Tuesday, October 04, 2005

Nuclear Venezuela

Venezuela's President Hugo Chavez recently stated during his weekly presidential address that his country is looking to acquire nuclear energy. From the Tehran Times:
"Brazil has advanced in its nuclear research, nuclear power, and that's valid. Argentina too, and we also are starting to do research and projects in the area of nuclear energy, with peaceful aims of course," Chavez said during his weekly radio and TV program "Hello President."

That seems a little fishy to me. I don't have the numbers here in front of me but it seems to me that oil, which Venezuela has plenty of, is a much cheaper source of energy than nuclear power. The idea, as Venezuela tries to sell it, is identical to Iran's rationale for nuclear energy. They will use nuclear power to power their country thus allowing them to export the oil they had been consuming and make money off of that additional export.

There is one problem with that. In addition to the fixed cost of building a nuclear reactor, neither Iran nor Venezuela produces much in the way of uranium ore. That means they would have to import the know-how and the uranium to build and operate the nuclear reactor. I'm willing to guess that would more than compensate for the added oil exports.

If you are Japan, for example, you might make the argument on security terms instead of economic terms. Reducing their dependence on oil imports reduces the threat that a blockade or embargo could harm our economy so they are willing to pay more. That is clearly not the case with Iran and Venezuela, both of which rank in the top five oil producers in the world. To quote a friend of mine:
It's like the Governor of Nebraska saying that they are going to hire some fishermen in Alaska to catch salmon that will then be shipped to Nebraska. Then, the government will hire chefs who specialize in preparing salmon in order to provide all the meals for the Nebraska residents, just so that Nebraska can sell the corn they produce to other states rather than have their own people consume it.

As if this wasn't troubling enough, there is more. If you are a medium-sized economy seeking nuclear power, who would you turn to? The United States or even France come to mind, but no! IRAN! From the same article:
Chavez, whose country is the world's fifth largest oil exporter, has said he is interested in working with Iran to explore peaceful nuclear energy. Chavez has insisted that Iran has the right to develop nuclear energy despite opposition from the U.S.

Keep in mind that Iran does not have the know-how to accomplish this task itself and had to rely on Russia, France and others to achieve its "peaceful" nuclear program. Does that sound like the people you would turn to?

So you may be asking yourself: "Self, is this a light water reactor (LWR) or are they going heavy?" Let me explain to you why you are asking the wrong question. The common perception, acquired from watching too much CNN, is that heavy water reactors help a country accomplish nuclear weaponry while those of the light water variety do not. This is not the case. In fact both reactors are equally capable of producing the desired goodies. The difference is that switching a reactor from energy production to weapon production is much easier to detect with LWRs. For that reason we prefer countries to have LWRs because we have faith that our intel guys (or the IAEA) will detect such things. They would need centrifuges to process the uranium, but Iran has already demonstrated how easily such facilities can be built and hidden.

So I ask you all, should we be worried that Venezuela is building LWRs? Should we be worried that they are turning to Iran for help doing so?

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