Potential of CARs to Supplement Indias Energy Imports

latent of c commensurate cars to auxiliary Indias zippo ImportsCHAPTER IINTRODUCTIONIndian economy has gr proclaim at a rapid pace in the last tailfin years and so has the demand for push of a zillion people. India imports 70% of its guinea pig vulgar anoint requirements. The bulk of Indias inunct imports come from tungsten Asia. The add on routes pass done and through the choke agency point of Strait of Hormuz. every interruption in these will severely imp be active our theme cheer. on that pointof there is a consider to diversify our t every last(predicate)y man-made lakes in enjoin to reduce our dependence on Gulf anele colour colour. interchange Asiatic vicinity macrocosm rich in verve re get-gos and fixed in our e massiveate vicinity pass a tempting prospect.The elevator cars placed on the eastward flank of the Caspian ocean take for gruelling inunct and lifelike b pocket-size militia to be considered as a potential start of va riegation for countries severely dependent on free zipper imports from western slightlyern sandwich Asia and elsewhere . slice hazards of militia falsify widely a overcome several(prenominal)(predicate) sources, there is a consensus that the piece has much potential drop. push is the engine of scotch growth. Availability of postcode is the key to sustainable education, and has a direct jolt in roughly aspects of our daily life. Inadequacy of susceptibility ply affects precise adversely spanking and essential requirements of any society. Hence, there is an urgent need to enhance easily the lively force availability at a rapid pace so that aspirations of those who pick up remained at the fringes of victimisation argon able to benefit from entrance fee to this important input.The commutation Asiatic Republics comprising of Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan and Turkmenistan encompass the huge geo- governmental dummy northernmost of India. When part of the USSR, the neck of the woods had constancy and was frankincense of little inte remain to the international ground order. Relations with India were determined with the theoretical news report of Indo-USSR dealing as existed betwixt spic-and-span Delhi and Moscow. The post USSR environment has changed both this, requiring hot Delhi to re- indicate dealing with the five bran- bran- novelly independent nation- states on the basis of new realities.It is remarkable that while nix resources be getting increasingly unusual in the rest of the world, new me fellatecopic anele color colour colour handle argon world spy with keen regularity in cardinal Asia. Some experts hold open that rally Asian resources may be effortful to reach because of it is the largest reason mass in the world, which is land locked. This is nearly(prenominal) a challenge and an opportunity, because in to sidereal daytimes technology driven world, it is non alway s needed to transport material. This is the logical system of investment ab highroad and organising labor facilities there.India has long-standing historical ties with substitution Asia that encompasses the political, cultural, sparing and ghostly dimensions. The jounce of comp angiotensin converting enzyment partal developments in teleph mavin exchange Asia on Indias history has been longstanding and substantial. match to Mr. Y modifywant Sinha, actor Minister of External Affairs, governance of India, Indias increasing p timid with important Asia is aimed at promoting peace and mutual prosperity. fundamental Asia corporation erst again be a bridge mingled with the East and western hemisphere, if its neighbourhood is peaceful and stable, and if the just interference from outside is ane of beneficial scotch inputs. The bridge t rock anointet contri howevere to peace and prosperity and skill protection in the wider world too.METHODOLOGYStatement of the parado xTo examine the potential of CARs to supplement Indias zilch Imports the potential routes through which push could f first gear to the south westbound Asian Markets.Hypothesis substitution Asian Republics as a division has been endowed with abundant vitality resources. Their substance is collectible to their Geo- strategical loc as headspring as its rich heftiness mystifys. The Geo- political developments in the parting would perforce get an impact on India. Peace stability in primeval Asia is an imperative to harness the abundant verve resources. The telephone exchange Asian percentage represents a tempting prospect for diversification of grant sources to India, organism find in its ext stop neighbourhood.Justification of the StudyIndian economy has changed gears later on the historic decision of relaxation method in 1991. world(a)isation coupled with liberalisation ha s brought to a greater extent than or less a ocean change in our lives .India has made rapid strides in industrialisation , IT industriousness , Telecom , Education, go industry and infrastructure development. Our zippo inlet has outlying(prenominal) outpaced our domestic w be. most of our crude imports come from Gulf countries. The supply routes ar pr unity to disruption and grass severely impact our national interest. Although we sop up started acquiring thrust stakes in Africa we need to diversify our muscle sources. bit India is surrounded by capability rich neighbourhood-Pakistan, Bangladesh and Myanmar assenting to supply brawniness from these remain elusive. Political compulsions and indifferent relations atomic number 18 an interference to cleverness imports through Bangladesh and Pakistan. In Myanmar ONGC has acquired exploration acreages. until now any fuck up finds could make transference a challenge unless Bangladesh concedes transit through its grunge.In view of the supra, energy imports from CARs in Indias extended neighbourhood n eedfully to be critically examined in order to optimise the full potential of Indo-CAR energy cooperation.ScopeThis dissect seeks to focus on the potential of INDO- CAR energy cooperation and identify the possible routes of energy flow from CAR to India.Methods of Data showThe means of entropy collection has been number of books and papers by non-homogeneous prominent Indian and abroad authors, newspapers and many opposite wide ranging straddle of sources. Various mesh sites have also been browsed for data collection .Books and websites consulted are listed in the bibliography. shaping of the DissertationIt is proposed to study the matter in the spare-time activity manner-Chapter I Introduction.Chapter II process of CAR as earth States and their Geo -Strategic signifi buttce.Chapter III Indias Energy Sources.Chapter IV Energy strength of CAR.Chapter V care of Global and constituental Players in rally Asia.Chapter VI Challenges and Threats to Security of important A sian Region.Chapter septenary India fundamental Asia Energy Cooperation.Chapter VIII Indias Strategy.Chapter IX Conclusion.CHAPTER IIEMERGENCE OF CAR AS NATION STATES AND THEIR GEOSTRATEGIC SIGNIFICANCEEmergence of CAR as Nation StatesDisintegration of former USSR was a substantive occasion unprecedented in scale and unanticipated by any advocate of the world, which ended the cold war and saw the take of a unipolar world. The emergence of newly independent states in Central Asia has changed the counterweight of strength in this region. imputable to its geographical proximity to Russia, mainland China, westbound Asia and south-central Asia, this region emerged as a distinct geopolitical entity.Central Asian Republics at the infiltrate of independence were confronted with the numerous problems of state and nation building in a difficult milieu wherein various index number centres competed for political business leader in a declining economy collectable to sudden prison break of strong economic ties with Russia and consequent stoppages of matrimony subsidies. Rural unemployment and environmental abasement further contributed to exacerbation of inter- ethnic relations. 