A Comprehensive Analysis of the Nuclear Policy of the Islamic Republic of Iran: Costs, Benefits and Challenges

The intention by the West in challenging the nuclear program (NP) of the Islamic Republic of Iran (IRI) is of a political nature. It aims not only to change the conduct of the regime of IRI in the global arena but also prevents it from acquiring the nuclear weapon.
The question is what would happen if Iran revised its NP and renounced the enrichment project? What would Iran lose in such a case and, what would the benefit of such a step be?
This article doesn’t deal with the legal aspects of the NP of the IRI. It doesn’t discuss whether it has the right to or not, enrich Uranium but it deals with the question whether NP fits the national interests of Iran economically and in view of its security.
Those favoring the application of the nuclear technology (NT) for electricity generation in Iran are very divers and build a broad spectrum of opinions.
The supreme leader of the IRI states: «I should point out that the importance of exploiting the nuclear energy (NE) and that of acquiring the NT for our country is much higher than the original discovery and exploitation of oil in our country»[1].
Ahmadinejad asserts that the NT is of vital interest to Iran. He allows himself to go on to stating that mastering of this technology has a higher value than taking the control of the petroleum industry 1953 by Iran. Recently in the course of an interview with the First TV Channel of IRI, once again, he reiterated that the value of the realization of the NT in the face of resistance from the West was hundreds of times higher than that of the nationalization of the petrol industry – it occurred under the premiership of Dr. Mossadegh[2].
Mr. Amir Mohebian an influential journalist for Resalat, a conservative newspaper, considers this as a destiny making issue for Iran by writing: «when you are going to evaluate such a destiny determining issue you can not be a penny pincher»[3].
Mr. Abbas Abdi a prominent figure from the opposition camp, states that: «There is almost no one in Iran who would deny the acquisition of NE if they knew the advantages and benefits of the NE versus the energy from fossil fuels»[4].
Radio, TV and print media univocally praise the NT as an ultimate solution for all the problems of the country. In an attempt to convince the Iranian citizens they portray it as the mother technology and the fundament for the progress of the country.
Interestingly, the justifications presented by the IRI and the previous regime for the application of the NT to generate electricity in Iran are very similar. That is why the propagandist for the NT, especially enrichment, in their pursuit of a “just” witness discovered Dr. Akbar Etemad, a one time director of the NP of the former Pahlavi regime. He explains away how “His Majesty”, twenty years ahead of his time, and for the sake of rescuing Iran from its backwardness, had prescribed the NT. Mr. Etemad personally believes that the NT is of vital importance, in fact, the mother and the motor for progress in other technologies as well as Iran’s economy[5].
It was this same principle for justification by such diverse proponents of the NE for Iran that motivated me to write this article.
First and foremost, I would like to analyze whether the enrichment technology has that “vital” significance as claimed by Mr. Ahmadinejad and others.
Primarily I would like to point out the following issues:
1. The dispute between the West and the IRI is not about the general achievements of the NT in such fields as medicine, industry, agriculture etc. It is not concerned with its power generation aspect either, but it is concerned with the Uranium enrichment aspect because of its duality of usage: in nuclear power plants (NPP) nuclear weapons.
2. It is generally perceived as positive to acquire all technologies through research and development in order to master it.
Although one can not simply disallow the right to deal with all aspects of the NT but it is prudent to critically consider the gain and loss equation for the enrichment technology. As a general rule, the financial resources for research and development are usually limited thus the provision of resources should be prioritized according to the needs, feasibility and the benefit/loss analyses.
Now let us try to analyze the claims of the proponents of the NT for the nuclear power generation in general, and the Uranium (U) enrichment, in particular.

Nuclear technology, a vital issue?

Source: IAEA Energy and Economic Database[8].

