EROEI FOR DUMMIES

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Posted on 29th October 2012 by Administrator in Economy |Politics |Social Issues

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Sometimes I wonder whether the idiots who blather on about American energy independence and hundreds of years of supply are shills for the oligarchs or whether they are just plain dumb. Maybe one of you can explain. Even a CNBC anchor bimbo should have the brain power to understand the concept of EROEI. The U.S. has been using less oil since 2008, but the cost keeps going up. 2012 will finish with the highest average price for a gallon of gasoline in the history of the country. We are not in control of our energy destiny. The cost to retrieve the remaining fossil fuel resources will continue to rise. Worldwide demand will keep rising. The easy to access oil has been burned. Math is hard. So is reality. Charles Hugh Smith with another fact filled article of truth.

Why Energy May Be Abundant But Not Cheap   (October 29, 2012)

 It doesn’t matter how abundant liquid fossil fuels might be; it’s their cost  that impacts the economy.
Many people think “peak oil” is about the world is “running out of oil.”

Actually, “peak oil” is about the world running out of cheap, easy-to-get oil. That means fossil fuels might be abundant (supply exceeds demand) for a time but still remain expensive.

The abundance or scarcity of energy is only one factor in its price.  As the cost of  extraction, transport, refining, and taxes rise, so does the “cost basis” or the total  cost of production from the field to the pump. Anyone selling oil below its cost basis  will lose money and go out of business.

We are trained to expect that anything that is abundant will be cheap, but energy is a  special case: it can be abundant but costly, because it’s become costly to produce.

EROEI (energy returned on energy invested) helps illuminate this point. In the good  old days, one barrel of oil invested might yield 100 barrels of oil extracted and refined for delivery.  Now it takes one barrel of oil to extract and refine 5 barrels of oil,  or perhaps as little as 3 barrels of unconventional or deep sea oil.

In the old days, oil would shoot out of the ground once a hole was drilled down to the  deposit. All the easy-to-find, easy-to-get oil has been consumed; now even Saudi Arabia  must pump millions of gallons of water into its wells to push the oil up out of the ground.  Recent discoveries of oil are in costly locales deep offshore or in extreme conditions.  It takes billions of dollars to erect the platforms and wells to reach the oil, so the  cost basis of this new oil is high.

It doesn’t matter how abundant liquid fossil fuels might be; it’s their cost that impacts the economy.   High energy costs mean households must spend more of their income on energy, leaving  less for savings and consumption.  High energy costs act as a hidden “tax” on the economy,  raising the price of everything that uses energy.

As household incomes drop and vehicles become more efficient, demand for gasoline declines.   Normally, we would expect lower demand to lead to lower prices.  But since the production costs of oil have risen, there is a “floor” for the price of gasoline.  As EROEI drops, the price floor rises, regardless of demand.

This decrease in real incomes and ratcheting-higher energy costs could lead to a situation where energy is abundant but few can afford to buy much of it.

The relative abundance of fracked natural gas and low-energy density fossil fuels like tar sands and shale has led to a media frenzy that confuses abundance with low cost.This article (via correspondent Steve K.) illustrates the tone and breezy selection of data to back up the “no worries, Mate” forecast of abundant cheap liquid fuels:An economy awash in oil. (MacLeans)

Not so fast, reports Rex Weyler of theDeep Green Blog.Here is Rex’s response to the above article.

Fair point about the volume of unconventional – deepwater, shale gas & oil, tar sands, etc. – hydrocarbons. These reserves may even produce peakies and/or sustain the plateau longer than some observers believe. However, biophysical restraints remain real; peak oil remains real; peak net energy appears imminent, and the impact on economies is already being felt globally. Points to consider:The dregs:In spite of huge shale & tar reserve discoveries, peak discoveries  remain well behind us, in the 1960s. My father, a petroleum geologist his entire life (and still, in Houston, Kazakstan…), knew about shale and tar deposits when I was  a teenager in the 1960s. He called them “the dregs.” These deposits are not really news within the oil industry. And they are the dregs because of high cost, low EROI and rapid  depletion.

