Iran vs. the USA: How Technology Leaks Could Affect the Great Space Race

American & Iranian Tensions: a Brief Review

Prior to the 1970s, Iran and America had been getting along rather well. However, that changed when Mohammad Reza Pahlavi, a Shah backed by the United States, was overthrown in Iran. During the same year, several dozen Americans were taken hostage at the American embassy in Tehran. Later, their rescue would be the inspiration for the Argo movie.

Although there were ups and downs, relations between the two countries remained largely cool. More recently, they’ve become cold. One of the major contentions between America and Iran is Iran’s desire to create a nuclear weapon. American policymakers felt it was a step too far and they began to exert influence to stop the weapon from being built. Primarily, this consisted of the United States sanctioning Iran and cutting it out of the global financial system. In a world that runs on dollars, getting cut out of the club can be financially devastating. A country cannot access foreign financial services, it may struggle to pay for commodities priced in dollars (as most are) and it may not be able to sell its own commodities as Iran has great trouble selling its embargoed oil.

Eventually, recognizing that diplomacy may solve more problems than a weaponized dollar, John Kerry led a team that brokered a deal with Iran. In exchange for stopping the development of a nuclear weapon, the USA would lift sanctions. Some estimated they were costing Iran between $4 and $8 billion per month in lost oil revenue. This brokered peace lasted for the duration of Obama’s presidency and then quickly fell apart. Trump denounced the deal and backed out. Then, he authorized the assassination of Iranian general Qasem Soleimani at the Baghdad airport in January of 2020.

This brings us to today. Iran and America are increasingly hostile to each other and it’s incumbent upon Iran to find a way to beat America that doesn’t depend on exchanging rifle fire. That’s where space comes in. Iran feels that this could be an arena where they can harness an advantage over the United States.

Iranian Satellites and Missiles

Recently, Iran has claimed to successfully launch its first military satellite, a big step forward for the country’s space program. What’s concerning for the Americans though is that some intelligence officials believe that the Iranians could use this rocket technology in order to launch ballistic missiles in the future. In regard to the missile launch, the U.S. Air Force General John Hyten said: “We want to make sure that they can never threaten the United States.”

If it becomes apparent that a ballistic missile is being developed we should expect the United States to respond forcefully. What form this response will take remains to be seen. What also remains to be seen is whether Iran is actually capable of building a ballistic missile. The old joke about it is that this isn’t rocket science… Well, this is rocket science and it takes a lot of time to get it right.

Risk of Technology Drain from US Space Programs and NASA

As proud as Americans are of walking on the moon if we’re going to state the objective facts it was Nazi Germany that helped them get there. Upon the conclusion of World War II, the United States recruited many of Germany’s top rocket scientists. Ever the equal opportunity employer, the United States was able to massively accelerate its space program by “hiring” these talented specialists.

Today, Iran is hoping to achieve a similar outcome. They would also like to poach talent in order to grow their own space program. Recently, we have learned of Sirous Asgari, an Iranian scientist who was arrested in the United States for allegedly sharing trade secrets with Iran. Although the charges were eventually dropped, Asgari was nonetheless deported for his alleged subterfuge. This case illustrates the potential danger posed by foreign nationals working on classified projects inside of the USA, as does the case of Hongjin Tan.

While working for petroleum company Philipps 66, Tan admitted to stealing trade secrets worth a staggering $1 billion. Tan’s coworkers noticed the Chinese scientist downloading proprietary information to a thumb drive and reported him to higher-ups. This theft would eventually lead to a two-year prison sentence for Tan.

The Chinese theft of American intellectual property has been an under-discussed national issue for years. A quick Google search will unearth numerous examples of Chinese nationals and even Chinese-Americans stealing information and sharing it with the Chinese government. Given these instances of theft, it’s, perhaps, somewhat perplexing that NASA has recently announced their intention to work with countries like China and India to co-develop space technology.

