Iran and nuclear ambiguity
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The rationale for nuclear power in Iran has remained essentially the same since the 1970s, when the Shah first adopted plans for development of a large-scale industry with the help of Western countries. The need to diversify an oil- dependent energy sector is dictated by projected increase in electricity and petroleum consumption due to a growing population and concerns about the eventual depletion of oil resources. Nuclear-generated electricity would allow greater revenues from increased oil and gas exports. According to Zarif (2005), Iran’s current nuclear energy plans may save it ‘190 million barrels of crude oil or $10 billion per year in  prices’. Finally, Iran claims that nuclear energy is preferable to that generated by fossil fuels due to environmental concerns.
Iran’s nuclear activities have been under close international scrutiny since the disclosures in 2002. Many scholars and politicians have questioned claims for a civilian nuclear industry on the grounds that nuclear power has no economic justification in an oil- and gas-rich state. This argument is weak. Nowhere in the world is nuclear power evaluated in purely economic terms, and no reactor being built today is free of direct or indirect government subsidies. Iran’s reasons for nuclear power are similar to those of other oil-reach nations in the Middle East. Questioning Iran’s justifications for nuclear power draws into question the development of nuclear power in the region as a whole and undermines the basic premise of the NPT. Finally, when the West questions the need for an industry that once had the strong support of European and US governments, it devalues arguments based on legitimate proliferation concerns.
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Arguments for or against nuclear power in Iran must, however, be kept separate from economic justifications for Iran’s development of nuclear fuel production capabilities. There is no doubt that, considering only costs, buying nuclear fuel would be cheaper on the market. The unknown, but no doubt high, investments in uranium enrichment would be better invested in more efficient oil and gas extraction and processing (Wood et al 2007). But the Islamic Republic’s claim, that no nuclear fuel guarantees are credible, carries some weight, considering its nuclear history. According to current officials, plans to generate 20,000 megawatts of nuclear energy, while protecting those investments in power plants from ‘the political whims of suppliers in a tightly controlled market,’ make domestic fuel production strategically, if not economically, sound (Zarif 2007, 83). Thus, Iran may evaluate fuel production, not as the simple cost of a consumable, but as an insurance premium to protect the larger capital investment in its future power plants. In fact, the mullahs have a relatively better justification for domestic fuel production than did the Shah 40 years ago.
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Certainly, Iran’s nuclear efforts are motivated by more than economics. Throughout the country’s nuclear history, officials have seen nuclear technology as a scientific achievement that would modernize the country. Since the 1970s, Iran has reaffirmed its NPT rights to peaceful nuclear technology and sought independence on nuclear decision-making.12 In 1977, Akbar Etemad, the head of the AEOI stated, ‘No country, or group of countries, has the right to dictate nuclear policy to another ’ (US Embassy Tehran 1977a). The Shah reserved the right to pursue fuel production, but never developed the capability. Since then, Iran has refused second-class status and sought parity with major powers. Today, nuclear independence had been honed to a quest for nuclear self-sufficiency by developing the entire fuel cycle.
Arguments for nuclear technology based on prestige have existed for years. The development of nuclear fuel cycle technology has been seen as joining an exclusive club of nations.13 However, Iran’s nuclear efforts have been coupled with a nationalistic sentiment that has become prominent over the last decade. Development of technology has been touted by the revolutionary regime as a victory over Western suppression and, therefore, a sign of national supremacy. Iran’s President Mahmoud Ahmadinejad stated that development of nuclear power would provide Iran with capabilities to become an ‘unrivalled world power’ (Iran Focus 2006). The nuclear issue has put Iran on the international radar: preventing an Iranian bomb is high on Western governments’ political agenda and, consequently, the issue features prominently in world press coverage. ‘We have been able to promote the status of Iran and Iranians in international level and we have enhanced the self-confidence spirits and national identity,’ said Gholam- Reza Aqazadeh, former head of the AEOI (BBC 2009).
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Since the revolution, the new regime has maintained that, ‘based on religious and Islamic beliefs as well as based on logic and wisdom’, it does not want to develop nuclear weapons (Khamenei as cited in Kerr 2008). The mullahs have maintained the strategic position of the monarchy: ‘A costly nuclear-weapon option would reduce Iran’s regional influence and increase its global vulnerabilities without providing any credible deterrence’ (Zarif 2004). Iranian officials have insisted that nuclear weapons ‘have no place in Iran’s defence doctrine’ (Khoshroo 2003). Moreover, the revolutionary regime rejects nuclear bombs on religious grounds. Ayatollah Ali Khamenei issued a fatwa in 2005 stating that ‘the production, stockpiling and use of nuclear weapons are forbidden under Islam and that the Islamic Republic of Iran shall never acquire these weapons’ (Mehr News Agency 2005).
