Pakistan's power politics

Mustafa Qadri
guardian.co.uk
Few things are as oppressive in Pakistan as the summer heat. In colonial times, the British would shift their garrison headquarters from Rawalpindi to the cool peaks of Murree, just north of present day Islamabad. Today, the elite are more likely to skip the country entirely or barricade themselves in the air-conditioned comfort of their cars and homes.

On the streets of Pakistan's vibrant cities, the industrious whir of countless generators is as ubiquitous as the hawkers desperately trying to make ends meet.

With its ever-growing population, Pakistan has always struggled to match energy supplies with demand. Those difficulties have turned violent recently. In Karachi and throughout the Punjab last week angry mobs went on a rampage and assailed power companies in frustration at the long daily power cuts that have brought modern life to a standstill.

The Gilani Research Foundation estimates (pdf) that 53% of Pakistan's population goes without electricity for more than eight hours a day. In fact, the blackouts are even longer in rural and poor urban areas which also lack other basic infrastructure like roads and waste water drainage. The situation has led to a series of annual hikes in energy costs. In the poorest slums of Karachi, for instance, people are forced to clandestinely tap into the electrical grids of rich communities because the retail price is too prohibitive. Power theft in Karachi and the Federally Administered Tribal Areas alone is believed to cost the state £138m in lost revenues.

The government has been under pressure to increase tariffs and reduce subsidies across a broad spectrum of industries including energy ever since agreeing to an IMF loan package last year in desperation as the nation's foreign reserves dwindled. The move has caused much consternation among consumers and local businesses, not just the angry mobs.

The power cuts occur with greater frequency during the long hot summer months. Every time they occur, modern life and business grinds to a halt. This, along with poor employment prospects, and education and health services – and not the Taliban – is the greatest concern for the average Pakistani.

"We have inherited these problems [from the Musharraf regime]. There was no planning done, there was no [energy] policy for the past 3-4 years," Asim Hussain, national adviser for petroleum and natural resources, tells me during a break in a London conference on Pakistan's oil and gas industry.

Just as a gaping hole divides the supply and demand for electricity in Pakistan, the country is heavily reliant on imported fossil fuels: local energy production accounts for only 15% of all usage. Oil and gas make up 80% of all of Pakistan's energy consumption and with 62,000km of pipelines, it has one of the largest networks in the world.

Authorities say they hope to raise national power generation by 4000 megawatts by 2010 but there are concerns the target is unlikely to be met as political intrigues continue to plague the government. Similar intrigues have scuppered attempts at exploiting alternative and renewable energy sources such as hydroelectricity. Among the stalled initiatives is the contentious Kalabagh dam project that proponents say will deliver greater irrigation for agriculture and quench a thirsty nation's energy needs by tapping into the Indus river. The project is opposed by all of Pakistan's provincial governments except the dominant Punjab. Critics cite multiple reasons for opposing the dam's construction including environmental degradation, mass displacement of regional communities, and domination of the project by the Punjab.

The failure to find local energy sources has compelled government and business to look abroad with mixed success. Pakistan recently signed a gas pipeline deal with Iran, but it will be some years before the taps will be turned on. Another proposal is to import LPG across the Persian gulf from Qatar, but such an ambitious venture requires substantial infrastructure still lacking in Pakistan.

With that and the unending energy crisis in mind, the Pakistan government has been wooing multinationals at a series of oil and gas exploration conferences in London, Houston and Calgary last week. With its Petroleum Policy 2009, the current government says it will reinvigorate Pakistan's troubled energy sector primarily through foreign investment.

Pakistan is not just a gateway to mineral resource wealth in Central Asia and the Middle East, it is rich in minerals and fossil fuels. According to government sources, there are believed to be reserves of 27bn barrels of oil and 280trn cubic feet of gas. Yet most of that wealth remains locked away: only 3.4% of oil and 19% of gas resources have been tapped thus far. "Pakistan has significant remaining exploration potential," explains a British geologist at the London conference. That has much to do with the country's "complex geology", and the fact that many of the most promising sites lie in the unstable regions of Balochistan and North West Frontier Province, home to separatists, militants and bandits.

Those obstacles haven't dissuaded some of the largest oil and gas companies – such as British Petroleum and ENI – from investing in large exploration licenses. "With great risks come great rewards," explains one eager executive from another multinational. "We have had years of experience in Iraq," another eager entrepreneur from a private security company assures me. The stakes are indeed high. "There is no doubt that we are dependent on foreign companies to exploit Pakistan's natural resources," senior petroleum ministry bureaucrat GA Sabri. Eighteen out of 20 companies operating ventures in Pakistan are foreign-owned.

For years indigenous and regional communities have complained that their ancestral lands have been damaged by prospecting resource companies, or that they haven't been given a stake in the riches under their feet. In a glossy pamphlet, the state-controlled Pakistan Petroleum Limited claims to be committed to developing these very same communities.

As the government and multinationals divide the spoils, however, the question remains whether the average citizen will get a seat at the table.