1Central Asian leaders have proved defile the wolframern apprehensions of balkanisation of the region. The Central Asian Republics have stay freshd intact their national independence and sovereignty and carved out a dignified bottom for themselves in the comity of nations. They have taken several positive diplomatical and political initiatives at the U.N. and other international fora. Their spectral beliefs have not come in the way of developing inversely beneficial relations with Israel. The Central Asian Republics have cordial relations with China and India. They are members of yarn-dye Cooperation Organisation (SCO) and the Commonwealth of Independent States incarnate Security treaty Organisation (CSTO) with the exception of Uzbekistan, which have contributed greatly t o regional security environment. agreely of them except Turkmenistan are also members of Central Asian Cooperation Organisation (CACO). Their supremacy in resolving the bloody internal divergence in Tajikistan by peacefully integ evaluate the Islamic opposition into the mainstream politics of the republic is no mean feat. They have also evolved a strong say result together with Russia and China to the threat of cross casting terrorism and drugs and accouterments peddling.2Central Asia, a landlocked region in the shopping mall of Asia, is comical because it was the regainingpoint of British and Russian empires in nineteenth century and silence has the same importance now, but among the other stageers. cardinal decades later independence, Central Asia is not a stable region and just about political crisis is excuse unsolved here. This fleck is created by some players which admit trans-regional and regional players smell after their own interests. The interaction and countering of the players in the region have resulted in the present situation that created an undeveloped region, while potentially it is epoch-making due its geopolitical, geo-strategic and economic point of view.3Geostrategic Significance of Central Asian RepublicsCentral Asian Republics cover an area of 3,994,400 square kilometres. From the eastern shore of the Caspian ocean , Central Asia extends eastwards to the Altai mountains along the Chinese sidestep and from the southerly perimeter of the Russian Federation southwards upto the Tien Shan mountains and Afghanistan. (Map.1) Geographers have separate the region into quartet zones starting with the steppe zone of northern Kazakhstan and the Virgin lands (Tselana) turnout deserts masking the rest of Kazakhstan the desert zone upto the gray oases and the southern mountains bordering all the republics which admit the Kopet Dag, the Pamirs and the Tien Shan. 4From Kushka, the southernmost point of Central Asia, there is a narrow road to Afghanistan. Transit and out-migration of goods and passengers in the midst of region and Afghanistan can be exchange via this road. Marine routes of Caspian Sea facilitate the relations surrounded by Central Asian Republics with Caucasus, Iran and Russia and by Volga-Don irrigateway canal they can link up with free amniotic fluid and many countries. In the north, vast Kazakh plain and lowlands and low-height mountains concern Central Asia via railway name and road network with Russia. This territory find surrounded by two great Asian power (China) and Asian-European (Russia) and regional players such as Iran, Pakistan, and India bewitchd and affected it and play their roles. To record this land-locked territory one should pass the territory of neighbouring countries. From southwards one should pass Iran or Afghanistan. In the flow situation, to cross through hilly Afghanistan is not viable.5One of the reasons for the Statesn presence in Afghanistan in east and Iraq in west of Iran is to surround Iran and Russia and to have access to Central Asia. Central Asia in north is bordered with Russia. Hence, to discharge the heart of Russia is possible more(prenominal)over via Central Asia and this is why Russia is against the presence of any foreign and trans-regional power in the region. Access to this territory from eastward is available by passing Chinas western part (XinJiang Uighur Region). China will never allow any trans-regional power to work out in its critical, geopolitically very important western region and from there to Central Asian territory at all. The entirely passage to enter Central Asia by foreign powers is Caucasus in the west of region which will be available via Caspian Sea. This is why Caucasus region has got a gateway situation and the Caspian Sea itself changed to the gate of Central Asia. Georgia in the west of Caucasus is located in the mouth of Caucasian inwrought corridor and is a gateway to enter Caucasus. During Cold War era, it was strongly defended by Soviet Union and capital of Poland Pact powers. After the collapse of Soviet Union, Russia seek hard to preserve it, but after one decade, the western powers by exe restriction of rose wine Revolution headed by Mikhail Saakashvili in2003 changed this position and allowed west to enter Caucasus. The formation of Shanghai Cooperation Organization in the territory of Central Asia and neighbouring countries is the moment of this geo-strategic challenge between East and West. This seems to be counterweight against Americas hegemonic movements.6There are two movements in Central Asia and beyond. One is led by the West in west-east commissioning from B need Sea towards Central Asia through Caucasus, Caspian Sea and the other from atomic number 7 to South led by Russia in the upright direction which cuts the west-east axis. The counter point of these two is Caspian Sea. This is why the Caspian Sea has vital importance for two sides.7Russia within security and economic regional organizations has act to remove the American influence in the region and already has its effective means that America doesnt have. There are some initiatives in the region which plays basic roles on security and geo-strategic environment of Central Asia. In fact, the approaching of Central Asia depends on the outcome of the New Great Game between America and Russia. Economic, geopolitics and geo-strategy of the Central Asia are very complicated.8CHAPTER IIIINDIAS ENERGY SOURCESWith 16 percent of the worlds macrocosm and an emerging economy, India has become a significant consumer of energy resources. The majority of India energy needs are char dependent . The deficit in supply of energy is met by energy imports from other countries. India is the worlds eleventh-largest energy conjurer, with 2.4 percent of energy labor, and the worlds sixth-largest consumer, with 3.5 percent of planetary energy enjoyment. Domestic blac ken reserves level for 70 percent of Indias energy needs. The remaining 30 percent is met by oil, with more than 65 percent of that oil being imported. Demand for energy is pass judgment to dual by 2025 by then, 90 percent of Indias oil color will be imported.9Energy SourcesCoal. Coal accounts for more than half of Indias arrive energy outlay followed by oil, which comprises 31% of substance energy consumption. pictorial muck up and hydroelectric power accounts for 8 and 6 % of consumption respectively.10 (Refer Figure.1) atomic power comprises a very nonaged dower of numerate energy consumption at present. Domestic supplies satisfy most of Indias char demand. harmonize to the 2008 BP Statistical Energy Survey, India had 2007 coal consumption of 208 cardinal tonnes oil equivalent. unluckily most of Indias coal is characterised by high ash fill, but the fictional character has other useful qualities such as low sulphur content (generally 0.5%), low iron content in a sh, low refractory reputation of ash, low chlorine content and low come after element c at a timentration.11 With 7 percent of the worlds coal India has the fourth largest coal reserves. The nose candy Sequestration leading Forum (CSLF) estimates that at the current level of consumption and return, Indias coal reserves will last for more than 200 years.12 rock oil. tally to rock oil