11-Feb-2023: Bombing of Nord Stream gas pipelines last year have ignited intense discussions and controversies

Underwater explosions in September 2022 have caused rupture in pipelines. Seismologists detected the cause was due to explosions under the sea.

Economic and political implications for Europe and Russia.

Europe:

• Loss of access to reliable and cost-effective source of natural gas.
• Large investments in Nord Stream 2 were made by European businesses.
• Pressure on governments from these businesses.
• Reduction in gas from Russia would increase gas prices.

Russia:

• Largest natural gas reserves in the world.
• Around 40% of budget comes from gas and oil sales.
• Nord Stream pipeline increases Russia's influence over Europe's energy markets.

Nord Stream Pipeline

The Nord Stream gas pipeline, also known as the Baltic Sea pipeline, is a 1,222 kilometer-long natural gas pipeline that connects Russia with Europe. This pipeline is considered to be the most direct and secure route for transporting natural gas from Russia to Europe, bypassing traditional transit countries like Ukraine and Belarus.

Nord Stream is operated by the Nord Stream AG consortium, with Gazprom holding a majority stake, and is made up of two parallel pipelines that run from the Russian city of Vyborg to the German town of Greifswald. The pipeline has a capacity of 55 billion cubic meters per year, which is enough to supply around 26 million European homes.

Nord Stream is also a cost-effective and environmentally friendly way of transporting natural gas. The pipeline has a lower carbon footprint than other forms of transportation, such as tanker ships or trucks, and is a more cost-effective option for transporting large volumes of gas over long distances.

The pipeline also supports the development of a competitive and integrated energy market in Europe by increasing the diversity of energy supply options. This helps to create a more resilient energy system and reduces the reliance on any single source or transit route.

Despite the benefits of the Nord Stream pipeline, there are some environmental concerns related to its construction and operation. The pipeline passes through the sensitive marine ecosystem of the Baltic Sea, which is home to many endangered species. The construction of the pipeline has been criticized for damaging the environment and disrupting the habitat of marine life.

4-Feb-2023: Pakistan inaugurates a nuclear reactor

Pakistan inaugurated a USD 2.7 billion nuclear reactor under China-Pakistan Economic Corridor (CPEC), providing some relief as the nation grapples with an energy crisis.

CPEC Nuclear Reactor

• Cost USD 2.7 billion
• Generates 1,100 megawatts capacity
• Provides relief for Pakistan's energy crisis
• Will generate some of the nation's cheapest electricity

Pakistan's Energy Crisis

• Nationwide power outages in Pakistan
• Struggle with blackouts for years
• Surging energy costs
• Low foreign-exchange reserves
• Pressure on government budget
• Talks with IMF for bailout in exchange for increased energy tariffs

China-Pakistan Economic Corridor (CPEC)

• A 3,000 km long infrastructure project connecting China's northwest Xinjiang Uygur Autonomous Region and Gwadar Port in Pakistan.
• Promotes connectivity across Pakistan with highways, railways, and pipelines accompanied by energy, industrial, and other infrastructure development projects.
• Paves the way for China to access the Middle East and Africa from Gwadar Port.
• Enables China to access the Indian Ocean.
• China supports development projects in Pakistan to overcome energy crises and stabilise economy as a part of the Belt and Road Initiative (BRI).

Challenges of CPEC for Pakistan and China

Pakistan:

• Regional Imbalances: Concerns about development and investment in certain areas and provinces
• Debt Trap
  • Large scale of projects financed by loans from China and the ability to repay these loans.
  • China is now Pakistan's largest creditor with Pakistan owing 27.4% of its total external debt to China in 2021, according to the IMF.
• Environmental Impacts
  • Negative impacts on environment from large-scale infrastructure projects
  • Deforestation, loss of biodiversity, air and water pollution
• Social Implications
  • Displacement of local communities
  • Loss of traditional livelihoods
  • Impact of increased migration and population pressures
• Sovereignty Concerns
  • Concerns about China's increasing influence in Pakistan
  • Potential for compromise of country's sovereignty and independence

China:

Security Concerns

• Security of Chinese workers.
• Stability of the region.

Political Opposition

• Opposition from certain political parties and groups.
• Concerns about lack of transparency and long-term implications on Pakistan's sovereignty.

CPEC's Implications for India:

India's Sovereignty:

• CPEC passes through the Pakistan-occupied Kashmir territory of Gilgit-Baltistan, which India claims.
• Success of CPEC will consolidate the region's perception as Pakistani territory, diminishing India's claim.

Chinese Control Over Trade Via Sea:

• Once fully functional, CPEC will offer a more economical trade route to North and Latin American enterprises.
• China will have the power to dictate terms of international movement of goods between Atlantic and Pacific oceans.

Chinese String of Pearls:

• Gwadar port's control will establish complete dominance of the Indian ocean by China.
• China already has a presence in other ports in the region.

Stronger BRI and Chinese Dominance in Trade Leadership: CPEC is one step towards China's BRI project to dominate the region politically.

Read more ...