No abstract

No abstract

The U.S. case against Iran is based on Iran's deceptions regarding nuclear weapons development. This case is buttressed by assertions that a state so petroleum-rich cannot need nuclear power to preserve exports, as Iran claims. The U.S. infers, therefore, that Iran's entire nuclear technology program must pertain to weapons development. However, some industry analysts project an Irani oil export decline [e.g., Clark JR (2005) Oil Gas J 103(18):34 -39]. If such a decline is occurring, Iran's claim to need nuclear power could be genuine. Because Iran's government relies on monopoly proceeds from oil exports for most revenue, it could become politically vulnerable if exports decline. Here, we survey the political economy of Irani petroleum for evidence of this decline. We define Iran's export decline rate (edr) as its summed rates of depletion and domestic demand growth, which we find equals 10 -12%. We estimate marginal cost per barrel for additions to Irani production capacity, from which we derive the ''standstill'' investment required to offset edr. We then compare the standstill investment to actual investment, which has been inadequate to offset edr. Even if a relatively optimistic schedule of future capacity addition is met, the ratio of 2011 to 2006 exports will be only 0.40 -0.52. A more probable scenario is that, absent some change in Irani policy, this ratio will be 0.33-0.46 with exports declining to zero by 2014 -2015. Energy subsidies, hostility to foreign investment, and inefficiencies of its state-planned economy underlie Iran's problem, which has no relation to ''peak oil.'' market power ͉ Middle East ͉ oil ͉ sanctions

It is widely believed that an oil weapon could impose scarcity upon the United States. Impending resource exhaustion is thought to exacerbate this threat. However, threat seems implausible when we consider strategic deficits of prospective weapon users and the improbability of impending resource exhaustion. Here, we explore a hypothesis relating oil to national security under a different assumption, abundance. We suggest that an oil cartel exerts market power to keep abundance at bay, commanding monopoly rents [or wealth transfers (wt)] that underwrite security threats. We then compare security threats attributed to the oil weapon to those that may arise from market power. We first reexamine whether oil is abundant or scarce by reviewing current development data, then we estimate a competitive price for oil. From this, we derive wt 2004 collections by Persian Gulf states Ϸ $132-178 ؋ 10 9 . We find that wt and the behavior of states collecting it interact to actuate security threats. Threats underwritten by wt are (i) the potential for emergence of a Persian Gulf superpower and (ii) terrorism. It is therefore oil market power, not oil per se, that actuates threats. We also describe a paradox in the relation of market power to the United States' defense doctrine of force projection to preempt a Gulf superpower. Because the superpower threat derives from wt, force alone cannot preempt it. A further paradox is that because foreign policy is premised on oil weapon fear, market power is appeased. Threats thereby grow unimpeded.abundance ͉ oil weapon ͉ scarcity

No abstract