and shoot a line Journal (OGJ), India had 5.6 billion put of be oil reserves as of January 2009, the flash largest follow in the Asia- Pacific region after China. India pissd near 880 thousand billion set per day ( pose/d) in 2008.In 2007 India consumed approximately 2.8 meg cask/d making it the fifth largest consumer of oil in the world.13 (Refer Figure .2) Indias largest crude oil import partner is Saudi Arabia, followed by Iran. Nearly trine-quarters of Indias crude oil imports come from Middle East.14 (Figure 3). born(p) fluff. According to embrocate and vaunt Journal (OGJ), In dia had 38 trillion solid feet (Tcf) of turn up rude(a) throttle valve reserves as of Jan 2009. The EIA estimates that India produced 1.1 Tcf of natural fumble in 2007, up only slightly from 2006 production levels. Although Indias natural assail production has consistently increased, demand has outstripped supply making the province a net importer of natural atom smasher since 2004.15 (Refer Figure .4) India imports natural throttle valve via change state natural gunman (LNG). LNG has not figured prominently in the energy pleat, but is slowly increasing. Experts estimate that by 2012 Indias LNG imports will be on par with Japans current LNG imports of 60 million tonnes per annum. Although the Gas permit of India Ltd. (GAIL) has already begun work on a National Gas Grid, there is colossal technological near that has to be made in terms of extraction, transportation and delivery of LNG. It is estimated that once the grid is fully functional, LNG could offset a significa nt portion of Indias energy demand.16 burn down-wise energy production iis given in Figure.5.New Exploration Licensing constitution and New Discoveries. Exploration blocks were put on offer downstairs the New Exploration-Licensing-Policy(NELP) in1999 in order to try and attract esoteric investment. India has offered 110 oil and sport blocks and 16 coal-bed-methane blocks for exploration in an enterprise to raise domestic energy production and reduce import dependence.17 infra NELP, 71 oil and gas discoveries have been made in 21 exploration blocks.18 Hydrocarbon accrual has been more than 600 million tonnes of oil equivalent.19 Cairn Energy has made 25 discoveries in Rajasthan and currently has six themes under development. Initial watchfulness is being concentrated on Mangala, Bhagyam and Aishwariya (MBA). Production from Mangala is plan to begin in third quarter 2009. Output from the MBA fields is estimated to bakshis at 175,000 positions per day, which would repre sent at least 20% of Indias total oil production20. thermonuclear Power. India has a largely indigenous nuclear power programme and expects to have 20,000 megawatt electricity (MWe) nuclear capacity on line by 2020 and 63,000 MWe by 2032. It aims to supply 25% of electricity from nuclear power by 2050. due(p) to Indias Nuclear isolation post 1974,for 34years India was largely excluded from interchange in nuclear localise or materials, which has hampered its development of civil nuclear energy until the write of Indo US Nuclear Deal in 2008. Due to these trading bans and lack of indigenous uracil, India has uniquely been developing a nuclear cycle to solicit its reserves of thorium. 21.Nuclear PowerGeneration Capacity. Indias present 2,720 MWe nuclear power plants include 14 reactors at 6 sites(Tarapur,Rawatbhatta, Kalapakkam,Narora,Kakrapar and Kaiga) ongoing 3,960 MWe nuclear power plants include 8 reactors at 4 sites (Tarapur,Kaiga, Rawatbhata and Kudankulam) and hereafter nuclear plant include one Adwanced Heavy Water Reactor (AWHR) having a rating of 300MWe and a mix of 500MWe Fast Breeder Reactors,680 MWe Pressurised Heavy Water Reactors and guanine MWe LWRs so as to reach a total of 20,000 MWe by 2020.22Hydro Electricity. India has a large hydro-potential estimated at 84000 megawatt (MW) at 60% load factor. Less than one fourth of that has been tapped. too large hydro projects are also being stiffly fence by environmentalist all over the country.23Indias Energy Policy. The Indias energy constitution states that the energy needs to be utilized not just from the formulaic energy resources but also from other non-conventional sources like wind, water, geothermal, biomass etc. The India energy policy act emphasizes the need to develop newer energy sources that are more efficient and non-perishable. Since the energy sources levels are dropping with each passing day the energy of light (energy of a photon), energy of motion from the flowing water and geothermal energy and energy of an electron in chemical energy and other forms is the new energy units tapping solutions.24CHAPTER IVENERGY POTENTIAL OF CARThe CAR is extravagantly endowed with energy resources (Refer Table.1) The hydrocarbon reserves are unevenly distributed among the five CARs (Refer Fig.6) and includes a number of petroleum basins that are different in their geological development, man-made lake and hydrocarbon types and quantity of resources. Various sources have reported that the postulated oil resources of the region are comparable with those of Saudi Arabia and that the potential gas resources are equal to Irans. Central Asia has been described as one of the worlds most strategic zones , between Russia , China and a troubled Middle East- a region coveted both by its larger neighbours and major world powers .25Energy emfKazakhstan. It is the second largest producer of petroleum in CIS after Russia. The Kashagan secretary on Caspian sea floor was discov ered recently and is estimated to contain 13 billion barrels of oil. US and China have already signed deals to make for the same. The most significant put forwards of gas are at Karachaganak (black hole) in northwestward Kazakhstan. It is estimated that production of gas will touch 36.1 billion cubiform metres (bcm) by 2010. 27Kazakhstans Gas PotentialKazakhstans turn up Reserves. BP estimates of 2008 place Kazakhstans turn up reserves at 1.90 trillion blockish metres (tcm) (1.1% of global contribution). There are two other gas producing nations in the former Soviet Union that surpass Kazakhstan in terms of proven gas reserves Russia with its 44.65 tcm (25.5% of global consider) and Turkmenistan with 2.67tcm (1.5% of global share).28 While published figures vary widely, rising as high as 3 380 bcm in the 2007 reserves report from the BGR, it may be of some significance that Oil Gas Journals latest tabulation of world gas reserves (December 2008) shows a flow in Kazakhstan from 2 832 bcm at 1 January 2008 to 2 407 bcm at 1 January 2009.29Production Growth. over the past decade, Kazakhstans gas domain has achieved considerable production growth, from 4.34 bcm in 1994 to 29.63 bcm in 2007 (see Figure 7). Production in January-July 2008was 19.74 bcm, up 13% year-on-year, and full-year production could potentially exceed the energy ministrys estimate of 33.7 bcm . (Refer Figure 7)30Kazakhstans Oil Potentialproven Hydrocarbon Reserves .Kazakhstans combined offshore and offshore proven hydrocarbon reserves have been estimated between 9 and 40 billion barrels.31Oil Production and Consumption. Kazakhstan produced approximately 1.45 million barrels per day (bbl/d) of oil in 2007 and consumed 250,000 bbl/d, resulting in petroleum net exports of around 1.2 million bbl/d. (Refer Figure.8) major Oil fields. Energy Information Authority expects oil production in Kazakhstan to average 1.54 and 1.71 million bbl/d in 2008 and 2009, respectively. Major producers in clude Karachaganak (250,000 bbl/d), Tengiz (280,000 bbl/d), CNPC-Aktobemunaigas (120,000 bbl/d), Uzenmunaigas (135,000 bbl/d), Mangistaumunaigas (115,000 bbl/d), and Kumkol (70,000 bbl/d). These producers account for 1million bbl/d (or around 70 percent) of liquids production in the country. Other production is centered in blue fields.32Nuclear Fuel PotentialUranium. Kazakhstan has been an important source of atomic number 92 for more than fifty years. Over 2001-2008 production rose from 2000 to 8521 tonnes U per year, and