How much is a nuclear program worth? For Iran, well over $100 billion.
According to a new report, keeping Iran's condemned nuclear program going has already cost Tehran more than $100 billion in lost oil revenue and foreign investments alone.
Istanbul — After a half century of work, the benefits of Iran’s nuclear program remain few: It provides less than 2 percent of Iran’s energy needs and some medical isotopes and has demonstrated scientific prowess.
But the costs of the nuclear project have also been enormous: More than $100 billion in lost oil revenue and foreign investment alone, according to a report released today by two Washington think tanks.
“Sanctions have raised the cost of Iran’s nuclear pursuit. Yes, they are proceeding with their [program], but the cost is going up,” says Alireza Nader, an Iran analyst at the RAND Corporation in Washington, a security think tank not involved with the study.
The high cost of Iran’s nuclear effort – which continues to grow, even under a US-engineered global sanctions regime – have raised questions for years about Iran’s ultimate intent. Is it to show, as Iran’s top officials claim, that the “revolutionary” Islamic Republic can defy sanctions, and Western and Israeli hostility, proving itself a “model” of independence for other Islamic and developing countries?
Or is the only explanation for such dogged persistence that Iran is determined to achieve nuclear weapons capacity – if not a weapon itself – regardless of the cost and despite its own public rejection of nuclear weapons as un-Islamic?
“Iran’s nuclear program has deep roots. It cannot be ‘ended’ or ‘bombed away',” – making diplomacy the “only long-term solution” to ensure it remains peaceful, conclude report authors Ali Vaez for the Federation of American Scientists, and Karim Sadjadpour of the Carnegie Endowment for International Peace in Washington.
Iran has been “overplaying" the nationalist aspects of its nuclear ambitions, rendering “any significant nuclear retreat tantamount to an act of capitulation, if not political suicide,” the report says.
Meanwhile, “Washington’s overwhelming focus on coercion and military threats has backed US policymakers into a rhetorical corner," it asserts.
In public and in ongoing nuclear talks, Washington must answer some key questions in order to persuade Iran and its public to consider a deal, says the report: “What could Iranians collectively gain by a nuclear compromise, other than a reduction of sanctions and the threat of war? How could a more conciliatory Iranian approach improve the country’s economy and advance its technological – including nuclear – prowess?”
The report is the first to tabulate the cost of Iran’s nuclear program, and therefore gauge its significance for the Islamic regime.
“It’s reasonable to argue that sanctions and pressures and diplomacy, positive and negative inducements – if you don’t want to call them ‘carrots and sticks’ – have a bearing on Iran’s calculations, because it’s not North Korea,” says Mr. Nader, whose recent work examines Iran’s motivations for continuing such a high-cost path.
“It gets lost in this town as to why they are pursuing this [nuclear] capability. It’s not to nuke Israel; they don’t want to nuke the US or Saudi Arabia, which makes zero sense,” says Nader. “It’s deterrence, and you don’t hear US officials talk about their deterrent needs.”
The concerns of negotiators of the P5+1 group (the US, Russia, China, Britain, France and Germany) echo those of decades ago, when in the 1970s Shah Mohammad Reza Pahlavi was a close ally and had carte blanche US military and diplomatic support.
Back then, Iran’s nuclear program saw a 12-fold increase in the number of nuclear scientists in just three years, the report notes, and the same questions were raised about Iran’s intentions: issues of sensitive technology, fuel stockpiles, and more safeguards to prevent any push for a bomb.
After the 1979 Islamic revolution, Iran’s nuclear effort was put on ice for years, dismissed by the new government as a costly hindrance imposed by the West, and finally buried when Iran’s revolutionary leader Ayatollah Ruhollah Khomeini said the unfinished power reactor at Bushehr should be used as “silos to store wheat,” according to the report.
Still, after Iran’s nuclear program was resurrected in the mid-1980s, it absorbed Iranian assets. By one count, building the uranium enrichment facility at Natanz beneath 25 feet of concrete at one point consumed Iran’s entire concrete output.
More to the story
While the report notes that it is “nearly impossible” to calculate the actual costs of Iran’s nuclear program, it gives examples of how some of Iran’s efforts do not make sense in a traditional cost-benefit analysis.
Iran has limited quantities of its own natural uranium, for example, such that even under the “most optimistic variants” it would only have enough known supplies to fuel its sole reactor at Bushehr for nine years. If “total known and speculative resources” are counted, at most Iran could run seven reactors for less than a decade, according to the report.
And, by some estimates, relying on nuclear fuel enriched domestically could cost Iran $125 million more per year than buying fuel on the international market.
According to the report, Bushehr today provides just 2 percent of Iran’s electricity needs – and 15 percent of the electricity that courses through the national grid “is lost through old and ill-maintained transmission lines.”
Separately, the report adds, Iran’s solar energy potential may be 13 times higher than the country’s “total energy needs.”
“I ask myself the question: Why is the regime in its entirety ready to pay such a high price, and make such great sacrifices, if there is no military component?” asks Ali Alfoneh, an Iran specialist at the Foundation for Defense of Democracies in Washington.
Too far along to give in
In the 1970s, France, assisted by the US and others, helped Iran develop nuclear technology that might have led eventually to an Iranian bomb. The prospect did not raise alarms like it would today.
“The Shah’s regime had a responsible foreign and security policy, and … was not perceived as a threat, despite the fact it was militarily superior to many of the neighbors,” says Mr. Alfoneh. But the Islamic Republic “has managed in the course of the last 34 years to be perceived as the greatest threat in the region, because of the policy of exporting the revolution, the rhetoric of Iranian leaders, [and] irresponsible measures," he says.
The big investment made by Iran already means it is not likely to be negotiated away, says Mr. Vaez – who is now with the International Crisis Group – and Mr. Sadjadpour, in their report.
“Many members of the US Congress will continue to demand that Iran be left with ‘no capability’ to produce nuclear weapons,” including halting all enrichment, the report states.
But this is “not essential from a nonproliferation standpoint” to limit Iran’s program, it continues. “More importantly, there is virtually no chance that Iran will abdicate what it and many developing countries now insist is a right – a right to enrichment.”