EurasiaNet Business & Economics - Questions Cloud Turkish-EU Energy Cooperation

BUSINESS & ECONOMICS

QUESTIONS CLOUD TURKISH-EU ENERGY COOPERATION
Yigal Schleifer 6/12/07

Turkey’s heartland of Anatolia � the massive plateau that serves as a natural land bridge between Asia and Europe � is dotted with the remains of 13th century inns, built by the Ottoman Turks’ predecessors to host the caravans that once traversed the fabled Silk Road from China.

Some 800 years later, modern Turkey is once again trying to take advantage of its strategic location, only instead of caravansaries, as the inns were called, it is building pipelines. Instead of silk and spices, the chief commodities moving from East to West are oil and natural gas.

Turkey’s strategy of establishing itself as a transit hub for natural resources is a key component of its efforts to join the European Union. At a recent conference in Istanbul aimed at strengthening Turkish-EU energy cooperation, officials from both Brussels and Ankara spoke in glowing terms about the potential for joint activity, while emphasizing Turkey’s strategic importance in the energy sphere.

"Turkey needs the European Union and the European Union needs Turkey. This is especially true in the field of energy," Andris Piebalgs, the EU’s energy commissioner, told the conference’s attendants. "Turkey is a link, a bridge, a corridor for our region’s energy supplies."

Turkey’s chief EU negotiator, Ali Babacan, told the same audience that "energy cooperation will bring us closer and create a situation where Turkey and the EU are stronger in the region."

Despite the positive rhetoric, experts say serious questions are clouding Turkey’s plans. Several oil and gas pipeline projects that would help link Turkey and the EU are struggling to get off the ground. Meanwhile, recent Russian moves in the Caspian and Black Sea regions seem to have put a lock on the resources that would fill those pipelines up. [For background see the Eurasia Insight archive].

At the same time pipeline plans have hit snags, Turkish-EU accession negotiations have stalled in several areas, and there are now worries that those strains might soon affect the energy sphere. [For background see the Eurasia Insight archive].

Turkey’s strategy of setting itself up as a transit hub is "being called into question these days," says Gareth Winrow, an expert on energy issues at Istanbul’s Bilgi University. "It was a gamble that Turkish officials made to portray Turkey as a transit state when they hadn’t yet realized it and they haven’t gotten projects of the ground. It sounds good and they can’t backtrack on it, but reality on the ground, especially regarding gas, is that there are serious problems."

The extent to which Turkey’s will be able to funnel energy westward may still be unclear, but the EU’s growing need for energy is beyond doubt. EU countries as a whole currently import about 50 percent of their energy needs, a figure that is expected to rise to 70 percent by 2030. Russian oil and gas presently account for 25 percent of the EU’s supplies, and Moscow’s share is projected to rise to 40 percent in 2030. The Middle East provides about a 45 percent share of the EU’s energy.

Brussels is uncomfortable with the notion of Moscow being a major supplier. Thus, EU officials have started to probe for alternate sources. The easiest solution, at least on paper, would be tapping into the large oil and gas reserves in Central Asia and the Caspian region, something in which Turkey would play a central role. But since the EU lacks a unified energy policy, efforts to pursue Caspian Basin supplies have lagged. Russia has also taken steps to maintain its current stranglehold on energy exports from Turkmenistan and Kazakhstan. [For background see the Eurasia Insight archive].

At one point, EU diversification hopes rested heavily on a planned 3,300 kilometer-long (2,050 mile) pipeline, dubbed Nabucco, which would bring Central Asian gas to Austria via Turkey, Bulgaria, Romania and Hungary. However, Nabucco’s future has grown increasingly dim in recent months, especially after Russia recently struck an export deal with Kazakhstan and Turkmenistan � two counties which would be key suppliers for the Nabucco pipeline � which effectively locked up their gas supplies for years to come. [For background see the Eurasia Insight archive].

