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Pye Ian

Pye Ian

Posted: May 26, 2009 02:21 PM

Bishop to Queen 4: Recapturing Iran on the Grand Chessboard


One of the potentially more daring and unique foreign policy mandates of the Obama Administration involves a pivotal shift in U.S./Iran relations (or lack thereof). The core reasons for said shift are not limited to America's political interests in the Middle East. More so, they entail intricate long-term geostrategic considerations vis-à-vis Central and South Asian energy politics. The biggest open secret in international affairs involves the race for a wider determination of who will prevail in the "New Great Game" for Eurasian energy resources, pipeline access routes and the necessary alliances for solidifying them.* Considering rising global energy stakes, Iran's oil and gas positioning, as well as how 30 plus years of US sanctions and frozen relations have garnered little for Washington, it is clear that the US needs Iran more than the other way around. In essence, for the US and its closest allies, Iran increasingly appears to be the "queen piece" on the global energy chessboard.

Essentially, the new Anglo-American imperative involves pulling Iran away from the rising Russo-Chinese Axis in global energy cooperation. The past few decades of frigidity between the US and Iran have allowed these powerful and highly collaborative Eastern powers to capture the economic fidelity and strategic deference of Teheran. Russia's conspicuous assistance in the nuclear and arms arenas, coupled with its neo-cartel-hinting natural gas ambitions, and China's $100 plus billion investment in Iranian energy and civic infrastructure assets, have in essence capitalized on the Anglo-American world's perpetual errors with this energy-rich, strategically located Persian Gulf actor. With the discovery of giant recent energy fields in her southwest region, Iran remains the world's second largest producer of both oil and natural gas.** Russia and Iran together retain nearly 20% of the world's oil and 50% of its natural gas reserves. Yet decades of US sanctions -- and recent pressure on firms like Royal Dutch Shell and even Total of France to pull out of Iran -- have resulted in the absence of the most advanced energy infrastructure technology in the world from accessing these fields. Enter archaic state energy appendages such as Russia's Gazprom, China's CNOOC and SINOPEC, India's ONGC and Indian Oil Corp., Eni of Italy, Pertamina of Indonesia, SKS of Malaysia, PDVSA of Venezuela and others to swarm around Iran's giant South Pars and Khuzestan fields like horse flies around an open, steaming chafing dish of beef skewers.

Years of Western economic neglect have also resulted in Iran negotiating pipeline, partnership and even state aid deals with Caracas, Islamabad, Jakarta, Moscow and Beijing, among others. Despite heavy US/UK resistance, the Iran-Pakistan-India (IPI) natural gas Pipeline (a.k.a. "The Peace Pipeline") is still a pending reality that threatens the US-EU sponsored TAPI (Turkmenistan-Afghanistan-Pakistan-India, or "Trans-Afghan") Pipeline. Iran also tutored Chavez's Venezuela in selling (read: eventually re-routing from the US) oil to China. The current 'observer status' on the Russo-Chinese erected Shanghai Cooperation Organization -- a nascent yet ambitious regional alliance of Central, South and East Asian states aimed at serving as a counterweight to NATO -- may soon evolve into full member status for Iran, along with that of her neighbor, Pakistan.

Winning Iran's good graces and regional loyalty would pay keen long term dividends. Russia's near-monopoly with European natural gas supplies -- a massive thorn in the side of US/UK energy concerns -- would be dealt a potent blow by opening up an alternative gas route into Europe. Iran stands as the most tempting alternative route provider, potentially feeding gas into the US-backed Nabucco Pipeline (designed to connect Caspian Sea energy to Europe via Turkey), thus serving as the main obstacle to Russia's proposed South Stream Pipeline (which, in theory, aims to link Turkmenistan through the Black Sea into Eastern Europe). A US-friendly Iran would also help convince an increasingly Russia-leaning Azerbaijan to play ball on Nabucco as well, not to mention Iran's already positive relations with Turkey further benefiting US/EU energy goals.