Thus it remains a mystery the claim that mastering of the enrichment technology is more meaningful than the exploration and exploitation of oil and 100 times more important than the act of nationalizing the petroleum industry.
The current verified natural gas resources of Iran, 26606 billion cubic meters, are sufficient for 319 years counting the current exploitation and consumption levels, 83.5 and 68 billion cubic meters respectively[9]. According to an assessment by the International Atomic Energy Agency (IAEA), the gas resources of Iran would last for 400 years hence[10]. Even allowing for the fact that the level of consumption will be increasing in the future, the energy resources will be enough for a very distant future. Furthermore, a set of data published on the IAEA website[11] quoting the ministry of energy of IRI, estimates the potential capacity of hydropower in Iran at 40000 megawatts 23000 megawatts of which exploitable against the current 2000 megawatt being used.
In Iran the annual average amount of solar energy per square meter is 2000 kilowatt, a vast source for future exploitation[12].
The abundant alternative energy resources makes it far from truth the claims by the IRI or the previous Iranian regime that the NE is of vital importance for Iran.

Is nuclear technology being perceived as the motor of progress?

Ahmadinejad at the highest phase of the propaganda for the NT insisted without any reasoning, that it would advance the country by 50 years. In the meantime Dr. Etemad, the director of the NP of the former regime, uttered: «Aside from the enormous lateral effects caused by the nuclear industry, let alone the generation of power, the NE industry would become an axis around which the scientific and technological improvement could be achieved. As a result it would contribute to enhancement of the national wealth».
Now let’s assume that in spite of the odds and restrictions, be they political, technological or geographical, Iran succeed in mastering the enrichment process. How does this transpire as 50 years of advancement? Is there a difference between the electricity being generated by nuclear fuel and that by other means, such as the natural gas? If Iran right now, produced that same amount of power by using its resources of natural gas would this have meant 50 years of advancement?

Is nuclear technology the basis for other technologies?

Interestingly, during the Pahlavi reign just as well as now, the NT has been praised as the “mother” of other technologies and the cause of their development. In their propaganda they have tried to concoct different images of applying NT in order to persuade the people that the West intends to entirely prevent Iran acquiring this multipurpose technology.
In his interview with the newspaper “Etemad Melli” Dr. Etemad states: «NT contains almost all other technologies»[13] and at another point: «The radiation itself have a vast number of applications… Although it was not the purpose of the Atomic Energy Organization of Iran nevertheless the created awareness and attraction can be a basis for scientific and technical development of the country»[14].
Now let us deal with the question, whether NT is a “mother” technology?
Essentially this technology has two different types of applications:
- Generation of energy;
- Other applications in medicine, industry, agriculture, cattle breeding, environment, hydrology, archeology, criminology and scientific researches.
Energy generation itself has also two aspects, that of instant release of energy which leads to nuclear weapon and that of slow and controlled release of energy giving rise to nuclear power plants (NPP) for electricity generation.
The two categories of applications have only a marginal overlap. A reactor of a NPP can not be used for the production of radio nuclides for, say, medicine or industry.
However for Iran it is not economically wise to enrich higher grade U for its research reactors.
That is the reason why Germany and France cover their needs for research reactors abroad although they have advanced enrichment industries. Germany has 12 research reactors whose fuel is purchased either in the USA or in Russia. France has 13 research reactors and their need for enriched U is fulfilled in the USA, except for a few cases[15].
Iran has five research reactors[16]. Apparently, until now it has not suffered any shortage of enriched U.
Contrary to the propaganda in Iran, the NT is neither a “mother” technology nor a key one. The time of its prosperity goes back to the period between the Second World War and the third quarter of the 20th century during which first countries which had spent a lot of financial resources for the development of the nuclear weaponry, at last, came across the idea of using the NT for the peaceful purposes.

The decreasing research activities in the field of NT in some internationally renown institutions

Taking a few examples of some important research centers in the USA and Germany, namely Argonne National Laboratory[17] and Brookhaven National Laboratory[18] in the USA and Kernforschungszentrum Jülich[19] and Kernforschungszentrum Karlsruhe[20] in Germany which were originally founded with the intention to exclusively perform nuclear research, immediately show the same trends in the overall research activities of these institutions.
A glance on the websites of these Institutions shows that nowadays only a marginal part of their activities is focused on nuclear research:
- Brookhaven National Laboratory founded in 1946 with the participation of the most renowned universities of the East Coast of the USA has currently 14 departments – none is dealing exclusively with NT. Amongst its 5 main research priorities there is only one domain dealing with NT but not with its energy related aspects.
- Research Center Jülich previously called Nuclear Research Center Jülich in Germany established in 1953 and until 1970 its activity was focused exclusively on nuclear research with its two nuclear reactors. Since then this center has shifted its research interests towards other scientific issues and now in the process of changing its identity altogether. Now among its 8 departments there is only one dealing with NT whilst the other so-called key technology fields do not mention the NT at all.
The above findings are confirmed by Nuclear Energy Agency (NEA), an organization associated with OECD[21].

