IRAN? ▪▪ More Commercial Activities Pipeline Could Not Be ▪▪ Financial Support to KRG

Energy Policy Turkey FUTURE OF POLICIES AND STRATEGIES

SEPTEMBER 2016 SECOND ISSUE

THE WORLD IS BIGGER THAN 5! UNITED TURKEY

HEARTOF ENERGY THE MIDDLE EAST

THAT IS WHAT THE GAME IS ALL ABOUT!

«ENERGY GAME: SYRIA & KURDISH CORRIDOR« «CHANGING BALANCES IN TURKISH ENERGY GAME BEFORE THE COUP» «FUTURE OF ISRAEL GAS EXPORT UP TO 2050 & TURKEY» «POLITICS OF KRG & ENERGY CORRIDOR THROUGH IRAN»

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ENERGY POLICY TURKEY ENERGY POLICY TURKEY

SEPTEMBER 2016 SECOND ISSUE SEPTEMBER 2016 SECOND ISSUE

FALL 2016

ISSUE 2

EDITOR

Necdet Karakurt (TESPAM)

PUBLISHING COORDINATOR

Ali Maraşlı (TESPAM) TURKEY'S ENERGY STRATEGIES AND POLITICS RESEARCH CENTER TURKEY'S ENERGY STRATEGIES AND POLITICS RESEARCH CENTER

ENERGY POLICY TURKEY ENERGY POLICY TURKEY

SEPTEMBER 2016 SECOND ISSUE SEPTEMBER 2016 SECOND ISSUE

FALL 2016 GRAPHIC DESIGN & PUBLISHING

Necdet Karakurt (TESPAM)

ISSUE 2

WEB DESIGN

Necdet Karakurt (TESPAM) EDITOR Ali Maraşlı (TESPAM) Necdet Karakurt (TESPAM)

RIGHT HOLDER ON BE HALF OF PUBLISHING COORDINATOR TURKEY ENERGY STRATEGIES & POLITICS RESEARCH CENTER Ali Maraşlı (TESPAM) Oğuzhan Akyener (TESPAM) INSIDE THIS ISSUE

Editor’s View

Necdet Karakurt Page 6

Energy Game: Syria & Kurdish Corridor

Necdet Karakurt and Oğuzhan Akyener

Page 10

Changing Balances in Turkish Energy Game Before the Coup

Oğuzhan Akyener Page 28

Future of Israel Gas Export up to 2050 & Turkey

Oğuzhan Akyener Page 38

Contradictory Politics of KRG & new Assumed Energy Corridor Through Iran

Oğuzhan Akyener Page 52

The Legal Status of the Caspian Sea: Implications on Caspian Resources Development and Transport CASPEAN SEA

Sohbet Karbuz Page 62 Prospects for Renewable Energy in Turkey after Paris COP21 Summit

Serhat S. Çubukçuoğlu Page 70

Energy Issues in the USA & EU Competition

by Serdar Gürüzümcü and Oğuzhan Akyener Page 76

A Brief Look on the Environmental Effects of Shale Gas Extraction

Fatih Temiz Page 82

Turkey’s Nuclear Issue - the Past and Fu- ture Dynamics

Gizem Ebrar Özel Page 94

Using Oil Shale as an Alternative Raw Material for Energy Production and Potentiality of Turkey

