Iran gasoline sanctions -- wonderful plan!

Despite having about 10% of the world’s proven oil reserves and being the fourth-largest crude-oil exporter, Iran is the second biggest gasoline importer in the world after the United States, according to the US Energy Information Administration (EIA), leading some to believe that sanctions on Iran’s gas imports will cause the Iranians to give up their perfectly legal and IAEA-monitored nuclear energy program.

Some bloggers have already voiced criticism of the plan to sanction gasoline sales to Iran for a variety of reasons, ie: There will also be so much smuggling that no sanctions will work. But the Iranians haven’t been sitting around, doing nothing in the meantime, and there are several additional reasons why gas sanctions won’t work:

First of all, Iran’s nuclear program is massively popular amongst Iranians, of any political persuasion. Trying to impose sanctions in order to force them to give up their enrichment program will only unite them further. People who are not familiar with Iran’s history may not realize that Iran has often been at the receiving end of such threats and ultimatums by foreign powers, which have stirred the ire of the patriotic Iranians. There’s a deep historical well of anti-colonialist resentment against foreign powers trying to dictate terms to Iran using boycotts and sanctions (not the least of which was the British-led international boycott of oil purchases from Iran during Mossadegh's term, for example.) To this day, the Iranians consider the governments who gave-in to such threats to be traitors.

And, as I previously mentioned, any such sanctions on Iran’s energy imports will only bolster the governments’ argument in favor of domestic production of nuclear reactor fuel, by proving that promises of “guaranteed” sales of reactor fuel to Iran are in fact subject to the whims of the great powers who may at any time engage in energy blackmail against Iran by cutting off/reducing the sale of reactor fuel for their own reasons.

Furthermore, considering the hugely subsidized cost of gas in Iran, and the government efforts to cut the excessive consumption of gas, any sort of gasoline sanctions would be a gift to the Iranian government. Gas prices in Iran are heavily subsidized, and sold below the market price at around 42 cents per gallon, which has encouraged waste, excess consumption, and smuggling to neighboring countries. An increase in vehicle sales in recent years has also contributed to the problem (Iran manufactures over a million cars a year now.) There were riots back in 2007 when Iran tried to address the gasoline over-consumption by imposing rationing, but now the sanctions provide a great opportunity for them to do so again, whilst shifting the political fallout and blame onto the foreign-imposed sanctions.

The Iranians have addressed the consumption side of the equation in other ways. Iran has significantly invested in making hybrid or natural gas-powered cars. CNG-powered car production in Iran jumped from 20,000 to over 400,000 in 2008. They expect 600,000 CNG-powered cars to be made in 2009. Even T. Boone Pickens grudgingly acknowledged Iran’s success:

"Iranians have already switched everything to natural gas. Why? Because they have an abundance of natural gas. It's cheaper, it's cleaner, and it's theirs. We have the same dynamics going for us, and we're sitting here not doing it. You keep saying, 'Well if it's so good, why aren't we doing it?' And I'm saying we haven't had the leadership to promote it."

And finally, while it is true that Iranian refineries were unable to keep pace with domestic demand, Iran has also been busy increasing its refining capability quite significantly, as reported by IAGS (pdf). So, should Iran give up its uranium fuel production capabilities in exchange for being “allowed” to import gasoline? I’ll leave the cost-benefit analysis to the economists and the nation’s strategic security planners. But as a side note, here’s an interesting factoid:

A tiny pellet of uranium held in the palm of your hand weighs about seven grams, a little more than a U.S. quarter. Get this: It can generate as much energy as 147 gallons of oil, 17,000 cubic feet of natural gas or 1,780 pounds of coal. - Nuclear Renaissance, Forbes.com Nov 14 2007

Sounds like a bad bargain to me.

Comments

[Philippe]

Do you have links or more info about the gas-powered and hybrid-powered car production in Iran ? Thanks

[No sorry, I hate all cars personally]

[MoonofA]

Some links in the (good) post do not work. Please check them.

{fixed em thx}