The deep-sea port of Gwadar, built mostly by the Chinese and sitting on Pakistan's coast on the Arabian Sea and near the mouth of the Strait of Hormuz, proves to be geopolitically invaluable for all parties. Via Gwadar, Pakistan, China, Kazakhstan, Kyrgyzstan and Uzbekistan are developing extensive road and rail links from Central Asia and the Chinese province of Xinjiang into the Arabian Sea coast. Gwadar is also forecast as encompassing conversion facilities to allow for the movement of natural gas as a part of plans for a termination point on the TAPI Pipeline. Given normalized relations between the US and the very Gwadar-proximate Iran, no costly provocations -- let alone an invasion and occupation of the Strait-flanking ethnic province of Baluchistan -- would be necessary.

Lastly, oil and gas flowing from a US-friendly Iran would assist OPEC and US/UK banks in further stabilizing the increasingly precarious US Dollar, which nonetheless still remains the global reserve currency as well as currency of record for energy pricing and trading. At the very least, under a scenario where another currency standard would actively be sought by world powers, Iran's cooperation could be procured for the requisite fiscal and logistical transitions.

Yet, considering 30 plus years of deep distrust and animosity between the two nations, how could such a détente even be imagined, let alone implemented? The answer must involve an unprecedented caliber of diplomacy from Washington -- enough to make Metternich spin with envy. The full scale and scope of US "Soft Power" (with respect to Joseph Nye) should be deployed -- yet in a unique manner so as not to offend, but rather to ease and entice, the theocratic leadership. It can be done; if Teheran can admire the communist, energy-gluttonous and disturbingly discreet ways of Beijing, she can come around to God-Fearing America much easier.

Washington should lift trade sanctions with Teheran, yet gradually and in a focused fashion. Initial steps should involve exchanges and investments in the energy sector (infrastructure upgrades, mining, pipelines, refining), minerals and other commodities, agriculture, textiles, consumer goods (many of which, mind you, make their way to Iran anyway under the radar via Dubai, yet are not transparently recorded on corporate ledgers), construction (architectural, engineering, and even 'Green' building expertise), and goodwill civic exchanges (sports, academia, group tourism, etc.).

Washington should respect Iran's internal societal mores and laws, and refrain from extended cultural exchanges (i.e. Hollywood, the fashion industry, major internet de-censoring efforts) until a climate of mutual trust builds and a three-decade-long sense of cultural paranoia thaws. Learning from the French, Germans, Italians and Japanese on how to trade with Iran without offending it would provide valuable due diligence for taking said delicate initial steps. The US should also refrain from demanding contractual exclusivities with regard to any of the aforementioned sectors, as a) Iran already trades with Europe, Russia, China and others and can always revert back to her proven markets, and b) that aggressive tact is partly what damaged Western/Iranian relations in the first place.***

No, the US should simply rely on the superior quality of its goods and services, the inherent optimism of its citizenry, as well as its diplomatic strengths. This way, Iranians will gradually gravitate away from the cryptically exclusive, interlocking tentacles of Russia, China and the others while a valuable, historically natural geopolitical alliance will be re-established.

2009-05-26-india.jpg
The proposed Iran-Pakistan-India natural gas pipeline (a.k.a. The Peace Pipeline, for its vision of 'connecting' Pakistan and India in energy and economic interdependence). Source: Wikipedia.

Educated in the United States and Great Britain, the writer is a corporate strategic planning consultant with nearly two decades of experience in the media, financial services, public policy and energy sectors. He is also a perpetual student of history and philosophy, and an enthusiast of the board games chess and Go!

* "The New Great Game" is a term used to describe the conceptualization of modern Central Asian and Eurasian geopolitics as a competition between powerful nations for strategic influence, energy hegemony and profits in Central Asia and the Caucasus region. It refers to "The Great Game," the 19th Century rivalry between the British and Russian Empires in Central Asia. Source: Wikipedia.

** Key caveat is that of proven reserves -- Turkmenistan may or may not surpass Iran in the latter energy category as of recently.

*** The Shah refused an exclusive contractual "request" from British Petroleum back in 1978, thus furthering an overall loss of confidence -- amongst other things -- in his leadership of Iran from his "friends" in London, Washington and New York City.