The Peace Pipeline and the N- Plant

 

Recently, Iran and Pakistan signed a $7.5 billion deal to build a gas pipeline (called the "Peace Pipeline") from Iran's South Pars field and is being built between Asalooyeh in southern Iran and Iranshahr near the border with Pakistan. Under the agreement, Iran will provide 750m cubic feet of gas per day to Pakistan.

The new pipeline is to be operational by 2015 and President Obama is furious about this, but is powerless to do much. The US has already provided billions of dollars in aid to Pakistan to fight the Taliban. Iran, indirectly, sponsers some elements with weapons. The gas sanctions against Iran will never have the impact to punish Iran for continuing its nuclear program. Too many companies wish to deal with Iran. It is a pro-west market in many ways and when a company or country pulls out for sanctions, it is replaced by another. Pakistan ignored sanctions, but India did not even though it was offered to be part of the deal. Some of America's allies are really not allies at all. They are merely opportunists taking advantage of the situation to cash in.

Now, another blow to sanctions, this time from Russia. Nothing new about this, but despite strong rhetoric from the US, Russia is activating the nuclear power plant in Bushehr, Iran, this summer. The US does not want it to occur until Iran backs down on the nuclear weapon development. Putin and Clinton are butting heads over this issue, which will only end in Russia's favor. It will be Iran's first operational nuclear power plant. The plant, built by Russia for a cool $1 billion dollars began in 1995. Iranian officials have been long impatient about its activation, citing that Russia was dragging its status because of US pressure. Most nuclear plants are built and operational in half the time.

Thus, more examples as to why President Obama's stiff sanctions will never be effective. Too many countries and companies have investments or critical stakes in Iran. Even the State of California, which has an economy of a small nation, has investments in Iran for their CalPers retirement fund. If a company like Shell Oil, stops shipping gasoline to Iran, another company will be more than willing to do it.

The bottom line is that money talks much louder than political policy. 

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