"Extinction" of Iranian oil exports in 2014-15
"Mr. Stern contends that the Iranian oil industry is actually in something of a death spiral. Iran has been missing its OPEC quota of late, and while high oil prices have masked the decline by keeping revenue up, production has been declining. Higher domestic energy demand in Iran combined with difficulty in attracting foreign investment and other economic problems, he argues, make a rapid decline in oil exports likely -- ending in the "extinction" of Iranian oil exports in 2014-15. If anything such as this is true, a huge component of the Iranian puzzle is being systematically overlooked.
Mr. Stern, writing recently in the Proceedings of the National Academy of Sciences, believes that the Iranian infatuation with nuclear energy may have its roots in this crisis, as well as in its desire for nuclear weapons. Increasing domestic use of nuclear energy would free up oil and gas, currently being used to satisfy Iran's electricity needs, for export, he argues. The major implication of his analysis, however, may be that Iran's regional power is being overestimated, that even without American or international intervention, Iran faces a reckoning soon as its major source of international money collapses.
We don't know whether Mr. Stern is right. The paper assumes that the country's leadership will be unable to meet the challenge of modernizing and expanding production facilities and that Chinese investment won't be available to ensure that exports continue at the rate China's own increasingly voracious appetite for oil requires. What's more, even if Iran faces major problems, it's not clear that would make it less dangerous or more pliant to international will. It could do the opposite.
But Mr. Stern's paper represents a refreshing examination of the suppositions that lie beneath current discussions of the Islamic republic. One of the intellectual failures in the run-up to the Iraq war was the absence of such examinations both within the intelligence community and in the political culture at large. Mr. Stern's challenge is valuable and worthy of serious response."
ABF, for the promotion of human rights and democracy in Iran
3 comments:
China is not known for its wonderous petro-expertise, although it must be lightyears ahead of what Iran has. Iran has not successfully managed a project on its own since 1978, giving foreigners the lead on all projects since that time. Iran also does not want to give 'ownership' of the wells to foreigners, so has a complicated buyback scheme which China may not be that familiar with. Also, Iran concluded a wonderful deal to make a pipeline to ship natural gas to India... and then, a few months later, announced that they may not have any to *ship*.
From what I can reason out, given life expectancies and such, the major problem in Iran is that all the managers from the 1970's have just retired over the past few years and/or been replaced by regime functionaries that know very little about the petroleum industry. Now in relative isolation they are stuck on their own and unable to get expertise in to teach them how to deal with their infrastructure problems. Even with that their economic problems of oil and gas subsidies are ruinous.
I don't know the basics of the Chinese deal, hopefully they are being *contracted* to do work. For if they are 'investing' in Iran, then Iran will have another excuse to drain funds from its industry as they will see Chinese money coming in. This regime has not acted rationally on its petro-industry so far and that sort of thing would not only not surprise me, but be right on target with their mental state of terrorism above all else. Now it is time to find out just how gullible China really is...
Really interesting set of articles which I've been following and linking too. I have to say I agree wtih you about the possible consequences- unlike Jacksonian I don't have the expertise to critique or say anything useful about the issue itself- but the consequences could play the wrong way, making the regime increasingly desperate. One way then to read the nuclear weapons issue could be the attempt of the regime to guarentee itself the status to be 'bought off'- like say Kim Jong Il in North Korea. I still think they may be aiming for total anialation of the world and especially Jews- but it strikes me that this could provide an interesting second motive. That nukes could be a way some saner members of the Mullocracy think to insure against the oil running out because it means that the US has to fund them to avoid nuclear war. Sorry if this isn't particularly clear its late here adn I'm just about to go to sleep- but these are great posts keep siphoning this information along.
Gracchi - One of the salient points of nuclear weapons from the Cold War was that they served as great *counters* in the game of Nations and were more valuable as a force kept available but never used. Thus the 'power' of the Superpowers was measured in 'warheads' and 'throw weight' not in areas such as economic capability. The actual measure of the Cold War was exactly *in* economic capability and not in any of those other measurements, for all the deadliness they implied. That said the concept of 'too useful to use' grew out of that.
One of the features of nuclear devices, being Weapons of Mass Destruction is the utility mode of them. I answer some questions posed by Jerry Pournelle on Why not containment for Iran? by pointing out the Cold War inapplicability to Iran because Iran does not meet the pre-requisites of being a sane State in its outlooks. The even more pressing point is that Iran has a demographic problem and a need to change internal culture. Seen in a fantastical mode which the regime has, the very first target to hit with a nuclear device is neither the US nor Israel, but its own non-adherant population. Put forth some sort of 'opening to the youth' of Iran, get all the youth culture leaders together, throw a big party and then put the utility mode of a nuclear device to work. You have a mass you need to eliminate, so you use it for that.
To the regime this gets multiple instant benefits: 1) it utterly demoralizes the youth culture and starts to address the demogaphics problem, 2) it can be blamed on the West or Israel, and thus gain instant press sympathy, and 3) it allows even more repressive measures to be taken at home and uses this act as a leverage on terrorism globally to push for harsher acts towards the US , Israel and the West in general.
Yes, various tests and such will demonstrate that it is not a US, Israeli or Western device or even Pakistani or Indian or Chinese or whatall... the regime does not *think* in that mode. They have a disconnect between cause and effect where violence is concerned and they expect economics to be driven by that fantastical outlook. While this would be an abhorrent concept to anyone in the West, or even most of the East, for that matter, if you are not restrained by ethics and morality and can justify such use via a concept of Global Empire and building it, then you are down to the old proverb of the eggs and the omelette.
And note that this is even if the harshest sanctions on the planet could be established. Get the capability and it has instant and immediate use.
Given the regime's attitudes towards outsiders in general, this is not out of line with that and thinking that their own population is now part of the problem... and they can *get* to their own population.
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