Iran and the NPT
The other major energy-related news item of the last couple of weeks is the negotiations with Iran over its nuclear fuel reprocessing capability, and the implications for nuclear weapons production. Even ignoring the fiery rhetoric coming out of Iran, the European-sponsored agreement announced this week is pretty clearly just a stopgap. Will the time thus bought be spent usefully, or are we merely postponing further unpleasant revelations?

The current deal can be viewed either as a pragmatic compromise facilitated by an effective "good cop/bad cop" act on the part of the EU and US, or as cynical appeasement by European governments eager for more trade with the mullahs and no appetite for confrontation. Whatever the motivation or the subsequent judgment of history, few experts seem to think this agreement will prevent Iran from joining the nuclear weapons club at a time of its choosing. The real benefit may be one I haven't seen articulated: buying time now is worthwhile, because full-blown sanctions on Iran are unthinkable in a world of $50 oil.

Iran currently exports 2.5 million barrels per day of oil, most of which goes to Europe and Asia. This quantity is greater than the most optimistic assessment of the world's remaining spare production capacity, so cutting it off would create a situation analogous to the 1973 and '79 oil crises. I am certain that the Iranian negotiators understand this completely--inasmuch as their own Islamic Revolution precipitated the 1979 crisis--and are taking full advantage of the bargaining power this gives them.

So is there a way out of this situation that won't result in Iran becoming a nuclear power, and in the process blowing the entire nuclear non-proliferation regime to kingdom come? The Wall Street Journal's suggestion of funding the Iranian opposition seems likelier to cost the latter their credibility and ruin any chances of turfing the mullahs out of power. This is a problem that cries out for some fresh thinking.