Writing in Atoms for Peace, Energy consultant David Wood suggests that Iran's demands for nuclear power in economic and technical terms are a justified response to rapid growth in domestic energy demands and an increased dependence on oil exports for revenue.
Despite its vast oil and gas reserves, years of under-investment in Iran has limited access to technology and stifled its production capacity. Indeed, Iran now relies on imports for certain refined petroleum products and natural gas. Wood argues that the development of this situation has forced Iran to consider alternative future energy solutions.
However, Wood says, broad international suspicion of Iran's nuclear ambitions led to UN sanctions being imposed on that industry in December 2006. He claims that the rapid expansion of its nuclear program should not be merely dismissed in terms of an indication that it is intent on developing nuclear weapons despite the media and political hyperbole, not least its own extreme political position.
A nuclear program could, if focused on power generation, quickly overcome the inadequacies in the country's energy, environmental and economic status, says Wood, and he suggests that Iran has a strong case for embracing nuclear power projects aimed at solving its burgeoning energy crisis, but that it has an uphill struggle to convince others of such benefits, and that it can be trusted with uranium enrichment capabilities, while it continues with its radical political stance.
The international politics of energy supply are now playing a significant role in undermining Iran's efforts to solve its energy problems, he says. He suggests that geopolitics and the country's energy trading relationships with China, India, and Russia are now set to play as important a role as the UN sanctions and opposition from OECD nations in how successfully and extensively Iran can develop its nuclear industry.
Wood's cites several statistics in his argument. He notes that Iran's population has more than doubled, from 32 million to almost 70 million, while oil production has fallen to less than 70% of the pre-revolutionary level.
He also says that despite being the world's second largest crude oil producer, Iran has poor refining capacity.
Finally, he says natural gas production has risen enormously but almost all of it is used to maintain pressure in oil wells, so Iran has become increasingly reliant on oil-fired electricity generation.