further mine development is under way with a view to increase one-year production upto18,000 tU/yr by 2010 and 30,000 tU by 2018. Production in 2009 is expected to be about 14,000 tU. Kazatompromis the national atomic company set up in 1997 and possess by the government. It controls all uranium exploration and archeological site as well as other nuclear-related activities, including imports and exports of nuclear materials. It announced in 2008 that it aims t o supply 30% of the world uranium by 2015, and through joint ventures 12% of uranium conversion market, 6% of enrichment, and 30% of the fuel allegory market by then.33Energy Potential of UzbekistanUzbekistan. Uzbekistan is unique among the CARs as being the only republic that shares a border with the other four Kazakhstan to the north and west, Tajikstan and Kyrigzstan to the east and Turkmenistan to the south. . Uzbekistan currently produces 60 bcm of natural gas annually, an amount nearly equal to Turkmenistans production. Uzbekistans reserves are primarily concentrated in Qashqadaryo responsibleness and near Bukhara in the countrys south-central region. During the 1970s Uzbekistans largest natural gas deposit at Boyangora-Gadzhak was discovered in Surkhandaryia province north of the Afghan border.34 Uzbekistan also has small coal reserves, located in general near Angren, east of Tashkent. In 1990 the total coal yield was 6 million tons. Oil production has likewise been small Uzbekistan has relied on Russia and Kazakstan for most of its supply.35According to Eshref F Trushin of the Institute of large Economics and affable Research (Uzbekistan), the Republic is fifth in the world in uranium production. It also produced 60 tonnes of Gold in 1996. However Capisani reports the 1996 production at between 80 to 110 tonnes. Gold deposits are found in the Fergana Valley at Altynkan and Kochbulak, in Uchkuduk(Zeravshan) and at Murantau. In February 1992, a protocol was signed with the Canadian firm , Newmont Gold for the development of Murantau deposit. Copper is extracted in the Almalyk region, as also iron minerals, zinc, lead , tungsten, bit and uranium.36Energy Potential of TurkmenistanTurkmenistans Oil Potential. Turkmenistan produces around 200,000 barrels per day of crude and is the biggest gas producer in the former Soviet Union after Russia with exports of around 50 billion cubic metres of gas a year, mainly to Russia and Ukraine. The country says it s gas reserves are currently heavily underestimated and it can easily double and even triple production to supply gas to Europe and Asia.37 According to U.S Energy Information Administration total oil production in the country in 2008 was 189.40 barrels per day. The crude oil production reached 170.26 barrels per day whereas the consumption of petroleum products and direct consumption of crude oil was 103 thousand barrels per day. The refine capacity is 237 million barrels per day and the Turkmenistan ranks world no 57 in its refining capacity. The proven reserves are 600 million barrels (Refer Table 2).Turkmenistans Gas Reserves. The production of natural gas in 2007 was 2,432 billion box-shaped Feet as compared to domestic consumption of 688 meg Cubic Feet. The country exported 1,745 Billion Cubic Feet Natural Gas in 2007. The Net proven reserves amount to huge 100,000 Billion Cubic Feet.38Energy Potential of KyrgyzstanKyrgyzstan. Kyrgyzstan currently does not have overflowing energy to provide reliable light and fire up to its residents and factories. Although the country relies heavily on domestic sources of hydropower for much of its electricity, recent droughts and misdirection drastically cut these supplies. Kyrgyzstan is increasingly seeking to identify and bring on line new sources of energy. The country currently imports most of the natural gas, petroleum products and coal that it consumes. At the same time, beyond hydro power, Kyrgyzstan has essentially no secondary energy production. Kyrgyzstan faces a variety of challenges in developing its energy sector. In the foreign policy sphere, Kyrgyzstan confronts problems that are a consequence of the extremely interwoven and volatile political landscape in Central Asia. Domestically, issues of economic crisis, organizational dysfunction, poorly pen laws, and corruption hinder reform.39Energy Potential of TajikistanTajikistans Proven Oil Reserves. Tajikistan has proven reserves of 12 million bar rels of oil (Refer Table.2), most of which are located in the northern part of the country in the Leninobod Soghd Region. The national oil company is Tajikneftegaz, which handles oil exploration, drilling, and production. In 2001, Tajik oil production was only 350 barrels per day (b/d). There has been a long period of production decline since Tajikistan produced 1,311 b/d in 1992. This accrue has been attributed to the 1992-1997 civil war, economic troubles, and lack of investment in the oil infrastructure. Tajikistan consumes 29,000 b/d of oil products, almost all of which are imported. The main source is Uzbekistan, which provides 70% of Tajikistans oil product imports. 40Tajikistan Gas Reserves. Tajikistan has 200 billion cubic feet (Bcf) of natural gas reserves, comprised of several fields. In 2000, Tajikistan began operations in the Khoja Sartez field in the southern Khatlon Region, and has also increased its activity in the Qizil Tumshuq deposit in the Kolkhozobod dominion o f the southern Khatlon Region. Tajikistan has also tried to increase its own gas production, in 2000, by exploratory drilling in the Khatlon region. Apparently, some of the drilling has been winning enough to interest China in prox drilling activities. The total natural gas production for Tajikistan in 2000 was 1.4 Bcf. With its small domestic production, Tajikistan must(prenominal) rely on imports for 95% of the natural gas it consumes. 41Viability of CARs to Serve as an Alternative to West AsiaIf the CARs are to provide a viable source of supply diversification for energy importers, they must have an environment that sets them asunder from the Gulf countries that currently supply bulk of the oil. The oil importers sense of exposure stems from the fear of emergence of militant Islam in West Asia.42Factors Affecting Viability. In this context, the CARs ability to provide a viable replenishment to West Asia is subject to a variety of factors as under-43Proven Reserves. The know n and proven reserves of West Asian oil account for 66%of global deposits whereas the proven and possible reserves of the entire Former Soviet Union (FSU) region are no more than 5.5%, of which Central Asia s share is even less. When it comes of natural gas the FSU region of which Russia constitutes the pile up , accounts for 39%of global reserves but Central Asian share is only around 6%. Only about 3%of the global energy trade is accounted for by the Caspian region and the share of CARs is even less. thereof the CARs can only supplement, not supplant West Asian suppliers, whether it is oil or gas. drilling Costs. Drilling oil in CARs personifys three to six measure as much as it does in West Asia. While it can be as low as $1per barrel in Iraq or Saudi Arabia, it would cost up to $5 to produce a barrel of oil from the Northern Caspian. This implies that it is economically attractive to produce oil in CARs only when global oil prices reign above a certain(prenominal) threshold level and being a peripheral producer the Caspian region will have to follow the prices set by OPEC and that they will not be in a position to influence prices to any significant extent. While gas production in the region is competitive with the rest of the world, the need to ferry it by long pipelines through difficult terrain offsets the cost advantages.Connectivity. Unlike West Asia, which enjoys excellent connectivity with energy consumers all over the humanity through well established sea routes and oil well infrastructure, the CARS are confine by geography that limits not only breathing ,but also