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Sanctions and US Shale Boom Kill Iran's Gas Dreams

Iran would need a decade to build the infrastructure to exploit its natural gas reserves, thought to be the world’s largest, because of international sanctions, as Bloomberg reports. World prices have dropped, and are projected to continue falling, because of American, Canadian, and Australian shale gas—so Iran’s natural gas would yield lower profits even under its best efforts to exploit them.

“Iran has missed the boat,” an energy consultant told Bloomberg. “They should have slotted in nicely between Qatar’s projects and the new Australian ones and before anyone was talking about U.S. exports. In addition to a lack of technology,” he continued, because of sanctions “they lack the funds.”

This spells trouble for Iran, which shares the world’s largest undersea gas field with Qatar. Qatar has become the world’s largest exporter of natural gas and one of the world’s wealthiest nations because of its huge gas reserves, while Iran’s energy industry has been hamstrung by sanctions and mismanagement. If Tehran chose to give up its nuclear program and the US and EU lifted sanctions, Iran could be looking at a brighter future. As another analyst told Bloomberg: “If Iran gets itself sorted out with Western powers and gets itself back into alignment with the rest of the world, the sky is the limit for them.”

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  • Nick Bidler

    >“If Iran gets itself sorted out with Western powers and gets itself back
    into alignment with the rest of the world, the sky is the limit for

    To flip the question in the other direction, if they actually get The Bomb, the sky is *also* the limit, in terms of what it can extort from its neighbors minus Israel.

    • Thirdsyphon

      I’m not so certain of that. North Korea has The Bomb, and Kim Jong Un spent half the spring bellowing explicit (and extravagant) threats at South Korea and the U.S. that he was going to use it against his enemies absent major concessions to his regime. His enemies yawned.

      Iran’s neighbors are infinitely more excitable than North Korea’s, and their response to similar threats would be. . . unpredictable. But a collective yawn would be about the best that Iran could reasonably hope for.

  • MWFlorida

    If Iran spent a fraction on natural gas as they are spending on nuclear, they could develop their huge reserves. Power is much cheaper generated from gas than nuclear, especially when you have an almost unlimited supply of natural gas. Look at the U.S. Most of our new power supply is gas-fired. The only 2 new nuclear plants (in Georgia and South Carolina) require massive government subsidies and will still cost their ratepayers dearly.

    Anyone in the power business knows that Iran is developing nuclear for military reasons, not for power generation.

  • bpuharic

    Wow, another failure of US foreign policy, I guess, according to the right.

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