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SECTION 1: Iran’s Nuclear Fuel Cycle Facilities: A Pattern off Peaceful Intent?

Nuclear Energy or Nuclear Weapons?

1.       Confirmed record of hiding sensitive nuclear fuel cycle activities from the IAEA.

2.       Iran’s rationale for “peaceful” nuclear fuel cycle does not hold up under scrutiny.

3.       Given Iran’s insufficient uranium reserves, Iran cannot achieve its goal of nuclear energy independence.

4.       Moreover, indigenous fuel cycle costs are substantially greater than importing nuclear fuel at market prices…or taking full advantage of its current wasted hydrocarbon resources.

5.       But Iran’s uranium reserves could give Iran a significant number of nuclear weapons. In fact, Iran’s facilities are scaled exactly like another state’s facilities that were designed to produce fissile material for nuclear weapons.

Fuel Cycle Rationalization

1. “Iran cannot rely on energy from fossil fuels for the following reason: resources are limited…and the local use of these resources will drastically affect foreign exchange earnings.”

·         Iranian Vice-President and Atomic Energy Minister Aghazadeh, May 2003

2. “The best use that a country like mine can make out of its uranium ores is to replace oil as a primary source of energy…within two decades most of our oil production will be consumed internally, leaving nothing tangible for export.”

·         Iranian Representative to the IAEA, Ambassador Salehi, March 2003

Iran’s Nuclear Fuel Cycle Facilities: Concealment & Deception

A History of Concealment & Deception

1.       Long-standing IAEA safeguards violations show that Iran kept its nuclear activities hidden until they were first revealed by others.

2.       Iran’s provision of “changing or contradictory information,” as described by the Director General, leaves major issues remain unresolved:

·         Apart from “contamination,” the full extent of centrifuge research and development;

·         The full extent of plutonium experimentation;

·         Military involvement in any nuclear activity.

NUCLEAR FACILITY IMAGES: Sites Unknown before 2002

1.       Lashcar A’bad:        Uranium Enrichment Facility

2.       Tehran:                   Uranium Enrichment Facility

3.       Arak:                      Heavy Water Facility

4.       Arak:                      Research Reactor, Research Facility

5.       Natanz:                   Uranium Enrichment Facility

6.       Ardekan:                 Uranium Processing Facility

7.       Gachin:                   Uranium Processing Facility

8.       Gachin:                   Uranium Mines

Other Sites

1.       Tehran:                   Research Facility

2.       Isfahan:                   Research Facility

3.       Isfahan:                   Uranium Enrichment Facility

4.       Saghand:                Uranium Mines

5.       Bushehr:                 Light Water Reactor

Natanz Gas Centrifuge Uranium Enrichment Complex

1.       Covert facility in remote location, could enrich uranium for weapons

2.       Dummy structures to prevent detection and identification

3.       Concealed underground, hardened, well defended

Arak Heavy Water Reactor Complex: Reactor could produce ~1-3 Bombs worth off Pu/yrr

1.       June 2004-March 2005, significant progress on Heavy Water plant construction

·         Full production of primary line planned for 2005

2.       Despite IAEA Board request to forgo construction,

·         Reactor is well underway and progressing rapidly. Iran says reactor needed for medical and industrial isotopes… A capability already inherent in Iran’s 10 Megawatt Tehran Research Reactor.

Clandestine Uranium Mine & Mill Still Under IIAEA Investigation

1.       Iran omitted from national websites, pre-2004 declarations to IAEA, and OECD/IAEA “Red Book” reporting… any indication of Gachin, while regularly citing Saghand

2.       DDG’s June Oral Statement reiterated that the Agency seeks to “better understand the complex arrangements governing the current and past administration of the mine.” Possible Military Involvement?

3.       IAEA investigating “why the work on the very promising [Gachin] project was suspended by the AEOI from 1994 to 2000” while Iran focused on the “much less promising ore deposit at Saghand.”

Iranian Government Misrepresented Uranium Mine

Mine M_26_13 is located at the Gachin Uranium Mill but is listed only as the Sandrasang mine near the village of Gachin for “building stone.”

SECTION II:  Iran’s Nuclear Fuel Cycle Facilities: The Myths off Self Sufficiency and Maximizing Energy Resources

Why Iran’s Large Nuclear Fuel Cycle Investment Makes No Sense Economically

1.       Alternate investments in natural gas or oil refining would be more attractive.

2.       Iran lacks adequate deposits of natural uranium to be self sufficient for civil nuclear power.

3.       Iran’s supply of other energy resources far from depleted.

Estimated Fuel Cycle Costs

Capital costs of selected nuclear facilities (Arak, Esfahan, Saghand, Gchine, Natanz) approximately $600 million - $1 billion.  For seven planned reactors, Iran would need to invest at least another $6.0 billion.