EROI:The volume of these low-net-energy reserves could extend peak oil production for decades, but at fast-declining net energy returned to society. We high-graded Earth’s  hydrocarbons, just as we high-graded the forests, fish, copper, tin, water, and so forth. We’ve taken the best, highest EROI hydrocarbons, the 100:1 free-flowing wells of the 1930s and 40s. We’re now into the 3:1 and 2:1 tar sands.

For example: damming rivers in Northern BC, to send electricity to the fracking fields,  to send shale gas to Alberta, to cook the boreal substrate, and mix the black sludge with gas condensate shipped in from California and by pipeline from Kitimat to Fort McMurray, to mix with the bitumen, to pipe to Vancouver Harbour, to ship to China, to burn in a  power plant, to supply electricity to their manufacturing empire.

By the time any of this energy gets used to actually make something useful to someone in society, and by the  time that user puts that usefulness to work to feed, clothe, house, or heal anyone,  there is no net-energy left.

Our food in North America is already negative net energy  by1:10 at best, up to 1:17 or worse for much of the crap we eat. This matters. EROI at well-head, EROI at the consumer pump, and EROI at the point of society’s actual  service all matter.

Well-head EROI, counting all public subsidies, is now in the 5:1 to 1:1 range for all  these “non-conventional” (meaning the dregs) hydrocarbon deposits. Money can be made.  Some energy can be delivered to Society, but this is already way below the well-head EROI that could likely run the current complexity of the human society, much less “grow” economies.

The degrading reserves take us down along the EROI curve, in which Net Energy returned to  society falls off a cliff around 6:1, and is in freefall by 3:1. Net-energy alone kills the idea of much economic growth from a booming hydrocarbon bonanza (other than some great  stock plays along the way). Furthermore, depletion renders the idea ever more unlikely:

Depletion:Depletion rates on these gas fields have arrived quickly and appear  drastic by historic industry standards. The fracking fields peak early and decline swiftly. In the Bakken shale field – one of the great North American saviour fields – the average  well has produced ~ 85k barrels in its first year and then declined at about 40% per year. The newer average wells peak earlier and decline faster, so the overall trend is down.

The depletion moves the production process along a function that approaches zero net  energy… Down we go along the EROI curve… 5:1 .. 4:1 .. 3 .. 2 … and then really complex society breaks down. An Amish farmer gets 10:1.

The Bakken break-even oil price is $85, so there is no profit in any of this right now,  but of course there will be if global depletion exceeds demand from crashing economies.

Depletion – both in volume and quality – and depletion for all industrial materials and  energy stores, EROI, and economic stagnation all work as feedback loops. No one knows  the bifurcation points in this complex system. We try to predict those, but miss by a longshot sometimes. Complex societies crash in this manner, declining returns on  investments in complexity, from Babylon to London and Washington. See J. Tainter,  H. Odum, N. Georgescu-Roegen, Hall, Cleveland, et al.

Here are some depletion data on The Oil Drum:Is Shale Oil Production from Bakken Headed for a Run with “The Red Queen”?.

See A Review of the Past and Current State of EROI Data (PDF)  by Hall, Cleveland, et al. (source: www.mdpi.com)

There is a lot of EROI data here: Obstacles Facing US Wind Energy. (The Oil Drum)

Below is the EROI curve, only the “We are here” point at 10:1 is the modern average, and  from a few years ago. The new conventional stuff is coming in lower and and the enhanced  recovery, shale and tar fields are already over the falls at 6 or 5:1 for the better stuff  (best dregs), and 3:1 to 1:1 for the dregs of the dregs, the deeper shale and tar sands.

So yes, our friends are correct about the great volume of tar, shale, deep, heavy  hydrocarbons, but increasing production of world liquid hydrocarbons much beyond the current 85mb/d is not likely, and increasing net productionis even less likely. As you may know, net production per capita peaked in 1979. Actual net production is  peaking now. This is the figure that counts: Actual current Net Production Delivered to  Society.

