Iran’s nuclear energy development programme has received international focus in recent years with the allegation made by the U.S. that Iran was using her nuclear civilian programme to produce a nuclear bomb. This was, however, not supported by the IAEA findings.

Iran’s interest to develop alternate sources of energy arose originally from two factors, namely, the wish to reduce the over-dependence on oil for the country’s energy requirements with prospects of depletion of oil resources; and the increasing demand for energy to put the ambitious industrial programme on track.

Anyone looking at the hydropower map of Iran would find the country studded with hydro power generating projects but still the supply was inadequate to meet the domestic demand. During the years following the war with Iraq, electricity was in serious short supply so much so that every shop and house in the capital had a portable electric generator ready at hand while embassies had installed huge generators to meet daily long power-cuts. In Sri Lanka, we were not aware of this. For example, when I planned to go to Dubai at the end of December 1990 to purchase two small electricity generators for the embassy and the residence our Foreign Ministry was surprised and asked me why. They thought Iran had surplus energy! [One should not judge the Sri Lankan Foreign Ministry’s knowledge of foreign affairs from this incident. Foreign Ministry file on Iran was just a blank when I proceeded to Iran as the first resident ambassador and I had to dig into the files of the Ministry of Foreign Trade to obtain a list of ministers in the Iranian government whose antecedents I found were amazingly different from ours. Each of them was a technocrat with more than one university degree or professional qualification. That was also a pointer to the state of our relations with Iran prior to President R.Premadasa taking over the administration).

The nuclear energy generating programme for peaceful civilian purposes has been a formidable one and goes back to the time of the Shah. One could trace the origins to 1960s but it was from 1970s that the Iranian government conceived definitive plans to reduce dependence on crude oil as a source of fuel and to re-channel it to petro-chemical industries, and for rapid installation of a nuclear generated electricity capacity along with maximum tapping of hydroelectric potential, greater use of natural gas, and other sources of alternate energy. The world oil [price] crisis gave added reasons to conserve oil resources. U.S. President Gerald Ford’s strategy paper (Richard Cheney was the White House Chief of Staff, and Donald Rumsfeld was the Secretary of Defence), also endorsed this view when it said that the "introduction of nuclear power will both provide for the growing needs of Iran's economy and free remaining oil reserves for export or conversion to petrochemicals."

President Gerald Ford signed a directive in 1976 offering Tehran the chance to buy and operate a U.S.-built reprocessing facility for extracting plutonium from nuclear reactor fuel. The deal was for a complete 'nuclear fuel cycle'. Iran, a U.S. ally then, had deep pockets and close ties to Washington. U.S. and European companies scrambled to do business there.

It was expected that the programme if completed would take the proportion of nuclear power in Iran’s energy resources from zero to 52 per cent by the 1990s. However, doubts were expressed outside Iran that the energy requirement forecast was exaggerated and also if Iran could fulfill this ambitious programme.

By 1976, Iran had begun to build four power reactors with a capacity of 4200 mega watts. Uranium enrichment was expected to be provided in the mid 1980s. Of course, the enrichment of uranium could have provided, as by-product of spent fuel, capacity to manufacture nuclear weapons. Had the programme gone through, it was estimated that by 1990s it would have given Iran over three metric tons of fissile material from domestically produced material which could have provided for 370 bombs with a total of 360 kg of plutonium. On the basis of Indian atomic bomb programme capacity, however, what the Iranians could achieve has been estimated at about 42 bombs of the ‘Indian bomb’ capacity.

The issue then was that the technology required for manufacturing a bomb was neither insurmountable, nor was Iran’s capacity to meet the budget for development of a bomb to be ignored. The latter, based on then cost-estimates comparable with British and French acquisitions, was given at U.S.$ 1000 to $ 2000 million annually. (U.S. estimates for ‘small power’ nuclear force was U.S.$ 100 to $ 400 million annually .U.S. Arms Control and Disarmament Agency Report, 1976). Meeting such expenditure was well within Iran’s then financial capabilities based on oil sales. It was this financial capability that worried the U.S as well as the Soviet Union then. It is again the same financial consideration that has sent out fears in the U.S and the allied camp today about Iran’s present financial capacity when oil revenue has reached a peak with increased prices. That is taking into account the fact that the Iranian government would cut down on local oil consumption and social benefits to the people. President Ahmadijenadreduction of gas provided to the consumers which led to recent protests is an example of the latter.

Shahs’ position was also to draw an analogy between Iran on one hand and Britain and France on the other, as a rising medium power. This parallel drawn by him was interpreted in the West as presence of prospects of Iran becoming a nuclear weapons power but he had denied any intentions to produce nuclear weapons. On the contrary, his signing of the Non Proliferation Treaty (NPT), call for the creation of a nuclear-arms free zone in the Middle East and support for the Indian Ocean Nuclear Free Zone (IOPZ) were claimed as positive indications of Iran’s intentions on the issue of nuclear weapons.