Abdurrahman Murat Page 104

Turkey’s 2016 National Coal Policy

Haluk Direskeneli

Page 116 EDITOR’S VIEW by Necdet Karakurt

In the wake of Unity, Turkey decides to take The picture drawn in Turkey on July 15 sug- responsibility over the Middle East and lead gests that each terrorist group is established the Muslims through a better future with and financed by the actuators that can be pleasant living conditions in a peaceful either officials from differentgovernmental world, where Muslims have equal rights once institutions and intelligence agencies or just “It should be over-ex- more just like on Ottoman times. In fact, it losers (terrorists) that can only survive out pressed that Ottoman should be over-expressed that Ottoman Em- in the bushes. It is possible, by using those pire ruled the world by the Unity of different actuators, to topple presidents and lock the Empire ruled the cultures, religions and races. In contrast, to- countries by bureaucracy. Let’s not forget the world by the Unity day’s powerful states’ unity is based on just servant media, through which propagandas religion. can be pursued to confuse and enrage the of different cultures, folks against their governments. religions and races. Perhaps, every other person has an idea or is aware that, in today’s world, the term “Uni- Turkish president, Recep Tayyip Erdogan, In contrast, today’s ty” equals to “Christianity”. The rest of the has seen one side of the coin from 2010 powerful states’ unity world is prone to be dismantled. This is the through June 2011 elections, when he no- logic that belongs to “Crusaders”, who start- ticed that a few of his executives and political is based on just reli- ed their duty in 1091. They have been ac- mates were, in fact, infidels. Their game was gion.” tively doing their best to dig the Middle East to stop the development of Turkey and lower and Africa since the World War I, when the Erdogan’s popularity. However, they need- Ottomans, successor of the mainly Muslim ed Justice and Development Party (AKP) to unity lost the control and Republic of Tur- keep their status and perhaps, get stronger key was born from its ashes. The new Turkish in the government. Which is why they only state, after it finally got its freedom from the needed Erdogan to step away and let AKP invaders in 1923, started from the scratch in their dirty hands. So the whole propagan- by building a democratic republic over the da about Erdogan being the bad guy main- last remnants of the Ottoman Empire. It has ly came from his own bureaucrats and AKP “Turkish president, never been easy for Turkey to walk the de- followers. Erdogan spoke but the bureaucrats Recep Tayyip Erdo- mocracy line in harmony because of either did the reverse so that people would be en- the financial problems or political unrests raged and Erdogan would lose his popularity. gan, has seen one procreated by the servants of the invaders. That did not happen, which indeed got on side of the coin from The young state struggled through coups, the nerves of the gamers and pushed them some of which successfully completed and towards the coup attempt. The coup attempt 2010 through June some of them were only left as unsuccessful again returned them empty handed. These attempts. days, Turkey have been trying to clean those 2011 elections, when infidels from the government and its insti- he noticed that a few Unfortunately, Turks had to live through tutions. of his executives and a well-written-scenario on 15 July 2016, namely “Attempted Terrorist Coup in Tur- What happens next all depends on how well political mates were, key”. The so called master-mind, Fetullah this cleaning process can be practised! How- Gulen, is just one of the servants of the cru- ever, being optimistic is a must for Turks in fact, infidels.” saders. The country residing such servants is since the role/responsibility they have been the United States, which basically is the base striving for will do the best for the Middle and a safe-ground, where the crusaders can Easterners. legally clean up their international mess.

ENERGY POLICY TURKEY Page 6 Energy, of course, is still the main actor of all fields that are filled with hydrocarbons. Now “The total trade the hassle in the Middle East. The crusaders that it is clear what to do along with the mil- amount in the world are feeding over the trade from the energy itary incursions in Syria, Turkey should en- sources of the region, which, in fact, covers courage its oil companies to do some detailed totals a bit more than majority of the world’s energy resources. Los- research and create a path to the new Syria’s 20 trillion US dollars ing the upper hand to Turks is a “No, No!” energy constitutions and have a possessive for them. So Turkey has to be weaker, should role in petroleum and trading laws of the free and more than half never be the dominator in the region, and Syria by adding their knowledge, experience of the total amount should be kept out in energy matters. in geoscience and trading. is accomplished Turkey has to realize once that the Middle Turkey can easily be a part of the legislative over petroleum and East Unity is the key to establish political partner for free Syria, acting as the big broth- and economic stability for Turks and Arabs er and filling all the political and bureaucrat- its products, related but to be able to do that, it has to grasp the ic gaps in the newly succeeded Syrian gov- technology and mer- upper hand in energy trade, consequently in ernment. Additionally, it should open up the energy researches and related technologies. path or guide the Turkish industry to new chandise. Turkey’s What good is it if you do not have an effi- ventures no matter how well internationally revenues is only cient company or companies actively work- competitive the industries are. Correct time ing and controlling the energy resources and for such acts has always been along with the about $190 billion.” the trade in the region? first step taken. So does Turkey have such plans in the future of Syria? Why is the energy trade so important? The total trade amount in the world totals a bit Turkey, at this point, should definitely focus more than 20 trillion US dollars and more on its energy politics and strategies on be- than half of the total amount is accom- half of its political and military activities in plished over petroleum and its products, re- the Middle East. The focus requires compre- “Turkey, at this lated technology and merchandise. Thinking hending how the energy game is played in about Turkey’s revenues as about $190 bil- the region, what countries are involved and point, should defi- lion, the amount of money circling around how their companies proceed behind closed nitely focus on its Turkey’s borders is over fiftyfold than its cur- doors. Hence, Energy Policy Turkey would rent revenues. So why not stand up and have like to illuminate certain moves and actions energy politics and your share from this beautiful glory? that will determine the next and following strategies on behalf game-changer-steps. There are certain steps required to be taken of its political and such as comprehending the balance in the This issue covers up mending relations with military activities energy game and how to reverse the balance Israel and Russia. The buzz about the East- in Turkey’s favour. It is always better to an- ern Mediterranean gas resources and a possi- in the Middle East. alyse how major countries involved in the ble Egypt-Israel-Cyprus/Turkey gas pipeline The focus requires Middle East do what they want. For instance: is put under investigation. Suggestions for Presidents and ministers travel along with a where and how to stand in the Mediterranean comprehending how group of business people whenever they seek were analysed along with the technicalities. the energy game is to establish great ties with another country. The pipeline from Northern Iraq to Iran is The situation is similar here, too, but the also highlighted in detail. Some questions re- played in the region, stage they are on is a bit bloody, which is garding the possibility accountability of such what countries are in- why all those countries move with their mili- project are answered by examples. Turkey’s tary powers to shape and secure certain lands position and advantages for any pipeline pro- volved and how their with good natural resources. jects to Europe around Turkish borders seem companies proceed to be all in favour of Turkey. Correct timing, Believe me, those businessmen are no civ- possessive actions and efficient planning will behind closed doors.” il engineers that talk about rebuilding the place Turkey in the spotlight, which is why damaged houses. They are surely energy impressive strategies should be engraved in companies to aggregate the most attractive political moves and actions.