Growing this figure is technically possible, and may happen with some massive production  bonanzas, i.e. we may see actual production push above 90mb/day, or higher, and may  even see net production increase, but a major glut of hydrocarbons? No. Not remotely.

When settlers first came to North America, they found copper nuggets the size of horses  exposed in river beds. China just bought the best known, last, huge, moderate-to-low-grade,  strip-minable, high-cost copper field in the world, in Afghanistan, for $billions over the western bids. There will be others, but rest assured: They will be lower grade, higher  cost, and the competition will be more intense. When was the last time you bought a “copper” fitting at the hardware store. They’re crap. The alloys are crap. Because the ore  quality is in decline and the costs of extraction are rising. Same with oil, trees, tin, coal….

Make no mistake: The war for the dwindling materials and energy flow is well underway.

Thank you, Rex, for this commentary on EROI and the quality and cost of hydrocarbon resources.Complex systems like economies are nonlinear, and so history does not necessarily track linear extrapolations of present trends.  With that caveat in mind, the preponderance of evidence supports the notion that fossil fuel energy may remain abundant in the sense that supply meets or exceeds demand in a global recession, but the price of liquid fuels may remain high enough to create a drag on growth, employment, tax revenues and all the other economic metrics impacted by high energy costs.

Resistance, Revolution, Liberation: A Model for Positive Change  (print $25) (Kindle eBook $9.95)

Read the Introduction (2,600 words) and Chapter One (7,600 words)for free.

We are like passengers on the Titanic ten minutes after its fatal encounter with the iceberg: though our financial system seems unsinkable, its reliance on debt and financialization has already doomed it.We cannot know when the Central State and financial system will destabilize, we only know they will destabilize. We cannot know which of the State’s fast-rising debts and obligations will be renounced; we only know they will be renounced in one fashion or another.

The process of the unsustainable collapsing and a new, more sustainable model emerging is  called revolution.

Rather than being powerless, we hold the fundamental building blocks of power. We need neither permission nor political change to liberate ourselves.  A powerless individual becomes powerful when he renounces the lies and complicity that enable the doomed Status Quo’s  dominance.

 

If this recession strikes you as different from previous downturns, you might  be interested in my book An Unconventional Guide to Investing in Troubled Times (print edition)orKindle ebook format. You can read the ebook on any  computer, smart phone, iPad, etc. Click here for links to Kindle apps and Chapter One.  The solution in one word: Localism.
Readers forum: DailyJava.net.

Order Survival+: Structuring Prosperity for Yourself and the Nation(free bits)(Kindle) orSurvival+ The Primer(Kindle)  or Weblogs & New Media: Marketing in Crisis(free bits)(Kindle) or from your local bookseller.

Of Two Minds Kindle edition:Of Two Minds blog-Kindle

ABOUT THAT UNDER CONTROL INFLATION

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Posted on 16th October 2012 by Administrator in Economy |Politics |Social Issues

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Today’s CPI misinformation report dutifully reports that inflation has been virtually non-existent over the last 12 months. The charts below beg to differ. But Bernanke doesn’t think food, energy and copper are that important to the average schmuck. With annual increases ranging from 4% to 35% for things we need everyday, how could the CPI only show annual inflation of 2.0%? We know from prior posts that 24% of the CPI is made up of owners equivalent rent. I keep reading that rents are skyrocketing by 10% and home prices are increasing. So, why isn’t this being heavily reflected in the CPI? The drones at the BLS say owners equivalent rent is only up 2.1% in the last year. The people running this country have no problem lying out of both sides of their mouth, saying housing is recovering strongly but their is no inflation in housing or rent.

I’ll tell you why the numbers don’t make sense. Because the Federal Government and the drones at the BLS are lying about the true inflation figures. They use their little regression models to manipulate the data and report tame inflation, when anyone with half a brain that fills up their tank, pays their utility bills, or goes grocery shopping knows that inflation is running north of 5%. The BLS is actually reporting that your food costs have only gone up by 0.8% in the last year.

Even the commodities below that show modest year over year changes should worry you.

