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Energy Policy 35 (2007) 2031–2037

Viewpoint

Specific concerns of Pakistan in the context of energy security issues and

geopolitics of the region

Mukhtar H. Sahir

a,



, Arshad H. Qureshi

b

aMechanical Engineering Department, University of Engineering and Technology, Taxila, Pakistan bMechancial Engineering Department, University of Engineering and Technology, Lahore, Pakistan

Available online 11 October 2006

Abstract

The global and regional energy security in future is not likely to be threatened as much by the shortage of resources as it is likely to be endangered by the disruption of supplies and availability of tradable resources: threatened by growing terrorism and geopolitical conflicts. Pakistan’s geo-strategic position and its importance act to both influence and undermine its energy security issues. It has the potential to provide a corridor for regional energy trade but it is ranked among the top nations exposed to potential threat of terrorist attacks because of the consequences of its role in the major geopolitical expeditions of the recent past. The paper examines the concerns of Pakistan emanating from the regional and global geopolitics of energy from Pakistan’s viewpoint.

r2006 Elsevier Ltd. All rights reserved.

Keywords: Energy security; Terrorism; Pakistan

1. Introduction

Energy, being the life line of industrialized economy and the most vital instrument of development, has been recognized as one of the most important strategic commodities. A strategic commodity is difficult to define with precision. However,Zaleski (2001)indicates two main attributes of a strategic commodity: it is essential for the economy of a country and the supply is uncertain or may present a risk. Energy satisfies both these conditions and

Andrews (2005)argues that energy is a strategic resource that has justified as well as influenced the outcome of wars, fueled as well as strangled economic progress, polluted as well as cleaned up the environment.

Traditionally, the concept of energy security has been based on ensuring sustainable and reliable energy supplies at affordable prices. The World Bank Report (2005)

identifies three key pillars of the global energy security, i.e. energy efficiency, diversification of energy supplies and dealing with volatility. The report also classifies the country-specific perspectives of energy security for the countries on the globe falling in major groups. However

practically the geo-politics of energy, aiming to achieve a position of strength by the international economic players, has been shaping the world and some major critical events of the recent past have added entirely new dimensions to the energy security.

The following sections of the paper present an overview of the energy security issues in the global and the regional perspectives and describe the specific implications and concerns for Pakistan. The authors have examined the issues from Pakistan’s viewpoint and some of the readers, having a different viewpoint, may find it difficult to agree to their arguments; however, the contrast of opinions is likely to broaden the horizon of thinking at least.

2. Energy security issues in global and regional perspectives The turbulent nature of the geo-politics of the world in the past few decades has made energy security a prime concern in the developed economies. The United States and other leading nations of the developed world not only devised dynamic strategies at the national level during this period but also joined hands to develop global and regional initiatives consistent with their long-term and long-range strategic interests. Establishment of the International

www.elsevier.com/locate/enpol

0301-4215/$ - see front matter r 2006 Elsevier Ltd. All rights reserved. doi:10.1016/j.enpol.2006.08.010

Corresponding author: Tel.: +92519047666; fax: +92519047420. E-mail address:sahir@uettaxila.edu.pk (M.H. Sahir).

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Energy Agency (IEA) associated with OECD, in the wake of the two major oil shocks of 1970s, is one example. The principal purpose of the IEA was to establish an emergency oil-sharing system among member countries to assist in managing future supply interruptions (Wilfrid and Kohl, 2004). Drawdown of strategic oil stocks, coordinated by IAE, was successfully employed to prevent destabilization of oil prices in 1991 during the first Iraq war.

The Gulf and Central Asia, because of their huge oil and gas reserves, have always been the focus of the strategic interests of industrialized nations, but foreign policy instruments and intelligence operations were usually considered sufficient for maintaining friendly regimes in the regions of interest until the 9/11 catastrophe.

