In the present article, Part II of a three-part series, the need for building nuclear reactors in Iran is analyzed. As was pointed out in Part I, in the opinion of this author, the questions that we Iranians must ask and debate, are: Does Iran need nuclear energy, and is acquiring it in her national interests? It was also pointed out that one must decouple Iran's need for nuclear energy which, as argued in this article, is completely legitimate on economical, social, and environmental grounds, from her alleged or real intentions for producing nuclear weapons.

Recall that the main argument of the United States against nuclear energy for Iran is that, Iran has vast oil and gas reserves, and hence she needs no nuclear reactor. This argument is, in general, not necessarily valid. Many countries that are rich in fossil energy resources, including Britain and Russia (both oil exporters), rely on nuclear power for a significant portion of their energy needs, while Germany, France, Japan, and many other countries, which have no oil or natural gas reserves, have not abandoned nuclear power in favor of more imported oil and gas, even though they can certainly afford this. There are currently 1118 nuclear reactors in the world of which 280 are for nuclear research, while another 400 are used in ships and submarines for producing power. The remaining 438 nuclear reactors are used for generating electricity, of which 104 are in the US, 59 in France, 53 in Japan, 29 in Russia, and 19 are in Germany. Between 1974, when Iran signed her first agreement for building nuclear reactors, and 2000, use of nuclear reactors for generating electricity has increased by a factor of 12!

In the particular case of Iran, the US argument that Iran needs no nuclear energy has no validity at all. While it is true that Iran does have vast oil and gas reserves, she also needs alternative energy sources. I argue that Iran's needs for such alternatives are glaring and indisputable, and I base my arguments on economical, social, and environmental considerations.

We first, however, consider the case for alternative sources of energy on general grounds:

Most of the world's major oil exporters, such as Iran, are developing nations. Thus, these countries must confront the challenge of their demographic explosion without possessing many of the necessary tools, which are strong state structures, rapidly-growing economies, large amounts of investment capitals, numerous entrepreneurs, engineers and inventors, and infrastructures that are reasonably advanced. In fact, we live in a world in which technology and capital are in the countries that are energy-hungry - those that have no major oil reserves of their own (for example, Germany, France, and Japan) or have at best inadequate sources (for example, the US) - whereas the population growth and social and political turbulence are in the developing countries that are major oil producers (such as Iran, Saudi Arabia, Mexico, Iraq, etc.).

At the same time, oil is a non-renewable national wealth of Iran (and other oil exporters). Once it is produced and exported, it can never be regenerated. One cannot expect Iran (and other oil-exporting countries) to deplete her non-renewable national wealth recklessly, without receiving any lasting products or benefits in return, but this will happen if Iran's sources for energy are not diversified, and she continues to rely almost exclusively on oil and gas for everything from the only source of energy to her annual budget. Except for Norway, every major oil exporter (including Russia) relies heavily on its revenue from oil sales, so much so that if the oil price stays too low for too long, we may have social instability and even revolution in these countries. What would happen to these countries if all of their recoverable oil and gas are rapidly depleted over a few decades, which would be the case if they rely on oil and gas for everything from their annual budget to energy sources?

In addition, a set of practical issues, which are important to the industrialized nations (notably in the Western hemisphere), must be addressed: What would happen to the West's huge chemical industry that uses oil- and gas-derived materials for its production and is an important source of jobs, if the world's oil and gas reserves are depleted too quickly? What would be the fate of the German plastic factories and the US polymer producers (plastics and polymers are some of the most heavily used materials in the world) that get their raw materials from the same source, and to the enormous petrochemical complexes around the world, if oil and gas resources are quickly depleted? Is it not better to develop alternative sources of energy, and use oil and gas more slowly and in more useful ways, by producing oil- and gas-derived materials and products that have much added values? If the answer to this question is yes, then why can Iran not use this argument?

Next, consider the case for alternative energy sources from an economical view point:

Iran's 60 major oil fields are mostly old, with some being depleted altogether. From 1979 until 1997 no major investment was made in Iran's oil industry. A study in 1998 concluded that, out of the 60 oil fields, 57 of them need major technical studies, repairs, upgrading, and repressurizing which would require, over a 15 year period, $40 billion! Although, since 1997, Iran has had considerable success in attracting foreign capital for its offshore oil and gas reserves, it is still far behind other oil exporting countries of the Middle East in terms of developing her fossil energy resources. Iran has not even been able to increase her oil production to the pre-Revolution level of 5.5 million barrels/day. If Iran cannot upgrade her oil facilities and industry on a timely manner, it will lose her market share. While there is no doubt that the solution to the urgent problem of upgrading Iran's oil industry is partly political, lack of any solution will have deep implications for Iran's future, which are discussed shortly.

