An Inconvenient Truth

Redline has always admired Iran’s commitment to renewable energy. If you take the public stance at face value, Iran is determined to pursue clean nuclear energy in spite of crippling economic sanctions. If everyone showed that level of commitment, Al Gore would be delighted.

In reality though, what actually matters to the Iranian Government is a very non-renewable source of energy, Oil.

The battle between President Rouhani روحانی and the IRGC is not the only major political conflict in Iran. Nuclear Vs Oil is at the heart of the Iranian story over the last decade. Redline could also describe it as SPND Vs NIOC; or Mohsen Fakhrizadeh (محسن فخری زاده) Vs Bijan Namdar Zanganeh (بیژن نامدار زنگنه). Although Redline thinks the former Oil Minister Rostam Ghasemi (رستم قاسمی), would have fared better if it actually came to blows.

Rostam Ghasemi

In the red corner we have oil giant the National Iranian Oil Company (NIOC or نفت ایران شرکت ملی), an organisation backed by Iran’s powerful Revolutionary Guards Corp (IRGC orسپاه پاسداران انقلاب اسلامی) according to the US Treasury. That the former Oil Minister and NIOC Chief, the aforementioned Ghasemi, is an IRGC General only serves to show how close the two are. NIOC make even Gazprom look small time when their proven oil and gas reserves are accounted for.

In the blue corner we have SPND (سازمان پژوهش و نوآوری دفاعorسپند), a small collection of Scientists, Researchers and Volleyball enthusiasts that has traditionally been the home of Iran’s clandestine nuclear weapons research.

This should be a David Vs Goliath contest. Redline doesn’t know how much money SPND makes the Iranian Government, maybe there’s a lot of cash in nepotistic CCTV contracts and Space Cat, but it probably doesn’t quite compare with the $85 billion in revenue NIOC made in 2010 for example.

Given that an estimated 100,000 people work at NIOC, in contrast to a few hundred unmotivated SPND employees, and in Iran what the IRGC wants it normally gets, NIOC’s interests should take precedence over SPND every time. In short Iran needs NIOC, Iran does not need SPND.

Oil!

A country should economically flourish. Take Norway, they have the shortest working week in the world and high average wages. Oil turned a country of 5 million fishermen into the economic equivalent of Bono. Yet their natural resources pale in comparison to Iran.

In fact, Business Insider puts Iran’s total energy reserves as the second highest on the planet. Iran accounts for around 10 per cent of the world’s oil reserves and 15 per cent of the natural gas, which in anyone’s language means they’re kind of a big deal. The under-worked and overpaid Norwegians can only dream of those figures.

Despite this, the sanctions imposed mainly due to SPND and its predecessors, as well as some spectacular mismanagement of the oil sector, means Iran has not made the most of its natural advantage. According to IMF estimates, between 2011 and 2014 Iran’s oil and gas exports were down from $118 billion to $56 billion, leaving Iran somewhere below such economic powerhouses as East Timor and Botswana in terms of gross domestic product per head .

Way to go Mohsen Fakhrizadeh!

In that context it’s no wonder that Iran decided to negotiate on the nuclear issue when the lucrative oil sector felt the squeeze.

So why has the potentially mighty 77 million strong Iran pursued policies that have led to it being trounced by Norway and squander vast oil revenues? Iran’s stance on the nuclear programme, at the expense of oil, makes little sense when we look at how this plays out for the people actually working in NIOC and SPND. Take two of those 77 million, SPND employees Mohammad and Seyyed.

The story of Mohammad and Seyyed

SPND logo

Two scientists, let's say they're called Mohammad and Seyyed, are examples of your average SPND scientist. They probably joined SPND filled with dreams of groundbreaking research on intellectual topics like radiation safety, nanodiamonds, neutronics or exploding bridge wires. With their education, they could have gone to any number of places but chose SPND out of patriotism. They go to work every day safe in the knowledge that Iran’s foreign policy is geared entirely to letting them do their jobs.

But Seyyed and Mohammad soon find the SPND to be an unedifying experience. The national prestige seems to have vanished. MODAFL is being downsized. Even Iran Khodro has more money. All of the work in their research groups has stopped; they aren't doing any of the exciting and intellectually stimulating work they signed up for. Mohammad has watched senior management like Mohsen Foroughizadeh (محسن فروغی زاده) get moved around and sidelined.

Seyyed fundamentally does not have the work to fill his day but, purely to keep up appearances, he's been ordered to be present in the office for 12 hours a day. Both Mohammad and Seyyed sit there, day after day, accomplishing little and doing small amounts of menial work, such as handling time cards, to justify their existence.

Occasionally they wonder if Fakhrizadeh will remember their names whilst he grapples with the SPND performance assessment system. Mohammad spends time wondering what will happen to his job if rumours of MODAFL downsizing are true. Oh and as Redline has previously mentioned, SPND staff do not always receive their wages and have their Nowruz bonus cut. Their activities are monitored regularly by the MOIS (وزارت اطلاعات جمهوری اسلامی ایران).

For people considered so important and sensitive that no one outside Iran can even talk to them, it seems strange that their jobs have been reduced to sitting around waiting for your boss to say you can go home.

It’s a hard NIOC life

NIOC

Seyyed and Mohammad could be forgiven for casting an envious eye to former classmates and peers at NIOC, people who are frankly just not as well educated as they are. Yet NIOC employees not only make a lot more money, they have a much shorter working week and can actually leave the country. Within Iran, these NIOC types are generally treated by the Iranian Government as important patriots, helping to fight the good fight through the export of Iran’s natural resources and generally improving the standard of living for the average Iranian.

But before you start feeling too sorry for Mohammad and Seyyed, just think about what the guys and girls at NIOC think of SPND. From their perspective what has SPND given them?

Fakhrizadeh and pals failed to keep a nuclear weapons project secret. In fact they failed to keep pretty much any nuclear activity secret. This meant the world came down very hard very fast on key parts of the Iranian economy i.e. NIOC. To top it off despite being caught they did not even get a working nuclear weapon out of all the noise.

This means that NIOC is now dealing with SPND’s mess instead of focusing on what oil companies and Dr. Dre do best, making $$$. NIOC employees should be making Norway-sized wages, but now just working with NIOC could land you in prison, ask Babak Zanjani (بابک زنجانی).

Foreign Investment

All things considered it seems strange that Rouhani and the IRGC would be at each other’s throats on this one. They both want the same thing, to turbo-charge the Iranian economy through oil exports. SPND is kind of in the way of this happening, and the IAEA don’t look like they are giving up on PMD any time soon.

In order for Iran and NIOC to make the most from their huge oil and gas reserves, they need foreign investment. In 2012, Iran received around $1 billion in foreign investment. Saudi Arabia, a country with similar natural resources, received over $200 billion. Do the math Mr Fakhrizadeh.

Iran knows that highly trained scientists would be of better use plotting oil fields rather than building a bomb. Perhaps Fakhrizadeh thinks differently, but most of his employees would probably be happier at NIOC.

Maybe it is time for Mohammad and Seyyed to reach for that NIOC application form.

Comment on this article...

Enter text shown below:

All comments will be moderated before submission. Please allow some time for them to appear.