Editor’s note: The following article is drawn from a long-form analysis of the history of the Iranian nuclear program in the Bulletin’s January/February 2009 edition. That analysis can be found here.

Editor’s note: The following article is drawn from a long-form analysis of the history of the Iranian nuclear program in the Bulletin’s January/February 2009 edition. That analysis can be found here.

Today, most of the debate about Iran concerns the purpose of its ongoing nuclear activities. But Tehran’s interest in nuclear technology dates back more than 30 years to when Shah Mohammed Rez Pahlavi sought a “full-fledged nuclear power industry” with the capacity to produce 23,000 megawatts of electricity. Although the Shah sought nuclear power to help turn Iran into a powerful modern state, the program’s size and some of its objectives raised questions in Washington about a nuclear proliferation risk. In addition, despite the Shah’s claims that he didn’t want to build a nuclear weapon, his regime’s interest in reprocessing plutonium and its insistence on a “full right” to reprocess raised apprehensions.

To achieve his goal, the Shah wanted to buy nuclear reactors from the United States (as well as Western Europe), but U.S. presidents wouldn’t approve the sales without conditions limiting his freedom of action to use U.S.-supplied resources. After protracted negotiations, Iran and Washington did reach an agreement, only to be derailed by the 1979 Islamic Revolution.

From the very beginning, proliferation concerns shaped the U.S. approach toward negotiations with Iran. The 1974 Indian nuclear test had caught the Nixon administration by surprise, and when Gerald Ford became president shortly thereafter, his administration looked more closely at the risks of nuclear proliferation. The Ford administration reasoned that a world with more nuclear powers would be more unstable: The danger of war would increase; U.S. influence would ebb as nuclear weapons gave “nations a sense of greater independence”; and dangers of “subnational theft and blackmail” would increase. That India had produced weapon-grade plutonium from a Canadian-supplied reactor meant that nuclear exports could never again be considered as simply commercial matters.

While past U.S. presidents had aligned themselves closely with the Shah–his dictatorial rule and human rights abuses notwithstanding–Washington didn’t take on faith his disavowals of nuclear weapons. Indeed, the Shah had said that he could revisit his stance if other powers in the region developed nuclear capabilities. To limit the possibility that a close ally such as Iran could go nuclear, the U.S. government wanted to create significant constraints on any commercial or technical nuclear assistance that it provided. Washington was especially worried about the Shah’s interest in a reprocessing facility that could provide Iran with weapon-grade plutonium.

But the Ford administration had a problem in that it wanted to impose tighter restrictions on Iran than Washington had required in agreements with other countries. Recognizing that an “overly receptive U.S. reaction” to Iranian interest in reprocessing could weaken efforts to discourage it in Pakistan and elsewhere, U.S. officials wanted to seek a virtual veto of Iranian reprocessing of U.S.-supplied reactor fuel. As such, they pressed Tehran to accept a multinational reprocessing center to avoid an Iranian domestic capability. Secretary of State Henry Kissinger also became interested in a “buyback” option so that the United States could acquire spent fuel rods from Iranian reactors. With buyback, Kissinger believed, Washington could ensure that any reprocessing occurred in the United States, not Iran.

Not unsurprisingly, the Iranians criticized U.S. efforts to limit their freedom of action. Rejecting “second-class citizen[ship]” and a U.S. veto of Iranian reprocessing of U.S.-supplied spent fuel, Akbar Etemad, the chairman of Iran’s Atomic Energy Organization, argued that Iran should have the “full right to decide whether to reprocess or otherwise dispose or treat the materials provided under the agreement.” Nevertheless, the Iranians became interested in the buyback option. But the 1976 election and Ford’s electoral defeat put the talks on hold until President Jimmy Carter came to power.

In its last months, the Ford administration, partly responding to criticisms from the Carter campaign, took an even more restrictive approach to reprocessing anywhere, even domestically, because of the proliferation risks. Recognizing the trend, in early 1977, Etemad publicly renounced interest in reprocessing–although U.S. observers wondered whether Tehran was spinning them. In any event, significant policy statements by Carter and congressional action on the Nonproliferation Act produced a tougher U.S. government approach toward reprocessing.

During the second half of 1977, the Shah and Carter administration reopened the nuclear negotiations, and by mid-1978 the two sides had initialed an agreement. The Shah’s regime, however, was beginning its descent, and neither Carter nor the Shah would ever sign it.

As in the 1976 draft, the agreement retained a U.S. veto on reprocessing, but in light of Carter’s tougher approach on that issue, it didn’t include options for buyback or a multinational plant. Iran’s spent fuel could be reprocessed in Western Europe, but only if the material couldn’t be stored in Iran, the United States, or Europe. All options would be “subject to U.S. law which includes determination of no significant increase in the risk of proliferation associated with approvals for reprocessing.” It would be possible to return recovered plutonium in the form of fabricated fuel to Iran, but only “under arrangements which are deemed to be more proliferation resistant than those which currently exist.”

Although part of the agreement’s purpose was to constrain Iran’s freedom of action, apparently the Shah and his advisers believed that such conditions were the price of the nuclear reactors and, presumably, good relations with Washington. Even as the Shah’s regime weakened, Iranian officials were bullish about their country’s nuclear prospects telling a local Westinghouse representative that they wanted to work with the U.S. nuclear industry and that “the bilateral would certainly not be scrapped.” Nevertheless, when the regime collapsed so did Iran’s nuclear relations with the West.

The apprehensions about nuclear proliferation in the region that may have encouraged the Shah to consider a nuclear option for the long run didn’t vanish with his overthrow. The same nationalism that emphasized Iran’s “full right” to reprocess and rejected “second-class” status foreshadowed Iran’s present-day claims about nuclear “rights” under the NPT. Moreover, U.S. enmity toward Iran after the 1979 Islamic Revolution significantly increased the regime’s interest in nuclear deterrence. Understanding the background to Iran’s quest for nuclear power won’t automatically produce better negotiating positions, but a better grasp of the motivations at play in Tehran and their long history may help if negotiations are to succeed.