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Iran- US rapprochement: Not If, But When

By: Meir Javedanfar

20/08/2008

Even without tough sanctions, Iran’s infrastructure seems to be falling apart. Its somewhat embarrassing for some Iranians when president Ahmadinejad praises the launch of the recent satellite as a scientific leap, while his government is doing such a lousy job of running Iran’s national infrastructure (and as it later turned out, with the satellite as well).

The problems with the electricity sector are just one example. Although sanctions are responsible for a small part of this, mismanagement and corruption amongst Iran’s ruling elite are the biggest causes. Everyday, Tehran is without power for 2 hours. Although people are given notice, a city of 10 million people can not suddenly stop functioning without any consequences. Also, people travel between neighborhoods, so its difficult for them to coordinate their activities, in order to avoid the blackouts.

As a result, Tehran’s economy is taking a major hit. For example, I have been told that bookings in dentists are down, because people don’t want to go under sedation after several injections, only for the dentist to suddenly realize that he can’t operate any of his tools.

Same goes for traffic. Many a times people have been waiting behind a traffic light, for it to go out with the power cut. Much like drivers in Israel, Iranian drivers also have the obsession of not wanting to be thought of as suckers. So all of a sudden, hundreds of cars, all competing to be the first to get out, create a massive gridlock.

Furthermore, according to the Iranian news agency Tabnak, people have stopped using lifts because so many have been caught out by the outages. To make things worst, there are also water outages as well, thus making things only more unbearable.

According to Advar news, yesterday, 70 people from a Tehran satellite town near Varamin demonstrated against the authorities. One can safely guess that in terms of number of people being fed up with the situation, this is a tip, of the tip, of the iceberg.

Iran’s plans to build extra nuclear power stations would theoretically help, however, this will not solve all the country’s energy problems. For example, when Bushehr goes on line, it will only resolve 50% of the shortfall in energy production. Other power plants are likely to take longer to build, due to sanctions. Therefore the shortfall will remain for a number of years.

With growth in demand for energy reaching 8% a year, Iran needs to import foreign technology and know how to run its industries, especially its energy sector, otherwise its economy will in most likelihood reach crisis point, which could threaten internal stability.

This will mean that the regime will have to markedly improve its relations with the West, especially the US. This may even include full diplomatic relations. It will have no other choice. It is not a question of if, but when.

The more important question is: will this crisis point arrive before the administration reaches it nuclear weapons goal or after? If before, then sanction and diplomacy will have a much better chance. However, with the price of oil being at record highs, and the fact that this enables the Iranian government to spend its way out of the crisis for the time being, in all likelihood, rapprochement from Iran will take place after it has the bomb.


Posted on : Aug 20 2008
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Posted under Iran- Energy |

Iran’s Genuine Energy Concerns

By: Meir Javedanfar

08/08/08

Due to its abundance of gas and oil resources, not many countries believe that Iran truly needs nuclear power for energEnergy shortages in Iran are becoming worsty purposes. However, when one looks at the energy situation in Iran, it becomes evident that there is in fact a dire need.

Iran’s total electricity production capacity stands at 33,000 megawatts (MW). 75% is from natural gas, 18 percent from oil, and 7 percent from hydroelectric power. Meanwhile, due to the fast rate of industrialization and population growth, demand for electricity is growing at 8% a year.

This year Iran has witnessed a severe drought. The citizens of the scenic city of Esfahan (described as the Florence of the East), were shocked to see that the Zayande rood river, which runs through the city centre, has completely dried up. Similar scenes were reported from other major sources of water.

According to some forecasts, Iran’s water problems are only going to get worst in the future. This has meant that instead of producing 6,500 megawatts, Iran hydro electric infrastructure has only produced 1500, thus creating a significant shortage.

There have also been sever problems with other sources of energy such as oil and gas, due to decaying infrastructure, which has been caused by sanctions and bad management.

This has meant that Tehran, a city of 14 million inhabitants, has been plunged into darkness for at least two hours a day, over the last six months. This is why Iranian newspapers carry daily schedules about which neighborhood will have its electricity cut and at what time. Similar problems have been reported in other parts of the country.

The last time there were power cuts in Iran was during the war against Iraq, and for a limited time afterwards. This makes the hot summer days for many Iranians unbearable. It also causes significant damage to the economy.

Iran’s requirement for nuclear energy is justified. Nuclear power would enable the Iranian government to make up the energy shortage, using an efficient technology. Also, it would enable it to export gas at higher price thus earning more income, instead of using it at home for domestic energy purposes.

The recent incentives package from the EU would have allowed Iran to have access to modern technical support and equipment from the West, which would have enabled it to use nuclear technology for the production of energy. However, Iran’s rejection of its demand for a temporary suspension of uranium enrichment, and the doubts surrounding Iran’s nuclear intentions have made much needed improvements in Iran’s energy sector very difficult.

For now it seems that Iran’s genuine energy concerns are hostage to the balance of power struggle between the Iranian government and the West.


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Posted on : Aug 08 2008
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Posted under Iran- Energy |