  • Heating oil is up 9% YTD and natural gas has surged 21% since May, just as we enter what is expected to be a colder than normal winter. Those senior citizens who are getting a $15 increase in their SS checks per month will just have to bundle up.
  • Unleaded gas is up 19% YTD and 2012 has seen the HIGHEST average price in the history of the U.S.
  • The huge increases in wheat, soybeans and corn due to the drought have resulted in some of the lowest inventories in history. The true impact of these price increases will really hit in 2013. Farmers have had to slaughter their cattle and hogs earlier to save on feed costs and this has resulted in meat prices temporarily declining. Prices for meat will soar next year as their is less supply. The other side effect will be unrest around the world, as food costs account for 50% of the budgets for poor people around the world.

The weightings in the CPI calculation are a joke. They have the balls to tell you that motor fuel only makes up 5% of your costs and food at home less than 9% of your costs. Let’s examine those assumptions. The median household income is $50,000. A family of four with both parents working would drive on average 12,000 miles per year for each of their two cars. That is 24,000 miles per year at 20 mpg equaling 1,200 gallons of gas used per year. At $3.80 per gallon, that would be an annual cost of $4,560. That would be 9.1% of your costs for a normal family. That is 80% more than the BLS weighting for motor fuel.

A normal family of four, based on my grocery expenditures of $150 to $200 per week, would spend $7,800 to $10,400 per year for food at home. Even using the low figure, it comes to 15% for a median income family. That is 67% higher than the BLS weighting. I would urge you to put your own circumstances into these equations and figure out if the BLS is full of shit. Thinking is essential to defeating the powers that be.

OIL

HEATING OIL

UNLEADED GAS

NATURAL GAS

COPPER

CORN

SOYBEANS

WHEAT

U.S. ENERGY INDEPENDENCE

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Posted on 25th September 2012 by Administrator in Economy |Politics |Social Issues

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Listening to the two clowns running for President discussing energy policy is like listening to those babies on the internet babbling jibberish as if it means something. One clown babbles about renewable energy and green jobs. The other clown babbles about drill, drill, drill and 100 years of supply under our feet. These two lying sacks of shit are telling the American public that America can and will be energy independent any day now. You see stories in the MSM that we have become a net exporter of “petroleum products”. The clueless masses thinks this means we have an excess supply of oil. What it means is that our economy is so bad, we have gasoline left over to sell other countries because we don’t have enough business to generate demand in this country.

The fact is that the United States uses 18 million barrels of oil per day. We import 10 million barrels of oil per day. We export 2 million barrels of petroleum products per day. We extract 5.7 million barrels per day from our soil. Do these facts support the idea of energy independence in the near future? Ever?

Is fracking going to save the day? When was the last time you filled up your tank with shale natural gas? How will our glut of shale gas save us? I haven’t seen the plans for converting gas stations and vehicles to natural gas. Have you? Obama wants you to plug your cars into an outlet and use coal to power your cars. The 2,000 Chevy Volts that Government Motors has sold this year will surely save the country from Big oil.

The dishonesty and lies spewed by both parties regarding U.S. energy independence benefits no one. An honest discussion about the implications to our society of much more expensive energy is too much to ask in the land of delusion.

DON’T WORRY, DRIVE ON: Fossil Fools & Fracking Lies from MONSTRO on Vimeo.

 From both political parties come cliches on energy policy

Monday, September 24,2012

 

We’ve heard it all before. Over and over for most of the last 40 years.

From politicians of both parties, cliches and nonsense on energy. Take the biggest cliche of all: U.S. energy independence. The candidates are all for it. Mitt Romney says he’ll make us independent by 2020, conveniently at the end of his second term. President Barack Obama says the route to energy independence is an “all-of-the-above” strategy and a “doubling-down” on renewables, especially if, as Obama has argued at various times, we have “Apollo” programs for new energy technologies.

These pronouncements are imprecise to the point of being meaningless.

Virtually any policy could be attached to the slogans, and their interminable restatement seems mainly an effort to produce a few uplifting sound bites on the evening news.

So Romney and his running mate, Paul Ryan, R-Wis., are for U.S. energy independence.

