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Thursday, August 23, 2018

The Peace Dividends of Energy Infrastructure – North Korea, Iran and Beyond [feedly]

The Peace Dividends of Energy Infrastructure – North Korea, Iran and Beyond
https://www.globalpolicyjournal.com/blog/23/08/2018/peace-dividends-energy-infrastructure-north-korea-iran-and-beyond


Morgan D. Bazilian and Saleem H. Ali explore the possibilities of using pipelines, or other energy infrastructure, as a basis for peace.

The compelling possibilities of using pipelines, or other energy infrastructure, as a basis for peace has emerged again, this time on the Korean peninsula. The lucrative energy market of South Korea has become increasingly important to the United States as it becomes a major producer of liquefied natural gas (LNG). However, it would be much more economical for South Korea to also consider gas from its regional neighbors, particularly Russia. Only three days after the historic summit between President Trump and North Korean leader Kim Jong Un, Russian gas giant Gazprom announced that it was revitalizing talks of a pipeline to South Korea.  It is also interesting to consider the recent high level engagement between North Korea on Iran as the US continues a paradoxical deescalation of conflict with the former and an escalation of belligerence with the latter. In the case of Iran, energy infrastructure is adding an additional wrinkle in U.S.-Turkey relations as well since Turkey has an established pipeline with Iran. Yet the prospect for peace dividends in this fraught case was also evident when President Trump granted an Iran sanctions waiver to a Caspian gas pipeline project to Turkey and Europe in which Iran's national oil company has a 10% stake.

Gas pipelines and security were clearly on President Trump's mind at the NATO summit in late July where he brought up gas dependence of Germany on Russia, albeit in ambivalent terms when compared with his rapprochement rhetoric in the summit with President Putin. It could be tempting for the US to see this as a zero sum game with yet another issue of Russian rivalry and competition but there is ample demand in South Korea and other major economies for resilient multiple sources of energy to use this as an opportunity for diplomatic engagement. The realities of an increasingly interconnected world make this paradigm even more attractive, both at the State level, but also for sub-national or local levels of engagement. Indeed, pipelines are also an important dynamic of the regional geopolitics of Iran and could provide an opening for conversations beyond the U.S. withdrawal from the nuclear deal.

The Infrastructure Bargain

Many of the world's most conflict-ridden borders may benefit from beginning to lay the foundations for peace through the somewhat mundane exercise of shared infrastructure; roads, water lines, gas and oil pipelines, or wires for electricity. This infrastructure holds the potential to provide a useful win-win to both parties in terms of trade, security, and the initial phases of building trust. It is also often overlooked at a useful tool for diplomacy; either because it is seen as too technocratic an approach, or too large a hurdle in terms of legal or regulatory frameworks that both parties can agree. Still, the borders of: Pakistan and India; South Sudan and Sudan; Iraq and Kurdistan; North and South Korea; and Palestine and Israel offer five pressing examples where various infrastructure has been previously built, considered, or analysed.

As a recent example, in February of 2018, the TAPI natural gas pipeline began construction with the stated purpose of becoming a foundation for peace between the countries of Turkmenistan, Afghanistan, Pakistan and India. Still, it runs through highly conflict-ridden areas, with very different views of the rule of law, religion, and markets. There is also a proposed power line project passing through Afghanistan, and providing transit fees to the poor country, is the proposed high-voltage power cable, the CASA 1000. The power line is supposed to support regional power needs in Kyrgyz Republic, Tajikistan, Pakistan, and Afghanistan. Enormous challenges remain to the financial success of these projects, let alone their impact on inter-state relations.

From Grid-lock to Smart Grids

New ideas about large-scale shared power transmission has recently gained backing in the form of the Chinese-backed GEIDCO initiative. The idea of initially regional, then global, electricity interconnection is to help support sustainable development in the connected countries and regions. Transboundary dams and energy sharing arrangements are not new by any means. Examples of gargantuan hydroelectric energy sharing such as the Itaipu between Paraguay, Brazil and Argentina; or the Kariba dam between Zambia and Zimbabawe, have existed for decades. However, the strategic use of such electricity grid infrastructure for regional green growth and cooperation deserves greater attention and upscaling.

There is still massive potential worldwide for harnessing and trading energy and reaping peace dividends in return. For example, Nepal has exploited less than 1% of its hydro potential, even though brownouts and blackouts are a regular feature of life in the country.  Rather than importing some of its power from India, it has tremendous potential for exporting energy to its southern neighbor.  Bhutan too sits high in the mountains of Asia, and knows well the art of living with a big neighbor. The export of hydroelectricity to India constitutes 40% of Bhutan's national income. Many big hydro projects are now under construction with Indian assistance, and will likely be commissioned by 2018-19. The electricity export to India will then triple. For India, it is an excellent source of reliable, economical and clean energy. Such energy trade bodes well for a South Asian regional grid system that had previously been championed by USAID under the South Asian Regional Energy Initiative (SARI).

Resilient Peace?

Energy infrastructure also has the potential for creating greater resilience against disruptions in post-conflict contexts. One successful post-conflict example comes from the small, wet, island of Ireland. Despite energy not being part of the Peace Agreement between the Catholic South and protestant North, the "All-Island market" has become a symbol of political success, and a foundation for strong economies. After the electricity market, and all-island gas market and network was pulled together. There are likely lessons in these exercise—a technical issue able to be successfully transacted below the radar of religion and politics—for other borders.

Detractors of the energy-for-peace approach may point towards the Ukranian predicament of energy dependence which have left it vulnerable to Russian designs for the region. However, it may also be argued that the energy infrastructure provided a moderating influence over an escalating conflict which could have been far worse had their not been reciprocal incentives to keep the gas flowing between Russia and Ukraine. The same is true for the relationship between Turkey and Russia which has gone through a series of tumultuous turns in 2017. However, the Black Sea pipelines have kept both countries engaged with each other despite their disagreements over the war in Syria.

Ultimately, the potential peace dividends of energy infrastructure will require more international coordination for optimal realization. Institutions such as the Energy Charter Treaty have tepidly considered transit protocols for pipelines and the International Renewable Energy Agency (IRENA) is building capacity for greater cooperation, particularly for solar and wind energy infrastructure. The organization has also achieved greater political prominence recently by launching a new Global Commission on the Geopolitics of Energy Transformation. The Korean Peninsula should be considered as an important test case of how energy transformations can ben enabled through geopolitical initiatives towards peacebuilding and the consequent potential for energy for building trust and preventing reemergence of conflict.

However, these efforts are still largely marginal to high politics of war and peace. The U.S-North Korea summit provides an opportunity to consider a more integrated strategy for post-conflict energy diplomacy which transcends competitive posturing. The redevelopment of North Korea will require major energy infrastructure investment as the ageing infrastructure in the country from the Cold War era is highly inefficient and unreliable. The fabled "Six Parties" who have been involved in the peace process for the past several decades should also consider how they could have an energy delivery strategy for the country which is both ecologically and economically efficient. Such a concerted effort at providing energy, which is the most fundamental condition for development, can build positive interdependence that can ultimately provide a more resilient peace.

 


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