1.       The role of economies of scale not clear in the Iranian nuclear program.

2.       Additional developmental hurdles unclear, such as with the fuel fabrication plant.

Attractive Alternatives to Investing in the Nuclear Fuel Cycle

1.       If Iran invested $2.5 – $3.2 billion to upgrade its natural gas infrastructure rather than to construct a nuclear fuel cycle infrastructure, Iran could save, at current market prices, $1.6 – $2.2 billion worth of natural gas annually.

2.       Were Iran to invest $5.5 billion in oil refinery projects to upgrade its gasoline refinery capacity, Iran could increase the annual net revenue for its petrochemical sector $982 million.

Benefit of Recovering Wasted Gas In 2002, Iran wasted 6.78% of natural gas gross production equal to 290 billion ft3.

1.       Assume Iran moved to world average (2.26%)

·         Approximate investment = $2.5 billion

·         Savings equivalent to:

1.       $1.6 billion (Market price 7.78$/MMBtu)³

2.       2.8 Bushehr Nuclear Power Plant equivalents⁴

2.       Assume Iran moved to N. American Average (0.53%)

·         Approximate investment = $3.2 billion

·         Savings equivalent to:

1.       $2.22 billion (Market price 7.78$/MMBtu)³

3.       3.9 Bushehr Nuclear Power Plant equivalents⁴

1, 2          – Data From U.S. EIA International Energy Annual 2002, Table 4.1

3              – Market Price U.S. EIA Natural Gas Weekly Update 7/13/05

4              – Replacement for CCTG Plants - 7200 BTU/kw-hr heat rate, 85% capacity factor, 1070BTU/ft3 natural gas

Benefits of Gasoline Production Upgrade

If Iran were to invest $5.6 billion in a high gasoline yield Western-type refinery, it could eliminate its dependence on imported gasoline and increase its annual net oil related revenue by approximately $982 million.

Comparative Nuclear Fuel Costs for 7000 Megawatts: Indigenous Vs. Market

Iran could save $59 - $161 million per year by purchasing fuel from abroad.

The Myth of Nuclear Fuel Self Sufficiency

Setting economics aside, even if speculative uranium deposits in Iran are assumed and included, Iran is not close to possessing sufficient uranium to fuel seven 1000 MWe for their lifetime. It is thus impossible for Iran to avoid dependence on a foreign supplier for its uranium fuel.

Limited Uranium Resources

            Iran does not have enough uranium to fuel its planned reactors

1.       Known uranium (1,427) + speculative (13,850) = 15,277 tons U

2.       Assume Bushehr burns 22 tons of LEU annually

Fuel Resource Constraints 2006-2026

1.       Known uranium will be exhausted by 2010 with only two operational reactors.

2.       Total uranium resources will be depleted by 2023 with all reactors far short of their 40 year design lifetime.

Which Resource [is] Truly Scarce?

1.       Oil

·         125.8 billion barrels proven reserves

·         Roughly 10% of world total

2.       Natural Gas

·         940 trillion cubic feet proven reserves

·         World’s 2nd largest supply, 15.5% world total

Iran’s Indigenous Energy Breakdown:                       

Energy equivalence used = 1070 BTU/ft3 natural gas, 5.8e6 BTU/barrel oil, 11,000 BTU/lb. coal, 4.41e11 BTU/mton U-235. Source Nuclear Engineering: Theory and Technology of Commercial Nuclear Power – Knief. Energy data from March 2005 U.S. EIA Iran Country Analysis Brief.

SECTION III: Iran’s Nuclear Fuel Cycle Facilities: To What End?

Nuclear Energy or Nuclear Weapons?

Extensive Concealment and Deception Record

1.       Once revealed, Iran offered rationale for “peaceful” nuclear fuel cycle… However:

·         Nuclear energy independence not feasible given ore reserves

2.       Iran could maximize its earnings and energy by:

·         Importing nuclear fuel

·         Reducing waste of natural gas currently flared

·         Increasing gasoline production for domestic energy independence

3.       Iran’s uranium reserves cannot support planned nuclear power plants, but are well-scaled to give Iran a significant number of nuclear weapons.

4.       Iran’s nuclear program is very similar to another state’s nuclear weapons program.

Uranium Reserves: Only Enough for Weapons

As noted, Iran’s uranium resources cannot support the peaceful program Iran says it is pursuing.  However, Iran’s uranium resources are more than sufficient to support a nuclear weapons capability. The Gachin mine’s output (~21 tonnes/yr) alone could supply enough uranium, if enriched, to produce ~4 nuclear weapons/yr.

Comparing Nuclear Infrastructures

Iran’s program is strikingly similar to Another State’s Program in other ways:

1.       Uranium mining – Both States have limited known domestic reserves (Iran ~ 71 tons/year versus ~ 23 tons/year)

2.       UF6 Conversion – Both state’s seek a 200 ton/year production capacity

Comparing Delivery Capabilities

1.       Iran’s Shahab III and Another State’s Variant

2.       Intermediate-range ballistic missile (IRBM) derived from the DPRK’s No Dong

CONCLUSION:

Iran’s past history of concealment and deception and nuclear fuel cycle infrastructure are most consistent with intent to acquire nuclear weapons.