U.S. Nuclear Deal With India Blocks Deal For Iran Pipeline

by Praful Bidwai

(IPS) NEW DELHI -- India, one of the world's big guzzlers of energy, is caught between the search for future supplies of vanishing resources, especially petroleum, and opting for nuclear power.

In recent years India has been gravitating towards the first option, reflected in frenzied attempts to tie up oil and gas supplies from such diverse sources as Vietnam, Burma, Bangladesh, Qatar, Sudan, Venezuela, Nigeria, Russia and Kazakhstan.

Above all, India moved towards signing a deal for a 2,600 km-long pipeline carrying natural gas from Iran through Pakistan. The $7.4 billon project has been seen as the star of the country's energy show.

Yet, 10 days ago, the government's preference suddenly shifted towards nuclear power. Official statements say India will promote it for its "energy security" and as a clean, safe means of producing electricity.

This is strange considering that nuclear power accounts for under three percent of India's electricity, and less than one percent of its energy consumption, and that the country's experience with nuclear energy, especially safety, has not been happy.

What explains the shift is not so much energy planners' calculations, technical factors, or social considerations, as geopolitical calculations.

Crucial here is Prime Minister Manmohan Singh's July 17-20 visit to Washington, where he signed a far-reaching nuclear cooperation agreement with President George W. Bush.

Under this, the U.S. has agreed to sell nuclear materials and technology to India and pledged to relax export restrictions and other controls in the global non-proliferation order, especially those imposed by the 44-state Nuclear Suppliers' Group (NSG).

India will, in return, identify and distinguish civilian and military nuclear facilities from each other and place the civilian ones 'voluntarily' under International Atomic Energy Agency (IAEA) safeguards, while toughening export controls.

"This is indeed a landmark agreement which admits India into the world's exclusive Nuclear Club as a de facto nuclear weapons-state," says Kamal Mitra Chenoy, of the Coalition for Nuclear Disarmament and Peace, and a professor at the School of International Studies at Jawaharlal Nehru University.

"It signifies India's abandonment of its decades-long commitment to global nuclear disarmament. There isn't a word in the Bush-Singh declaration about a nuclear weapons-free world. Indian policy-makers have decided to play a purely cynical game: join the Nuclear Club, which they stridently condemned for decades."

If it does go through, the Bush-Singh deal will open avenues for imports of civilian nuclear materials into India. India is running out of uranium as its old mines get depleted and new mining projects face popular opposition.

Uranium imports, like those of power reactors, could give a temporary boost to India's nuclear power program, which has performed below par for decades. Against the promise of 10,000 Mw of nuclear electricity by 2000, India's current nuclear capacity is just 3,300 Mw.

Singh's decision to pump adrenalin into the nuclear power sector has astonished many.

In a July 21 interview to The Washington Post, Singh raised doubts about the viability and bankability of the Iran-Pakistan-India pipeline project: "There are many risks, because considering all the uncertainties of the situation there in Iran. I don't know if any international consortium of bankers would probably underwrite this."

This has been widely seen as Singh's effort to placate Washington, which has repeatedly voiced its opposition to the pipeline and warned that under its domestic laws, it will have to impose sanctions on any project that helps Iran, considered part of the 'Axis of Evil.'

Politically and strategically, the nuclear power paradigm fits in with an alliance with the U.S. Nuclear trade with India will also help the languishing U.S. nuclear equipment industry. The U.S. has ordered no new power reactor since 1973.

The pact will also keep India closely aligned with the global North, which accounts for the bulk of international nuclear supplies.

Most important, the image of India as a 'responsible' nuclear weapons-state will keep India in line with American priorities.

By contrast, the oil pipeline would be a symbol of South-South economic cooperation and political solidarity, which the U.S. quietly opposes, as it opposes any developing country group that it can't control. It also has huge positive 'externalities' such as a breakthrough in relations with Pakistan, as well as better ties with Iran, an emerging power.

Pakistan stands to gain over 500 million dollars a year as transit fees from the pipeline. The pipeline will also signify a high level of confidence and mutual comfort between the two neighbors.

There is even a proposal to extend the pipeline to China and to develop yet another conduit from Central Asia via Afghanistan and Pakistan.

Singh supported South-South energy cooperation at the 50th anniversary of the Afro-Asian Conference in Jakarta in April, saying: "While our continents include both major producers and consumers of energy, the framework within which we produce and consume energy is determined elsewhere." He called the dominating role of Western governments and companies an 'anomaly.'

The idea was widely welcomed in South Asia. But now Singh seems to be retreating from it, citing purely commercial and technical grounds.

Argues economic writer M K Venu: "If you were to make a purely technical argument, no nuclear power plant in the world runs purely on commercial principles. There is an implicit sovereign guarantee in regard to the mitigation of costs and other risk factors such as ensuring regular supply of fuel. You cannot buy enriched uranium from any private party like you buy coal for a thermal power plant."

India's own experience with nuclear power has not been pleasant. Nuclear power has claimed over a quarter of the country's energy research budget, but yielded very little energy, and that too of indifferent reliability. Wind turbine generation has already overtaken nuclear power in capacity -- without fuss, high subsidies or environmental problems.

Nuclear power's generic problems of occupational and environmental safety are greatly magnified in India. "Nobody can claim nuclear power is environment-friendly," says M.V. Ramana, from the Center for Interdisciplinary Studies in Environment and Development in Bangalore. "Nuclear power leaves wastes that remain radioactive for tens of thousands of years. No solution exists to the problem of storing such wastes."

Nor is the claim credible that nuclear power will help mitigate global warming. However, argues Ramana, "There is no empirical evidence that increased use of nuclear power has contributed to reducing a country's carbon-dioxide emissions."

The best case study is Japan, a strongly pro-nuclear energy country. From 1965 to 1995, Japan's nuclear plant capacity increased by over 40,000 Mw, but carbon dioxide emissions tripled.

"Nuclear power tends to require and promote a supply-oriented energy policy. The high cost of nuclear power also means that any potential decreases in carbon emissions due to its adoption are expensive," added Ramana.

If India yields to U.S. pressure on the Iran pipeline, India is likely to be stuck with the wrong paradigm and court energy insecurity. If it follows its South-South instincts, India will improve relations with its neighbors and create greater security and prosperity for South and West Asia.