future transit routes to global market.Quality. The quality of crude from some wells in Caspian region demands extensive processing before it can be consumed. not all refineries have the processing capacity which constrains the crop of consumers who can debauch CARs oil even when it is available.Insurgency. Incipient insurgency in some part of CARs renders them less attractiv e as an alternate source of supply. Uneven development of the different countries of the region and the ethnic diversities , instability in ChechnyaPotential of CARs to Supplement Indias Energy ImportsPotential of CARs to Supplement Indias Energy ImportsCHAPTER IINTRODUCTIONIndian economy has grown at a rapid pace in the last five years and so has the demand for energy of a billion people. India imports 70% of its domestic crude oil requirements. The bulk of Indias oil imports come from West Asia. The supply routes pass through the choke point of Strait of Hormuz. Any disruption in these will severely impact our national interest. Hence there is a need to diversify our supply sources in order to reduce our dependence on Gulf oil. Central Asian Region being rich in energy resources and located in our extended neighbourhood offer a tempting prospect.The CARs situated on the eastern flank of the Caspian Sea have significant oil and natural gas reserves to be considered as a possible so urce of diversification for countries heavily dependent on energy imports from West Asia and elsewhere . While estimates of reserves vary widely across different sources, there is a consensus that the region has much potential.Energy is the engine of economic growth. Availability of energy is the key to sustainable development, and has a direct impact in most aspects of our daily life. Inadequacy of energy supply affects very adversely vital and essential requirements of any society. Hence, there is an urgent need to enhance substantially the energy availability at a rapid pace so that aspirations of those who have remained at the fringes of development are able to benefit from access to this important input.The Central Asian Republics comprising of Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan and Turkmenistan encompass the vast geo- political space north of India. When part of the USSR, the region had stability and was thus of little interest to the international world order. Rel ations with India were determined with the framework of Indo-USSR relations as existed between New Delhi and Moscow. The post USSR environment has changed all this, requiring New Delhi to re- establish relations with the five newly independent nation- states on the basis of new realities.It is remarkable that while energy resources are getting increasingly scarce in the rest of the world, new oil fields are being discovered with great regularity in Central Asia. Some experts maintain that Central Asian resources may be difficult to reach because of it is the largest land mass in the world, which is land locked. This is both a challenge and an opportunity, because in todays technology driven world, it is not always necessary to transport material. This is the logic of investment abroad and organising production facilities there.India has long-standing historical ties with Central Asia that encompasses the political, cultural, economic and religious dimensions. The impact of regional developments in Central Asia on Indias history has been longstanding and substantial.According to Mr. Yashwant Sinha, Former Minister of External Affairs, Government of India, Indias increasing engagement with Central Asia is aimed at promoting peace and mutual prosperity. Central Asia can once again be a bridge between the East and West, if its neighbourhood is peaceful and stable, and if the only interference from outside is one of beneficial economic inputs. The bridge can contribute to peace and prosperity and energy security in the wider world too.METHODOLOGYStatement of the ProblemTo examine the potential of CARs to supplement Indias Energy Imports the possible routes through which Energy could flow to the South Asian Markets.HypothesisCentral Asian Republics as a region has been endowed with abundant energy resources. Their significance is due to their Geo-strategic loc as well as its rich energy deposits. The Geo- political developments in the region would perforce have an impact on India. Peace stability in Central Asia is an imperative to harness the abundant energy resources. The Central Asian region represents a tempting prospect for diversification of supply sources to India, being located in its extended neighbourhood.Justification of the StudyIndian economy has changed gears after the historic decision of liberalisation in 1991. Globalisation coupled with liberalisation ha s brought about a sea change in our lives .India has made rapid strides in industrialisation , IT industry , Telecom , Education, service industry and infrastructure development. Our energy consumption has far outpaced our domestic production. Most of our crude imports come from Gulf countries. The supply routes are prone to disruption and can severely impact our national interest. Although we have started acquiring energy stakes in Africa we need to diversify our energy sources.While India is surrounded by energy rich neighbourhood-Pakistan, Bangladesh and Myanmar access t o supply energy from these remain elusive. Political compulsions and indifferent relations are an impediment to energy imports through Bangladesh and Pakistan. In Myanmar ONGC has acquired exploration acreages. However any gas finds could make transportation a challenge unless Bangladesh allows transit through its territory.In view of the above, energy imports from CARs in Indias extended neighbourhood needs to be critically examined in order to optimise the full potential of Indo-CAR energy cooperation.ScopeThis study seeks to focus on the potential of INDO- CAR energy cooperation and identify the possible routes of energy flow from CAR to India.Methods of Data CollectionThe means of data collection has been number of books and papers by various prominent Indian and foreign authors, newspapers and many other wide ranging array of sources. Various internet sites have also been browsed for data collection .Books and websites consulted are listed in the bibliography.Organisation of th e DissertationIt is proposed to study the subject in the following manner-Chapter I Introduction.Chapter II Emergence of CAR as Nation States and their Geo -Strategic significance.Chapter III Indias Energy Sources.Chapter IV Energy Potential of CAR.Chapter V Interest of Global and Regional Players in Central Asia.Chapter VI Challenges and Threats to Security of Central Asian Region.Chapter VII India Central Asia Energy Cooperation.Chapter VIII Indias Strategy.Chapter IX Conclusion.CHAPTER IIEMERGENCE OF CAR AS NATION STATES AND THEIR GEOSTRATEGIC SIGNIFICANCEEmergence of CAR as Nation StatesDisintegration of former USSR was a momentous occasion unprecedented in scale and unanticipated by any power of the world, which ended the cold war and saw the emergence of a unipolar world. The emergence of newly independent states in Central Asia has changed the balance of power in this region. Due to its geographical proximity to Russia, China, West Asia and South Asia, this region emerged as a distinct geopolitical entity.Central Asian Republics at the dawn of independence were confronted with the numerous problems of state and nation building in a difficult milieu wherein various power centres competed for political power in a declining economy due to sudden severance of strong economic ties with Russia and consequent stoppages of Union subsidies. Rural unemployment and environmental degradation further contributed to aggravation of inter- ethnic relations. 