The New Iran Sanctions: Worse Than the Old Ones

The U.S. Congress is considering cutting off petroleum-products shipments to Iran -- a useless sanction, and a distraction from real solutions.

In an effort to prevent Iran from becoming a nuclear power, the U.S. Congress has set its sights on the Islamic Republic's foreign gasoline dependence. The logic is straightforward: Iran, it has been widely reported, is an oil giant that nonetheless imports 40 percent of its gasoline; internationally coordinated sanctions stopping it from obtaining enough could pain the regime into rethinking its nuclear ambitions. Little wonder the bipartisan Iran Refined Petroleum Sanctions Act, introduced in both the Senate and the House, enjoys the support of at least 74 senators and 294 representatives.

There is just one problem: Iran is much less vulnerable to gasoline sanctions than is commonly believed on Capitol Hill, and its foreign gasoline dependence is dropping by the day.

The little-known reason is that President Mahmoud Ahmadinejad has imposed dramatic measures to eliminate this strategic vulnerability. He has massively expanded the country's refinery infrastructure. Seven of Iran's nine existing refineries are undergoing expansion projects; seven new refineries are on the drawing board or already under construction. In three to five years, these projects will double Iran's refining capacity, putting it on par with Saudi Arabia.

These efforts, in addition to an effective petrol rationing scheme, have slashed Iran's need to import petroleum products. As of this fall, Iran's daily gasoline dependence will stand below 25 percent. This figure is expected to decline even further to roughly 15 percent over the next year as new refining capacity comes online. By 2012 Iran is projected to be gasoline self-sufficient; shortly after that, the Islamic Republic is likely to become a net gasoline exporter.

In expanding its refining capacity, Iran worked with French, British, German, Swiss, Korean, Romanian, Italian, Danish, Japanese, Chinese, and even American firms (working through shell companies set up overseas). Vigorous enforcement of the Iran Refined Petroleum Sanctions Act might cause some of these companies to reconsider their relations with Iran. But the idea that the new U.S. sanctions on gasoline imports -- widely thought in Washington to be a "drastic" measure -- would derail Iran's progress toward energy independence or inflict more than a pin prick on the mullahs' regime is overly optimistic.

First, the foreign companies that have been involved in Iran's refinery expansion projects have done so in the early phases of licensing, consulting, financing, design and engineering. For the most part these services have already been performed; the Iranians do the construction themselves. Even if the foreign partners responded to the sanctions, it would have little impact on the projects.

Second, Iran is becoming increasingly reliant on China for its refinery expansion program -- and Beijing has shown little interest in abiding by any sanctions regime initiated by the United States. In recent months, Chinese companies have greatly expanded their presence in Iran's oil sector. In the coming months, Sinopec, the state-owned Chinese oil company, is scheduled to complete the expansion of the Tabriz and Shazand refineries -- adding 3.3 million gallons of gasoline per day. Iran has also secured agreements to take part in three overseas refining joint ventures, in Malaysia, Indonesia, and Syria. The chances those governments would annul these projects are nil.

Simultaneously, Iran is ambitiously pushing alternative fuels to reduce its gasoline consumption. Three years ago, Ahmadinejad initiated a program to convert Iran's vehicles to run on natural gas rather than gasoline. Iran has the world's third-largest natural gas reserves (around 16 percent of the world's total). Now, the government is subsidizing retrofitting cars for natural gas; an Iranian version of "cash for clunkers" is phasing out old gas guzzlers; and domestic automakers now must enable all new cars to run on natural gas, which hundreds of refueling stations are being renovated to serve. The government also provides financial incentives for drivers to prefer natural gas over gasoline. A gallon of gasoline costs 53 cents while the natural gas equivalent only costs 15 cents. Since the initiation of the program, gas has replaced 10 percent of Iran's total gasoline consumption for transport fuel.

Furthermore, Iran is one of the world's largest producers of methanol -- a cousin to ethanol that can be made from not just agricultural products, but also coal and natural gas. The country has four major methanol plants and is building two massive new ones, among the largest in the world, which will increase Iran's production capacity by more than 60 percent. These factories, built with the aid of a Danish company, will enable Iran to blend alcohol into its fuel, just as the United States does with gas and ethanol, and lower its gasoline consumption by at least 5 percent without any need for vehicle retrofitting. Finally, the Iranian government is encouraging its citizens to use public buses by subsidizing diesel.