How original! This has been proposed by, well, just about every politician since Richard Nixon. He came up with the idea in 1973 (to be achieved by 1980). Romney’s only innovation is an eight-year time frame and he has called for “North American energy independence,” to include Canada and Mexico, both major energy exporters. Nixon wanted independence in seven years, but since Gerald Ford, the standard energy independence time frame has been 10 years. When Ford’s aides first looked into the matter, they felt their first goal was to redefine “independence” and their second was to redefine “10 years.”

The pained effort to define energy independence has been ongoing. In the 1970s Nixon’s (and Gerald Ford’s) Treasury Secretary William Simon thought energy independence meant having diversified sources of oil supply. By that definition we’ve been energy independent for about 25 years.

I have no idea what Romney means by it, especially since he seems to want us to only be independent of such countries as Venezuela (at least under Hugo Chavez) and of the Middle East.

Of course, the simplest definition is one Nixon first used: We would only use energy supplies produced in and by the U.S. This is possible; we could forbid imported energy supplies. Period.

It would also be almost unspeakably stupid. It would mean, for example, if world energy prices were low, we would forcibly lower our standard of living and put American firms at a great competitive disadvantage by choosing expensive energy over cheaper. No doubt other nations would send us a “thank you.” Complete energy self-sufficiency was tried in Romania under the Communist dictator Nicolae Ceausescu.

Ask any Romanian who lived through that time how well the experiment worked out; you won’t get a recommendation.

A few politicians and pundits argue that our engagement in the global energy market does cost us. That is why we went to war, in 1991, most notably. But does anyone seriously believe the U.S. (the world’s only military superpower) would just stand aside while the global economy fell to pieces because of a major disruption of the oil market?

Of course, Obama also touts energy independence on his campaign website along with a few new imprecise energy slogans.

“All-of-the-above,” for example, could mean “anything-I-like-to the extent-I-like it.” “Doubling-down” could mean spending twice as much money as we already have or just reinforcing some nebulous commitment with twice as much rhetoric, uttered twice as loudly.

Obama also has the burden of having spent billions of taxpayer dollars already on his fantasies of renewable energy “Apollo” programs, programs that were supposed to create millions of “green jobs.” Like energy independence, as studies have shown, it’s unclear just what constitutes a green job.

What is really unfortunate about the president’s policies is that he could actually do some good on the energy front by ordering the Environmental Protection Agency to suspend the pernicious Renewable Fuel Standard — a.k.a. the ethanol mandate. He could even blame George W. Bush since the 2007 ethanol bill was one Bush strongly endorsed.

Then again so did Sen. Barack Obama and many other Democrats in Congress.

Of course, that bill had a lofty goal beyond ethanol: As House Speaker Nancy Pelosi described it, this was the U.S. “energy independence day” bill.

And who opposes that?
Peter Z. Grossman is a professor of economics at Butler University in Indianapolis and the author of “U.S. Energy Policy and the Pursuit of Failure.”

IRAN WAR FROM A RUSSIAN POINT OF VIEW

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Posted on 18th September 2012 by Administrator in Economy |Politics |Social Issues

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How sad is it that I actually have more faith in the impartiality of an article from Pravda than I do from the NYT or Wall Street Journal? Anyone who thinks attacking Iran will be a cakewalk and not have huge unintended consequences, is smoking dope. The Chinese and Russians do not want the U.S. and Israel in control of Iran and their oil. The potential for World War III has not been higher since the Cuban Missile Crisis in 1962.

Iran to kick off World War Three

10.01.2012 17:00

Iran to kick off World War Three. 46337.jpeg

The world is perhaps standing on the brink of another major war, which may kick off in Iran. Sources close to special services of different countries even come up with dates when the war may begin. The Southern Caucasus borders on Iran. Russia’s borders are near the country too. GeorgiaTimes and a scientist of politics of the Tbilisi State University (Georgia) tried to predict what consequences the armed conflict may lead to for separate countries of the region.

