The Hypocrisy of Sanctions on Iran : Persian Gulf: The U.S. fights a reactor for nuclear energy while U.S. companies get rich on ‘forbidden,’ underpriced oil.

This is the stuff of high comedy: While Newt Gingrich and fellow Republicans pinch pennies, threaten school lunches, food stamps and welfare benefits, Defense Secretary William J. Perry is busy offering Russians--old Communist Party and KGB hands, Evil Empire builders of less than a decade ago, killers in Chechnya today--millions of American taxpayers’ dollars to stop the sale of light-water nuclear reactors to Iran.

The plutonium in these reactors is useless in making nuclear bombs. In fact, these are the very same type of reactors recommended for North Korea to prevent it from becoming a nuclear threat.

The U.S. government believes that Iranian scientists could learn how to build bombs by studying the energy-producing secrets of the Russian reactors. Yet the same reactors are mysteriously devoid of educational value to North Koreans. Where is the logic?

For two decades, Iran has had a nuclear energy program; it was delayed by the revolution and then the war with Iraq, and is now back on track. Yet it is no secret that Iran, in a volatile region where Israel, India and perhaps Pakistan have military nuclear capabilities, is interested in developing such capabilities of its own. It is equally clear that a cash-hungry Russia and an oil-thirsty Western Europe would--whether openly or secretly--be helpful in Iran’s attempt to reach this goal in its larger quest to fill the Persian Gulf power vacuum (quixotic as both efforts may be). But America cannot indefinitely curb Iran, which it has declared a rogue nation, by descending upon whomever wants to sign a contract with Tehran.

True, Conoco was stopped from developing off-shore oil fields for Iran when the Clinton Administration exerted pressure on its parent company to cancel the deal. And Russia may lose its determination to conclude the Iran sale when Presidents Clinton and Yeltsin meet during the pending summit. But in a world intent on trade, conducting foreign policy by forcing others’ deals to fall through has its limits. In its continuing effort to isolate Iran at any price, America may find itself alone.

Yet there is another level of deals going on that makes this picture even more complex and dubious: the nearly $2.5 billion a year that Iran receives by selling its oil to American companies, among them Exxon, Texaco and Mobil. The sole U.S. restriction on these companies is that they cannot sell this oil at home. For those who are even superficially familiar with Big Oil, with its phantom freights and port-hopping tankers, the restriction is laughable. It is highly likely that Iranian oil, as well as oil from “rogue state” Libya, finds its way to gas stations in this country.

Why is the drumbeat of political and economic animosity kept so loud while oil flows so quietly? Because this arrangement has done wonders to keep the benchmark price of crude oil at about $18 a barrel, which is at least $10 below its real market value. The miracle has been achieved by portraying oil-producing countries either as utter villains (Iran, Iraq and Libya) to make them desperate to sell their oil under conditional embargoes, or as good and docile friends (Saudi Arabia and Kuwait) worthy of the West’s patronage.

Choosing the realistic political middle ground would give all of these countries the bargaining power that the major oil companies do not want them to have. Iraqi oil, despite a U.N. embargo, leaves that country over land and through the Gulf--at $8 a barrel. Low as it is, this price is sufficient to enrich the Iraqi elite and helps to keep the price of crude oil depressed worldwide.

As long as the U.S. government does the oil companies’ bidding in the Persian Gulf, it cannot have a real policy for the region, one that is comprehensive, consistent, humanitarian and mutually beneficial. What passes for a policy now merely prolongs wasteful dependence on foreign oil in this country, and postpones meaningful plans for conservation and alternative fuel development.

The world is hurtling toward a new Dark Age when oil, a finite and soon-to-be-scarce commodity, can dictate political policy, modify ethical conduct and justify war. Iran, as a producing country, is only too aware of how finite oil is, which helps to explain its nuclear energy program. America, too, should be marshaling its technological might to develop alternative fuels, preferably non-nuclear, and to share them with a world where, today, whenever we look beyond the smoke screen of political and ideological rhetoric, we see a barrel of oil.