Energy + Geography + Politics = EnerGeoPolitics

February 12, 2013

Nowhere today is that formula more evident than in South and Southwest Asia.   The populous and demographically young nations of India and Pakistan are poised for economic growth that could equal or even surpass the recently developed economies of East and Southeast Asia.  Among the many hindering factors are lack of energy, geographic isolation from energy sources, and a politics of historic enmity.   However, the vast energy supplies of Central Asia – gas, oil and electricity – hold the promise of breaking those centuries old blockages.  Could the goals of growth and prosperity be the catalyst needed for the energeopolitics formula?    The European Energy Review lays out the problem quite clearly:

The energy deficits and power shortages in Southwest Asia force key regional players to look for new sources of supply at home and abroad. Turkmenistan’s gas and Central Asia’s hydroelectricity could become indispensable sources of energy for the regional states, in particular for Pakistan. Afghanistan could become a key gas and electricity transit corridor. But this can only happen if a regional multilateral framework is created in which energy investments are secure. Probably the best way to achieve this is by further extending the Energy Charter Treaty (ECT), which already has a considerable presence in Central Asia, to encompass all the major players in Southwest Asia. The ECT might even become for Southwest Asia what the European Coal and Steel Community was for Europe.

India and Pakistan combined make up close to one-fifth of the world’s population, much of it without stable access to primary energy and power supplies. A timely response to this challenge is crucial considering last summer’s energy shortages in India, which affected more than half-a-billion people. The shortage of energy supplies, especially electricity, already slows down considerably these countries’ economic growth. The overall annual growth rate in Pakistan is 3 to 4 percent and in India 7 to 8 percent. Without energy shortages, the growth rates of Pakistan and India would be 3 to 4 percent higher.

In India and especially in Pakistan, natural gas is rapidly gaining importance as a key source in the power generation mix. Gas-fired turbines are highly efficient and relatively cheap to build. Gas-based power stations are also flexible and can quickly respond to peak demand, which is particularly relevant for the electricity sectors of these two countries.

Read the whole thing.  It is behind a “premium” wall, but you can apply for a free trial subscription.



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