Nuclear Power In Middle East: Strategic And Economic Significance – Analysis | Giancarlo Elia

If we look at the latest data, the OPEC countries – or anyway the Middle East countries – are those which are investing more resources in nuclear power. Iran, for example, was the first State to directly place a nuclear reactor into the electricity grid for civilian uses in 2011.

Despite the JCPOA recently signed by Iran with the P5+1 which, however, will certainly not stop the Iranian military-civilian research, the Shi’ite country is playing on nuclear power, together with the other countries, for the following reasons: a) nuclear power makes available crude oil quantities which shift from the internal market to foreign sales; b) nuclear power extends the life cycle of oil wells, most of which are now aging, since it reduces domestic demand; c) the use of nuclear power allows a civilian-military “dual use “, independent and autonomous from the old regional alliances, which are now all definitively under crisis.

Hence, in addition to manage the deal with Iran rationally and advisedly, it will be necessary – in a very short lapse of time – to reach a series of bilateral agreements on nuclear power with the other Gulf and Middle East countries – an idea which I do not think is widespread in the current strategic debate.

In this particular case, Iran will use nuclear power for military purposes when it has it, or rather when it has a “threshold” threat, which is what really matters, as a strategic substitute for a large conventional force which is lacking in Iran.

The Shi’ite country has a strategic rationale linked to asymmetric warfare and proxy wars, like those of the Hezbollah in the Lebanon – the structure created by Iran to hit Israel with a hybrid war that the Jewish State cannot oppose with the same techniques.

Or nuclear power is seen as a “game changer”, even only as an ultimate and credible threat, for a non-conventional clash in which Israel is present.

Or a part of the Sunni world.

Therefore, the rationale of Iran’s nuclear power is to force the Jewish State into an asymmetric war in the regions opposing it and outside its borders, in a context of international – but mainly tactical – isolation.

What matters, however, is not the technical ability to actually produce, have and show a series of nuclear devices, but the ability to manage – in the shortest possible time – the transition from an acceptable level for the Non-Proliferation Treaty to the typical one of the operational nuclear power.

Incidentally, the Italian signature of the Non-Proliferation Treaty (NPT) in May 1975 marks the start of the end of its independent and autonomous foreign policy.

And to think that Italy wanted to walk out of the Non-Proliferation Treaty at the G8 Summit held in Birmingham in 1998.

The NPT is used to clip the wings of the Euro-Western and Mediterranean countries, while India and Pakistan which, with their nuclear tests threw the Birmingham G8 Summit in turmoil, rightly view the NPT – like the other Arab and Islamic countries which are currently at the nuclear threshold – as one of the edicts in Manzoni’s novel The Betrothed.

Just think of what would have happened in the Mediterranean currently under fire if we had had an effective level of nuclear deterrence, managed according to the customs, usages and codes agreed upon.

Hence Iran remains at the so-called nuclear threshold, where India and Pakistan, North Korea and, of course, Israel have been for long time.

In fact the JCPOA equalizes the level of maximum threat, namely the nuclear threat, between Israel and Iran.

Iran as a threshold power is exactly what the Iranian leaders wanted.

This causes a revolution in the Middle East strategic equation and, hence, in the European and NATO one.

If the Shi’ite Republic has a threshold power and if, meanwhile, the civilian use of nuclear power still allows nuclear testing (which is possible on the basis of the JCPOA), the Jewish State is turned into a strategic hostage.

I do not know whether Western signatories to the agreement with Iran have been fully aware of this – but I somehow doubt it.

The purely economic obsession, typical of Western diplomacies, has blinded the minds of Western leaders.

If Israel is deprived of its supreme threat, it becomes targetable and vulnerable at conventional level, where the Israeli structural limits are evident and unavoidable.

It would have been better to sign an agreement with Iran allowing to better control also the military sites of the Shi’ite State, in addition to reducing the amount of fissile material for “civilian” production, which is currently too high and guarantees alone the threshold effect of the Iranian nuclear power. All we need to do is only shift it.

The data on the distribution of nuclear plants, globally, is still particularly important.

According to the IAEA, in September 2010 – the date of the last survey – nuclear facilities totaled 441 in 29 countries.

The share of nuclear power in energy production is higher in Europe (27%) while, in 2010, South Asia and the Middle East were, in fact, at zero.

Today, however, as many as 65 new States show an interest in nuclear energy, and among them, at least one fifth is located in the Middle East.

The Gulf Cooperation Council’s will to go nuclear dates back to 2007, while also peripheral Arab nations and, above all, the non-oil countries (such as Jordan) are paving the way for widespread nuclearization.

The projects currently under consideration report the operation of 90 nuclear reactors to be placed in 26 sites in thirteen countries of the region by the end of 2030.

Six Middle East countries, namely Bahrain, Egypt, obviously Iran, Jordan, the United Arab Emirates and Yemen are planning to build a nuclear power plant by the end of 2017.