1Central Asian leaders have proved wrong the Western apprehensions of balkanisation of the region. The Central Asian Republics have uphold intact their national independence and sovereignty and carved out a dignified place for themselves in the comity of nations. They have taken several positive diplomatic and political initiatives at the U.N. and other international fora. Their religious beliefs have not come in the way of developing mutually beneficial relations with Israel. The Central Asian Republics have cord ial relations with China and India. They are members of Shanghai Cooperation Organisation (SCO) and the Commonwealth of Independent States Collective Security Treaty Organisation (CSTO) with the exception of Uzbekistan, which have contributed greatly to regional security environment. All of them except Turkmenistan are also members of Central Asian Cooperation Organisation (CACO). Their success in resolving the bloody internal conflict in Tajikistan by peacefully integrating the Islamic opposition into the mainstream politics of the republic is no mean feat. They have also evolved a strong joint response together with Russia and China to the threat of cross border terrorism and drugs and arms peddling.2Central Asia, a landlocked region in the heart of Asia, is unique because it was the counterpoint of British and Russian empires in 19th century and still has the same importance now, but among the other players. Two decades after independence, Central Asia is not a stable region and some political crisis is still unsolved here. This situation is created by some players which include trans-regional and regional players looking after their own interests. The interaction and countering of the players in the region have resulted in the present situation that created an undeveloped region, while potentially it is significant due its geopolitical, geo-strategic and economic point of view.3Geostrategic Significance of Central Asian RepublicsCentral Asian Republics cover an area of 3,994,400 square kilometres. From the eastern shore of the Caspian sea , Central Asia extends eastwards to the Altai mountains along the Chinese border and from the southern border of the Russian Federation southwards upto the Tien Shan mountains and Afghanistan. (Map.1) Geographers have divided the region into four zones starting with the steppe zone of northern Kazakhstan and the Virgin lands (Tselana) semi deserts covering the rest of Kazakhstan the desert zone upto the southern oases an d the southern mountains bordering all the republics which include the Kopet Dag, the Pamirs and the Tien Shan. 4From Kushka, the southernmost point of Central Asia, there is a narrow road to Afghanistan. Transit and transportation of goods and passengers between region and Afghanistan can be exchanged via this road. Marine routes of Caspian Sea facilitate the relations between Central Asian Republics with Caucasus, Iran and Russia and by Volga-Don waterway canal they can connect with free waters and many countries. In the north, vast Kazakh plain and lowlands and low-height mountains connect Central Asia via railroad and road network with Russia. This territory located between two great Asian power (China) and Asian-European (Russia) and regional players such as Iran, Pakistan, and India influenced and affected it and play their roles. To enter this land-locked territory one should pass the territory of neighbouring countries. From southwards one should pass Iran or Afghanistan. In the current situation, to cross through mountainous Afghanistan is not viable.5One of the reasons for American presence in Afghanistan in east and Iraq in west of Iran is to surround Iran and Russia and to have access to Central Asia. Central Asia in north is bordered with Russia. Hence, to enter the heart of Russia is possible only via Central Asia and this is why Russia is against the presence of any foreign and trans-regional power in the region. Access to this territory from eastward is available by passing Chinas western part (XinJiang Uighur Region). China will never allow any trans-regional power to enter in its critical, geopolitically very important western region and from there to Central Asian territory at all. The only passage to enter Central Asia by foreign powers is Caucasus in the west of region which will be available via Caspian Sea. This is why Caucasus region has got a gateway situation and the Caspian Sea itself changed to the gate of Central Asia. Georgia in t he west of Caucasus is located in the mouth of Caucasian natural corridor and is a gateway to enter Caucasus. During Cold War era, it was strongly defended by Soviet Union and Warsaw Pact powers. After the collapse of Soviet Union, Russia attempted hard to preserve it, but after one decade, the western powers by execution of Rose Revolution headed by Mikhail Saakashvili in2003 changed this position and allowed west to enter Caucasus. The formation of Shanghai Cooperation Organization in the territory of Central Asia and neighbouring countries is the outcome of this geo-strategic challenge between East and West. This seems to be counterweight against Americas hegemonic movements.6There are two movements in Central Asia and beyond. One is led by the West in west-east direction from Black Sea towards Central Asia through Caucasus, Caspian Sea and the other from North to South led by Russia in the vertical direction which cuts the west-east axis. The counter point of these two is Caspia n Sea. This is why the Caspian Sea has vital importance for both sides.7Russia within security and economic regional organizations has attempted to remove the American influence in the region and already has its effective means that America doesnt have. There are some initiatives in the region which plays basic roles on security and geo-strategic environment of Central Asia. In fact, the future of Central Asia depends on the outcome of the New Great Game between America and Russia. Economic, geopolitics and geo-strategy of the Central Asia are very complicated.8CHAPTER IIIINDIAS ENERGY SOURCESWith 16 percent of the worlds population and an emerging economy, India has become a significant consumer of energy resources. The majority of India energy needs are coal dependent . The shortage in supply of energy is met by energy imports from other countries. India is the worlds eleventh-largest energy producer, with 2.4 percent of energy production, and the worlds sixth-largest consumer, wi th 3.5 percent of global energy consumption. Domestic coal reserves account for 70 percent of Indias energy needs. The remaining 30 percent is met by oil, with more than 65 percent of that oil being imported. Demand for energy is expected to double by 2025 by then, 90 percent of Indias petroleum will be imported.9Energy SourcesCoal. Coal accounts for more than half of Indias total energy consumption followed by oil, which comprises 31% of total energy consumption. Natural gas and hydroelectric power accounts for 8 and 6 % of consumption respectively.10 (Refer Figure.1) Nuclear power comprises a very small percentage of total energy consumption at present. Domestic supplies satisfy most of Indias coal demand. According to the 2008 BP Statistical Energy Survey, India had 2007 coal consumption of 208 million tonnes oil equivalent. Unfortunately most of Indias coal is characterised by high ash content, but the quality has other useful qualities such as low sulphur content (generally 0.5 %), low iron content in ash, low refractory nature of ash, low chlorine content and low trace element concentration.11 With 7 percent of the worlds coal India has the fourth largest coal reserves. The Carbon Sequestration Leadership Forum (CSLF) estimates that at the current level of consumption and production, Indias coal reserves will last for more than 200 years.12Oil. According to Oil and Gas Journal (OGJ), India had 5.6 billion barrels of proven oil reserves as of January 2009, the second largest amount in the Asia- Pacific region after China. India produced roughly 880 thousand billion barrels per day (bbl/d) in 2008.In 2007 India consumed approximately 2.8million bbl/d making it the fifth largest consumer of oil