At the same time, since early 1990s, Iran's consumption of oil has been increasing at an alarming rate of 8% per year, and her total energy consumption has increased from 1.6 quadrillion Btu (quads) in 1980 to more than 5.5 quads at present - an increase of more than 280%. If this trend continues, Iran will become a net oil importer by 2010, a gigantic catastrophe for a country which relies on oil for 80% of her foreign currency and 45% of her total annual budget. If that happens, how will Iran be able to feed her population, estimated to reach 100 million by 2025, and also spend on her development and national security? The fact is that, despite considerable efforts over the past 30 years, Iran's industrial output, aside from her oil industry, accounts for only 15% of her gross domestic product.

In one of the rare occasions that he said something profound, the Shah once stated that a barrel of oil is too precious (he used the word "sharif" in Persian to describe oil) to be used for generating electricity. Paraphrasing him, I would say that a million cubic feet of gas is too precious to burn; natural gas should be used for generating huge amounts of petrochemical products with much added values, which is precisely what Iran has been trying to do: Iran currently produces about $2.7 billion/year worth of petrochemical products. At the same time, in 40-50 years, when oil will no longer be the major source of energy and will be replaced by gas, Iran (the gas reserves of which will last for at least 200 years) will be in an excellent position to be the main supplier to Asia and Europe. Therefore, why should Iran use her hard-earned oil and gas for generating electricity, if she can develop alternative sources of energy?

Looking at this issue from another angle, it is estimated that Iran's known uranium ore reserves can produce as much electricity as 45 BILLION barrels of oil. This is a huge amount by any criterion, but particularly so if we only recall that Iran's known oil reserves are currently estimated to be about 96 billion barrels. In other words, if we can extract all of Iran's known oil reserves (a remote possibility!) and use about half of them just for producing electricity, we will generate as much electricity as what Iran's presently-known uranium deposits can produce! It would therefore be absolutely foolish not to do this!

Consider this problem from a third angle: Iran's present installed electrical capacity is more than the 20,000 megawatt that had been predicted for 1990. However, Iran's annual growth in demand for electricity is 5-8%. Hence, it is estimated that, by the year 2010, Iran will need another 7,000-megawatt of electricity which, ignoring all other factors (see above and below), and even under the best possible circumstances, namely, immediate lifting of the US sanctions against Iran and flow of vast investment capital into Iran's oil and gas industry, cannot be produced by oil and gas alone. Therefore, the question is: What is Iran supposed to do?

One of the main arguments that some of the experts on nuclear weapons present against Iran having nuclear energy is that, it is not economical for Iran to generate electricity using nuclear reactors, because she has vast gas reserves which can be used for producing electricity. To support their arguments, these experts usually cite studies that estimate that the cost to finish the Bushehr nuclear reactors will be $1,000 per installed kilowatt, while the electricity from natural gas-fired power plants costs $600-800 per kilowatt. However, such arguments are not valid. In addition to the necessity of,

(1) using the gas for producing petrochemical products with much added values (see above);

(2) preserving much of Iran's gas reserves for her future generations and to position Iran in 40-50 years as the main supplier of energy to Europe and Asia, and

(3) avoiding the severe adverse effect of burning gas and the resulting carbon emission which is the major culprit in global warming and the greenhouse effect (see below),

The above estimates are simply wrong, because they do not take into account the huge costs of the medical care for people who suffer from the diseases caused by pollution of the environment by oil and gas, as well as the damage to nature caused by carbon emission and the resulting global warming.

In 1990, in a seminar at Gustave E. von Grunebaum Center for Near Eastern Studies of the University of California in Los Angeles (the complete content of that seminar was published later; see, M. Sahimi, "How Much do We Pay for a Barrel of Oil?" in, "Proceedings of the Third International Conference on Non-Renewable Energy Sources," Tehran, Iran, December 1993; see also, M. Sahimi, "Factors Affecting the Development of Fossil Energy Resources of Developing Countries," in, "United States-Third World Relations in the New World Order," edited by A.P. Grammy and C.K. Bragg, Nova Science Publishers, New York, 1996, page 361), this author stated that:

"Typical estimates for the cost of producing electricity and other forms of energy using oil and gas are only based on their market prices. However, these prices reflect only the cost of producing oil and gas (including the costs of of labor and materials used for their extraction from underground reservoirs) and of transporting them to the consumer. But some of the costs of consuming oil and gas are not directly included in our energy bill, nor are they paid for by the companies that sell us energy. These are the hidden costs of oil and gas that we pay indirectly for the health problems caused by air, water and soil pollution resulting from using oil and gas, environmental degradation caused by carbon emission and global warming, and acid rains. Since the producers and consumers do not pay directly for such costs, society as a whole must pay for them. Thus, although such costs are hidden, they are real. For example, according to the American Lung Association, health costs, including, for example, lost potential income, of air pollution alone are estimated to be about $50 billion a year, and the main culprit for air pollution is the fossil fuels, mainly oil and gas, our primary source of energy. Estimating the possible cost of the damage inflicted on Earth by global warming, caused by carbon emission that is the direct result of burning oil AND gas, is currently impossible."