The terrorist attacks on the highly secure buildings of the United States raised questions about the vulnerabilities of strategic infrastructures including the energy infrastruc-ture, and a multilevel and multidimensional stream of actions was triggered. The justifications as well as impacts of these actions are being debated in the context of geopolitical prejudices.Cordesman and Al-Rodhan (2006)

provide a detailed description of the current scope and trends in the geopolitics-driven energy security concerns. 2.1. Turbulence in the Gulf and Central Asia and fear of further conflicts

The Gulf and Central Asia are the two regions assessed to be the main suppliers of the world energy needs in foreseeable future. On the one side the US and Europe are trying to secure their energy future by increasing their influence, and on the other side energy-hungry economies of the fast growing Asian countries are eyeing the resources of the two regions. The quest for energy of the two regions has set the stage for a complex geopolitical game in which all the global and regional actors are playing for a greater share. Klare (2002) presented a review of the global resources trends and their associated geopolitical phenom-ena, while Edwards (2003) explored the relationship of geopolitics and the politico-security concepts.

In the post-9/11 scenario, a preemptive approach against perceived future threats triggered US-led-coalition attacks on Afghanistan; adjoining energy reserves of Central Asia, and Iraq; a major oil producing country of the Gulf region. Change of regimes and physical control of territories in the two countries was successfully managed by the coalitions but the turbulence and violence prevailing afterwards is costing more than the war. It must be recognized that sustainable peace and political stability is vital in these regions, failing which may entail a complex geopolitical situation in the context of intense competition expected between east and west for oil and gas resources in the future (Tempest, 2003;Ryoichi et al., 2005).

Instead of the traditional approach of overpowering the strategic resources, a rational economic approach of ensuring due shares through sustainable political and economic agreements among the international community

is needed. The global community must be conscious that the growing dependence of the US on oil imports from the Middle East and the Asia Pacific region’s growing dependence on oil have the potential to lead to more serious conflicts in both regions unless these issues are dealt with in geo-economic rather than geo-strategic terms (Salameh, 2003). A cold headed and unbiased analysis of the turbulence prevailing in the two regions is needed to understand the real causes of turbulence and to identify the effective remedial strategies because the conflicting inter-ests of the global and regional geo-political actors are feared to exploit the post-9/11 wrath to their advantages

Atal (2003).

2.2. Recognition of real threats to global energy security and need of multilateral actions

A recent report shows the world oil production capacities projections for the next 25 years, which are summarized inTables 1.

Also data from the BP’s Statistical Review of World Energy indicate that at the current level of demand the world has sufficient reserves to meet oil demand for 40 years, and to meet natural gas demand for over 60 years, so the issue of energy security is driven not by physical shortage but by the challenges of ensuring availability of traded oil and gas resources (Hydrocarbon Processing, 2004). Besides assurances of oil supply security from the Gulf region during the 21st century (Tippee, 2004), the supplementary potential of the North Sea, Russia and the Caspian Basin presents an optimistic picture of the future. Considerable promises for the future are also indicated by the non-conventional oil source estimates (IEA, 2002), the renewable potential (Blankinship, 2005) and new/alternate energy technologies development (Petersen and Erickson, 2004). The real threat to global energy security in the near future is not from the shortage of energy resources but it is the safety and management of the supply and use systems, which call for rational behavior from all economic players across the globe.

The natural disasters, accidents and technical mishaps have always been part of our world. Major power blackouts across the UK, Italy, Sweden and Denmark in 2003 raised new questions about the systems’ integrity and need of diversification (Bialek, 2005); however, terrorism is

Table 1

World oil production capacity million bpd

Region History (estimates) Projections

1990 2002 2010 2015 2020 2025

OPEC 27.2 30.6 39.9 43.7 49.7 56.0

NON OPEC 42.2 49.4 56.6 61.7 63.9 66.2 WORLD 69.4 80.0 105.4 105.4 113.6 122.2 Data source: International Energy Outlook 2005/Report#DOE/EIA-0484(2005).

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a relatively new but the most serious threat. In the post-9/ 11 scenario the Governments and energy industry actors are re-assessing and redesigning the security measures and the contingency plans for any previously unforeseen vulnerabilities of the energy infrastructures (Dittrick, 2002).

