenistan, which completes the author’s ‘gas-troika’, is a fresh player in the gas game without any backlog of alignment inertia. It follows the policy of international diplomatic neutrality to maximise return from its energy endowments. The chapter on Turkmenistan shows how a powerful country in the neighbourhood—China in this case—can turn out to be a game changer. Indeed, China has established itself as a speedy and reliable partner by spearheading the construction of longest pipeline of the world, that is, Central Asia–China pipeline in a short period of three years. China also got the right to explore and develop one of Turkmen’s onshore fields, which was a departure from latter’s policy of allowing only domestic companies. The author justifies how China’s move has opened up the options for the exporting and transit countries of the region.
The third and last part of the book that pertains to India, gives a case of how pipeline projects can be derailed because of extraneous reasons in spite of decade-long negotiations. With US opposition to IPI pipeline and China’s quick implementation of Sino–Myanmar pipeline that provided destination to Myanmar’s gas, India is left only with the TAPI option. TAPI pipeline has its share of uncertainties given that it passes through Pakistan and Afghanistan. One can derive two inferences from the discussion in the chapter. First, in a trilateral/ quadrilateral pipeline project, bilateral negotiations are less meaningful. Second, in this game of pipelines, exporters suffer from the syndrome of ‘over promise and under delivery’. The author has mentioned two such cases: Turkmenistan in case of TAPI (p. 159) and Oman in case of South Asia Gas Enterprises Pvt. Ltd. (SAGE) energy corridor (p. 168). This underscores the popular notion that politics is a game of perception and pipeline politics is no exception.
Throughout the book, the author has drawn analogy of pipeline diplomacy with the game of chess. In the pipeline game, however, unlike chess, there is a limited choice for the payer to set the game. It is like a player gets a chance to play the game from the middle. One cannot choose one’s geography or neighbours. But one can choose policies, strategy, and rapidness and agility in terms of its actions. Also, in this game of gas pipeline, there are more than two players, not limited to countries, with uneven sets of power. Power too shifts among actors at different stages of the game. As the author indicates, after any pipeline project is in place, the investor loses the position of power that it previously holds on account of scarce capital. Several pipelines in the same region make the game complicated. Uncertainties keep the game in perennial excitement. A pawn can instrument a checkmate to the King in the game of chess. In similar vein, regime change in a small transit country can spoil a mega project.
This book is undoubtedly comprehensive. It brings forth debates surrounding gas pipelines and presents all sides of these debates with logic and care. For instance, though the whole book relies on the premise that gas is the preferred fuel for future, the author has not hesitated in bringing up the Stop Dirty Fuel Campaign to highlight the adverse impact of gas leakages. Similarly, the book does not shy away from highlighting the methodological nuances, data discrepancies in the sector both globally and in Indian context.
Immobility is a major drawback in gas pipelines. The fixed infrastructure makes a pipeline viable only when adequate gas for a time frame of 20–30 or more years is available at the point of the source. The book has highlighted this critical limitation that the pipeline cannot be redirected anywhere beyond where the pipe leads. It would have been appropriate, if the book had addressed one pertinent question: what happens to the pipeline, when the gas source exhausts? Even as the book mentions the role of vehicle fleet driving the natural gas demand in case of India, it does not discuss a scenario where India shifts to electric mobility substantially. There are some editorial glitches in the book. ‘Luke Patey’ (whose succinct comment appears at the back cover) has been printed as ‘Luke Pate’, and the missing ‘y’ has found its way in the name of the Indian Prime Minister, who is spelt as ‘Narendra Mody’ (p. 151).
Overall, Dietl’s book will remain an important contribution in the field of energy security and international politics. Natural gas found use in all kinds of needs: cooking, transportation, industry and power production. This cleanest fossil fuel is also a friend to renewable sources. Because of its quick ramping up and down, gas balances for the abrupt change in renewable energy supply like that of wind and solar and minimises the impact of variability and uncertainty. The indispensability of gas is going to rise in the coming years. So is the relevance of Dietl’s book. The gas sector being extremely dynamic, the political significance of some of the events outlined in the book might pale with time. But like the game of chess where every move matters, the historical significance would remain.