If we take into account such costs, then the cost of producing electricity from gas (and oil) will be much larger than the commercial estimates usually quoted, and very much comparable with what it costs to generate it using nuclear reactors. A recent study by Professors John Deutch and Ernest Moniz of, respectively, the chemistry and physics departments of the Massachusetts Institute of Technology reached a simi liar conclusion (see, the New York Times, the Op-Ed page, Thursday August 14, 2003).

Consider now the case for alternative sources of energy in terms of Iran's population growth and her social dynamics:

Since the 1979 Revolution, Iran's population has more than doubled, from 32 to nearly 70 million, while her oil production is only 70% of the pre-Revolution level. This then begs the following question: Why is it that the US and her allies believed, in the 1970s, that Iran needed nuclear reactors and nuclear energy, when Iran's population was less than half of the present and her oil production was much more than now, but they now argue that Iran does not need nuclear energy? How do the US and her allies suggest Iran should feed, house and educate her population, create jobs for her army of educated people, and develop the country, all with oil and gas alone, while she has very significant uranium deposits that can be used for generating electricity?

Consider the case for alternative energy sources from an environmental view point:

Iran is beset by huge environmental problems that have been caused by oil and gas consumption, problems that are reaching catastrophic scales. Although Iran established a Department of Environment in 1971, and even though Article 50 of her current Constitution states that, "In the Islamic Republic of Iran protection of the environment, in which present and future generations should enjoy a transcendent social life, is regarded as a public duty," 8 years of war with Iraq, economic sanctions, careless (with respect to the environment) development after the War, and the 120% increase in the population, have kept the goal of cleaning the environment and maintaining it that way on the back-burner. However, the environment and its health can no longer be neglected.

Since 1980, carbon emissions in Iran have risen by 240%, from 33.1 million metric tons emitted in 1980 to more than 85 million metric tons at present. Note that, whether we use oil (which causes severe pollution problems) or gas (which, compared with oil and coal, is considered as a relatively clean source of energy), carbon emission cannot be avoided. This emission is one of the main culprits behind air pollution in Tehran and all other major cities of Iran that has reached catastrophic levels, so much so that the elementary schools must be closed on many days. Long term effects of the polluted air are blamed for causing 17,000 deaths every year in Tehran alone, as well as causing severe problems for people with asthma, heart, and skin conditions. The cost of medical care for such illnesses is reaching astronomical levels.

Polluted air also severely damages soil and groundwater resources by contaminating the rain water. At the same time, Iran's industrial base, using oil and gas for energy, generates wastes that contaminate a large number of rivers and coastal waters and threaten drinking water supplies. These are separate from oil spills in the Persian Gulf and pollution in the Caspian Sea that continue to contaminate the waters. These are all caused by the fact that, Iran's renewable energy consumption, including hydropower, solar, wind, tide, and geothermal, account for only 2% of its total energy consumption, with the rest supplied by oil and gas.

What are, or can be, alternative sources of energy for Iran? Surely, given Iran's vast central desert, solar power can potentially be very useful for generating electricity and energy. However, this technology is not yet well-developed. In certain parts of Iran, geothermal sources can also be used for generating electricity, but Iran has just started exploring this possibility, and it will take at least 15 years to develop this at any significant scale. That leaves nuclear reactors, which will not solve her chronic shortage of electricity, nor will they solve all of Iran's pollution problems, but they do represent the first important step in diversifying Iran's sources for energy.

Nuclear reactors do have their own problems. One is their management which has to be at a very high level so that the chances of accidents, similar to those that happened in Three-Mile Island in the US (in 1979) and in Chernobyl in Russia (in 1986), will be minimal. In addition, one must deal with protecting and storing the nuclear wastes produced by the reactors which would be radioactive for at least tens of thousands of years. But, these problems are generally believed to be manageable.

In Part III of this series, the dispute between Iran and the International Atomic Energy Agency will be described and analyzed.

Iran's Nuclear Program. Part I: Its History

Iran's Nuclear Program. Part III: The Emerging Crisis