Energy Charter Treaty (ECT): Challenges and Prospects for Pakistan's Energy Trade and Security

Abstract

Energy is one of the fundamental inputs to economic growth in a modern world. Therefore, energy security is pivotal especially for the developing countries such as Pakistan. Due to deficiency in indigenous energy resources and consumer base, Pakistan has to rely on imported natural gas. Natural gas trade has several dimensions, which may correlate with domestic as well as cross-border energy transactions, by means of bilateral or multilateral agreements. The relationship among the trading partners and geopolitical situation raise complexity in the agreements that may halt the potential trade volumes. This is evident in the case of Pakistan, which cannot import natural gas even though; it faced huge economic loss due to energy shortages. Energy Charter Treaty (ECT) is an international, inter-governmental legal treaty, enforceable among the energy producing, transit and the consuming states. It postulates a systemic process covering legal and commercial aspects of energy trade. Trade openness is justified in the present time of multifaceted challenges of terrorism and conflicts wherein, the global peace can be achieved not only through deterrence, regional supremacy and non-interference into other states‘ affairs, but also through permanent international peace efforts, economic inter-dependence and cooperation. Therefore, energy cooperation among the states may fortify economic, social, political integration and prosperity. Cooperation among nations can be enriched through cross-border economic pacts, and integration by applying liberalization of economic policies and the energy trade inter se states. The institutional coordination may serve as a crucial catalyst in this regard. However, various past studies shows that energy security in Pakistan deficiency, specifically in natural gas sector, relies on international-trans-border energy trade with legal commitment and security. Historically, it is evident that economic agreements may not only get the states closer, but may also strengthen trust thus, improving the inter-states‘ peace-orientation and conflict management. It greatly fosters total economic gain and prosperity of the nations.

In this dissertation, case study of Turkmenistan Afghanistan Pakistan India (TAPI) Gas Pipeline—as a Peace Pipeline, among the contracting states of ECT permanent members and observers has been analyzed with a conclusion that it will resolve common disputes, but may also contribute towards building economically stronger the countries of South Asia and Central Asian. It has also been analyzed on the well-established research touchstones that in order to address energy deficiency in Pakistan, the legal, regulatory and commercial regime of the country may be harmonized with ECT‘s regime, which may not only mitigate the challenges and hurdles in securing energy transit for Pakistan but may also ensure invulnerable energy supply to Pakistan for the greater good of its generations to come