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Turkey’s geographical presence between Europe and the Middle East makes it uniquely situated to serve as the energy bridge between the East and the West. Despite this, the country has remained reliant primarily on Russia and Africa for its natural gas and has yet to effectively develop its own natural resources. This presents not only a domestic problem for Turkey, but it could impose a national security risk for both the United States and Western Europe. Turkey has long had a relationship with the West, and the United States will continue to a have direct stake in the strength of Turkey if they continue to fight ISIS. However, Turkey’s success is largely dependent upon the nation’s ability to access energy, and that continues to remain a major problem.
As of 2009, Turkey met only 30 percent of its energy consumption through domestic production. With Turkey’s demand for energy rising, it has turned toward natural gas to satisfy that demand. Turkey uses more than 50 percent of the natural gas it consumes for electricity. Further, Turkey imports approximately 99 percent of that natural gas, with Russia responsible for 60 percent of it and Iran for 20 percent. The reign of Prime Minister Recep Erdogan has further complicated Turkey’s reliance on foreign energy, as some countries are now restricting energy supplies to the country because they view Erdogan as moving away from a democracy and more toward an authoritative regime. This has resulted in Turkey becoming even further dependent on Russia to meet its most basic energy needs.
No matter the type of government that Turkey evolves, the country is quickly becoming a major hub for natural gas and that is becoming exceedingly important for Europe’s energy security. European countries are major consumers of natural gas, and share a similar interest with Turkey in moving away from Russian for their supply. Turkey has the potential to give Europe an unbridled access to Middle Eastern natural gas thanks to it being a transit nation. Countries such as: Israel, Azerbaijan, Turkmenistan and Iraq all have a desire to supply natural gas to Europe via Turkey. The United States is in the position to help Turkey develop their natural resource infrastructure and advance U.S. interest along the way. Turkey’s energy dependence, along with the change in U.S. regulations allowing for the export of natural gas, provides America with an opportunity to diminish Russian influence, bolster our domestic natural gas industry, and to further exert western influence in the region. However, even if we are successful in prying Turkey away from Russia, there are other issues that must be addressed for a healthy U.S.-Turkey relationship.
Turkey has a huge thirst for oil and gas, and they import a whopping 90 percent of their oil and gas supply. What Turkey has been pretty good at doing for years very effectively is transporting and refining oil and gas products, since the country sits right in the middle of major oil and gas fields — both onshore and offshore — throughout the entire Middle East. There are many pipelines and terminals that criss-cross Turkey, as it carries supplies from those fields from countries to the North, South, East and West. Turkey knows how to manage supplies very well and how to make money off of those supplies by transporting, selling and reselling gas to other countries. They also know how to refine oil really well, as they operate 6 or 7 refineries in the country. But they have never really produced oil and gas.
Since oil and gas production comes from a number of countries, the Russians undercut just about all other countries and they have done it for years. But that may change soon, and it looks like it is starting to happen, since the EU and certain European nations are starting to cut some of their supplies to Turkey because of Erdogan’s crackdown on democracy and increased human rights violations. So Russia is taking advantage of the situation, and they aren’t happy about it. All of this has forced Turkey to reassess its own energy independence and that they need to really start developing their own natural resources. They don’t want to be in this situation again. So for now, Russia is squeezing Turkey on price because their alternatives are dwindling.
But herein lies a problem. There haven’t been any major discoveries in Turkey and its resources have been historically underdeveloped. They don’t have a lot of proven reserves. However, it is widely known that there are some major oil and gas fields in Turkey and offshore near Cyprus. Turkey is home to one of the top international shale plays called the Dadas Shale onshore; and then offshore, there is the Black Sea, which has very well-established hydrocarbons near Cyprus. So all of the above leads to the conclusion that the U.S. could and should help Turkey in developing those assets, and this is where the U.S. could really leverage its own relationship with Turkey vis-a-vis Russia. Overall, it would bode well for the U.S. to assist Turkey in developing their energy assets and the entire world benefits, obviously, from Turkey ramping up its efforts to destroy ISIS.
The United States and Turkey have recently shared a somewhat strained relationship due to the U.S. arming the YPG in Syria. Turkey views the YPG as an extension of the PKK, which has been designated a terrorist group by the United States, Turkey and the European Union. Further, Turkey’s National Security Council stated on May 28 that this action was “not befitting” of a friend. It is arguable that the YPG is doing more in Syria to fight ISIS than Turkey has, but Turkey has also indicated that it would eliminate ISIS if the U.S. wouldn’t rely so much on the YPG. In short, both countries need each other and they both offer something that each struggles to find elsewhere, which is the U.S. receiving a strong regional ally in fighting ISIS and terrorism in general, and Turkey receiving energy security through diversity of supply through the U.S. and other western nations. The opportunity to work with each other in such a capacity would be a win-win for both countries.
Paul Looney serves as HBW’s EVP for Strategic Development where he provides regulatory guidance in the areas of onshore and offshore oil and gas projects, and assists clients with issues relating to compliance with government rule-making authorities, including federal, state and local environmental entities. Looney also advises clients in the areas of upstream oil and gas and in the midstream services sector, and assists companies seeking to take their products and services to market. Looney’s area of focus has included working with state and federal regulators in the permitting and the exporting of LNG and various refined petroleum products. Until 2011, when he joined HBW Resources, Looney was the principal at the Washington Capitol Group in Washington, D.C., where he assisted clients in promoting their businesses throughout all areas of the federal government and helped formulate strategies that sought to ultimately win government approval of their high-profile energy projects. In the past, he served as government affairs director at the American Institute of Aeronautics and Astronautics and also served as principal investigator on various federal government contracts concerning basic and applied research programs within DOD, DOE, DOI and NASA. Prior to AIAA, Looney was a legislative assistant to U.S. Congressman Ed Royce (R-CA) where he handled the Congressman’s energy and aerospace portfolio. Looney began his career in Austin, Texas, serving under Karl Rove at Rove & Company, where he handled opposition research initiatives on select state and federal campaigns. Looney holds a B.A. from the University of Texas at Austin and an M.P.A. in International Affairs from George Mason University.
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