New ayatollahs with nuclear weapons?

Press, 5 January 1980, Page 10

New ayatollahs with nuclear weapons?

From the “Economist,” London

To understand the present real energy crisis for the 1980 s, do not look at the Organisation of Petroleum Exporting Countries. Look at the prospects before America’s electric utility companies. President Carter has told them, “as a matter of law,” that they must use only half as much oil in the late 1980 s as they are using now. This means they must use more nuclear and coal-fired energy, but environmentalists then stop these from being used. Regulatory lag in price controls during high inflation has put all the companies’ share prices below their asset values, so no sensible

company is inclined to dilute its equity further to finance the building of power stations it might not be allowed to use. There is, therefore, not going to be enough electricity in the United States in the 1980 s. In South Korea, it now takes less than five years to build a nuclear power plant. In the United States, because of environmental objections the latest nuclear plant took 16 years from first mooting to readiness to be included in last year’s temporary ban from being used. Because of quick construction the cost of nuclear energy in South Korea is under

half the cost of electricity from oil. Before last month’s O.P.E.C. rises, the figures were 12.4 won per kilowatt hour from nuclear versus 23.6 won per kilowatt hour from oil-fired. As nuclear techniques advance and South Korean environmentalism does not, South Korea is likely to become a cheaper energy country than the United States in the 1980 s as well as being temporarily a lowerwage one. All the other advancing countries of East Asia are therefore likely to want to go much more nuclear too. The Carter Administration has ensured that this nuclear-’ isation will take place in the

most dangerous way. Until 1977 the newly industrialising countries felt that they need not fear any eventual shortage of cheap nuclear fuels because, with the expected advent of technologies for fast breeders and reprocessing, the reserves of uranium and thorium could be stretched far into the future. Since then the Americans, with the best of intentions, have slowed their own re--, search into such nasty things and have imposed strict restrictions on the international transfer, of- new nuclear technology. If the Americans had earlier taken, the opposite road — the road, of high research and renting out technology on marginal 'cost principles,

with clients among the small developing countries /having to allow inspection of all their nuclear plants and /research establishments — they.could have made the independent acquisition of■ reprocessing and fast-breeder./ technology economically unattractive to the developing countries, by enabling them to rent the knowledge more cheaply. Instead, the newly industrialising countries in the 1980 s will start-to • develop more advanced nuclear technology themselves. They will probably find it easier; more unsafe and quicker IP producing the capability of nuclear explosions than Western societies suppose. Newly industrialising coun-

tries are often politically unstable, especially when too’ much power is concentratedin their governments’ hands (spurred on by such devices as government-to-govemment aid, institution-to-government loans). Iran was such a country. The main international consequences of America’s internal environmental and energy price controls:will be to keep up American demand for foreign oil even if O.P.E.C. is restricting its' supply, to send the newly industrialising countries more independently nuclear, .and to make it more likely that the 1989 equivalent of an ayatollah will have nuclear weapons in his hands. This could . blow up the world.