Does the U enrichment leads to Autarky?

Another argument to justify the enrichment program of the IRI is that need for fuel rods. In order to be independent it is important to produce the rods within the country.
Without getting bogged down with the discussion about the cost and benefits of the Autarky in the world of globalization let us scrutinize the question whether UE brings really Autarky?
- NPP for generating electricity in general, and its safeguarding and security in particular, are very sensitive and complex issues. The required materials must be highly sophisticated to enable them to retain their functionality reliably enough under the extraordinary conditions within and surrounding the NPP. Engineering of these materials requires advanced knowledge, experience and expertise within the ranks of the domestic industrialists which is not even in intermediate term achievable in Iran. Therefore Iran would be dependent on the supply from abroad. The dependence of Iran on Russia through the past 30 years regarding the Bushehr’s NPP confirms the above statement.
- Assuming that IRI eventually surmounts the technological obstacles mentioned above, still the dependency of Iran on resources outside Iran will increase soon.
According to the data published by the IAEA based on the information supplied by the Atomic Energy Organization of Iran (AEOI), the amount of the verified and easily exploitable U deposits is 3000 Tons and the amount of estimated (not proven) U resources with higher extraction costs is 20000-30000 Tons[22].
Now let us see how far the asserted Self-Sufficiency could be achieved if the entire fuel rod production cycle were in place.
The IRI just as the previous regime had intended to provide 23000 Megawatts electricity by means of 23 nuclear power plants. Let us assume that the IRI succeeds in constructing and operating 20 nuclear power plants. Each plant consumes in average, 100000 SWU (Separation Work Unit) per year which is equivalent to approximately 150 Tons of U[23]. Thus a total of 3000 Tons per year is required to run the 20 power plants. It means that the entire proven U reserves of Iran would last just one year. Taking into consideration the rather optimistic assessment of the U reserves of 20000-30000 Tons, then the reactors would be running for 12-13 years[24]! It is widely known that the average lifetime of a NPP is 40-50 years so after 12-13 years Iran will have to import U from abroad – predominantly the western countries like Australia and Canada. Thus Iran would again find itself in a situation which it has been trying to avoid.
- It doesn’t economically make sense to produce just for few NPPs.
For instance; Urenco, a multinational company, alone provides 23% of the world wide production for the consumption of 17 countries[25].
The high capital consumption for the development, construction and maintenance of the enrichment facilities simply can not be justified economically to provide for the needs of a few power plants.

Is the NT cheaper?

Today, the construction of a1000-1200 Megawatt NPP is around 4-5 billions €[26] and the same figure for a gas power plant with 900 Megawatts output is 500 millions €, i.e. with the initial investment for just one NPP it is possible to build at least 8 gas power plants in a much shorter time[27]. Looking at a comparative study published by OECD it becomes evident that in the European countries the cost per kWh in case of NPP is up to almost double as high as in the case of gas power plants. European countries have to import gas from remote locations incurring transport costs[28].
The proponents of NE argue that the rise of oil prices would make nuclear fuel more economic, is not correct. This is not true because for the foreseeable future the price of energy is determined by fossil fuels, especially oil. In fact the sharp increase of the U price in the world market around 2008 follows the trend of energy market (refer to the following diagram)[29].

NPP are capital intensive but have low capacity for job creation

Another point is that the degree of the creation of job opportunities is low for Nuclear industry. For instance, there are 104 NPP in the USA providing jobs for 30000 employees (average 300 per NPP). This does not justify the high investment in a country like Iran where every year millions of young citizens come into the market and seek jobs.

Why only Iran should not be allowed to use the nuclear energy (NE)?

