US objects to gas pipeline

Published July 28, 2005

WASHINGTON, July 27: Days after signing a deal to provide nuclear technology to India for meeting energy needs, the US administration has expressed ‘serious concerns’ over New Delhi’s efforts to buy natural gas from Iran. A senior State Department official told a Senate hearing in Washington that India and China’s energy deals with Iran “raise concerns under US law and policy”.

Assistant Secretary of State for Economic and Business Affairs, E. Anthony Wayne, also objected to the proposed Iran-Pakistan-India gas pipeline, saying that such negotiations could undermine US energy policies. “A troubling aspect of the recent surge in overseas energy deals by China and India is their willingness to invest in countries that are pursuing policies that are harmful to global stability,” Mr Wayne told the Senate Foreign Relations Committee.

During his first state visit to Washington last week, Indian Prime Minister Manmohan Singh signed an unprecedented nuclear deal with the Bush administration. Under the deal, the US agreed to ignore international non-proliferation regimes to provide nuclear fuel and reactors to India, which is a declared nuclear arms state.

Soon after signing the deal, Mr Singh indicated a change in the Indian approach towards the proposed gas pipeline project with Iran, saying that India could not ignore the risks involved in such a project. India had earlier vowed to go ahead with the project despite objections raised by Secretary of State Condoleezza Rice’s during a visit to New Delhi in March.

At the Senate hearing, Mr Wayne recalled that during her visit Ms Rice had told the Indians that the proposed pipeline ‘raises US concerns’. He noted that despite this objection, “Indian and Pakistani officials are engaged in detailed discussions on the technical, financial and legal aspects of building a $4 billion pipeline that would bring Iranian natural gas to Pakistan and India”. Mr Wayne said both Chinese and Indian firms “have been involved in oil and gas sector deals in Iran that raise concerns under US law and policy”.

The US official said that oil deals with Iran and Sudan “can undermine efforts to encourage policy changes that will reduce global instability and energy security for all”. Mr Wayne also objected to the Chinese efforts to outbid major Western oil companies, noting that “in their rush to stake claims around the world, Chinese oil companies have accepted terms that would often not be considered commercially viable for major Western oil companies”.

Meanwhile, Subir Raha, the government-appointed head of India’s biggest oil company, Oil & Natural Gas, has said that the US would be “stupid” to attack Iran and risk imposing record oil prices on the global economy.

“You launch one more attack and you can’t even guess where the speculation will go,” Mr Raha said. “With the stalemate in Afghanistan, stalemate in Iraq and elsewhere, you already have a price of $55 a barrel.”

“I see no reason why India’s priorities should be subservient to US priorities,” said Mr Raha, who has worked for state-run oil companies for the past 35 years. “The US is chasing oil and gas as badly as China or India or anybody else.”

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