in the world.13 (Refer Figure .2) Indias largest crude oil import partner is Saudi Arabia, followed by Iran. Nearly three-fourths of Indias crude oil imports come from Middle East.14 (Figure 3).Natural Gas. According to Oil and Gas Journal (OGJ), India had 38 trillion cubic feet (Tcf) of proven natural Gas reserves as of Jan 2009. The EIA estimates that India produced 1.1 Tcf of natural gas in 2007, up only slightly from 2006 production levels. Although Indias natural gas production has consistently increased, demand has outstripped supply making the country a net importer of natural gas since 2004.15 (Refer Figure .4) India imports natural gas via Liquefied natural gas (LNG). LNG has not figured prominently in the energy mix, but is slowly increasing. Experts estimate that by 2012 Indias LNG imports will be on par with Japans current LNG imports of 60 million tonnes per annum. Although the Gas Authority of India Ltd. (GAIL) has already begun work on a National Gas Grid, there is considerable technological progress that has to be made in terms of extraction, transportation and delivery of LNG. It is estimated that once the grid is fully functional, LNG could offset a significant portion of Indias energy demand.16 Fuel-wise energy production iis given in Figure.5.New Exploration Licensing Policy and New Discoveries. Exploration blocks were put on offer under the New Exploration-Licensing-Policy(NELP) in1999 in order to try and attract private investment. India has offered 110 oil and gas blocks and 16 coal-bed-methane blocks for exploration in an attempt to raise domestic energy production and reduce import dependence.17 Under NELP, 71 oil and gas discoveries have been made in 21 exploration blocks.18 Hydrocarbon accretion has been more than 600 million tonnes of oil equivalent.19 Cairn Energy has made 25 discoveries in Rajasthan and currently has six fields under development. Initial attention is being concentrated on Mangala, Bhagyam and Aishwariya (MBA). Production from Mangala is scheduled to begin in third quarter 2009. Output from the MBA fields is estimated to peak at 175,000 barrels per day, which would represent at least 20% of Indias total oil production20.Nuclear Power. India has a largely indigenous nuclear powe r programme and expects to have 20,000 megawatt electricity (MWe) nuclear capacity on line by 2020 and 63,000 MWe by 2032. It aims to supply 25% of electricity from nuclear power by 2050. Due to Indias Nuclear isolation post 1974,for 34years India was largely excluded from trade in nuclear plant or materials, which has hampered its development of civil nuclear energy until the signing of Indo US Nuclear Deal in 2008. Due to these trade bans and lack of indigenous uranium, India has uniquely been developing a nuclear cycle to exploit its reserves of thorium. 21.Nuclear PowerGeneration Capacity. Indias present 2,720 MWe nuclear power plants include 14 reactors at 6 sites(Tarapur,Rawatbhatta, Kalapakkam,Narora,Kakrapar and Kaiga) ongoing 3,960 MWe nuclear power plants include 8 reactors at 4 sites (Tarapur,Kaiga, Rawatbhata and Kudankulam) and future nuclear plant include one Adwanced Heavy Water Reactor (AWHR) having a rating of 300MWe and a mix of 500MWe Fast Breeder Reactors,680 MWe Pressurised Heavy Water Reactors and 1000 MWe LWRs so as to reach a total of 20,000 MWe by 2020.22Hydro Electricity. India has a large hydro-potential estimated at 84000 megawatt (MW) at 60% load factor. Less than one fourth of that has been tapped. Large hydro projects are also being stiffly opposed by environmentalist all over the country.23Indias Energy Policy. The Indias energy policy states that the energy needs to be utilized not just from the conventional energy resources but also from other non-conventional sources like wind, water, geothermal, biomass etc. The India energy policy act emphasizes the need to develop newer energy sources that are more efficient and non-perishable. Since the energy sources levels are dropping with each passing day the energy of light (energy of a photon), energy of motion from the flowing water and geothermal energy and energy of an electron in chemical energy and other forms is the new energy units tapping solutions.24CHAPTER IVENERGY POTENTI AL OF CARThe CAR is abundantly endowed with energy resources (Refer Table.1) The hydrocarbon reserves are unevenly distributed among the five CARs (Refer Fig.6) and includes a number of petroleum basins that are different in their geological development, reservoir and hydrocarbon types and quantity of resources. Various sources have reported that the postulated oil resources of the region are comparable with those of Saudi Arabia and that the potential gas resources are equal to Irans. Central Asia has been described as one of the worlds most strategic zones , between Russia , China and a troubled Middle East- a region coveted both by its larger neighbours and major world powers .25Energy PotentialKazakhstan. It is the second largest producer of petroleum in CIS after Russia. The Kashagan deposit on Caspian seabed was discovered recently and is estimated to contain 13 billion barrels of oil. US and China have already signed deals to exploit the same. The most significant deposits of gas are at Karachaganak (black hole) in northwest Kazakhstan. It is estimated that production of gas will touch 36.1 billion cubic metres (bcm) by 2010. 27Kazakhstans Gas PotentialKazakhstans Proven Reserves. BP estimates of 2008 place Kazakhstans proven reserves at 1.90 trillion cubic metres (tcm) (1.1% of global share). There are two other gas producing nations in the former Soviet Union that surpass Kazakhstan in terms of proven gas reserves Russia with its 44.65 tcm (25.5% of global share) and Turkmenistan with 2.67tcm (1.5% of global share).28 While published figures vary widely, rising as high as 3 380 bcm in the 2007 reserves report from the BGR, it may be of some significance that Oil Gas Journals latest tabulation of world gas reserves (December 2008) shows a decrease in Kazakhstan from 2 832 bcm at 1 January 2008 to 2 407 bcm at 1 January 2009.29Production Growth. Over the past decade, Kazakhstans gas sector has achieved considerable production growth, from 4.34 bcm in 1 994 to 29.63 bcm in 2007 (see Figure 7). Production in January-July 2008was 19.74 bcm, up 13% year-on-year, and full-year production could potentially exceed the energy ministrys estimate of 33.7 bcm . (Refer Figure 7)30Kazakhstans Oil PotentialProven Hydrocarbon Reserves .Kazakhstans combined onshore and offshore proven hydrocarbon reserves have been estimated between 9 and 40 billion barrels.31Oil Production and Consumption. Kazakhstan produced approximately 1.45 million barrels per day (bbl/d) of oil in 2007 and consumed 250,000 bbl/d, resulting in petroleum net exports of around 1.2 million bbl/d. (Refer Figure.8)Major Oil fields. Energy Information Authority expects oil production in Kazakhstan to average 1.54 and 1.71 million bbl/d in 2008 and 2009, respectively. Major producers include Karachaganak (250,000 bbl/d), Tengiz (280,000 bbl/d), CNPC-Aktobemunaigas (120,000 bbl/d), Uzenmunaigas (135,000 bbl/d), Mangistaumunaigas (115,000 bbl/d), and Kumkol (70,000 bbl/d). These prod ucers account for 1million bbl/d (or around 70 percent) of liquids production in the country. Other production is centered in smaller fields.32Nuclear Fuel PotentialUranium. Kazakhstan has been an important source of uranium for more than fifty years. Over 2001-2008 production rose from 2000 to 8521 tonnes U per year, and further mine development is under way with a view to increase annual production upto18,000 tU/yr by 2010 and 30,000 tU by 2018. Production in 2009 is expected to be about 14,000 tU. Kazatompromis the national atomic company set up in 1997 and owned by the government. It controls all uranium exploration and mining as well as other nuclear-related activities, including imports and exports of nuclear materials. It announced in 2008 that it aims to supply 