The war may begin when Israel strikes “nuclear” objects in Iran. The United States will support the attack. If it happens, the new large-scale war will become inevitable. Iran is not Libya, and not even Iraq.  In addition, anti-Iranian enemies have failed to build the “axis of hatred” around Iran. Therefore, many countries in the region will support Iran either directly or by implication. In particular, it goes about China. Chinese President Hu Jintao stated that if the USA or any other country attacked Iran, China would take responsive measures immediately. As for Moscow, sources at Russia’s Defense Ministry said that the forces in the region had already been mobilized in case of a possible war.

Many Iranians come to Armenia, a republic of the former Soviet Union, for weekends. Women feel more liberated there, whereas men can drink cognac freely. The times, when Iran was separated from the Caucasus with the iron curtain of the Soviet Union, have become a thing of the past. Nowadays, for many residents of Armenia and Azerbaijan, Iran is not an exotic state at all.

Armenia and Azerbaijan only border on Iran; the countries can only careless about the problems of their neighbor. However, it only seems so. The war with Iran, if it ever happens, is not going to be a regional conflict.

Georgian scientist of politics, Solomon Lebanoidze, is pessimistic about the future of the region. As he said in an interview with GeorgiaTimes, the war in Iran is very likely to happen. “It may happen that this war may grow into World War III. No one is going to stay aside. There are many nuances here that will not give any country of the Caucasus an opportunity to remain a serene harbor,” the expert said.

Russia will obviously stand up against the war with Iran. It will not be possible for Russia not to be involved in the conflict. Russia may come into a military alliance with China in case of the conflict. The alliance may gradually develop into the anti-Western coalition of forces against Israel and the USA, if they get involved in the war too.

“If the war begins, the Russian army base in Armenia will find itself isolated. If it happens, Russia may try to take measures to make a corridor via Georgia, the expert believes. “Georgia and Iran have pragmatic and friendly relations. I believe that Georgia will try to play a passive role in the process,” the scientist of politics said.

According to the Nezavisimaya Gazeta newspaper, Russia is already concerned about the security of its army base in Armenia. Servicemen’s families have left the base, whereas the personnel have moved to another area, closer to the borders with Turkey.

The isolation of the Russian base in Armenia may push Azerbaijan towards another war for Nagorny Karabakh. “Azerbaijan may use Russia’s weakening position in Armenia and launch the war for the liberation of Karabakh. The way how the war develops depends on larger participants, such as the United States and Turkey. I do not think that the States will be passive in this situation,” the scientist of politics said.

For the Southern Caucasus, the war with Iran may resemble the time in the beginning of the 1990s, when the region was “depressurized” from its common condition. Many conflicts and wars sparked because of them, and many of them are still unsolved.

Anton Krivenyuk

GeorgiaTimes

Read the original in Russian 

BENEFITS & COSTS OF WAR WITH IRAN

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Posted on 16th September 2012 by Administrator in Economy |Politics |Social Issues

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It’s funny how a 57 page study put out earlier this week and signed by some heavyweight thinkers from the U.S. about the potential benefits and costs of war with Iran hasn’t been mentioned by anyone in the MSM. It is only found on obscure blogs. The MSM has the sole purpose of serving their corporate masters. War with Iran will benefit the Military Industrial Complex and the bankers that will bankroll the war. It will increase the misery of the average American as energy and food prices rise ever higher. Click the link to the Pdf report and understand the possibilities.

September 15, 2012

Weighing Benefits and Costs of Military Action Against Iran

Prime Minister Netanyahu of Israel has been perfectly clear. He wants the United States to go to war with Iran on Israel’s behalf, or, failing that, to define exactly when and how we would start our third war in the Middle East since 2001. President Obama has received these blandishments with a distinct lack of enthusiasm.

Mr Netanyahu is correct in his apparent assumption that the US can do a much better job of destroying Iran’s nuclear facilities than Israel can do alone. However, his unconcealed pressure on the president of the United States during the final stages of an election is a power play without precedent. The small ally tail does occasionally attempt to wag the American dog, but seldom so blatantly.

But, Mr. Netanyahu’s objectives and tactics aside, the real question is whether the United States or anyone else should go to war with Iran over its nuclear program. What would the benefits be? What would be the costs?