Sustainable coordinated socio-political and techno-eco-nomic actions are needed on one side to eradicate the terrorism and on the other side to protect the infrastruc-tures from terrorist attacks. Different elements of the energy infrastructure are characterized by distinct vulner-abilities and a design approach is needed for evolving energy systems that are inherently harder to successfully attack (Alexander et al., 2004).

Departure from traditional approaches in geopolitics of energy is needed to avoid development of new conflicts and help resolve the existing conflicts peacefully , in an environment of healthy market oriented competition. It must be recognized that energy is the need and right of every nation and it may be available to all, only if the resources are pooled by the international community to find viable techno-economic and sustainable political solutions.

Multilateral initiatives and investments are needed for reducing the inherent vulnerabilities of energy infrastruc-ture, diversification of energy resources and promotion of the development and use of alternative energy resources. 3. Energy security issues of Pakistan in the context of geopolitics in the region

The energy security of Pakistan is inherently tied up with the global and regional geopolitical interests because of its unique geographical location, its potential to influence the Muslim World occupying most of the world energy reserves, its historical relations with the US, EU and China and its economic potential. During and after the cold war, Pakistan has always been a part of the major international moves and expeditions, which practically shaped the world in general and Asia in particular, and it is likely to remain an important geo-political actor of the region in the foreseeable future as well.

3.1. Strategic location of Pakistan

Pakistan is a fast growing economy of the developing world, which has a very important strategic location with respect to the energy rich Persian Gulf and Central Asia, as shown inFig. 1.

On the southern side it has a long coastal line (1064 km) associated with the Arabian Sea very near the Persian Gulf, where two deep sea ports, i.e. Karachi and Gwadar are available. On the eastern and north-eastern side, respec-tively, it has common borders with the fast growing economic giants of India and China. Iran makes up the country’s south-west border, and Afghanistan runs along its western and northern edge.

It has developed very good road and railway network that may be linked to Central Asian states via Afghanistan. It already has road links with China and both road and railway links with India and Iran.

It has a population of 153.96 million, a literacy rate of 53% and per capita annual income of 736$. Further details may be had by following the link / http://www.infopak.-gov.pk/Factsheets/factsheet_index.htmS.

3.2. Implications of strategic location in the context of geo-politics of energy

Pakistan’s geo-strategic position and its importance act to both influence and undermine its energy security issues. The US, EU, China and India, being major potential energy users, are the major actors of the geo-politics of energy in the region and Pakistan has been entangled in a complex geo-political mesh because of its simultaneously good relations with the US and China, its long-standing disputes with India and its inherent ties with the Muslim nations of troubled regions.

China’s oil security in particular (Wu, 2004) and Asia’s energy security in general (Fesharaki et al., 2003) are tied up with Middle East oil and Central Asian energy resources and opportunities for huge regional energy trade and cooperation have been indicated (Sinyugin, 2002). However, the traditional rivalry and long-standing con-flicts between Pakistan and India have been causing doubts and reservations (Pandian, 2005), which are overshadow-ing the rational approach.

On one side, the long-term energy needs of fast growing China (Ryoichi et al., 2005) while on the other side increasing dependence of both China and the United States on the Middle East oil (Salameh, 2003) and the growing geopolitical trends indicating apparent rivalry between two Fig. 1. Location map of Pakistan. Image source: EIA/DOE country analysis briefs.

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of its friends are creating difficult situation for Pakistan in the region because Pakistan can hardly afford to lose either.

The Caspian Sea states are likely to supplement the world energy supplies in the future and therefore the US as well as the EU considers this region very important for energy security. The Trans-Caspian gas pipeline project (Feller, 2004b) and the Ttrans-Afghanistan gas pipeline project (see Fig. 5) are two examples of the supply diversification efforts of various nations. Because of its location and potential of logistic links with the Gulf and Central Asian states, Pakistan is likely to serve as an international trade corridor in the future. However, the growing tension between the US and Iran, the growing new strategic partnerships in the region, prevailing violence along northern and northeastern boundaries, militant groups embarrassing neighbors, and the domestic political instability are major factors that Pakistan needs to seriously and carefully tackle to take advantage of the emerging economic opportunities.