All of these measures show that the chance a U.S. sanctions policy will inflict economic pain and trigger a change in the regime's behavior is slim. The focus on such sanctions would be warranted if Iran's petroleum-products dependence were deep. But it is no longer the case. The wheels of Washington's bureaucracy have turned too slowly to keep pace with Iran's wiliness.

And in their fixation with sanctions, U.S. lawmakers have been distracted from some tectonic changes in the Iranian energy security landscape. In May, the Islamic Republic signed a pipeline deal with Pakistan that will provide Iranian natural gas access to the Asian market. India's petroleum minister announced that New Delhi will not bow to any external pressure against extending the pipeline into India; this means that millions of Indians might soon be relying on Iran for their electricity (in a deal Russian gas giant Gazprom has shown interest in financing). Last month, Iran concluded a deal to connect with Turkmenistan as European countries moved forward toward building the Nabucco pipeline, which could bring Iranian gas into the heart of Europe.

Derailing each of these moves would have much lasting impact on Iran's plans for regional hegemony than the gasoline sanctions. If the congressional activism directed toward this feel-good solution were directed toward efforts to block Iran from developing new economic lifelines, Tehran would have a real reason to worry.



Tough Questions Nobody Wants to Ask

It's time to scrutinize the basic assumptions behind Obama's escalation in Afghanistan -- before it's too late.

Over the last few years, castigating the media for its failure to examine the case for war in Iraq, simply accepting the Bush administration's facts and rationales, has become something of a cottage industry. You might think, given the fuss over Iraq, that the media and its critics would be zealously examining our stepped-up efforts in Afghanistan -- one of the most extraordinary, difficult, and costly ventures of American foreign policy. But, for the most part, they are not.

Only in the last few months have public figures questioned the case for war in Afghanistan. Recently, Harvard scholar Rory Stewart and 9/11 Commission head Lee Hamilton have asked whether the war is worth U.S. blood and treasure. And no less than General Stanley McChrystal reportedly admitted that U.S.-led forces may be losing -- or at least not winning.

For the Iraq war, the media was charged with not seeking out and publicizing the worries of the academics, policy analysts, and others deeply skeptical of urgency of the threat and the Bush administration's stated casus belli. Later, it was accused of overlooking the wider story by embedding reporters in the operations of military units once the war began and focusing attention on tactics and human-interest stories. Now, the United States is building a nation-state in Afghanistan and changing the national-security priorities in Pakistan -- whose people overwhelmingly dislike the United States. By and large, the media is not asking those basic and critical questions of Afghanistan.

On Afghanistan, there are few stories of mid-level officials disputing the administration's view of the situation and the U.S. policy approach. For instance, few questions have been asked about the consequences or the morality of the United States urging Pakistan to displace two million in the Swat Valley in order to attack militants using air and artillery. Editorialists tend to be either quiet on the Pakistan-Afghanistan question, or strongly supportive of American efforts. Strategy is almost never questioned. Media watchers seem more interested in determining whether the press is soft or hard on U.S. President Barack Obama. Until a recent uptick in coverage, the number of television minutes and front-page stories had dropped precipitously. And, the American media still has little regular presence in Afghanistan; most well-known columnists visit courtesy of the aircraft of senior American military and diplomatic officials.

Why the lack of rigorous examination of American efforts in Afghanistan for the past eight years? The Afghan war began with a vengeance shortly after 9/11. The United States and its allies quickly destroyed the Taliban regime, drove al Qaeda and the Taliban to remote Pakistan border areas, and cobbled together something of a state. American attention then turned to Iraq -- leaving Afghanistan forgotten. The media has barely covered how, exactly, the Taliban succeeded in restoring a fighting capability with safe havens in Pakistan and support from sympathetic Pashtuns.