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Although the IAEA does not have conclusive evidence that Iran’s nuclear programme has military dimensions, it has raised questions about very specific research that is not dual use but applicable only to nuclear weapons. In its reports, the IAEA refers to this work as the ‘alleged studies’.22 The IAEA has no independent intelligence-gathering capacity so the accusations come from Western, mostly US, intelligence agencies and Iranian dissident groups with contacts inside the nuclear enterprise (Oelrich and Barzashka 2010a) but the IAEA states that the ‘information, which was provided to the Agency by several Member States, appears to have been derived from multiple sources over different periods of time, is detailed in content, and appears to be generally consistent’.23 The allegations include research on converging explosive compression of uranium and spherical casting of uranium, detonators with precise timing, and a possible nuclear re-entry vehicle for Iran’s Shahab-3 missile (IAEA 2008). The Times published an undated document that laid out a programme for research on a neutron generator using explosively compressed uranium deuteride (Philip 2009). None of this research would have any plausible use except for a nuclear weapon. In addition, there have been accusations of work that might have some civilian applications but clearly would be of interest to a nuclear weapon designer, for example production of polonium-210, used for neutron triggers for weapons.
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No one believes that Iran today has a nuclear weapon or even the material for one. The challenge today is the possibility that Iran may be working towards a bomb. Consequently, many countries, lacking absolute assurances otherwise, will act as though the potential danger is there.
If Iran maintains its nuclear ambiguity indefinitely, it is reasonable to fear that other nations in the region may want to match Iran’s latent capability. While a standoff among virtual nuclear powers is less dangerous than having neighbours with nuclear-armed missiles pointed at one another, it is still very destabilizing. Wars fought between latent nuclear powers can be expected to spark frantic races to complete bomb work. Indeed, fear that a neighbour might be starting the final stages of a bomb could spark pre-emptive wars. Wars, once started, could be brutal and intense if each side felt compelled to force its enemy to capitulate before a nuclear weapon could be completed. Compromise and ceasefires could be seen as stalling tactics to allow final bomb work and could become impossible.
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Deterring Iran’s use of a nuclear weapon is just the beginning of the challenge. Some US strategists believe that the greater threat is that Iran will believe that a nuclear weapon neutralizes threats of conventional attack by the US and other powers and Iran will, therefore, be emboldened to engage in ever more risky and provocative behaviour until Western and regional powers are forced to intervene even against a nuclear-armed Iran.24 Iran may want to develop nuclear weapons, not to use against European capitals to paralyse North Atlantic Treaty Organization (NATO) powers, but to use nuclear weapons on its own territory to stop a conventional invading army, a nuclear use that would present the West with a very difficult conundrum regarding ‘retaliation’. Whether the US and other nations are actually paralysed by an Iranian nuclear weapon is not really important. The danger arises if Iran only believes that nuclear weapons provide a security guarantee and is lured into ever riskier behaviour. Moreover, the US has an interest in devaluing nuclear acquisition to deter the next potential proliferator from going nuclear. The US may feel compelled to be particularly rigid with Iran or any new nuclear states precisely to prove that nuclear weapons do not buy the kind of military and political leverage hoped for or, if they do, only at great cost. A nuclear weapon could, therefore, increase the likelihood of conventional confrontation between the West and Iran (Sagan 2006; Takeyh 2007).
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A regional enrichment facility is one commonly proposed option for providing Iran with the fuel guarantees it believes it needs, while reassuring its neighbours. Regional centres face many challenges; the foremost is a lack of incentives for others to participate. The international market appears to be a reliable supplier of enrichment services and fuel. Since the beginning of the nuclear age, no nuclear reactor has stopped operations because fuel was denied for political reasons. The advanced nuclear nations now have an overcapacity in enrichment and new reactors will come online only slowly; thus enrichment prices should stay low for a decade or two. Only in rare cases, for example Iran, will a nation have concerns about the political reliability of fuel supplies. Potential regional partners might ask why they should produce something locally at great expense when they can buy it cheaply on the international market.
The timing of the development of a regional enrichment facility is another challenge. The only power reactor in the region is Iran’s soon-to-be-completed reactor at Bushehr and that will be fuelled by Russia. Iran’s other light-water reactors are still on the drawing boards. Several other nations have expressed interest in building reactors. The United Arab Emirates (UAE) has a contract with the Republic of Korea for construction of four reactors, and fuel deals for those reactors have already been negotiated. Other nations have, at most, ambitions that may result in reactors in a decade or more. A regional enrichment centre may not be economically plausible before then. Even so, Iran could use the framework of regional enrichment capacity to bring its enrichment capacity under greater regional inspection and partial control or to eventually support enrichment located outside Iran.
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Iran is often treated as a unique case, but it is a symptom of a much wider problem. Although there may be some specific ways to limit the Iranian threat, a solution will likely require a fundamental shift in attitude towards the nuclear fuel cycle. Change has to be led by the established nuclear states. The lack of a universal attitude towards nuclear fuel technology undermines non- proliferation efforts. Uranium enrichment cannot be treated as just another industry, like steel or petrochemicals, when established nuclear states do it but is considered a nuclear weapons proliferation threat when the rest of the world engages in it. Nuclear fuel supply should be an international activity with international guarantees, whether regional or global. The nations with established commercial nuclear industries must provide balanced incentives to Iran—and other countries—and work more actively at promoting regional solutions. Perfectly reliable supplies of nuclear fuel will not stop Iran from developing its own capability if its real goal is a nuclear weapon, but reliable supplies will force Iran to show its hand, removing the ongoing ambiguity regarding its nuclear activities.