By Matthew M. Reed
Saudi Arabia needs nuclear power if it wants to sell oil rather than burn it at home. As of today, nearly all domestic energy in the Kingdom comes from oil and gas–and those needs are expected to triple in the next twenty years. Washington and Riyadh are now exploring nuclear options as part of a $100 billion push by the Saudis to diversify their energy portfolio. Both countries would benefit from a deal. For one, it would free up Saudi oil for export instead of consumption; global markets would be flush with hundreds of thousands of barrels of “new” crude. A transparent, legalistic nuclear deal might also refocus attention on Iran’s opaque program.
The logic is sound so long as the Saudis confirm their interests are non-military. Given the long shadow of Iran, explicit promises would be a good place to start, so might American security guarantees if the Saudis need convincing. France and Saudi Arabia agreed to develop nuclear energy in February. The deal is only the most recent of many, all of which prove the Saudis are serious about changing their consumption habits.
As Al Arabiya reported on June 2: “Saudi Arabia plans to build 16 nuclear power reactors by 2030, which could potentially cost more than $100 billion.” Abdul Ghani bin Melaibari, coordinator of scientific collaboration at King Abdullah City for Atomic and Renewable Energy, told Arab News that Saudi Arabia will have two reactors in the next ten years. “After that, every year we will establish two [at an approximate cost of $7 billion each], until we have 16 by 2030.” If successful, more Saudi crude will reach the market, potentially affording the Saudis more spare capacity and a greater ability to moderate prices. Everyone wins.
As for international security, a US-Saudi deal would have to be comprehensive and transparent, in keeping with the principles of non-proliferation. Saudi Arabia is already a party to the Non-Proliferation Treaty so its obligations are well known. The goal should be to isolate Iran by establishing a new standard in the Persian Gulf. This alternative model would hinge on inspections and the denunciation of nuclear weapons. This might be too subtle a point, but the Gulf can harness nuclear power without making the region radioactive.
Beyond technical issues and cost, American legislators may prove the biggest obstacle. Saudi Arabia’s intent will be questioned at tense hearings if a deal moves forward. The Kingdom’s reputation remains tainted by gross stereotypes, suspicions about 9/11, and the bitter taste left by the 1973 oil embargo, which the Saudis can’t shake so long as millions of voters remember it well.
An unnamed House staffer, quoted by Christian Science Monitor, had this to say on July 29: “There aren’t many countries you could come up with where people would be more energized in opposition to this kind of cooperation than this one.” Very true. Rep. Ileana Ros-Lehtinen, chairwoman of the House Foreign Affairs Committee, confirmed as much on July 30 with a prepared statement that claimed “Saudi Arabia is an unstable country in an unstable region.” That would be news to the Saudis, for sure, given that no critical mass has hit the streets, and the regime–like others around the Gulf–has proved stable so far. The administration will have to overcome popular misconceptions like these and argue forcefully that a comprehensive nuclear deal can enhance American security, further isolate Iran, and, in due time, positively impact oil markets.
I’ll cap this off with some quick take-aways: if nuclear weapons are not part of the equation then it’s in America’s interest for Saudi Arabia, a critical oil producer, to develop new energies that allow it to sell more oil. But the administration should be prepared to fight for a deal. In recent years, both Bush and Obama have arranged massive arms sales to the Saudis in spite of reservations on Capitol Hill. Any nuclear arrangement will be an uphill battle worse than prior deals for conventional arms. It’s unclear if this administration, which has fought big battles over healthcare and the debt, is willing to fight for a partner many Americans don’t trust.
And lastly, we shouldn’t get too far ahead of ourselves: advocates of a deal should remember that a joint effort will require years of cooperation and any impact will not be felt for a decade or more. Oil market volatility could make the journey painful yet. And, if the US wants to isolate Iran with successive nuclear pacts, keep in mind that there is a ceiling for isolation—and that Iran could reach it before these arrangements make a difference.