21 April 2006
Researchers Find Iranian Nuclear Program Economically Wasteful
Study suggests program inconsistent with Iran's resources, energy needs
By David Shelby
Washington File Staff Writer
Washington – A recent report from researchers at two leading U.S. Department of Energy research laboratories concludes that Iran’s nuclear program is inconsistent with the Iranian government’s stated purpose of developing civil nuclear power production in order to achieve energy independence.
“While this is a worthwhile and generally accepted national planning objective, it is clear that the nuclear program as now structured will not achieve it, and in fact may delay it by diverting capital and other resources from projects that would address pressing current energy sector problems and contribute to ultimate energy independence,” the report says.
Researchers from the Pacific Northwest National Laboratory and Los Alamos National Laboratory issued the report, The Economics of Energy Independence for Iran, in March. It examines Iran’s nuclear program and alternative energy investments strictly on their economic merits.
The researchers found that the tremendous investment necessary for Iran to establish the entire nuclear fuel cycle from mining to fuel fabrication is not justified by Iran’s meager uranium reserves and would not produce nuclear fuel at internationally competitive prices.
“This finding calls into question the economic logic of the program, and suggests that other factors may be motivating the drive to acquire indigenous front-end nuclear capabilities,” the report said.
The report notes that the basis for a self-sufficient nuclear program is indigenous uranium ore that can be mined and converted into fuel. It says, however, that Iran’s 1,427 metric tons of known uranium reserves would be enough to support the country’s proposed nuclear reactor development program only through 2010. Even taking into account estimated undiscovered reserves of 13,850 metric tons, the program would run out of fuel by 2023, shortly after the completion of the seventh proposed plant.
The report estimates that the cost for Iran to develop its current nuclear fuel manufacturing facilities would be between $600 million and $1 billion, and it observes that even with these facilities, the country will not have adequate production capacity to fuel a single reactor. It says Iran will have to invest 10 times to 20 times as much as it already has invested in mining and manufacturing facilities to support its proposed seven to 20 nuclear power plants.
Conversely, the report states, Iran could make profitable investments aimed at utilizing its abundant fossil fuel resources. Iran has some of the largest oil and gas reserves in the world. At current production rates, it has 90 years worth of oil and 220 years worth of natural gas.
The researchers observe that Iran flares off nearly 7 percent of its gross production of natural gas as an uncaptured byproduct of its oil drilling activities. This gives Iran the highest percentage of natural gas wasted among all major petroleum-producing countries. The report says that if Iran were to use available technology to reduce its level of waste to the world average, it could use the gas to generate nearly as much electricity as three nuclear power plants.
The report also notes that Iran is ignoring other pressing concerns in the energy sector. The country’s limited refinery capacity means that it has become an importer of gasoline. The report says that boosting the refinery capacity would be an effective way of improving the country’s energy independence.
The researchers maintain that Iran’s investment in its nuclear program starves more profitable projects in fossil fuel development of capital resources. They also suggest that Iran’s pursuit of the nuclear fuel cycle likely will undermine foreign investment in its entire energy sector and dampen Iran’s international trade prospects.
“Despite obvious needs and simple solutions which would promote and probably achieve real energy independence, Iran's energy investments remain skewed in favor of a nuclear program which does not accord with its resource endowments or its near-term energy sector needs,” the report states. “In summary, the stated economic rationale for the nuclear program is inconsistent with both the facts of the program and the behavior of Iran in the broader energy investment sphere.”
Researchers on the project were Thomas Wood, Matthew Milazzo and Barbara Reichmuth of the Pacific Northwest Laboratory and Jeff Bedell of Los Alamos Laboratory.
(The Washington File is a product of the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
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