First of all the question is not justified because no one forbids IRI using NE. The question is rather: is that economically wise for Iran to use NE?
According to IAEA there are 430 NPPs in 31 countries worldwide. Among these there are 251 belonging to the countries with the nuclear weaponry that is to say, the USA, Russia and the former Soviet States, UK, France, China, India and finally Pakistan. Hence 60% of the NPPs are in the countries where the original purpose of their NPs was the development of nuclear weapons.
30% of the NPPs are located in six countries Japan, South Korea, Germany, Canada, Sweden, and Spain. Five out of the six are countries with poor domestic energy resources. The NPP is employed here also, in order to reduce the strategic vulnerability by diversification of their energy suppliers. Canada is the only country among the above six, which possesses huge U deposits. In fact, all of original 31 countries possessing NPP except the USA, Russia and Canada, suffer more or less deficits of domestic energy supplies. Thus Iran having multiple rich energy resources is positioned in an essentially different set of circumstances from the above states.

Why the IRI now, and the Pahlavi Regime in the past, initiated and followed their own intensive nuclear programs?

Pahlavi Era. In the Pahlavi Era there were three motives giving rise to the program:
- Political and security consideration like the option for the development of nuclear weapon.
- Shah’s inclination towards the prestigious “fashion” of that time, in short, his Megalomagnia.
- Huge projects provided a potential for corrupt dealings.

Was the nuclear program of Iran suseptible to corruption?

The German media have recently revealed a corruption scandal involving Siemens, the original contractors of the NPPs in Bushehr, Iran. It led to the resignation of the entire executive board and the head of supervisory board, H.Von Pierer. According to the magazine “Spiegel” Bushehr was one of the gravest cases of corruption. Siemens had agreed to pay 400 million DM (200 million Euros) to individuals affiliated with the Shah in order to secure the contract for Bushehr[30].
Apparently Dr. Etemad had not enough control over his very own project!

The present day Islamic Republic of Iran

After the revolution, the IRI decided to discontinue the nuclear project like many other projects of the previous regime. However, in the wake of the military attack by Saddam Hossein’s Iraq and the subsequent deployment of chemical weapons blatantly ignored by the West and the East, the armed forces and the leadership of the IRI were motivated to produce comparable weaponry. They failed to develop the nuclear bomb during the 18year long episode of secretive work. The main intention of the IRI was from the very beginning of NP, the possession of a deterrence option or alternatively, being able to negotiate from a position of strength. After the revelation of the program the regime gave up the weapon project because it was not any more possible to continue the weaponry project in a world where countless curious “eyes” were directed towards the IRI.

What about the other applications of NT?

There are plenty of applications of the NT beyond energy generation which are not subject of challenges.
Iran could respond to the needs of the country in these fields by using the five research reactor it possesses.
It is remarkable that, despite the common believe, the economic value of the non-energy applications of NT is much higher than the energy generating one.
For example, the economic value of the electricity and services generated by NPPs in the USA is estimated to be 39 billion $ compared with 119 billion $ for non-energy sector. In Japan this relation is 47 billion $ to 52 billion $ respectively.
In both countries the share of the entire nuclear industry is estimated as being 2% of their GNPs[31].

Hence Iran could rather concentrate its attempt on the non-energy sector because there are no fundamental restrictions, neither due to the resources nor due to the political objections.

Is Iran capable to deal with non-energy aspects of NT?

But Dr. Etemad the top nuclear manager of the old regime explains that the R&D activities in this field were not the task of his organization AEOI[32].
IRI seemingly continued this tradition. According to the website of the IAEA there is no significant activities of the existing research reactors in these fields[33].
In fact due to the its overall policy the IRI was the subject of embargoes by the West and later by the UN.
The practical consequence of these embargoes is that Iran can not purchase instruments and means needed for nuclear research because even a simple detector can be attributed as having dual use.
In fact the nuclear policy of the IRI jeopardizes the economically more promising development of NT in the non-energy sector.

The existing facilities of Iran for non-energy related applications

The nuclear research reactors are the most important facilities for the development of non-energy related applications. The design and construction of them is quite different than the reactors used in NPPs.
According to the website of the IAEA Iran possesses five research reactors. These are built in the 60ies and 90ies and their need for “fuel” is provided by Argentina and China[34].
By looking closely to the details of these reactors one can reveal that they are barely used.

