The National Interest: The United States should cooperate with Iran on energy

Friday, August 29, 2008

From Wikipedia: The share of Iran's oil sector in the GDP increased from 15% in 2002 to 25% in 2006, mainly because of a sharp increase in the price of oil.

Related to the post just below, here's an editorial that I agree with (I actually found it in an active search to see if I could find any articles that agreed with my opinion on the matter) from the National Interest on why the United States should cooperate with Iran on energy, entitled "Make a Deal with Iran":
Both Senators McCain and Obama have made a series of statements about what they would do as president. Among both their laundry lists: bring down the cost of energy—both to help American consumers but also to deprive “rogues” of petrodollars; help Europe diversify its energy supply so as to reduce dependence on Russia; bring Ukraine and Georgia into NATO; make progress in stabilizing Iraq and Afghanistan—both to permit the withdrawal of U.S. forces and to prevent chaos; and deter Iran from acquiring a nuclear weapon.

To achieve all of these goals—not just the last one—the next president needs a major breakthrough on Iran—one that would end the standoff that has lasted since 1979.

OPEC president Chakib Khelil has repeatedly noted that one of the factors keeping oil prices higher than they ought to be is the perception among traders and speculators that a clash between Iran and the United States—especially a prolonged military confrontation—is likely. Khelil recently observed that oil should be trading at about $70 per barrel, rather than the significantly higher prices we’ve seen in the last several months.

In addition, Iran’s oil production and processing complex is outdated and in need of repair. With Iran fully reintegrated into international financial and capital markets, more of its estimated 136 billion barrels of reserves could be tapped. This would be especially helpful in meeting the growing demand of Asian economies for oil, which has contributed so much to keeping prices high.
And with all of the concern about the concentration and consolidation of Eurasia’s energy resources by Russian firms and transport routes, Iran is the only feasible alternative to supplying Europe’s thirst for natural gas. Iran has an estimated 974 trillion cubic feet of natural-gas reserves, the second largest in the world. Pipeline projects like NABUCCO, designed to give European consumers feasible alternatives to other routes owned or controlled by Russia’s GAZPROM, are only cost-effective if some of Iran’s natural-gas bounty is committed.

Iranian energy flowing westward to European markets would balance Russian influence—not remove it altogether—but would guarantee that the Kremlin’s ability to wield a potential “energy weapon” would be lessened significantly.
Lastly, Iranian elections are coming up soon and as the current president is very interested in being re-elected, now is probably the best time to aim for an agreement on energy:
Iran has presidential elections scheduled for 2009. It may be useful to recall that Mahmoud Ahmadinejad was elected in 2005, not on a platform of developing nuclear weapons or destroying Israel, but instead by promising to tackle corruption and deliver economic growth.
I would also add to this that Turkey and Iran are already cooperation on energy anyway, and disturbing this with excessive hawkishness would be most unwelcome considering that it's through Turkish help that NATO ships have been able to go through the Black Sea to Georgia.


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