Pakistan's Gas Pipeline a Solution and a Dilemma

If Pakistan continues with its massive oil pipeline construction, it could face US sanctions and cause international issues, despite also possibly solving Pakistan's energy crisis, writes Syed Fazl-e-Haider of The National.

Pakistan is facing a conundrum. Led by the prime minister Nawaz Sharif, the new government is being pressed by the United States not to proceed with a US$7.5 billion gas pipeline project with Iran. But gas imported from Iran could avert the worst power crisis in Pakistan's history.

How can Mr Sharif go ahead with what is considered the country's energy lifeline, without damaging its relations with the US?

The US secretary of state John Kerry, during a recent visit to Islamabad, warned energy-deficient Pakistan that the pipeline project could invoke sanctions on the country.

The project was inaugurated by the former Pakistani government, led by the president Asif Ali Zardari on March 11. The ground-breaking ceremony, held in the Iranian border city of Chabahar, marked the beginning of work on the 780-kilometer pipeline earmarked for the Pakistani side of the border.

Iran has already completed 900km of pipeline on its side. Furthermore, Tehran has agreed to lend Islamabad US$500 million, a third of the estimated cost of the Pakistani section of the pipeline. Islamabad has already awarded the contract for building its portion to the Iranian company Tadbir Energy. Under the contract, Tadbir Energy is to undertake the construction of the pipeline in Pakistani territory in two phases.

But the project faces stiff opposition from Washington, which has issued Islamabad with several warnings to abandon the pipeline or face sanctions.

The US is opposed to any project with Iran that involves substantial investment, because of western fears that Tehran is planning to build a nuclear arsenal.

Because other countries' companies have lost interest in any Iranian projects amid pressure from the United States, Islamabad and Tehran decided to lay the pipeline using Pakistani and Iranian gas companies.

The pipeline is vital to Pakistan's pressing energy needs. Once completed, it is expected to start delivering gas to Pakistan by December 2014. It would initially transfer 30 million cubic metres of gas per day—enough to bail the country out of its acute energy crisis.

With massive power cuts in major cities and towns on a daily basis, the country is undergoing its biggest energy crisis.

The energy shortage has not only stifled industry, it has also made the lives of 180 million Pakistanis unbearable.

The former government's decision to go ahead with the pipeline is widely believed to be a politically motivated decision taken a few days before the government completed its five-year tenure on March 15. Technically speaking, an outgoing government is not supposed to take such decisions, which could have far-reaching implications not only for the country, but also for the whole region.

Now the ball is in the Sharif government's court. Does it go ahead with the project, defying the US pressure and risking economic sanctions, or does it simply abandon the project and seek Washington's help for an alternative energy project?

The US has worked hard to persuade the Pakistani authorities to shelve the pipeline project and has offered financial and technical assistance to bring about a liquefied natural gas importing plan alongside the construction of the Diamer-Bhasha Dam in the country's north.

Abandoning the pipeline project would, however, be a politically sensitive decision to be taken by a democratic government because it would come at a high political cost.

Mr Sharif's government, which has pledged to end the energy crisis, might choose to expedite work on the pipeline, which would help to generate around 5,000 megawatts of electricity—equivalent to the current peak shortage of power in the country.

The pipeline would have far-reaching geopolitical ramifications. Were it extended to India or China, it would be able to meet the energy demand of other countries as well as Pakistan.

The project was initially planned as an Iran-Pakistan-India pipeline to carry gas from Iran to Pakistan and on to India. New Delhi withdrew in 2009 after coming under pressure from Washington, but India has kept open the option of joining at a later stage. After India's withdrawal, China expressed interest in joining the project.

The pipeline, were it to be finished, could affect demand for Saudi Arabia and UAE energy in South Asia. Pakistan imports about 80% of its oil. The availability of Iranian gas could cut the country's oil imports from the UAE, Saudi Arabia, Kuwait and other oil-producing countries.

Saudi Arabia is reported to have offered Pakistan alternative options to cope with its energy crisis in a move to persuade Islamabad to abandon the Iran pipeline project.

Read more from The National here…

Ron Carson’s Latest Gambit: Digital Coaching Platform

Ron Carson’s Peak Advisor Alliance, which provides practice management consulting to 1,100 advisor members, announced this week the rollout of a virtual coaching and marketing platform called Digital Fortress, which Carson says will provide “growth made easy” for advisors, for $459 a month.

The platform provides access to Peak’s practice management expertise, tied with content provided by Faulkner Publishing, which is led by Craig Faulkner, who was the founder and longtime president of Emerald Publications. Also included is website creation and hosting, electronic newsletter creation, marketing effort analytics and a mobile app for advisors. 

In an interview Thursday, Carson said that his plan is to have Digital Fortress accomplish for advisors “what Pixar did for Disney,” by providing a “single-point access portal that automates an advisor’s marketing, website and social media operations," with “compliance-approved content” and Peak’s practice management resources, including online access to Peak’s in-house and external coaches. His intent is to help advisors “to grow easily and compete at a level” that they couldn’t reach without the platform.

The platform itself is a flexible one, Carson said, that can respond to the needs of individual advisors and their clients, and can be customized to reflect the advisor’s own personality and firm branding. Carson called Digital Fortress “the first one-stop shop for client communication, practice management ideas and marketing automation all at your fingertips through a singular central hub.” 

In the same interview, Faulkner said that the central feature of Digital Fortress is the “robust advisor admin” function, a “command center” dashboard that analyzes each advisor user’s activity on the platform’s consumer marketing campaigns.

The virtual coaching, he said, is “self-paced coaching” that uses a “wealth of video content” from Peak “that the advisor can go through at their own pace,” while receiving “direct online support from coaches.”

At Emerald, Faulkner says he “trained thousands of individuals on the how-to’s of marketing,” but that Digital Fortress “refines the process” to allow an advisor to focus on “how do I increase my client base, and how do I manage those clients,” which perennially are an advisor’s two major concerns. 

When asked about the cost of the program, Carson said it would be $495 a month, which he called a “reallocation of funds” by advisor users. “They’re already spending $15,000 to $25,000 a year” building, maintaining and hosting their websites, not to mention the cost of the content on those websites, he says. “It should be cash-flow positive out of the gate,” he said, while providing “a more robust digital brand.”

When asked whether virtual coaching will work absent the accountability that a one-on-one coach supplies, Carson admitted that there was "a segment of advisors who want to be held accountable to a human being, but they still have that option.”

He said the “command center,” or dashboard, “holds them accountable; if you need to accomplish something by a certain date, it will ping you.” Moreover, “young advisors are very comfortable with digital,” and in using the platform, advisors “literally with a slider can customize the program for what their biggest need is, and set timelines to accomplish” those goals.

Paul West, managing director of Peak Alliance, said that in considering the virtues of virtual coaching, “we took the best concepts we’ve used for all these years” at Peak, including integrating videos and role playing in addressing practice management and marketing initiatives. 

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See a recent ThinkAdvisor article on the first advisor to join Ron Carson's Carson Institutional Advisory (CIA) succession planning program.