This is not to say that Afghanistan is a "forgotten war" in Washington. The Obama administration came to the Afghan war with the perspective that it, not Iraq, was the real battle of importance to the United States. Al Qaeda was there and the terrorist group was a real, existential threat to the American homeland. The administration declared its priority in Afghanistan to be to destroy al Qaeda -- the most persuasive way of maintaining public and congressional support for a much enlarged, highly uncertain venture. It is pounded home repeatedly. It is, in the current parlance, a war of necessity -- not of choice.

But the deepening U.S involvement in Afghanistan under the Obama administration is based on assumptions that merit and require more sustained examination by the media, given the vast importance of the enterprise.

First, the U.S. strategy asserts that al Qaeda remains the real threat to the United States, and that the re-Talibanization of Afghanistan will again permit terrorists to operate more freely. No one questions the threat from al Qaeda. More problematically, though, few question that a sustained massive commitment of manpower and money for years to come is the best way of proceeding. After all, al Qaeda leaders, now said to be residing reasonably securely along the Pakistan border, have networks extending beyond the Afghan state to places like Yemen and Somalia, the latter effectively abandoned by the United States after many years of ineffective meddling. Can their planning and training only be done in Afghanistan?

Second, other more publicly acceptable and therefore more durable military approaches to Afghanistan existed, but they were passed-over with little public scrutiny. For instance, a combination of U.S. intelligence, Special Forces, and air capabilities, supplemented by Afghan militias and regular forces, holds promise for keeping al Qaeda and the Taliban under continuing strain. The Afghans have been fighting each other for decades before the Americans arrived and should be able to continue to do so, particularly with American assistance. By all accounts, most Afghans do not welcome the return of the Taliban. It's likely the U.S. government examined and rejected such an approach, but more public debate of this option would have been welcome.

Third, the administration asserts that if the Taliban is to be permanently prevented from controlling Afghanistan and allowing al Qaeda to roam, it is necessary to build an Afghan state with a strong central government. But such intense, long-term nation-building is much more difficult in Afghanistan than Iraq: The economy is rudimentary and dependent on poppy cultivation, the population is highly illiterate, the ethnic divisions are numerous, the trained officials are few. The administration apparently believes that if significant nation-building progress is made via the military and civilian "surge" in the next year, Congress will provide funds for the longer term. That is an impressive gamble.

And bottom-line questions remain. What will it cost? How much forces will be needed? How long will it take before an Afghan state can reasonably function and the threat of al Qaeda is eliminated?  The administration, not surprisingly, finds such questions inconvenient. They tend to deflect them -- acknowledging it will be tough and costly, and saying we have to see what can be accomplished over the next year, despite the bad results of the last seven. The enormity of the stakes requires not just faith, but continuing examination of huge sacrifices: in lives lost, military personnel deployed, costs borne, and American credibility engaged.

Obviously these questions cannot be easily answered and answers will vary. Analysts outside government are busy pouring over U.S. policies in Afghanistan, providing an important service to the administration and the public. Whether such policies are misguided is beside the point. Indeed they may be practical, appropriate, and worth the gamble. Given our long involvement in Afghanistan, many in and out of the administration will argue that there are also strong moral and humanitarian reasons to stay the course.

But the media has largely abdicated on its responsibility to serve not just as an outlet for the opinions of others, but also in digging out new facts and providing continuing analysis. It must remain vigilant against assertions that "we have no alternative to doing what we are doing or else the consequences will be disastrous." That may be correct, but it is what the public always hears until the government changes its mind.

Naturally, mainstream media are constrained by an evolving industry in which traditional investigative journalism is no longer as financially viable. It costs lots of money to keep reporters in Afghanistan. Security is a daunting problem, as New York Times journalist David Rohde found as guest of the Taliban for seven months. Additionally, the investigative journalism of the past inadequately responds to today's technologies, business models, and audience demands.  The media must cater to an audience that expects instantaneous news feed updates from the Internet, and that does not allow for much in-depth analysis.

However, upheavals in the media industry and the demands of its patrons do not relinquish reporters and columnists of their responsibilities as gatekeepers, ferrets, and watchdogs. Now, more than ever, a reexamination of the basic assumptions about the Afghan war is welcome. We need much more analysis, skepticism, and news -- before it's too late.

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