This Article is From Dec 15, 2014

Mani-Talk: Nuclear Deal with Russia is No Reason to Celebrate

(Mani Shankar Aiyar is a Congress MP in the Rajya Sabha.)

On the same day that visiting Russian President Vladimir Putin committed himself to supplying 12 nuclear reactors to India, oil prices slipped below $60 and look set to drop to a band between $35 and $40. This makes the nuclear deal less enticing than it might otherwise have been. For it underlines the impossibility of substituting nuclear power for petroleum in our energy basket. In present circumstances, Modi would have been better advised to ask Putin how he thought Russia might network India into an Asian gas and oil community to meet India's energy requirements than focus on nuclear cooperation.

This is not the popular or media perception and, therefore, needs to be explained. Even under the most optimistic assumptions, nuclear energy, which now constitutes between 1%-2% of India's energy consumption, could not rise above 6% till well into the middle of the century. Therefore, our prime requirement is not nuclear power but fossil energy.

Second, as Kudankulam has demonstrated, finding locations for nuclear plants is always going to be problematic and will increasingly be so. For while no one objects to nuclear energy, almost everyone objects to locating nuclear plants in their vicinity. We have seen this at Jaitapur in Maharashtra as well as in West Bengal. Fukushima has shown that even in a highly developed country like Japan with a deeply embedded industrial culture and a highly disciplined work-force, nuclear accidents can happen and leave a trail of destruction over decades, indeed over generations, that make the Bhopal tragedy look like a small accident.

That is why the Three Mile Island nuclear accident in the US in 1979 led to a complete stoppage of all new nuclear plants in that country for nearly four decades. The most intensively industrialized country in the world, Germany, which has no fossil fuel of its own, decided in the wake of Fukushima that it would phase out all its existing nuclear power plants, build no new plants and move towards one hundred per cent dependence on fossil fuels and renewable energy. France alone continues to rely on nuclear power but has the safety back-up of ample supplies of gas from Algeria by pipeline. For India to be celebrating 12 new Russian nuclear plants is like dancing the Dance of Death twelve times over.

Third, while Obama could tick off BP that the US would not accept "nickels and dimes" for the damage done to the country's environment by the deep sea oil rig disaster in the Gulf of Mexico (which killed no humans but did polish off a few seals) and thus get compensation of 68 billion dollars, India screwed no more than $480 million out of Union Carbide despite the loss of hundreds of lives and severe injuries to thousands of others - and still counting. Yet, our law on liability for nuclear accidents is considered too drastic for a single American nuclear plant manufacturer to come forward with supplies to India.

Fourth, the Russian nuclear deal comes at just the time that oil prices are plummeting, taking the sheen off much costlier nuclear power and pointing to the restoration of stability in the global oil and gas market.

As Russia is a leading producer of oil and gas, what Modi should have talked to Putin about (but did not) is the possibility of India-Russian cooperation in securing the diversion towards India of Russia's rich resources of oil and gas. He should have done so bearing at least two other factors in mind. One, that incremental Russian production is much more likely to come from its Siberian fields to the east of the Urals than from the traditional fields in western Russia which are getting increasingly depleted. What the Russians call Siberia is what, we should point out to them, constitutes north Asia. Moreover, the island of Sakhalin, where ONGC is partnering BP, clearly lies in Asian and not European Russia.

Also, Russia continues to have tremendous influence, particularly in the complex petroleum sector, over its former Central Asian republics - Kazakhstan, Turkmenistan, Uzbekistan and Azerbaijan, who are flush with oil and gas. It is from these sources that China has sourced much of its huge incremental requirements of oil and gas. There is still plenty left over. And we should be much more actively pursuing oil diplomacy in Central and North Asia than has been in evidence recently to access these resources. The prospects for this have significantly increased since the Ukraine snafu has led to the West boycotting Russian fuel supplies. Also, the fall in international oil prices makes it incumbent on Russia to look to newer and more reliable partners - and there can be no more reliable partner than "time-tested" India.

It would appear, however, that oil was not even whispered in Modi's conversations with Putin. By focusing almost exclusively on nuclear reactors, Modi gave Russia a market to flog their reactors that few others want but which will barely contribute to meeting our growing energy requirements while subjecting the country's future to the uttermost danger of nuclear catastrophe.

What Modi's advisers need to recognize is the dramatically altering geo-politics of oil and gas. Asia is the world's biggest producer of oil and gas. It is also the largest growing market for oil and gas with a huge unsatisfied appetite for fuel to sustain its growth. That is why, within an overarching goal of progressively establishing an Asian Oil and Gas Community, attention should be centred on first putting in place the elements of an Asian gas grid.

From an Indian perspective, the first leg of such a grid should be to link Iran with India either overland through Pakistan or by the undersea technology that has only lately become feasible. Such a core gas pipeline can then be extended to Qatar and other Gulf countries, and beyond to Iraq, and include a major branch line to Azerbaijan. Supplementing this western gas network, we should be expediting the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline that is on the drawing boards but is still to take-off for want of the necessary political will. Tapping all these sources might provide such huge surpluses over and above India's immediate needs as to make it possible to extend the pipeline right across India to south-west China through Myanmar. We would earn far higher transit fees from any such arrangements than we might have to pay out to get west Asian and central Asian gas into India.

To promote this as a pan-Asian project, we should extend TAPI to send out tentacles to Uzbekistan, Kazakhstan and Russia itself - for the Caspian petroleum-rich port town of Astrakhan lies in the Russian Federation. If Astrakhan were to be a key hub of the proposed Asian Gas Grid, the other Central Asian Republics might have the greater confidence to become part of this revolutionary new network.

As far as north Asia is concerned, while a pipeline all the way from Siberia or Sakhalin to India might not at present be technically feasible, swap arrangements might be possible between India and Korea, as well as India and Japan, to supply them gas from our contracted lots in north Asia (particularly Sakhalin) in exchange for our getting the LNG they have contracted from Indonesia and possibly Australia.

To do all this requires, however, a revival of the Nehruvian vision that led to India convening the Asian Relations Conference under Jawaharlal Nehru in March 1947 even before we were wholly independent. Asia is the continent that led the world in the progress of human civilization from the earliest recorded times till the onset of European colonialism some 300 years ago. But Asia remains the most divided continent despite the Nehruvian initiative of 1947. That is because, in spite of progressively shaking off the colonial yoke, Asia has been the playground of Great Power rivalry in the second half of the 20th century and into the 21st.

This must change. We should take note from the European experience of having first set up the European Coal and Steel Community before moving to the European Common Market, the European Community and now the European Union.

An Asian Union might be a century or more away but we can move towards that goal by establishing an Asian Gas Grid as the first step towards an Asian Oil and Gas Community that might over time then evolve into an Asian Union.

But how can an India narrowly wedded to Hindutva and a Hindu Rashtra, and controlled by the likes of Sakshi Maharaj and Sadhvi Jyoti, even begin to have the all-encompassing vision that guided the Father of our Foreign Policy? No wonder Modi prefers to limit himself to buying nuclear reactors that no one else wants.

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