BACKGROUND: Because of its geographical vicinity to both the major oil and gas producing region of the Caspian Sea and the Middle East, Turkey frequently declares that it is eager to be an energy corridor to the West. Its dependency on Russian and Iranian natural gas, at 65 and 20 percent, respectively, and the risk that these countries could use energy as a political instrument, pushes Turkey in the direction of searching for alternative sources that could increase its security of supply. Turkey hence decided to accelerate its search for alternatives last winter, when Iran decreased its natural gas supplies. The frequent supply disruptions were blamed on “technical problems” and occurred in an environment of Russian energy blackmail against several countries, aggravating the crisis. Turkey hence revitalized support for a series of pipeline projects presently on the agenda, most of which plan to transfer to Europe natural gas originating in Azerbaijan, Egypt, Iraq and Turkmenistan. The politically most significant of these is the Nabucco pipeline, which aims to connect Turkey’s natural gas grid to the EU’s, bringing supplies from the East well into Austrian territory.
During 2002-2007, the AKP government did not generate new energy projects, and the government’s energy policy was hampered by several issues. First, the very serious court cases that had been brought against the former government’s energy minister and several associates over allegations of systematic corruption in the Blue Stream pipeline deal with Russia had a paralyzing effect on much of the energy bureaucracy, much of which was connected with or appointed by the now indicted officials. Simply put, in this environment, no one dared to take new initiatives. Secondly, previous governments had also launched projects, especially in the electricity sector, that had excess capacity at the time, which hampered the initiation of forward-looking projects.
However, in order to meet projected energy requirements, new energy projects, including those relying on nuclear power, were brought to the fore following the 2007 elections. Though priorities are open to discussion, Turkey’s commitment to become an energy corridor is accepted by all political parties and related government institutions.
The realization of the Baku-Tbilisi-Ceyhan oil pipeline, the Baku-Tbilisi-Erzurum gas pipeline, and the geopolitical developments connected with these projects increase Turkey’s thirst for Trans-Caspian pipelines. Turkey, which has been looking to improve its regional role since the Central Asian states gained their independence, nevertheless only recently came to fully realize the potential gains from the strategic expansion of the new pipelines. Turkish political elites have grasped the importance of coming to serve as a transportation and energy corridor for Europe, and have tried to strengthen Turkey’s European integration.
IMPLICATIONS: After the 2007 general elections, the Turkish energy sector expected a radical change of program from the newly re-elected AKP government. One of the expectations was a change at the ministerial level, due to a general dissatisfaction with the performance of the minister in charge, Hilmi Guler, who was seen as not having been able to strategically harness Turkey’s potential in the energy field. However, as was the case with many other ministerial positions, Prime Minister Erdogan kept the incumbent minister in place. As a result, the expected changes in the bureaucracy did not take place.
Because many former ministers and bureaucrats responsible for energy affairs have been charged with corruption cases, the current bureaucratic team in the energy ministry is uneasy about initiating or finalizing feasibility studies regarding many of the urgent energy projects that are being planned. Even projects already under way are progressing slowly, and many projects have been postponed, suspended or even cancelled.
Another weakness of the AKP bureaucratic team is its strong tendency to assign higher positions at the ministry to people affiliated with the party or with a background in the Milli Görus(“National View”) conservative religious movement, without taking into consideration their experience and qualifications. This is in fact endemic to the AKP’s administrative style, at display not only in the Ministry of Energy but at several other governmental institutions. This practice was one of the main causes of the recent indictment of the AKP by Turkey’s chief prosecutor.
Nuclear energy is the most concrete example of this phenomenon. Turkey has had plans to initiate nuclear power programs for almost three decades. However, these plans could only be realized through legislative changes, which have failed to move forward. Tenders have now been issued and firms are scheduled to compete for these mega-projects in September 2008.
Although the Turkish political arena has been suffering from growing instability lately, significant developments in EU energy policies have taken place during the last two years. This carries great importance for Turkey, as it increases Turkey’s opportunity to achieve its goal of becoming an energy hub for Europe. At last, the EU has developed a consciousness in terms of supply security and diversification of the resources, and is trying to decrease its dependency on Russian natural gas supplies. With energy security gaining importance in Europe, the possibility of realizing projects such as Nabucco, mentioned frequently by Turkish politicians, has increased. However, despite the economic and political support of the EU, these projects continue to be constrained by serious difficulties. Thus, it is still uncertain which sources will be used to fuel the constructed lines connecting Turkey to Europe.
If the Iran option is set aside because of the firm U.S. policy seeking to prevent Iranian energy exports to Europe, the main credible source of gas would be Turkmen and Kazakh fields located on the eastern shore of the Caspian Sea. Azerbaijani, Iraqi and Egyptian sources are all discussed, but uncertainties regarding the size of resources and their transport to Turkey have left investors unconvinced. The unclear prospects of Trans-Caspian oil and gas transportation lines, which are necessary to feed Central Asian gas into Nabucco, are a major sticking point. On the other hand, Gazprom and the Russian political leadership have worked hard to suggest that Russian gas should be pushed through to same routes either by building parallel pipelines to those proposed by the EU, or simply by feeding Russian gas into them. However, adhering to these Russian proposals would amount to nothing but the continuation and deepening of Europe’s, and Turkey’s dependency on Russian energy supplies.
As far as Turkey’s role is concerned, it has occasionally been undermining its own claim of being an energy bridge by making exaggerated demands. Turkey is still hesitant about accepting a transit regime, because of lingering ideas at some quarters that Turkey, rather than becoming a major transit hub for Europe should opt for a role as a seller of energy bought at lesser value on its eastern frontiers. This would amount to Turkey replicating Gazprom’s strategy, which has been built on acquiring Central Asian gas through a monopolistic position at low prices, only to sell it on to Europe at a much higher price. No doubt, it is not in the interest of the EU to make itself dependent on another country while trying to break Russia’s monopoly. Moreover, Turkey is not in a position comparable to Russia’s with regard to its relationship with potential suppliers who would see little value in selling resources at low prices to Turkey. Unlike Central Asian states and Russia, they do have a choice. Besides, Turkey does not have any infrastructure in place that would allow it to acquire such a position. Such an approach is therefore unrealistic, and weakens Turkey’s hand rather than strengthening it.
Turkey’s wobbling in the energy sector, affected by the capacity deficits in both the political and bureaucratic cadres, is preventing Turkey from fully utilizing the potential of one of its strongest cards in relations with the EU: its potential to reduce European dependence on Russian energy. But Turkey’s policies, or lack thereof, are instead discouraging the EU.
CONCLUSIONS: The weakness of the political and bureaucratic cadres combined with the case to close down the AKP make it unlikely that Turkey will be in a position to pursue a realistic energy policy in the short term. Experts project that already this summer, supplies will not meet the domestic demand. Under current circumstances, Turkey is unlikely to adapt to the EU energy policies; it acts in a haphazard manner and is apparently not capable even to secure its own urgent energy needs. However, the EU’s newfound interest in diversification of supply could have a positive effect on Turkey. Indeed, European interest in energy projects involving both Turkey and producer countries in the Caspian could be an important factor in helping Turkey overcome the current uncertainty and paralysis in its energy sector.