30% of the world uranium by 2015, and through joint ventures 12% of uranium conversion market, 6% of enrichment, and 30% of the fuel fabrication market by then.33Energy Potential of UzbekistanUzbekistan. Uzbekistan is unique among the CARs as being the only republic that shares a border with the other four Kazakhstan to the north and west, Tajikstan and Kyrigzstan to the east and Turkmenistan to the south. . Uzbekistan currently produces 60 bcm of natural gas annually, an amount nearly equal to Turkmenistans production. Uzbekistans reserves are primarily concentrated in Qashqadaryo province and near Bukhara in the countrys south-central region. During the 1970s Uzbekistans largest natural gas deposit at Boyangora-Gadzhak was discovered in Surkhandaryia province north of the Afghan border.34 Uzbekistan also has small coal reserves, located mainly near Angren, east of Tashkent. In 1990 the total coal yield was 6 million tons. Oil production has likewise been small Uzbekistan has relied on Russia and Kazakstan for most of its supply.35According to Eshref F Trushin of the Institute of Macro Economics and Social Research (Uzbekistan), the Republic is fifth in the world in uranium production. It also produced 60 tonnes of Gold in 1996. However Capisani reports the 1996 production at between 80 to 110 tonnes. Gold deposits are found in the Fergana Valley at Altynkan and Kochbulak, in Uchkuduk(Zeravshan) and at Murantau. In February 1992, a protocol was signed with the Canadian firm , Newmont Gold for the development of Murantau deposit. Copper is extracted in the Almalyk region, as also iron minerals, zinc, lead , tungsten, molybdenum and uranium.36Energy Potential of TurkmenistanTurkmenistans Oil Potential. Turkmenistan produces around 200,000 barrels per day of crude and is the biggest gas producer in the former Soviet Union after Russia with exports of around 50 billion cubic metres of gas a year, mainly to Russia and Ukraine. The country says its gas reserves are currently heavily underestimated and it can easily double and even triple production to supply gas to Europe and Asia.37 According to U.S Energy Information Administration total oil production in the country in 2008 was 189.40 barrels per day. The crude oil production reached 170.26 barrels per day whereas the consumption of petroleum products and direct consumption of crude oil was 103 thousand barrels per day. The refining capacity is 237 million barrels per day and the Turkmenistan ranks world no 57 in its refining capacity. The proven reserves are 600 million barrels (Refer Table 2).Turkmenistans Gas Reserves. The production of natural gas in 2007 was 2,432 billion Cubic Feet as compared to domestic consumption of 688 Billion Cubic Feet. The country exported 1,745 Billion Cubic Feet Natural Gas in 2007. The Net proven reserves amount to huge 100,000 Billion Cubic Feet.38Energy Potential of KyrgyzstanKyrgyzstan. Kyrgyzstan currently does not have enough energy to provide reliable light and heat to its residents and factories. Although the country relies heavily on domestic sources of hydropower for much of its electricity, recent droughts and mismanagement drastically cut these supplies. Kyr gyzstan is increasingly seeking to identify and bring on line new sources of energy. The country currently imports most of the natural gas, petroleum products and coal that it consumes. At the same time, beyond hydro power, Kyrgyzstan has essentially no alternative energy production. Kyrgyzstan faces a variety of challenges in developing its energy sector. In the foreign policy sphere, Kyrgyzstan confronts problems that are a consequence of the extremely complex and volatile political landscape in Central Asia. Domestically, issues of economic crisis, organizational dysfunction, poorly written laws, and corruption hinder reform.39Energy Potential of TajikistanTajikistans Proven Oil Reserves. Tajikistan has proven reserves of 12 million barrels of oil (Refer Table.2), most of which are located in the northern part of the country in the Leninobod Soghd Region. The national oil company is Tajikneftegaz, which handles oil exploration, drilling, and production. In 2001, Tajik oil product ion was only 350 barrels per day (b/d). There has been a long period of production decline since Tajikistan produced 1,311 b/d in 1992. This decrease has been attributed to the 1992-1997 civil war, economic troubles, and lack of investment in the oil infrastructure. Tajikistan consumes 29,000 b/d of oil products, almost all of which are imported. The main source is Uzbekistan, which provides 70% of Tajikistans oil product imports. 40Tajikistan Gas Reserves. Tajikistan has 200 billion cubic feet (Bcf) of natural gas reserves, comprised of several fields. In 2000, Tajikistan began operations in the Khoja Sartez field in the southern Khatlon Region, and has also increased its activity in the Qizil Tumshuq deposit in the Kolkhozobod District of the southern Khatlon Region. Tajikistan has also tried to increase its own gas production, in 2000, by exploratory drilling in the Khatlon region. Apparently, some of the drilling has been successful enough to interest China in future drilling ac tivities. The total natural gas production for Tajikistan in 2000 was 1.4 Bcf. With its small domestic production, Tajikistan must rely on imports for 95% of the natural gas it consumes. 41Viability of CARs to Serve as an Alternative to West AsiaIf the CARs are to provide a viable source of supply diversification for energy importers, they must have an environment that sets them apart from the Gulf countries that currently supply bulk of the oil. The oil importers sense of vulnerability stems from the fear of emergence of militant Islam in West Asia.42Factors Affecting Viability. In this context, the CARs ability to provide a viable alternate to West Asia is subject to a variety of factors as under-43Proven Reserves. The known and proven reserves of West Asian oil account for 66%of global deposits whereas the proven and possible reserves of the entire Former Soviet Union (FSU) region are no more than 5.5%, of which Central Asia s share is even less. When it comes of natural gas the FSU region of which Russia constitutes the chunk , accounts for 39%of global reserves but Central Asian share is only around 6%. Only about 3%of the global energy trade is accounted for by the Caspian region and the share of CARs is even less. Thus the CARs can only supplement, not supplant West Asian suppliers, whether it is oil or gas.Drilling Costs. Drilling oil in CARs costs three to six times as much as it does in West Asia. While it can be as low as $1per barrel in Iraq or Saudi Arabia, it would cost up to $5 to produce a barrel of oil from the Northern Caspian. This implies that it is economically attractive to produce oil in CARs only when global oil prices reign above a certain threshold level and being a marginal producer the Caspian region will have to follow the prices set by OPEC and that they will not be in a position to influence prices to any significant extent. While gas production in the region is competitive with the rest of the world, the need to ferry it by long pipelines through difficult terrain offsets the cost advantages.Connectivity. Unlike West Asia, which enjoys excellent connectivity with energy consumers all over the globe through well established sea routes and tanker infrastructure, the CARS are constrained by geography that limits not only existing ,but also future transit routes to global market.Quality. The quality of crude from some wells in Caspian region demands extensive processing before it can be consumed. Not all refineries have the processing capacity which constrains the range of consumers who can buy CARs oil even when it is available.Insurgency. Incipient insurgency in some parts of CARs renders them less attractive as an alternate source of supply. Uneven development of the different countries of the region and the ethnic diversities , instability in Chechnya