Turkey’s energy goals

There is another player who follows energy developments and cooperation between Greece, Cyprus, Israel and Egypt and so far remains outside the equation. Turkey did not hide its interest for energy reserves of the Eastern Mediterranean. This interest is related to its goal of becoming an important energy hub, leaving behind other political issues that affect developments.

A series of documents was forwarded as part of the discussion organized by the think tank Turkish Policy Quarterly in cooperation with the Atlantic Council, which focus on the energy issue and its importance for the whole region, in parallel to how Turkey is affected by these developments.

Daphne Arslan noted that “Turkey is a country with few sources of mineral wealth”. This is why the country needs “to secure supplies” of energy through a combination of imports and indigenous production. She estimates that because of its position, Turkey is “an ideal and developing market for producing countries and in a good spot to make use of recent natural gas discoveries in the Eastern Mediterranean”, even to forward LNG to international markets. She further notes that “Turkey’s strategic position between producing countries in the Middle East and in the Caspian and the consuming European market, offers the prospect of acting as a bridge and contributing to European energy security”.

Turkey, says Alparslan Bayraktar, underwent an important change in its energy market between 2002 and 2017. During that period, according to the energy minister, there was a focus on policy and legislature with the result of making great steps and changes in the market. At the same time, investments in renewables were also forwarded.

Turkey, after 16 years, proceeded in its transition through its National Energy and Mining Policy (NEMP). This policy, according to Alparslan Bayraktar, stands on three pylons: Security of supply, finding and securing markets.

Through NEMP, Turkey aims to achieve energy autonomy, security in its peripheral supplies and facilitate international partnerships. This new era in energy policy is expected by Al. Bayraktar to raise Turkey from a powerful peripheral player today to a global one.

According to the International Energy Agency (IEA), there will be faster growth in the energy sector within its members. Alparslan Bayraktar mentions that IEA expects fossil fuels to continue to be the primary energy sources worldwide until 2040 and notes that this was one of the reasons why Turkey moves on with its own exploration. The Turkish government’s decision is to go forward with its own exploration. The drilling ship “Fatih” commenced surveys last September in the Mediterranean. A second ship, said the Turkish minister, is planned to begin its own activities within the next few months. Furthermore, the two surveying ships “Barbaros Hayreddin Pasa” and “Oruç Reis” will begin exploration in the Black Sea and the Mediterranean.

Speaking about the Eastern Mediterranean, he noted that it is a region with prospects if one takes into account recent natural gas and oil discoveries. He noted that oil and gas discoveries by Turkey will enhance his country’s energy security. In the event of discovering significant reserves, then reality in the region will change.

Next moves

As for Turkey’s next steps, Alparslan Bayraktar mentions three goals that are connected to crucial investments:

1) Offshore exploration for gas and oil. TPAO will be more active in the near future when it comes to drilling.

2) More activity and international cooperation between production companies.

3) More merges and buyouts should be expected in the near future, since foreign investors are attracted to available properties.

Sandra Oudkirk, Deputy Assistant Secretary of the State Department, underlined that the US support the 40 billion dollar Southern Gas Corridor or SGC. It is a grand project for the transferring natural gas from the Caspian to Europe. Despite the fact that the US are not actively involved, she said that they support this project.

The American official noted that SGC’s importance relies partly on opportunities created for each country. For Azerbaijan and other possible suppliers, this corridor means access to Europe’s huge market and creates the prospect of steady longterm income. For consumers in Turkey and Europe, the corridor enhances longterm energy security. At the same time it reduces reliance on just one source.

She brings Russia as an example that moves in two directions when it comes to transferring its own natural gas to Europe. One is to Germany through the Baltic with the Nord Stream pipeline. The other is through the Black Sea and Turkey with the TurkStream pipeline.

Sandra Oudkirk’s evaluation is that these two projects can maintain and also expand Russia’s already dominant position in European energy markets. The Russian government, she added, has already used Gazprom repeatedly to achieve its geopolitical goals.

It is not accidental that “taking into account that Russia uses energy as a political weapon”, the Us believe that Europe “will have to differentiate its energy supplies in order to react effectively to possible complications in the delivery of natural gas from Russia”.

Catalyst for collaboration

In Washington there is the belief that energy can act as a catalyst for collaboration between competitors in regions such as the Eastern Mediterranean. The American official noted Egypt and Israel as an example, who have redefined their peripheral relationship because of natural gas and their governments are constantly seeking cooperation. This is why there is hope that recent discoveries will further contribute to the change of climate in the Eastern Mediterranean. This will take first and foremost political cooperation.

The other side of the coin

There is the constant remark that energy can become a driver for peace and cooperation between Eastern Mediterranean countries. As a source of cooperation, under strictly business and economic terms, this can be achieved through participation of all the regional players. Apart from that, what many politicians in the US, Europe and our region say is very hard to achieve.

Brenda Shaffer of the Atlantic Council has a different view than the politicians. She believes that “natural gas discoveries in the Eastern Mediterranean will probably not promote peace between players of the region”. Nonetheless, she claims that gas trade between the region’s states can contribute to internal prosperity, thus enhancing stability.

The phrase “we must become an energy hub” has been said many times. Brenda Shaffer’s view might bring many back to reality: “Many of the Eastern Mediterranean’s states – including Turkey, Egypt and Cyprus – have declared their ambition to act as hubs in the region. It is hard to understand why that desire prevails among these states”. She further notes that in the best case what will come is some of these states becoming transit centers.

She brings Turkey as an example, which is currently an important center, since it is situated between significant energy sources and a large market in Europe. “The prospect of Turkey becoming a hub is small and even if it is achieved, it will not bring greater geopolitical value than today as the main transit country for natural gas”, Shaffer adds.

Moving one step further, she shows to those who believe that natural gas will solve the region’s problems, but also Cyprus’s, that “until today there is not a single case of a ‘peace pipeline’ globally, where the energy prize acts to solve conflict”. And she concludes that in the best case, natural gas can act as a source of energy towards other directions, such as desalination plants and to offer water to nations of the region and to avert another cause of conflict.

Source: Andreas Pimpisiis, Phileleftheros of Cyprus
Energyworld, January/February issue 2019

 

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