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    Middle East
     Aug 28, 2012


Get nuclear option off the table
By Mahmood Khaghani

As a retired official with very considerable high level international experience in Iran's state oil company - particularly in the Caspian area - I am bemused by the counter-productivity of Western sanctions and have long been an advocate of what I have termed "energy diplomacy".

Since World War I, if not before, the largely unspoken and unwritten basis of Western foreign policy doctrine - firstly that of the United Kingdom, and subsequently that of the United States - has been energy security. It should come as no surprise to find

 
that China may share the same priority in terms of security of supply and that Russia's pre-eminent policy focus as a producer is the security of demand.

In pursuit of this energy doctrine, in 1953 the US- and UK-sponsored coup overthrew the democratically elected Iranian government in order to secure lucrative Western oil interests in the Middle East-Persian Gulf. The Shah subsequently ruled Iran with an iron fist for more than 25 years.

Thirty-three years on from the Islamic Revolution in 1979, the US still has not reconciled itself to the fact that Iran does not wish to be subject to Western hegemony, any more than does China or Russia, and there has been a long and bitter conflict, which has now escalated to ludicrous extremes.

Throughout the eight years of the Saddam Hossein regime's war against Iran, despite the bitter nature of political differences, the Islamic Republic of Iran reliably supplied energy to the West, and indeed oil was even supplied - via intermediaries - to states that are antagonists of the Islamic Republic of Iran. Similarly, for 40 years through the Cold War, Russia reliably supplied gas to the West, and it is only the coming of ruthless commercial practices and disagreements between oligarchs that has led to any brief interruption in supply.

Energy co-operation
Iran has long been conscious that oil and gas are finite resources, and that there is a need for sustainable production of energy in Iran once reserves are exhausted. As in the West, Iran has - beginning with the Shah - taken the view that nuclear energy is necessary in this context, and of course has acted upon this view by developing the necessary facilities and expertise.

However, distrust between the West and Iran has led to the current conflicts, and counter-productive energy and financial sanctions. But there is potentially an opening for a new "energy diplomacy" approach to ending the current impasse.

Events in Fukushima last March, where a tsunami devastated a nuclear-power plant, and subsequent changes in nuclear energy policy not only in Japan but in countries like Germany have not gone unnoticed in Iran. Moreover, the fact that nuclear energy can only be funded by states, and is nowhere economically viable in the private sector, has not gone unnoticed in Iran either, particularly at a time when the global dollar-based financial system is on its last legs.

Leaving national security concerns to one side to the politicians and diplomats, I believe that through academic and commercial channels in particular it may well be possible to open up a new dialogue in respect of energy co-operation. Western investment and technology transfer in respect of renewable energy and - in particular - carbon energy savings, may enable Iran to meet the need for long-term energy security and sustainability to the benefit of both constituencies.

The role of the EU
European Union support of US sanctions is proving extremely costly, and as we saw in Greece - where Iran came to be virtually the only supplier of energy on credit terms - the US is essentially fighting an economic war to the last drop of EU blood. As the euro crisis continues to deepen - as it must with a currency without a fiscal base - a new energy co-operation and energy diplomacy initiative will undoubtedly become attractive.

I do not believe that 21st century problems can be resolved by 20th century solutions, but - as the noted energy market expert, Chris Cook, has pointed out in Asia Times Online, and widely in the Economic Co-operation Organisation (ECO) group of 10 nations in and adjoining the Caspian - there are in fact solutions available that pre-date the modern financial system but which have been long forgotten.

Energy co-operation has always - until the current counter-productive conflicts - transcended political differences. There is a window of opportunity for constructive engagement between Iran and the P5+1 (the United Nations Security Council permanent members plus Germany) in respect of energy co-operation and energy economics.

If an increasing number of nations can come to the conclusion - having built, tested and operated facilities - that nuclear energy makes no economic sense, then it is entirely possible that upon mature reflection, Iran may - without being forced - come to precisely the same conclusion.

The current regime of sanctions even prevents Iran from training oil and gas engineers to conserve existing resources, never mind acquiring renewable energy and above all energy-saving technology that could make nuclear energy redundant.

Such sanctions are, quite frankly, even more counter-productive than the sublimely dumb sanctions which for years prevented Iran from accessing Internet and mobile communications technology.

I hope that common sense may now break out at the next session of talks between Iran and the P5+1 which may perhaps aim to take politics out of energy by beginning a new era of constructive energy co-operation between the West and Iran.

Mahmood Khaghani, now retired, had more than 33 years of service in senior international positions in Iran's petroleum industry. He held the position of the Director for Energy, Minerals and Environment at the Secretariat of the Economic Cooperation Organization (ECO) during 1996-2000. He is a graduate in energy engineering at Britain's Surrey University and is a business development & joint ventures adviser. Mr Khaghani has participated and presented papers in many international conferences and seminars.

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