Europe Could Soon Be Dependent On Iran For Gas

Tehran is trying to take a leaf out of Moscow's playbook and build a regional gas empire of its own, and it could soon be sending gas to Europe and Pakistan. Key to Iran's expansion is the undermining of the EU and U.S. backed Nabucco pipeline, conceived to bring Central Asian gas via the Caucasus and Turkey to Europe, bypassing Russia. But the inconvenient truth is that no major gas-producing country has actually signed up for the pipeline. Meanwhile, Russia has bought 7 billion of the estimated 8 billion cubic meters of gas at Nabucco's main planned source, Azerbaijan's Shah Deniz gas field. And as of last week, the Turkmens have one reason fewer to participate in Nabucco: they just opened a new gas pipeline to Iran. Naturally, this is not exactly what Washington had in mind when it wanted to explore alternate routes for gas to get to Europe. It seems the problem-plagued Nabucco, rather than isolating Russia, is fast becoming a way for Iran to make itself Europe's indispensable energy supplier.

The West can't do much about the issue. The U.S. says it won't support Nabucco if Iran is involved, but it isn't putting up any hard cash to push for the pipeline's completion. European gas consumption may have dipped during the recession, but projections say that annual gas demand will rise from the current 500 billion cubic meters to 815 billion by 2030, of which Nabucco is expected to supply 31 billion. That means the EU can't afford to be fussy about where it gets its gas—even if it means swapping one unreliable gas supplier, Russia, for the even less predictable Iran.