3.3. Economic growth and future energy needs of Pakistan Pakistan has shown very promising economic growth in the recent past; its real GDP growth during the fiscal year ending on June 2005 was 8.4% (EIA country analysis brief on Pakistan). The energy use profile of Pakistan over the past years is shown inTable 2.

According to the Pakistan Energy Year Book (2005), 71% of the energy supplies were managed through indigenous sources, while 29% were the imports. Energy supply and demand mixes for 2005 are shown in Figs. 2 and 3.

It is clear from the above figures that gas and oil are the most prominent resources in the present primary energy mix of Pakistan, while hydro and coal are the next important resources. The same trends are likely to continue in the future. The Planning Commission of the Govern-ment of Pakistan, in their projections, shown in Table 3, paint a very optimistic picture of the coal, hydro, nuclear and renewable resources; however, natural gas and oil are

likely to remain dominant resources, in view of the demand mix trends (Fig. 4) which indicate industrial and transport sectors to be the dominant energy use sectors.

Indigenous production levels of oil, gas and electricity, and world ranking for Pakistan are shown inTable 4.

The fact that in 2005, to which the above figures belong, 29% energy needs were managed through import (major share taken by oil alone) further testifies that imported oil shall maintain an important share in the future energy mix. Natural gas has emerged as the most important fuel in the recent past and trends indicate its dominant share in the future energy mix.

At present all of the natural gas needs are being met through indigenous production and, in view of some recent discoveries Vahidi and Fesharaki (2002), have painted a

Table 2

Historical energy use profile of Pakistan

Years Population

(million)

Total primary energy (MMTOE)

Power gen. installed capacity (MW) Natural gas consumption (MMcfd) Energy consumption per capita (MMBtu) 1950 35 1.4 115 NIL 1.7 1960 45 3.0 425 60 2.9 1970 60 6.4 1700 300 4.5 1980 81 12.5 3500 711 6.5 1990 108 28.0 9000 1364 10.9 2000 140 42.0 17,000 1950 12.5 2001 143 44.5 17,000 2104 13.0 2002 146 45.2 17,758 2259 13.0 2003 149 47.1 17,793 2390 13.2 2004 153 50.8 19,252 2881 13.9

Source: Pakistan energy year book-various issues.

Primary Energy Supply Mix 2005

Oil 30% Coal 8% Hydro 11% Nulclear 1% Gas 50%

Fig. 2. Data source:Pakistan Energy Year Book (2005).

Sectoral energy demand mix 2005 Domestic 21.2% Commercial 3.4% Industrial 39.7% Agricultural 2.2% Transport 31.4% Other Govt 2.1%

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very optimistic picture about the future; however, due to multiple factors it is estimated that gas imports will be inevitable in future. In order to meet future domestic needs and in view of the potential to provide imported gas to India as well, the Government of Pakistan has planned three gas pipeline projects. i.e. Iran–Pakistan (IP), Qatar– Pakistan (QP), and Tajkistan–Afghanistan–Pakistan (TAP), all terminating at Bhong, a place adjoining the Indian border. The proposed routs of the pipelines are shown inFig. 5.

In fact, these pipeline projects have been designed by assuming India as the major end user and studies show that India needs imported gas more as well as earlier than

Pakistan (Sen, 2000). Presently, there are reservations on the Indian side because of the traditional conflicts between the two nations (Akbarzadeh, 2003); however, the situation may not prevail for a longer time and Starr and Cornell (2005) argue that India’s increasing energy needs (not to mention Pakistan’s) are likely to force it to review its objections to a gas line via Pakistan, especially if bilateral relations between the two improve.

