Will Turkey Benefit from its Centrality?
Turkey is energy poor. The country imports the vast majority of its oil, gas and hard coal supplies to meet domestic demand. Turkey imports 58 percent of its gas from Russia, 19 percent from Iran, 9 percent from Algeria, 9 percent from Azerbaijan and 3 percent from Nigeria.
Turkey paid $60.1 billion for energy last year with an 11 percent increase from a year earlier. Turkey’s energy dependency is expected to double in the next decade due to a massive rise of energy consumption, according to a recent report by the US Energy Information Administration (EIA). Electricity needs in particular are expected to grow twice as fast as its overall energy use.
In a recent announcement, Energy Minister Taner Yıldız said that indications of possible shale gas resources had been found in the Central Anatolian provinces of Ankara, Konya and Kırşehir. The shale gas reserve is estimated at 1.8 trillion cubic meters and could satisfy 40 years of natural gas consumption with an annual production of 45 billion cubic meters. Turkey is currently employing its efforts to determine the accuracy of its shale gas potential.
Whether Turkey is blessed with shale gas remains uncertain. What is certain, is that it is blessed with centrality. It connects an energy-rich East to an energy-hungry West. Turkey could therefore play a paramount role in facilitating the transport of Israeli gas to a Europe largely dominated by Russian gas. Israel and Turkey are flirting with the idea of building a gas pipeline from Israel’s Leviathan Basin directly to Turkey to supply European markets. However, a few obstacles might stand in the way.
Political tensions between Israel and Turkey
Relations between the two countries have deteriorated since May 2010 when nine Turks were killed by Israeli forces when they boarded the Turkish Mavi Marmara aid ship that was attempting to break the Gaza blockade. For example, and to illustrate the tension between the two countries, the Turkish prime minister dramatically walked out of the Davos Economic Forum in January 2013 this year because the Israeli president was present. A UN report condemning the deaths but justifying Israel's blockade provoked Ankara to reduce even further its diplomatic relations with Tel-Aviv. The clash between the two countries was additionally amplified when Turkish Prime Minister Recep Tayyip Erdogan recently called Zionism a ‘crime against humanity’.
The new Israeli government that will be formed by Benjamin Netanyahu in the coming days will deliberate on crucial points regarding Israel’s new role as a regional energy power. One of the major questions that will be examined is how the Israeli gas will be exported. The possibility of establishing a closer relationship with Turkey could potentially be motivated by the two countries’ mutual economic interest. However, the history of tensed Turkish-Cypriot relationship could be a deterrent to the fruition of the pipeline project given that such a pipeline will have to pass under Cypriot waters.
A divided Cyprus
Cyprus is divided between its northern part inhabited by Turkish Cypriots since 1974 and the eastern part inhabited by Greek Cypriots. The division of Cyprus is now as flagrant as ever since the discovery of hydrocarbon resources in its waters, creating tension between the Turks and the Greeks. The Turkish Republic of Cyprus has formulated its opposition to any exploration of oil and gas before the unity the Island is achieved. To the start of the drilling process by Greek southern Cyprus, Turkey reacted aggressively by threatening to send war ships to the waters of the northern half. Israel's energy cooperation with Cyprus could stand in the way of a proposed Israel-Turkey natural gas pipeline.
Lebanon and Syria in the Way
Another obstacle to an Israeli-Turkish pipeline would be the fact that Lebanon and Syria’s economic waters lie between Israel and Turkey.
Pressure from Russia
An Israeli-Turkish pipeline would diversify the gas portfolio of Russia-dependent Europe and Turkey. Therefore, it is very likely to receive a strong opposition from Russia and state-owned Russian energy company Gazprom.
Solution?
A pipeline to Greece, although longer, costlier and riskier, seems to be one of the solutions. Another possible solution would be exporting liquefied natural gas (LNG) to markets where prices are high. It would be an ideal scenario for Israel if it weren’t for the huge investments required. Cyprus lacks the cash to go for the LNG option. Israel lacks the space. A floating LNG vessel has been considered but the technology is new and untested. Given the interests at stake, improved diplomatic relations between Israel and Turkey might deserve the two countries efforts.
Karen Ayat is an analyst focused on energy geopolitics in the Eastern Mediterranean.
Follow Karen on Twitter: @karenayat