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Does Turkey Prefer A European Or Eurasian Energy Union?

Does Turkey Prefer A European Or Eurasian Energy Union?

The sixth meeting of the World Forum on Energy Regulation is scheduled to be held on May 25–28, in Istanbul, and is being organized by the office of the prime minister of the Turkish Republic. The competitive and dynamically expanding nature of the energy sector in Eurasia has been boosting Turkey’s regional importance as it prepares to take on the role of a strategically important transit and energy hub country (Hurriyet Daily News, January 28).

December 2014 saw the reemergence of competition between rival pipeline projects in Eurasia—similar to the earlier competition between the Nabucco natural gas pipeline, proposed by a consortium of European companies, and Russia’s South Stream. Currently, Russia’s new proposed pipeline project—Turkish Stream—is challenging the Azerbaijani-initiated Southern Gas Corridor, which will carry Caspian-basin gas to Europe via the South Caucasus, Turkey and then across Southeastern Europe.

Turkey is already signed on to the Southern Gas Corridor—the Corridor’s longest pipeline segment, the Trans-Anatolian Pipeline (TANAP), will cross Turkey from east to west—but it is also being strongly courted by Moscow to host Turkish Stream (see EDM, December 17, 2014; February 20, 2015). This growing significance of Turkey in competing large-scale energy transit projects across Europe and Eurasia has also opened up a discussion domestically regarding which prospective energy union the country should become part of—European or Eurasian. Related: Oil Field Services To Bear The Brunt Of Price Collapse

In particular, the Turkish media has been discussing the idea of an Energy Union for Eurasia since the beginning of the year. Gurkan Kumbaroglu, the Istanbul-based president-elect of the International Association for Energy Economics (IAEE), said that his organization aims to create an energy union that will include 18 countries and be under the supervision of Turkey, Russia and Azerbaijan. According to the IAEE, the formation of this regional entity was agreed at a meeting that included Kumbaroglu as well as representatives from the State Oil Company of Azerbaijan Republic (SOCAR) (Yeni Safak, January 27).

Kumbaroglu said the IAEE’s aim is to gather Turkey, Azerbaijan, Turkmenistan, Kosovo, Macedonia, Albania, Montenegro, Bosnia-Herzegovina, Russia, Romania, Kazakhstan, Greece, Croatia, Serbia, Bulgaria and Slovenia under the same project, particularly because many of these countries have cool or antagonistic relationships and have never effectively worked together before. “As the IAEE, we hope to invest in these countries, establish workshops and form business opportunities,” Kumbaroglu explained. (Daily Sabah, January 26). In addition, the Eurasian Energy Union has started discussions on the establishment of a common energy platform among Russia, Belarus and Kazakhstan within the Moscow-led Eurasian Economic Union (Souzveche.ru, March 6).

Notably, the office headquarters for the IAEE’s Eurasian Energy Union will be located in Istanbul, which SOCAR enthusiastically supports. According to Azerbaijani energy expert Fuad Alizade, “Turkey will be a good platform for Azerbaijan and Turkmenistan for establishing energy cooperation within the Eurasian Energy Union” (Novosti.az, January 29).

Meanwhile, however, the European Union is currently in the process of creating its own Energy Union, which will replace its heretofore existent Energy Community (of which Turkey is an observer but not a formal member) (EurActiv, February 26). Maros Sefcovic, the European Commission vice president responsible for the EU Energy Union, has noted that the Union will assist member states in their negotiations with important suppliers such as Russia for natural gas. Related: Range Resources Expects Natural Gas Glut To Even Out By Year End

And under its expansive energy strategy, the European Energy Union aims to support over 1 billion euros in investment in energy projects until 2020, as well as pass a strategically coordinated list of energy reform legislation. Sefcovic also declared that strategic cooperation with Turkey will be pursued within the European Energy Union in order to lay the groundwork for a genuine common energy market for Europe. The EU, he promised, will use all foreign policy instruments at its disposal to establish strategic energy partnerships with production or transit countries such as Turkey, Azerbaijan and Gibraltar, as well as other potential suppliers (Hurriyet Daily News, March 16).

Turkey’s central role within the South Gas Corridor and its potential relations with or even inclusion in an EU Energy Union structure is threatening to Russia’s continued dominant position—particularly, in the energy sphere—in the region Moscow considers its “near abroad.” Consequently, Moscow has been pressing Ankara to agree to Russian proposals and trying to imply that Europe is not happy with the energy partnership between Russia and Turkey (Verda Ozer, Hurriyet, February 14, 2015; CNNTURK, December 2, 2014).

Moreover, it has been working hard to convince Turkey that a closer partnership with Russia, over other regional players, will be most beneficial to Turkey over the long term (Kanal A, December, 4, 2014). Related: Can Shell Afford To Drill In The Arctic?

Turkey is currently trying to decide which of the two similar though competing projects—the Eurasian or the European Energy Union—would be more beneficial for the country.

Considering the partially overlapping memberships of the two structures, especially in the Balkans, it remains to be seen how viable it will be for either energy union to exist simultaneously; or if, in fact, there can be some way to integrate both projects in the future. Moreover, Russia’s attempts to build an ever closer relationship with Turkey—and the latter’s openness to such gestures—will complicate regional energy geopolitics further.

Thus, Brussels and Ankara are likely to disagree on strategically important energy security issues over the coming years unless Turkey and the EU can achieve tighter cooperation under the framework of the European Energy Union. But if Turkey instead starts to pursue a more independent policy, particularly one at odds with the European Union, the Eurasian region will experience ever more unstable and competitive energy geopolitics.

By Orhan Gafarli for Jamestown.org

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  • C Grogg on May 03 2015 said:
    Prefer has nothing to do with it it's called business and best offer win

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