Over a Barrel | Green Energy News

January 15, 2006 – Vol.10 No.43

OVER A BARREL.

Iran’s determination to have nuclear capability - for power and possibly weapons - is putting the squeeze on America’s most sensitive area: Its addiction to oil.

If it’s true, as petroleum investment banker/author Matthew R. Simmons says, that Iran’s oil has actually peaked, then building a nuclear power plant to help energize the nation could simply be matter of increasing revenues from international trade: selling more oil. (The nuclear weapon possibility is another story.)

Consider this. Being the fourth largest oil exporter in the world, Iran must be reaping the benefit of high global oil prices. The nation must have copious amounts of cash in the bank. Iran certainly would like to see that trend continue.

But, as it watches its reserves dwindle (if they are in fact dwindling) it would make more sense to export as much high-priced oil as possible rather than burn it up internally. Even if its oil isn’t dwindling this revenue enhancement seems feasible. The same argument would be true for Iran’s natural gas supplies as well.

At today’s prices nuclear-generated power is cheaper than oil or natural gas-generated power. Petroleum and natural gas are the only real exports the nation has. Better not squander them at home.

And what can the U.S. and the U.N. do? Severe economic sanctions - the inability for Iran to export oil - would cause oil to skyrocket, economies worldwide would crash to earth. A ground attack? Not enough soldiers. A missile attack? The already dismal world opinion of the U.S. would drop off the chart. Who knows? Maybe some crafty diplomat can come up with a solution. None yet however. Like it or not the nuclear-capable club may have a new member.

Matthew R. Simmons is the author of Twilight in the Desert, which details reasons why he believes Saudi Arabian oil is at or near peak. He discusses the rest of world’s oil situation as well.