For which countries the NT could be useful?

NPPs are like any other technology to some degree susceptible for malfunctioning and accidents. The decisive difference however is that the aftermath of an accident in a NPP could be catastrophic. Thus a country is advised to build NPPs only if there is no other ways to response to the energy demands of the country.

Does Iran need NPPs?

There is no economical justification for an intensive NP in the IRI. With a part of the financial efforts for pursuing the NP, Iran could build enough conventional gas power plants (GPP) to prevent the shut down of electricity during the summer in many cities.
It is advisable for the IRI to reconsider the strategy of electricity generation. The NPPs which are already built can be put into operation. The required fuel can be purchased from the global market.

Why does the world mistrust the NP’s aim of IRI?

- Sustained enmity of the IRI with existing global order, opposition to the peace process of the Middle East, support for the armed groups that challenge the peace, denying of Holocaust, refusing to recognize the right for Israel to exist and violation of the human rights and the democracy in Iran.
- Lack of an economic justification for the intensive pursuit of the NP.
- Lack of transparence in the NP.
- The recent refusal of IRI to ship the LEU reserves to abroad although there is currently no application for it, gives rise to speculations. It is then plausible to question what else the intention of the regime could be than retaining the theoretical option to make the bomb at home.

Political implications of the nuclear dispute

- The temptation to acquire nuclear weapons for a country like Iran as mentioned above is understandable but not necessarily wise.
- The double standard policy of the West concerning the nuclear weapon in the region also provokes the drive toward this weapon.
- Security gain via military strength exclusively is so far as the West concerns an illusion – looking at the huge imbalance of the military forces in favor of the West.
Regarding the neighbors in the Middle East it would ignite an arm race with a devastating effect on their economies.
- The West is certainly against a nuclear armed Iran. But what in fact is more relevant for it is the comportment of the IRI in the global arena – lack of respect to the international rules, support for armed groups and animosity with Israel etc.
But it is much easier to mobilize the world against the specter of a nuclear armed Iran than receive their support to change its conduct.
- The IRI leaders are convinced that the nuclear issue is only an excuse for weakening and eventually overthrowing the Islamic rule in Iran.
By a similar calculation the regime have chosen nuclear issue as the battle ground where it is easier to sell the nuclear dispute as the defense of the national sovereignty and interests to its citizens. The regime hoped with this policy to get more domestic support than its own social basis among the citizens.
Is Iran going to make the Bomb? One can assume that the IRI has revitalized its NP in order to make the bomb but its purpose had been more of a deterrent. Now under a different set of circumstances the regime would not be able to divert nuclear material for making bomb. Its nuclear activity is not only under the direct supervision of the IAEA but also under the observation of countless “eyes” all around the world.
Is NP of Iran a mortal danger for Israel? I think the idea that a nuclear armed Iran is a fatal threat for Israel is highly exaggerated; a fact which is more and more recognized by the Israelis (even refer to a recent statement of Barak the defense minister of Israel).
Because the leadership of the IRI does not consist of a group with an apocalyptic fixation but people with ordinary interest who are not inclined to commit suicide.
Nevertheless it is desirable that the antidemocratic regime of IRI should not acquire nuclear weapon.
Furthermore a nuclear attack on Israel would destroy the allied groups of the IRI like Hezbollah and Hamas, too.
What is the new development in relation between 5+1 to the IRI?
Beginning of Oct. 2009 the representatives of five permanent members of the Security Council plus Germany (5+1) and the IRI came to Geneva together to end the stalemate of the negotiations. It was the first official and direct negotiation between the representatives of the USA and Iran.
On the Basis of a proposal by Mr. Ahmadinejad for the exchange of Iranian low enriched U (LEU) versus 20% enriched U for the research reactor of Teheran a compromise was apparently found.
It was agreed to organize a follow up meeting in Vienna where the technical details would be figured out. As a result of this meeting the IAEA Secretary General Elbaradei proposed that Iran sent 75% of its LEU deposit to Russia. After the enrichment to 20% in Russia, France should make fuel rods out of it and send it back to Iran.
The outcome seemed optimistic because, on one hand, the IRI was principally allowed to acquire fuel for its research reactors in the global market; and on the other hand, it was convenient not for 5+1 to provide the IRI with that fuel. In other words, the proposal demanded no sides to make big concessions – neither great advantages nor pains.
Furthermore the proposal was conceived for easing a face saving back step for the IRI from its bold rhetoric. However the IRI still needed to present some success to its public. The exchange of its LEU versus 20% U could offer a justification that the regime’s efforts were not entirely fruitless.
In fact, in his recent speech Ahmadinejad has praised this deal as a sign that the 5+1 has recognized the nuclear achievements of his government and is moving from confrontation to cooperation.
By sending out Iran’s LEU reserves, 5+1 can be assured that the IRI would not get the opportunity to accumulate LEU and thus to leave the West with a fait accompli.
This requisite by the 5+1 seems to suggest an undercurrent which could be explained as follows. Firstly, the LEU stockpiles of Iran are safeguarded by the IAEA. Secondly, Iran is not yet obliged to halt its enrichment machinery and could replace the exported LEU. Thirdly, if Iran decided to pull out of the NPT it would take a long time to produce weapons grade U, giving the international community enough time to react adequately. So I think that the demand of 5+1 is more of a political act to save its own face, unless that the IRI has already run out of the basic material for enrichment,
i.e. the“Yellow Cake”.
- In fact, there are indications that the IRI was not been able to master the technology of Yellow Cake production. This is reported in the website of Dr. Shirzad, a physics professor and ex-member of the IRI Parliament[35].
In the IAEA report published on 26. November there are also some hints confirming this finding.
If the reports were true, then 5+1 has to deal with an IRI which can not possess significant amounts of LEU in a foreseeable future thus a threat of a nuclear Iran would be obsolete.