Those issue have been addressed dispassionately and authoritatively by a bipartisan study that appeared last week. Weighing Benefits and Costs of Military Action Against Iran is a 57-page study produced by the Iran Project, a non-governmental organization that seeks to improve official contacts between the United States and Iranian governments. I have benefited from attending a number of their research and analysis sessions, though I played no role in the production of this paper.

The study was endorsed by a star-studded group of more than thirty former senior U.S. officials with generations of experience in the national security realm. They include well-know Republicans and Democrats, including former national security advisers Brent Scowcroft and Zbigniew Brzezinski, as well as senior military officers with extensive experience in the Persian Gulf region, ambassadors and State Department officials, members of Congress and others.

The study recognizes that a number of benefits could potentially be realized by an effective use of military force against Iran. A concentrated strike could damage Iran’s capability to enrich uranium, degrade Iran’s military capacity, demonstrate US credibility and resolve, and potentially deter nuclear proliferation more generally.

However, unlike most papers advocating for or against the use of military force, this study then proceeds to balance carefully the perceived gains against the anticipated costs. The authors do not draw any conclusions or make any recommendations, but anyone who reads this paper with the attention it deserves cannot help but be impressed by the gravity and supreme danger of a decision to initiate military action.

In addition to Iran’s likely direct and indirect retaliation against the United States and Israel, a military strike would probably result in a breakdown of hard won international solidarity against Iran’s nuclear program. An attack on a Muslim nation could enhance the recruiting ability of radical Islamist groups and further damage US credibility globally. It would likely rally the Iranian population behind its current hard-line leadership and, perversely, increase Iran’s motivation to build a bomb. Iran might also withdraw from the Nuclear Non-Proliferation Treaty (NPT) and end all cooperation with the International Atomic Energy Agency (IAEA), leaving the international community with greatly reduced knowledge of Iran’s nuclear program.

Military conflict in the Gulf would certainly result in global political and economic instability, including disruptions in energy supply and security. In addition to costing the U.S. economy hundreds of billions of dollars yearly, a sustained conflict would boost the price of oil and further disrupt an already fragile world economy.

The study provides a considered answer to some of the most important questions concerning Iran’s nuclear program.

Has Iran taken a decision to build a nuclear weapon?

United States intelligence officials believe that no decision to develop a nuclear weapon has been made by Iran’s Supreme Leader… .Given extensive monitoring and surveillance of Iranian activities, signs of an Iranian decision to build a nuclear weapon would likely be detected.

If they took such a decision, how long would it take to make a bomb?

Given Iran’s current centrifuge capacity and stockpiles of enriched uranium, and the technical challenges entailed in fashioning even a crude, testable nuclear device, conservative estimates suggest that it would take Iran a year or more to build a military grade weapon, once the decision was made to do so. At least two years or more would be required to create a nuclear warhead that is reliably deliverable by a missile.

What if Iran is cheating?

U.S. intelligence officials have expressed confidence that Iran has not yet built any new, undeclared nuclear facilities and that there is a good—but not perfect—chance that new clandestine enrichment facilities could be detected on a timely basis.

What are our options if Iran does decide to proceed toward building a nuclear weapon?

Given the time required for Iran to progress from the decision to weaponize to possession of a reliable, deliverable weapon, the United States would have an opportunity to develop international support for multilateral action against Iran, including further sanctions, additional negotiations, and the use of military force.

Could it all be done from the air?

If the U.S. decided to seek a more ambitious objective, such as regime change in Iran or undermining Iran’s influence in the region, then an even greater commitment of force would be required to occupy all or part of the country. Given Iran’s large size and population, and the strength of Iranian nationalism, we estimate that the occupation of Iran would require a commitment of resources and personnel greater than what the U.S. has expended over the past 10 years in the Iraq and Afghanistan wars combined.

This study is a compendium of the best information available on this sensitive issue, presented in a clear and readable style by people who know what they are talking about.

If you are interested in the pros and cons of the military dimension of the Iranian nuclear issue, start here.

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