Gazprom, Russia’s state-owned energy giant, has also been holding talks with Hungary and Austria about building large depots in their countries to store Russian gas, which observers see as another attempt to undermine the Nabucco project. Turkey, meanwhile, has long been eager to build a pipeline that would bypass the congested Bosphorus Straits and would ease the shipping of oil to the west. Recently, though, Russia announced it will be part of building another bypass pipeline, one that goes through Bulgaria and Greece, promising to fill it with Russian and Kazakh oil.

Although Turkey has started construction of its bypass pipeline, which goes from the Black Sea port of Samsun to the Mediterranean oil and gas terminal at Ceyhan, it so far has no guaranteed oil supplies to pump through once it’s completed.

Turkey’s most significant accomplishment in the energy field has been the successful completion of the $4 billion, 1760 kilometer-long (1093 miles) Baku-Tbilisi-Ceyhan (BTC) oil pipeline and the slightly shorter Baku-Tbilisi-Erzerum (BTE) gas pipeline. Both pipelines are currently only transporting Azeri oil and gas, but energy experts warn that the pipelines will only viable � both financially and in terms of truly helping diversify Europe’s energy supplies � if they also start carrying resources from other Caspian producers, particularly Kazakhstan. Turkish and western efforts to get the Kazakhs to agree to the construction of an underwater Caspian pipeline that would link up with the BTE have so far been unsuccessful, to a large part because of Russian opposition to the project. [For background see the Eurasia Insight archive].

"Central Asia is the new region for power politics," says Lt. Col. Marcel de Haas, a security expert at the Netherlands Institute of International Relations. "The problem is that Gazprom is directed by one voice, that of the Kremlin/[President Vladimir] Putin, which is not the case in the EU where energy policy is not a common course but mostly a case of individual states that make energy deals with Gazprom or other producers."

"As a result of Putin’s recent actions in Kazakhstan and Turkmenistan, Europe’s plans for direct pipelines from Central Asia to the West seem to be blocked," de Haas added.

Mitat Balkan, energy coordinator at Turkey’s ministry of foreign affairs, suggested that if the EU wanted to obtain Caspian Basin energy, Brussels needs to launch a diplomatic offensive. "The European Union needs to go [Central Asia] at both the [European] Commission level and at the member-state political level to show the interest to attract them more to cooperation with Europe."

There are concerns that Ankara and Brussels’s cooperation in the energy field could become the victim of troubles facing other areas of Turkey’s EU membership bid. EU leaders have been critical in what they see as a slowdown in Turkey’s EU-related reform process and Brussels partially froze accessions negotiations late last year after Turkey refused to open up its ports to vessels from Cyprus, a member of the European bloc. The elections of Nicholas Sarkozy in France and Angela Merkel in Germany, both of whom have expressed their opposition to Turkey’s EU membership bid, do not inspire confidence in Ankara that accession talks can quickly get back on track.

Turkish analysts say that with its EU negotiations in trouble, Ankara is now starting to look at energy issues as way of increasing its leverage with Brussels. For example, Turkey has so far resisted the EU’s invitation to join the newly formed European Energy Community, a body that aims to bring southeastern European countries � including those that are not EU members � into a single regulatory framework for trading energy. Turkish officials have said that they need to get Turkey’s internal energy market in order before joining the EEC, but Bulent Aras, a professor of international relations at Istanbul’s Isik University and an expert on energy issues, sees something else at work.

"There is a change in Turkish attitudes. In the past, Turkey was following the line of going along with bilateral agreements [with the EU] on energy projects. But now the Turkish line is to use its position as a transit country and energy issues as a bargaining chip regarding European Union membership," Aras said.

Editor�s Note: Yigal Schleifer is a freelance journalist based in Istanbul.

The Central Eurasia Project aims, through its website, meetings, papers, and grants, to foster a more informed debate about the social, political and economic developments of the Caucasus and Central Asia. It is a program of the Open Society Institute-New York. The Open Society Institute-New York is a private operating and grantmaking foundation that promotes the development of open societies around the world by supporting educational, social, and legal reform, and by encouraging alternative approaches to complex and controversial issues.

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