Monday, April 18, 2005

The Iranian Eastern Front

According to this piece at The American Thinker, Iran is not quite surrounded because the countries to its east need energy to fuel their economies:
Faced with the failure of their not-so-covert operations in Iraq, and their inability to shut down Iraq’s oil trade without suffering severe consequences, Iran’s leaders are now implementing a course of action similar to one that Hitler adopted after the failure to win the Battle of Britain over 60 years ago: turn east and establish a Second Front.

Contrary to popular belief, Iran is not surrounded. They have one remaining open avenue to influence the outcome of our campaign in the Central Region. By turning east through Baluchistan and dangling the economic and energy carrots to the eastern democratic anchor in the region, India, and our nominal ally in the War of Terror, Pakistan, the mullahs hope to keep their regime intact, while suppressing the nascent democratic movement within their borders.

Rather than massed conventional armies, Iran’s Second Front involves the revival of an expanded energy trade scheme coupled with politico-military pressure using the old stand-by of terror attacks. Simply put, India and Pakistan are energy consumers, and Iran will use its vast energy reserves to its geo-political advantage. Iran has the world's second largest natural gas reserves at an estimated 812 trillion cubic feet (Tcf), while India’s and Pakistan’s reserves amount to only 23 Tcf and 22 Tcf respectively. (A detailed discussion of South Asia’s energy needs and the Iran-India Pipeline can be found here.)...Nevertheless, the US has mounted an effective counter to Iran’s move to the east. During her visit to India, Secretary Rice referred to the pipeline deal when she stated,

"'Our views concerning Iran are very well known and we have communicated to the Indian government our concerns about gas pipeline cooperation between Iran and India,' Rice told a news conference in New Delhi. 'We need to look at the broader question of how India meets its energy needs in the next decade.' "

The sale of the F-16s to Pakistan is said to have angered some Indian leaders. But this sale must not be viewed in isolation, since this is only the beginning of a comprehensive strategy to defend against Iran’s Second Front. The Australian reports that the US is embarking upon a wide-ranging plan to help India become a major power in the 21st century. The US will boost India’s military capabilities with sales of fighter aircraft, anti-missile defense systems, and the latest digitized command and control gear. And most notably, the US and India will cooperate on economic and energy initiatives...Iran is in a pickle. Its Western Front effort has gone nowhere and is under increasing pressure from the military forces of the US and the Coalition in the Persian Gulf and Iraq. The mullahs' attempt to bribe India and Pakistan with the promise of cheap energy and a “jobs program” to construct the pipeline will come to naught. Also, the largest terrorist stronghold in the Central Region will see to it that maximum pain will be inflicted on any attempt to run the pipeline through Baluchistan.

There are very few options left to the Islamic Republic, none of which are very satisfactory from the mullah’s point of view...
Worth reading it all.

Update: Iran used to be surrounded by a buffer zone and with its seat of government tucked well inland, presented a challenge to get into. Things have changed...

See my earlier post about the "surrounded" mullahs here.

Update2: The NY Times has an article on topic:
As it faces the threat of global sanctions from the United States and Europe because of suspicions that it is turning its nuclear program to weapons production, Iran is fighting back with a powerful weapon of its own: its vast oil and gas resources.

Iran's ruling clerics are meticulously arranging energy sales and building partnerships with influential countries, including China and India, as a way to win stronger friendships around the world...
But it has some problems, too:
There is no guarantee, though, that Iran's clients will necessarily turn into political allies. Moreover, Iran's ability to buy friendships is undermined by its own limitations. While the country pumps close to four million barrels of oil a day, it spends $2 billion each year to import fuel because of a lack of refining capacity. Then it spends another $3 billion to subsidize gasoline that is sold here at one of the lowest prices in the world - 8 cents a liter, or about 30 cents a gallon.

And nearly a third of Iran's production is unavailable for export because it is tied up in domestic consumption, where much of it is squandered by inefficient cars, badly insulated homes or wasteful industries.

"Iran definitely has geology on its side," said Vincent Lauerman, the editor in chief of Geopolitics of Energy, an industry newsletter based in Calgary, Alberta. "But if you look at the fields that are producing, these tend to be mature and declining."

Still, for all its problems, Tehran is definitely making progress in its geopolitical campaign. In January, Iran said it would provide India with liquefied natural gas for 25 years, an agreement valued at $40 billion. It also gave India's state-owned Oil and Natural Gas Company, ONGC, a 20 percent stake in the Yadavaran oil field, a 300,000 barrel-a-day project.

That agreement came on the heels of a similar deal signed in October, a commitment to supply China with natural gas over 30 years that also granted China's state-owned oil company, Sinopec, a 50 percent stake in Yadavaran, which holds an estimated 3 billion barrels of oil reserves. This came with a potential value of $70 billion.

Iran is also trying to persuade the strategic rivals India and Pakistan to agree to the construction of a $4 billion pipeline that would carry Iranian gas through Pakistan to India...

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