Looking at Iran’s Nuclear Program From an Energy Perspective

(3BL Media/Justmeans) - Recently, Secretary of State John Kerry negotiated an historic agreement with the government of Iran, regarding their use of nuclear technology. In short, the agreement will result in lifting some economic sanctions in exchange for vows and a verification program, to ensure that Iran does not pursue nuclear weapons. The agreement has provoked quite a bit of attention, including a visit to Congress by Israeli Prime Minister Benjamin Netanyahu, and a letter from Congress to the Iranian government, both disparaging the agreement. The premise of the talks is that an atmosphere of openness and communication is more conducive to maintaining peace than sanctions and threats.

The Iranians claim that they desperately need nuclear power to maintain and grow their economy. That has been questioned by some writers, who say that, looking at this strictly from an energy perspective. Given Iran’s fossil fuel wealth, why should they require nuclear power, with its financial and safety challenges, at this time, when a number of countries are moving away from it?

That’s the question that Geoffery Styles, a former oil company executive, currently Managing Director of GSW Strategy Group, LLC, is asking. "Iran makes an unusual candidate for civilian nuclear power, compared to other countries with nuclear power. Most of these fall into either of two categories: those that lack other energy resources to support their economies, such as France, Japan and South Korea, and resource-rich countries that developed nuclear power as a consequence of their pursuit of nuclear weapons, including the US, former USSR, UK, and arguably China. Blessed as it is with hydrocarbon reserves, Iran does not fall into the former category, and it claims not to fall into the latter. Does it represent a unique case?"

Styles suggests that it does not, pointing out that, roughly 75% of Iran’s energy growth since 2003 has come from natural gas, which Iran has in abundance. According to a report from BP, Iran has the world’s largest proven reserve of natural gas, comprising 18% of the world’s total.

As the cost of nuclear power keeps rising, natural gas power plant costs have declined, not to mention the cost of solar power, which Iran has abundant potential for. The dramatic decline in solar prices has been well documented here and elsewhere.

Whatever the costs of consuming a larger portion of their exports might be, argues Styles, they would probably be less that what the sanctions have already cost them.
 

Iran’s interest in nuclear energy goes back to 1957 as part of the US Atoms for peace program. It grew in the days of the Shah in the 1970’s, when, encouraged by the US to “expand its non-oil energy base,” a cadre of Iranian nuclear engineers was trained at MIT in order to help the country meet its growing demand for electricity. They established a target of 23 GW in order to free up oil and gas for export. Their oil industry was then, and is still in decline.

The program has been plagued with problems, though Iran does have one operating nuclear plant today, a 1 GW unit that produces at net of 930 MW in Bushehr. There are plans in place for an additional 4GW, including two more units at Bushehr.

It should also be pointed out that Iran is not the only Middle Eastern pursuing nuclear power. Notably, the United Arab Emirates (UAE), with 10% of the world’s oil reserves, is pursuing nuclear power as well—even as they have increased their oil production by 31% since 2002, with an additional 40% increase planned. The Emirates Nuclear Energy Corporation (ENEC) accepted a $20 billion bid from a South Korean consortium to build four commercial nuclear power reactors, comprising a total of 5.6 GW, to be completed by 2020 at Barakah. They estimate that by that time, nuclear power will meet 25% of the country’s electricity demand.

The country is aggressively investing in renewable energy as well, (including the Shams-1 solar plant that I visited in January) but because of intense desalination developments, they will still have a shortfall in electricity without the nuclear. UAE, has an aggressive de-carbonization effort in place in which all of these things play a part.

The situation in Iran is a complicated one, as is the world energy picture. The question raised about their need for nuclear power is a fair one. Indeed, there are other ways that their energy needs could be met. However, the fact the peace-loving UAE, a staunch US ally, is also aggressively pursuing nuclear, shows that it’s not an entirely unreasonable proposition. I might have preferred to see Secretary Kerry assemble a consortium to help Iran meet their energy needs without nuclear power. That would be expensive, but far less than war a war might end up costing. Not to mention what a moral victory that would be for clean power.

Image credit: kmichiels: Flickr Creative Commons