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International News Title: Energy war: India and China face off in Central Asia Call it a diplomatic fandango. Heavy-duty Chinese bulldozers groan day and night, building motorable roads that will connect towns with cities in Kazakhstan. In the countryside, Russian engineers are busy putting new cables on newly-erected towers to put a fresh spark into the rusty, unreliable electrical grid. On the streets of Tashkent and Dushanbe, Bollywood numbers incite local people to break into impromptu jigs. And in the war-torn dustbowls of Afghanistan, American workers are building schools and hospitals in the middle of non-stop gunfire. The Indians are doing the same, at the risk of their lives. This is the soft side of the story — efforts to woo the Central Asian republics with humanitarian charm. The hard truths of the world's sudden love for the region are hidden behind the barbed wire fences and camouflaged battle gear. In the past few years, military bases have cropped up across the region. The Americans have several bases in Central Asia, including Afghanistan. The Russians, Nato and Chinese too have established military posts in the region. Even India can claim to have set up an air defence unit in Tajikistan. This week, as the oil prices soared to $147 per barrel, the world energy scenario became bleaker. With the market analysts frequently talking about oil climbing up to $200 by early next year, now there is no doubt that another oil shock — worse than its previous avatar in the 1970s — is staring at all the energy-hungry economies, particularly India and China. Already branded villains of this scary scene, the two Asian countries will continue to guzzle more oil to feed their booming economies, even as demand for oil would fall in the industrialized world. In a report last week, the International Energy Agency (IEA) spoke about two future scenarios — the growth of "long-term demand led by China and India..." and "the supply threats, including increasing conflict...." Already, analysts are fretting about the possibility of a US-Israel attack on Iran to stop it from getting the Bomb. If that comes to pass, it could alter the global energy calculus forever. In Stephen Gaghan's landmark flick Syriana, when an oil-rich prince asks his advisor: "What are they thinking, my brother and these American lawyers?", the expert answers: "They're thinking that it's running out. It's running out... and 90% of what's left is in the Middle East. This is a fight to the death." With Iraq still burning and Iran also on the hit list, a new conflict could knock out the region from the world energy scene. Since, in the long run, the world is going to be out of oil anyway, the energy powerplay is shifting from the Middle East to Central Asia. As their economies demand more and more fuel, both India and China are focusing on the region to ensure an interrupted supply of oil and gas. But the competition is tough. The Americans and Russians are there too. And they have set up military bases in the region to protect their pipelines. India and China are following suit, with Beijing many steps ahead of India. With the opening of China-Kazakhstan pipeline in December 2007, China has already secured much of the Kazakh oil. Working on a plan of making a new export corridor stretching from Kazakhstan's oil-rich Caspian basin to China, Beijing is making sure that its oil supplies are not disrupted by a conflict, as is the case with present oil deliveries from the Persian Gulf and Sudan. At present, China gets more than 15% of its oil from Iran. But, with the Iranian leaders playing with fire, China is now looking for cheap energy resources in its own backyard, even as it contemplates a military base in Iran. "Energy is the Achilles' heel of China's economic growth. Beijing knows that only too well. A decision by Washington to take military action against Iran now would pull a far larger cast of actors into the fray than Iraq," says F William Engdahl, the author of the book, A Century of War: Anglo-American Oil Politics and the New World Order, in an article on his website. Though it's been late to act, India has begun to look for oil and gas in the region. As India inches closer to its nuclear deal with the US, the proposed Iran-Pakistan-India gas pipeline is almost history. Even at the time of signing the nuke deal, then US assistant secretary of state Nicholas Burns had warned India that Iran "was not a reliable long-term supplier of fuel" and advised New Delhi to turn to places like Kazakhstan and Turkmenistan. India is finally waking up to the huge potential of Central Asia as an alternative energy hub. A few months back, Indian vice president Hamid Ansari travelled to Turkmenistan and Kazakhstan with a delegation, exploring the possibilities of Indian participation in offshore Caspian Shelf for oil and gas blocks. India has also been exploring the possibility of joining the proposed Turkmenistan-Afghanistan-Pakistan gas pipeline. It was with an eye on the energy resources of the region and China's growing clout in Central Asia that India set up a military base at Ayni in Tajikistan two years ago. "The global order is re-dividing into roughly two de facto blocs — one has the US at its core and the other has Russia-China at its core. Energy is the major dividing line between the two blocs," W Joseph Stroupe, a strategic analyst, wrote recently. By putting the nuclear deal on the fast track, New Delhi too seems to be all set to join the US bloc and become an active participant in the energy war in Central Asia.
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