Q&A: R K PACHAURI--‘Strategic Interests, Not Terrorism, Propelled US To Launch Attack On Iraq’
<a href=www.financialexpress.com>The Finnantial Express
The war on Iraq has raised many questions about fairness, the human cost, international norms and the impact on the global economy as well as our own economy. Director General of The Energy And Resources Institute (Teri) and chairman of the inter-governmental panel on climate change RK Pachauri says war portends ill not only for Iraq but also for oil dependent countries like India. In an interview with RAMESH MENON, he says that strategic interests propelled the United States to launch an attack on Iraq. If the war continues for long, oil prices would shoot up and the war’s environmental impact would go beyond Iraq’s borders. Excerpts:
If the war in Iraq continues, what are its implications for India? The implications are serious for India which imports 70 per cent of its crude oil requirements. A prolonged war will affect inflation and the government’s budgetary deficits. We may be in for a difficult situation.
Why do you think the US was so keen to go into Iraq? The United States has several strategic interests behind this move. There is no denying the fact that Iraq is a different society in that region. Iraq is secular. The level of education and literacy there is very high. There is a gender balance. Women and men are employed in various organisations. There is significant agricultural activity. It has a fair amount of water resources. Having a democratic government there could further US interests. More importantly, there is a possibility of Iraq becoming a much larger repository of hydrocarbons than it is today. Already, it has the second largest oil reserves in the world. That makes it a very attractive area to have some area of influence in. But more than that it has more to do with the Middle East as a whole. So there is a larger strategic interest which has to do with the politics of the region. It is also a fact that the United States is going to become a much larger importer of oil than it is today. The imports are going to go up rapidly and they are concerned over where the oil is going to come from in future.
Is its Iraqi policy not dictated by its desire to control oil reserves in the Gulf? Well, oil is certainly an important component of the policy. But not the only one.
What does this mean for the rest of the world? That is difficult to say at the moment. One will have to see how political developments take shape in that part of the world. You might have instability to begin with, but later you might get stable regimes. But it is very speculative. But one can safely predict that we are going to have an uneasy period. That really means that oil prices would fluctuate a bit. They may go up sharply. The world would be seriously hit. Another aspect is the impact it is going to have on the US economy. If the US economy does not recover, it certainly has implications for the rest of the world that will not be favorable.
The United States is no more as comfortable with Saudi Arabia, which also has large reserves. Yes, they are uneasy with their relationship with Saudi Arabia. I have got this through conversations with several people in the US government. They are very nervous about the fact that a large part of the funding that has gone into terrorist activities worldwide seems to have emanated from Saudi Arabia. If you talk to officials in the United States you will get the feeling that the regime in Saudi Arabia is either ineffective in curbing the outflow of money for such activities or has perhaps not been strong enough to put it down... Therefore, they feel that a presence in Iraq would give them additional leverage with countries in the region, particularly Saudi Arabia.
Is India more vulnerable to oil price rise than many other countries? Unfortunately, it is. India’s percentage of imports has gone up significantly and even the magnitude is going up even if we are able to hold up the percentage of imports related to our total consumption. Projections by the International Energy Agency show that by 2030 India will be consuming five million barrels of oil a day. That puts us in the big league. We need an aggressive, integrated forward looking energy policy that reduces our dependency on oil imports. I am afraid I do not see any signs of that now.
How do you see the politics of oil taking shape in the years to come? It will get murkier in the years to come. Everyone thought OPEC would be finished. But it has come to life again. OPEC today produces more quantities of oil than in the past. It is about 27 million barrels a day. If OPEC is going to have a larger share of the global oil market, it also gives them more clout in deciding oil prices. The kind of excess capacity that existed during the Gulf war 12 years ago, is not there now. At that point of time, Saudi Arabia substantially increased its output calming the prices in the oil market. In the future if you have disruptions like the type you have in Venezuela, then that could have a serious impact on global oil prices. Fluctuations in oil prices today would be more serious than in the past.
As far as strategic oil reserves are concerned, is India in a comfortable position? We have a month’s supply. The government has been taking steps to increase its storage of oil. I do not see any emergency in the near future.
How difficult will it be to reduce our dependence on oil imports? It is very difficult because it will take imagination. It will take coordinated action between several ministries. More importantly, it will require major reforms in the power and energy sector.
There are fears of large scale environmental damage that the war in Iraq would lead to. Those fears are justified. But as we do not know how long the war would last, we do not know now how the war is going to unfold and what kind of weapons will be used as it escalates. It is a little too early to figure that out.