The recently published MTDF plan of the Pakistan Government includes quite ambitious targets for the hydropower, nuclear and renewable sources as well. However, there are a number of practical constraints due to which these targets seem difficult to achieve. Lack of political harmony and conflicting interests of the provincial level leadership are hindering the progress on major hydropower projects. The nuclear power option is over-shadowed by the doubts among the global community based on controversial past actions. Renewable technolo-gies have limited potential and scope at present; however, opportunities exist to take advantage of international initiatives like SARI/Energy (South Asia Regional Initia-tive for Energy) and the non-nuclear technology support of the developed world.

3.4. Pakistan’s energy security and implications of the war against terrorism

Pakistan played the role of a frontline state during the Afghan War against Soviet invasion and it was the most affected state by the left-overs of that war. Not only the millions of Afghan refugees over burdened its economy but also the breed of armed jihadi groups, organized and used as worrier force during the so-called Afghan Jihad, to which it was left alone to deal with after the end of war, became a permanent threat to the law and order situation Table 3

Primary energy supply by source (MTOE) Actuala Projectionsb Year 2005 2010 2015 2020 2025 2030 Oil 16.33 20.69 32.51 45.47 57.93 66.84 Gas 27.95 38.99 52.98 77.85 114.84 162.58 Coal 4.22 7.16 14.45 24.77 38.28 68.65 Hydro 6.12 11.03 16.4 21.44 30.5 38.93 Renewables 0 0.84 1.6 3 5.58 9.2 Nuclear 0.67 0.69 2.23 4.81 8.24 15.11 Total 55.29 79.4 120.17 177.34 255.37 361.31 a

Energy Year Book 2005,

bMTDF Planning Commission GOP.

Energy Mix Trends

0 5 10 15 20 25 30 2000 2001 2002 2003 2004 2005 Year MTOE Oil Gas Coal Hydro Nuclear

Fig. 4. Data Source:Pakistan Energy Year Book (2005).

Table 4

Pakistan: 2005 production and world ranking

Energy Production Rank

Oil 61,000 bbl/day 55

Gas 23,400 million cu.m 25

Electricity 75,270 million kWh 35

Data source: 2005 CIA World factbook (www.photius.com/rankings/ economy).

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and the national security. In order to get rid of these elements as well as to ensure peace and stability in its north, Pakistan supported Taliban in Afghanistan: where private armies of individual warlords had created a state of violence. Taliban, being entirely a local element, did bring peace to Afghanistan, but their fundamentalist approach, traditional tribal courtesy and lack of vision were misused by a terrorist group of foreign elements, namely Al-Qaida. Pakistan and the international community had been trying to persuade the Taliban regime to get rid of the Al-Qaida leadership but the efforts failed.

The world recognized the real potential threat only after the 9/11 catastrophe and the war against terrorism started. Pakistan again joined hands with the international com-munity and once again played the role of a frontline state and consequently suffered the most. The stubborn Taliban regime met its fate. Infrastructure created by Al-Qaida in Afghanistan and its widespread terrorist network was largely destroyed by the coalition, of which Pakistan was an active partner. Pakistan is still engaged in eradicating the Al-Qaida remains and Taliban militants infiltrated in its loosely controlled northern tribal territory.

The comprehensive analysis of the results and implica-tions of the two situaimplica-tions and the roles described above, being controversial and debatable in the context of prevailing geopolitical prejudices, are out of the scope of this paper; however, it may be concluded without any prejudice that the local and foreign terrorist groups have become a real threat to the national security of Pakistan in general and the energy security in particular.

Table 5shows that Pakistan is third in the ranking of 186 countries of the world having a likelihood of terrorist attacks in the next 12 months.

Terrorist attacks on the President and the Prime Minister of Pakistan in the recent past and growing attacks on the vulnerable infrastructure like railway tracks, gas pipelines and electricity transmission networks have proved the correctness of the above assessment. It is an established fact that pipeline sabotage is the terrorists’ weapon of choice (Luft, 2005b), and recent attacks on oil pipelines in Iraq (Fellers, 2004a) and on gas pipelines in Pakistan (John and Daly, 2006) have raised new questions regarding the security of these vital infrastructures.