What is the aim of the IRI?

The IRI would like to acquire the capability of the construction of the nuclear weapons in order to negotiate with 5+1 from a position of strength. Apparently the regime considers its LEU deposit as a potential weapon and as such working as a deterrent.
The concessions that it would demand is the recognition of the IRI by the USA, a security guarantee again by the USA, the lifting of embargoes etc…
Another demand would be to silence the West in to the human rights abuses and crack down on the democracy movement of Iran’s citizens.

What is the situation now?

The different factions of the regime have sent contradictory signals. While Ahamdinejad and the commandant in chief of the Pasdaran seemed to be in favor of the agreement, prominent members of the other conservative faction like the Speaker of the Parliament Larijani are strictly opposed to it.
The negotiation process is experiencing a deadlock.
Meanwhile he pressure from the USA and Russia on the IRI has dramatically increased, and found its manifestation in an adopted resolution of the IAEA’s Board of Governors by a clear majority.

What could be possibly going on within the Regime in respect of 5+1 proposal?

- The regime doesn’t want at all to make a compromise but tries to gain time.
- It did not come well-prepared to the negotiations and only afterwards reflected about the consequences of the compromise. In other words, the IRI leadership perceives the LEU deposit as a potential bomb thus it would not have made it so painful to ship it to outside of Iran.
- The confusing signal from different parts of the IRI leadership may indicate that they have not reached a consensus yet.
- Signaling the willingness to make to compromise only to withdraw it after two rounds of negotiations, may indicate that there is a rivalry between the conservative factions. One faction does not want to grant the other the success of repairing the relation to the USA.

Conclusion

The leadership of the IRI has shown susceptibility to pressures and maybe this time again it accepts the compromise in the last minute.
Hopefully the negotiations will go on and open the way for a solution to this conflict which has been magnified by both sides. We should not forget that this dispute brought Iran to the threshold to a war several times in the past.
Also it should be emphasized that as long as the world is divided between haves and haves not of nuclear protection there is always the temptation to acquire nuclear weapons.
The immediate aftermath of a compromise is that the democracy movement of the Iranian citizens will come out of the shadow of the nuclear stand off. This will be the most valuable contribution to the Iran’s national interests.
It is essential to remind that a reliable and sustainable solution of nuclear challenge can only be reached eventually, with a democratic Iran.

29th November 2009