If all goes according to the Iranian and Russian wishes, Yemen should host a nuclear site – not falling within the JCPOA regulation – right in front of the Saudi coast.

While, however, we have noted some geopolitical conditions for the establishment of the Middle East Sunni and Shi’ite countries’ nuclear power, it should be recalled that the shift to nuclear power has also internal motivations.

Firstly, there is the demographic and economic growth which needs low-cost and abundant electricity.

Moreover, in a situation characterized by a slowing down in energy consumption from hydrocarbons in Europe and in the other industrial countries.

From 1980 to 2010, the demand for electricity grew throughout the Middle East by five times, but also the global demand for electricity is expected to grow by 61% between 2010 and 2050.

In said period, the demand for electricity in the Middle East is expected to rise by 114%.

Obviously, with nuclear power, the Middle East countries also want to present themselves as potential exporters of electricity, as well as hydrocarbons, in addition to meeting their domestic demand.

On the other hand, cheap and abundant energy is inevitable for the very future and survival of the countries in the region.

In Saudi Arabia 50% of electricity consumption is used for air conditioners, for obvious climate reasons.

No to mention the sea water desalination plants needed for the local population’s life.

If the OPEC countries of the Middle East do not free themselves from dependence on their own sources of energy from hydrocarbons, it is obvious that – at a time of shrinking international oil markets and lower structural prices – it will no longer be possible to maintain social peace or to afford the same costs for the survival of the population.

In the Emirates, for example, 97% of electricity production depends on natural gas, while in Egypt 70% of the “wonderful electric light” – as the Futurists called it – is produced by gas, which is either an unmanageable cost or, even worse, an unmanageable bond with those who supplies it to poor countries.

Even in Iran gas is worth 67% of total energy production, while currently Iran’s regulated nuclear power accounts for less than 6% of the total energy produced.

Obviously, as already noted, nuclear energy is used to support the exports of hydrocarbons: the proceeds from the sale of natural gas and oil, for example, are worth 85% of revenues in Qatar and Saudi Arabia, while Iran – and this is a key factor of its strategic autonomy – acquires only 60% of its revenue from the sale of hydrocarbons abroad.

The more or less explicit war in the Middle East will be won by the last country having the ability to sell gas and oil to the West.

The country which will last longer with its active oil wells, will be the real hegemonic power in the region. The fight has already begun.

In the OPEC cartel, which is now ever less important to manage prices, the equivalent of our “wars of succession” has arrived.

Oman, which is not a member of the Vienna cartel, is the largest oil producer outside the oligopoly dominated by OAPEC, the Arab and Sunni sub-cartel established in 1968 with a deal, still relevant today, including Kuwait, Libya and Saudi Arabia.

But nuclearization is a real bargain even for the Arab or Islamic net energy importers, such as Turkey – or, at the time, Jordan – which want to reduce the costs of gas acquisition from Russia and Iran, countries which are always less in line with President Erdogan’s hegemonic designs.

Furthermore, if each country has its own nuclear power plants, the danger of violent energy disruptions, due to the jihadists or to other reasons, is largely diminished.

If each country has its own nuclear system, the “sword jihad” inside the Middle East will soon have no longer reason to exist.

Moreover, it is also worth taking note of a critical date: the time of the Egyptian, Jordanian and Saudi resumption of nuclear energy production coincides with the one according to which the JCPOA between the P5+1 and Iran will enable the latter to resume some research activities – even of a military nature – in the nuclear sector.

Therefore the strategic equation is clear: the Russian Federation will have an interest in managing the nuclearization of the Greater Middle East – and its presence in Syria is a sign in this regard – while both the European Union and the United States will remain linked to the very important oil market.

They will also be conditioned by the nuclear power internal to oil producers.

Nevertheless, in this case, a new variable will appear on the crude oil and natural gas prices: their economic and strategic connection with the quantity and the cost of production of nuclear energy within the crude oil producing countries.

About the author
*Professor Giancarlo Elia Valori is an eminent Italian economist and businessman. He holds prestigious academic distinctions and national orders. Mr Valori has lectured on international affairs and economics at the world’s leading universities such as Peking University, the Hebrew University of Jerusalem and the Yeshiva University in New York. He currently chairs “La Centrale Finanziaria Generale Spa”, he is also the honorary president of Huawei Italy, economic adviser to the Chinese giant HNA Group and Khashoggi Holding’s advisor. In 1992 he was appointed Officier de la Légion d’Honneur de la République Francaise, with this motivation: “A man who can see across borders to understand the world” and in 2002 he received the title of “Honorable” of the Académie des Sciences de l’Institut de France.

This article was published by Modern Diplomacy

Source: http://www.eurasiareview.com/10022016-nuclear-power-in-middle-east-strategic-and-economic-significance-analysis/