The claim of nuclear intentions as a deterrent was not unfounded. In the technological field, had Iran’s technological advances and industrialization programme gone apace as planned under the Shah’s regime, the country would have reached the status of a medium industrial power like France by the end of 1990s. This was my own assessment after having observed closely, the industrial infrastructure (many closed at the time) and the industrial and defence equipment displayed at exhibitions in Tehran in the 1990s and the military hardware exhibition in Dubai. That was comparing them (both military and other industries) with the range and standard of industrial products of China I had seen during many visits to their industrial complexes and what I had seen at Indian industrial exhibitions. In contrast to both China and India, Iran had the advantage of greater [oil] revenues and lesser problems of taking care of vast populations.

What was the reaction of the U.S. to prospects of Iran rising to be a medium nuclear power under the Shah? It has been pointed out that she was basically opposed to it on the ground that she wanted the nuclear monopoly shared only by her and the Soviet Union. Meanwhile, both big powers could not halt Britain and France and later China acquiring medium- capacity nuclear power status. U.S. also did not react violently and put enough pressure on India and Pakistan over their plans to produce the bomb despite the sanctions applied. The U.S. proceeded more diplomatically with India though Pakistan was handled roughly. The reason partly was the dicey relationship with India which had been in the Soviet orbit. She had to be handled ‘diplomatically,’ keeping also in mind that one was dealing with the biggest democracy in the world as U.S. Deputy Secretary of State (1994-2001) Strobe Talbott’s memoirs reveal. ( Engaging India- Diplomacy, Democracy and the Bomb’, 2004). In that context too the U.S. could not have viewed an Iranian bomb under the Shah who was her close ally, as unacceptable.

In other words, as long as the Shah was within the U.S. orbit of influence, no alarm was raised, however, about any prospects of Iran developing capacity to produce a bomb. Not only is there no evidence of any remonstration of concern but one could even see that Iran’s heavy military build up was encouraged as a deterrent against the Soviet Union which had ambitions in the Middle East including access to warm water ports. With the establishment of Iran's atomic agency and the NPT in place, and Iran signing the Nuclear Non-Proliferation Treaty (NPT) in 1968 and ratifying it in 1970 the Shah approved plans to construct, with U.S. help, up to 23 nuclear power stations by the year 2000.

The assessment by the U.S. Arms Control Agency Report 1976, saw Iran capable of developing a ‘middle level’ nuclear programme. Iran had also developed means of delivery of nuclear weapons. While a nuclear deterrent was then seen to serve as a deterrent against any Soviet intentions, India’s acquisition of the bomb provided for Iran a reason for looking for a regional balance. Pakistan’s vulnerability figured in this dimension but Iran saw the need to secure a regional nuclear balance in the face of the progress India was making without encouraging Pakistan to produce the atomic bomb. The idea of the ‘Muslim Bomb’ was born in the context of Indo-Pakistan rivalry and later, that of Arab/Muslim rivalry with Israel. The U.S. could not have been averse to this development especially with Soviet-India defence co-operation becoming a serious matter. Containing Indo-Soviet strategic cooperation was also part of the reason of Kissinger’s secret mission to Beijing which led to President Nixon’s historic visit there. The U.S offer of aerial deterrent in case of a Soviet threat to China, which was considered a strong possibility by the Chinese leaders, was a strategic move to meet Soviet-India axis.

What made the about-turn in U.S. policy towards Iran was the overthrow of Shah by the revolutionary forces in 1979 and the anti-U.S. and anti-Israel disposition of the new regime. That broke down U.S’ relationship with Iran. Earlier, the U.S. had the possibility of influencing Iran but now with the new regime Iran had to be controlled. Iran’s heavy military build up secured under the Shah to excessive proportions had to be demolished. Prospects of Iran’s nuclear ambitions which began under the Shah had to be thwarted.

To achieve this there was no need to engage in open hostility. With the rivalry with the Soviet Union in view and in order not to disrupt the flow out of Iranian oil, direct military action had to be avoided. Besides, there was no direct cause for provocation to commence military action against Iran.

The U.S. approached the situation in a two- pronged way. One was to cancel the agreement to provide technical training for Iranian engineers working at the U.S. supplied 5-mega watt nuclear research reactor at Tehran Nuclear Research Center (TNRC) which became operational in 1967 and provide highly enriched uranium for it; and to pressurize the Kraftwerk Union, a joint venture of Siemens AG and AEG Telefunken which had signed a contract with Iran in 1975 to buld two reactors at Bushehr, to fully withdraw from the project in July 1979, after work stopped in January 1979 [The two reactors were not delivered though they had been paid for]; and also France to refuse to give any enriched uranium to Iran after 1979. The French contract to build two other reactors near Ahwaz was also cancelled. Though the post-revolution Bazagan government decided that Iran did not need nuclear energy, perhaps, the location of Ahwaz plant too was considered unsuitable from a security point of view as it was close to the Iraqi border. [As in the case of advance payments made to U.S. and German firms, Iran also didn't get back its investment from Eurodif, the joint venture formed with France]. No wonder the revolutionary regime holds the U.S.and the West in mistrust!