The Hindu : Pipeline politics in Bangladesh

Online edition of India's National Newspaper
Monday, Jul 22, 2002

Opinion

Opinion - News Analysis

Pipeline politics in Bangladesh

By C. Raja Mohan

NEW DELHI JULY 21. Under pressure from the American energy companies to export its vast natural gas resources to India, Bangladesh is nearing yet another frustrating non-decision. A committee set up by Dhaka to examine the options on the utilisation of its gas resources is likely to submit its report next week.

But don't hold your breath. Media reports from Dhaka say the Committee might avoid a clear position on gas exports. The panel could recommend that gas exports are all right if new fields are discovered. In other words, "not now''.

This will not please the American company, Unocal, which has been moving heaven and earth for a green signal from Dhaka on gas exports. Unocal wants to build a 1,363-km pipeline to move gas from the Bibiyanah gas field in North Eastern Bangladesh to the HBJ pipeline near Delhi. It will run through West Bengal, Bihar, and Uttar Pradesh.

Unocal has a simple case: the $1.2 billion project would bring in an estimated revenue of $3.7 billions to Dhaka over the next 20 years, and an immediate investment of about $700 millions. Jobs and development associated with such a mega project are extras. Unocal also believes that Bangladesh could become an energy hub allowing the transport of gas from Myanmar and North Eastern India to the energy-hungry mainland. Dhaka could just sit back and charge transit fees. But nothing is simple in Bangladesh, which is traumatised by the prospect of ``giving away'' its natural resources to India. In the wake of the Unocal proposal, the Bangla Supreme Court itself intervened to prevent an immediate decision.

The Bangladesh National Party, now in power, was opposed to gas exports to India when in opposition. Once in power, it has shown some flexibility, under American pressure. Its move to set up a committee on gas utilisation was widely seen as a way of moving towards that difficult decision. But since when have committees taken bold decisions?

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The key question in the Bangla debate on energy exports is the following. How much gas is there? Ultra-nationalists in Bangladesh worry that there is not enough for future domestic consumption. Pragmatists, far fewer, say there is enough and then some for exports. Realists, almost extinct, know that unless Bangladesh exports some of its gas, it will not be able to able to pay the oil companies in dollars. Dhaka believes the gas reserves are around 16 trillion cubic feet. The U.S. Geological Survey in a recent report estimates there is additional 32 tcf of ``undiscovered reserves''. The oil companies argue that without a decision to export gas to India, there cannot be new exploration which could help expand the size of "known reserves''.

That brings us back to politics. Can Bangladesh really think big and act bold? Your guess is as good as mine. For the leaders of the Subcontinent have wallowed in poverty for so long that they do not know how to generate prosperity through cooperation.

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Yes, Unocal is the same company that wanted to build a natural gas pipeline from Turkmenistan to India through Afghanistan and Pakistan. They tried hard to sell the idea to the Taliban, which was more interested in spreading Islamic revolution than making money. Amidst protests that it is dealing with the devil, Unocal finally pulled out of the project in the late 1990s.

Unlike the petty minds in the Subcontinent, American oil companies have always dreamt expansively and took huge risks. Unocal continues to believe that eventually a network of pipelines will physically connect the producers and consumers of oil and natural gas in Asia from Indo-China to Turkey.

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Thanks to the defeat of the Taliban, the Afghan pipeline project is back in play. In May, the leader of Afghanistan, Hamid Karzai, the strongman of Turkmenistan, Sapamurat Niyazov, and Pakistan's Pervez Musharraf, met in Islamabad to revive the plans for the Afghan pipeline. Unocal is yet to show its hand.

But there is an interesting new player — Russia — in the Great Game of Central Asian pipelines. Around the same time as the triangular meeting in Islamabad, a high-powered delegation from Gazprom — the Russian gas giant — visited Pakistan to sound out the prospects.

Russia believes it could play a key role in building pipelines from both Iran and Central Asia to the Subcontinent, and is stepping up its political and petroleum contacts with Pakistan.

The Americans, meanwhile, have decided that Russia is a partner and no longer a rival when it comes to energy politics in Central Asia.

After nearly a century of suspicion, Washington and Moscow are ready to work together; but going by the present form, New Delhi and Dhaka will rather fight petty on trade and transit than make money on mega projects. Sadly, grand thinking does not come easily to the Subcontinent.

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