Apart from the heritage of terrorist groups Pakistan had as a result of Afghan Jihad, another terrorist element

suspected to be fueled by the interests of regional geopolitical actors to some extent and managed by some local tribal lords has presented serious threats to the energy and logistic infrastructures in the province of Baloachistan (Luft, 2005a;Alexander’s Gas and Oil Connections, 2006). Pakistan is trying hard to establish government control/ writ in the tribal areas adjoining to the Afghanistan borders in its Balochistan province and the tribal belt of Waziristan adjoining its North Western Frontier province. These areas, which had been out of normal government control (since the British rule) and loosely administered by political agents and the local tribal chiefs, had become safe havens for the terrorists.

Pakistan has the necessary military capability and the strong commitment to eradicate terrorism; however, it needs a strong economic and technical backup from the international community to develop these areas in terms of infrastructure and social services, so that inherent tribal fighting culture may be transformed into an open society. Sustainable peace and harmony in these areas can only be ensured through political and economic instruments for which sincerity and a rational approach of the national leadership and the local political entities are pre-requisites. Regional and global economic actors should also recognize that the traditional geopolitical strategies, if allowed to prevail, shall contribute nothing except for destabilizing the region and diverting attention from the real threats.

4. Conclusions

The energy security of Pakistan is tied up with global and regional geopolitical complexities because of its strategic location and above all because of its leading role and partnership in the major geopolitical expeditions in the region. Because of its indigenous resource potential, economic growth trends and logistic links with the Gulf states and Central Asia natural gas and oil are likely to dominate the future energy mix of Pakistan, consequently increasing its import dependence. Utilization of hydro potential, increasing shares of coal and nuclear energy in the national energy mix and the development of renewables may supplement the energy needs but a strong technical backup from the developed world and huge foreign investments will be needed, for which an integrated planning approach and a conducive environment are pre-requisite.

Neither for the world nor for Pakistan is the shortage of supplies the real energy security concern, but it is the disruption of supplies threatened by the growing wave of terrorism and traditional geopolitical practices. Pakistan is not alone whose energy infrastructure is exposed to the threat of terrorism, but most of the states of the region including Afghanistan, India, Nepal and Sri Lanka face militant and terrorist threats from groups that are likely to disrupt energy flow. Andersen and Consolatore (2005)

argue that this threat could prompt greater cooperation Table 5

Ranking by likelihood of terrorist attack

Rank Country Rank Country

1 Colombia 6 Afghanistan

2 Israel 7 Indonesia

3 Pakistan 8 Iraq

4 United States 9 India

5 Philippines 10 UK/Sri Lanka

Data source: World Markets Research Center /www.photius.com/ rankings/terrorism.htmlS.

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among the states of the region as they develop a symbiotic relationship on energy.

The Gulf and Caspian basin regions have huge energy resource potentials, which are to be shared by the global community in the foreseeable future, and the traditional geopolitical approach of overpowering, if allowed to prevail, may lead to new conflicts. A new approach of ensuring due share through healthy economic competition, multinational investments and technical cooperation can only enhance the global energy security.

Pakistan, because of its unique location and huge logistic potential, may serve as a trade corridor as well as an energy corridor in Asia and most of the regional and global economic actors may take advantage of the opportunities. However, both Pakistan and the potential regional beneficiaries need to sincerely work for creating an environment conducive for capturing the emerging eco-nomic opportunities. Sustainable mutual trust, ecoeco-nomic cooperation and healthy market-based competition among Pakistan, India and Afghanistan is necessary for individual and collective gains. Besides general neighborhood these three nations are tied up by the historical heritage and blood relationships of their citizens.

Pakistan needs to effectively eradicate the routs and causes of terrorism, improve the relationship with the regional and global entities, create a harmonized and sustainable democratic system of government, ensure peace and stability and total control within its territories and create investment friendly environment for FDI.

Regional economic cooperation, sustainable peaceful resolution of long-standing disputes and departure from the geo-political approach may help the regional entities to enhance their individual and collective energy security.

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