In a statement from 2019, NASA suggested: “As NASA works toward its plan to sustainably return to the Moon, it will be critical to collaborate with both commercial and international partners along the way. This approach will enable human expansion across the solar system and bring back to Earth new knowledge and opportunities.” Whether this approach of technology sharing is wise remains to be seen.

Besides NASA, there are multiple private companies with some ties to China, Russia, and even Iran. Going forward, these companies should prove to American government officials how they are preventing information flow from America to other parts of the world. Further, American officials may need to tighten security for foreign rocket scientists working within the USA. In the most sensitive areas, there may even need to be restrictions stipulating that only American-born researchers can work on certain projects. While the politically correct crowd would have a field day with this, at some point national security needs to win out over public perception.

This need to prevent technology leakage from private firms is especially important given that NASA increases cooperation with commercial space tech companies. While the most exciting rocketry developments happening within the United States are taking place at SpaceX. There are few people who don’t feel amazed when watching a video of a SpaceX rocket landing on a yellow X, which is the size of a kiddie pool. SpaceX, thankfully, has not shown any inclination to work with foreign governments, which is good, considering how military tensions between the countries are heating up.

Economic Effects

Iran’s main source of income is oil which is not an easy commodity to sell when your country is sanctioned. The problem for Iran is the incredible influence that the Americans can exert in such matters. Global trade is the lifeblood of many countries, and access to the dollar is so important, that if the Americans say “jump”, most countries will ask “how high?” If the Americans tell the world not to do business with Iran, most countries will comply. Or, as in a recent example, if the United States puts an Iranian airline on the blacklist, most countries will cease working with it. Everyone is afraid that if they don’t cut Iran out they’ll be the ones sitting in the time-out corner next. Their own economic prospects will be on the fritz.

As an example of how pernicious these sanctions are, one of the largest incentives in the short-lived Iran-America nuclear deal was that America would remove some of the sanctions. This would essentially cost America nothing and yet Iran was willing to give up a nuclear weapon in exchange for it. Although this deal failed, Iran may be hoping that they can leverage a functioning space program just as they leveraged the threat of a nuclear weapon. A space program could provide Iran with a bargaining tool against America and give them a powerful seat at the table for negotiating the cessation of sanctions.

Additionally, the ability to launch rockets into space is a highly sought-after service. While Iran is currently “launch-capable” with its Safir rocket, two out of the last three launches have been failures. It is unlikely that many countries will be willing to risk putting a ridiculously expensive satellite on top of a tall tube that has a two-in-three chance of going off like a pipe bomb. However, if Iran improves its space program and increases the reliability of its rockets, it could find a new source of income as other countries are willing to pay to have their cargo launched into space. Case in point, Iran’s new Qased rocket has put the military satellite into orbit.

Whether space mining is a decade away, or perhaps, it’s one of those bold visions that never comes to fruition, the United States is willing to invest in it. In April of 2020, Ellen Lord, the Undersecretary of Defense, noted: “We expect payments at the higher progress payment rate to start this week, helping provide $3 billion in increased cash flow to industry.” Chad Anderson, the managing partner at Space Capital said: “For a lot of U.S. companies, when investors are retrenching, the government is stepping up and either increasing their investment or providing advances to some of these companies.”

Clearly, the further development of space capabilities is important to the United States government. The same must be true for Iran and their own domestic space agencies, although they’re slightly more tight-lipped on the matter. If governments believe that funding private companies is the best way to assure dominance in space, we’ll likely see the taxpayer dollars flow into these programs.

Look at the Incentives

Charlie Munger famously said; “Show me the incentive and I will show you the outcome.” Iran has every incentive to develop its space program and become a global leader in all things rocketry. The outcome? They’re heavily incentivized to capture intellectual capital from wherever they can get it — whether that’s hacking into systems to steal engineering data or recruiting talented scientists from the United States to share proprietary information with the Iranian government. Technology leaks from America could leapfrog Iran’s space program by years, maybe even decades, and that’s an unfortunate truth that needs to be realized and acted upon in the United States.