Turkey: Europe’s Emerging Energy Corridor for Central Eurasian, Caucasian and Caspian Oil and Gas
1/20/2007 (Balkanalysis.com)
By Mehmet Efe Biresselioglu*
One important geopolitical consequence of the demise of the Soviet Union was the rise of intense political and commercial competition for control of the vast energy resources of the eight newly independent and vulnerable states of Central Eurasia: the sub-region of Central Asia, consisting of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan; and the sub-region of the Caucasus, consisting of Armenia, Azerbaijan and Georgia. Another effect was the change of control of the Caspian Sea basin from two littoral states, which had been the Soviet Union and Iran, to the five countries of Russia, Iran, Azerbaijan, Kazakhstan and Turkmenistan. Enormous oil and natural gas reserves attracted the major actors of the world into the region, and analysts early on dubbed it a new chapter in the old “Great Game.â€
According to the US Energy Information Administration, the oil and natural gas reserves of these regions are significant. The proven oil reserves of five Caspian Sea Region Countries are 153.8 BBbbl, which is 14.6 percent of the world’s proven oil reserves. Their proven reserves of natural gas are 2688.3 tfc, which is almost 50 percent of the world’s proven reserves. If we include the possible reserves of the five Caspian Sea region littorals and Uzbekistan, figures reach up to 30 percent of world oil reserves and 60 percent of natural gas reserves.
Europe’s Growing Energy Needs
Europe is entering a new era in its energy consumption. Energy demand will continue to increase as there is, and will increasingly be, strong competition for global energy resources. In 25 years’ time, between 60 and 70 percent of Europe’s oil and natural gas needs will be met by third countries which are not members of the European Union. The expectation of total energy demand growth is only about 0.5 percent per year on average through 2030, and oil demand will hold steady, according to a World Energy Outlook report.
However, the European Union’s main problem is high and volatile energy prices, and a lack of energy supply diversity, because of the EU’s dependence on external suppliers, especially Russia. It is frequently argued that Russia cannot be considered a reliable partner of the EU in this respect because of the frequent arguments among various countries of the former Soviet Union, between suppliers and transit countries, a phenomenon which has negative effects on supply. Also, there is a limit to how much gas Russia can sell to Europe, since Russia needs gas for itself and is reaching its limit of exports.
Therefore, Europe needs alternative energy suppliers in order to diversify its energy supply. The former Soviet states of Central Eurasia, the Caucasus and Caspian Sea have the potential to meet Europe’s oil and natural gas needs; Central Asian and Caspian Sea Basin oil reserves rival those of Saudi Arabia and the Middle East, and the region also has the world’s richest reserves of natural gas. There are many advantages for the European energy markets in these regions according to the context of energy need and diversity. Yet the possibility of realizing these advantages hinges on one crucial issue: how is the gas and oil to get to its potential markets?
Turkey’s Crucial Role as a Supplier of Energy to Europe
Energy has become a strategic factor in global politics. It is a key to national power as well as a major requirement for economic growth. Turkey’s geo-strategic position makes it a natural energy bridge and a transit point between the main oil producing areas in the Caspian, Caucasus and Central Asia on the one hand, and consumer markets in Europe on the other. For Turkey, which has few energy supplies of its own, the recently completed Baku-Tbilisi Ceyhan (BTC) pipeline is the initial step in its effort to become a major energy player, not as a producer but as a transit point.
In an era when countries are increasingly looking to diversify their energy sources, Turkey hopes to establish itself as a kind of energy supermarket, betting that controlling oil routes will turn out to be as strategically valuable as producing the stuff. Geographically, Turkey is endowed with advantages, so the country would like to use those advantages to take on a role as a supplier of energy resources.
The BTC pipeline offers landlocked Caspian basin states another export route to global markets, significantly and purposefully, bypassing Russia in the process. Here Turkey has a dual role because of Russia’s interest in Turkey’s role in a north-south (Black Sea-Mediterranean) corridor to bypass Ukraine (Russia is currently using Ukraine to export oil and natural gas to Europe). If Turkey could balance the Western and Russian interests, it would become an important energy route indeed. CONTINUE