7 Page SECOND ISSUE NECDET KARAKURT

“Status of Caspian Status of Caspian Sea requires a great attention as it should be one of Turkey’s goals to Sea requires a great get the upper hand in energy game. Finding attention as it should credible ways for moderating all the parties to set the economic sea borders in Caspian be one of Turkey’s Sea will definitely serve plausible results for goals to get the the future. upper hand in energy The myth about oil shales is cracked down game. Finding cred- and analysed for how valuable an energy source it can be for Turkey. Understanding ible ways for moder- the environmental effects of shale gas busi- ating all the parties to ness seems to play a key role before going too deep in oil shale reservoirs. set the economic sea borders in Caspian Advice regarding renewable energy sources and getting prepared legally in the future Sea will definitely for a balanced move forward approach are serve plausible re- practical information that Turkey has to consider as Turkey’s renewable energy potential sults for the future..” is quite notable. Nuclear energy has been a turning point for Turkey’s energy future but it is still questionable if the pros weighs heav- ier than the cons. “Coal” is a matter subject that needs to be handled correctly. Some experts claim that “black gold” is Turkey’s future energy source just because Turkey has some coal reserves. Yes, Turkey has coal reserves but what matters is the coal’s calorific ““Coal” is a matter value! subject that needs to At last, the coup attempt is examined be handled correctly. through the energy window. Some questions are raised and tried to be answered as if there Some experts claim is any relationship between countries and that “black gold” their energy initiatives in the region. Even though there is no clear evidence between is Turkey’s future energy and the coup attempt, all the coun- energy source just tries involved in the region seem to stand on their energy foot. because Turkey has some coal reserves. Yes, Turkey has coal reserves but what matters is the coal’s calorific value!”

ENERGY POLICY TURKEY Page 8 EDITOR’S VIEW

9 Page SECOND ISSUE ENERGY GAME: SYRIA & KURDISH CORRIDOR by Necdet Karakurt and Oğuzhan Akyener

has been proved by Turkey that PYD/YPG is INTRODUCTION the parallel extension of so called Kurdistan “The balance in Workers’ Party (PKK), known as a terrorist organization. However, USA and EU tend Syria has been inter- A huge lack in the governmental authorita- to close their ears on Turkey’s warnings. Per- tive figures and the head of country being un- changeable since it haps, in the near future, when the crisis or reasonably selfish and foolish have left Syria unrest in Syria ends, those terrorists will start is possible to relate in the hands of the hell-hounds, who havoc wreaking havoc in today’s supporter coun- throughout the country and devastate cities, each terrorist group tries as history always repeats itself. settlements, and villages, where especially with a country. When- the Arabs and Turkmen live. Terrorism cre- Turkey, out of all the countries involved in ated a realm of chaos in Syria that increased ever a country loses the region, focuses on the civilian rights and appetite for many powerful countries to play perhaps, it is the only country that lacks a the upper hand or a key role and get the biggest share from the powerful energy strategy regarding the re- energy resources in the region. The balance tries to settle its politi- serves in the region. Terrorist groups like in Syria has been interchangeable since it is Daesh and PYD/YPG are the puppets of the cal struggles in Syria, possible to relate each terrorist group with a international assembly and their tasks are to country. Whenever a country loses the upper a suicide bomber or complicate the peace works that have been hand or tries to settle its political struggles longed for in the region by either using ter- a terrorist attack in in Syria, a suicide bomber or a terrorist at- rorist attacks at the puppeteer’s will or just tack in some other countries is put on stage. some other countries with their presence in certain circumstances For instance; Turkey and France had to suffer and places to be involved or who gets what is put on stage.” from al-Dawla al-Islamiya al-Iraq al-Sham and how. These days, the complexity is going (Daesh) (Energy Policy Turkey condemns Is- further and deeper that all the puppeteers in lamic State like implications for this terrorist the region have even confused themselves as group and stands firm behind our president their steps, decisions and statements are con- Recep Tayyip Erdogan’s naming the group as flictive, which makes estimating the future of Daesh) attacks because they opposed to a few Syria more difficult. critical moves by USA and/or Russia. What “Turkey, out of all the is ironically funny about those instances is A well balanced observation with hard- the fact that so called terrorist group Daesh countries involved in grounds might alert the whole world that the is only able to operate in Turkey and France. greater Middle East project has been activat- the region, focuses It is well known that Daesh members are ed in the concept of popular “Ethnical Engi- from all over the world but if Europe was on the civilian rights neering Process”. The hard-grounds for such the only continent of focus, then it would project can be elaborated with the current and perhaps, it is be expected that Daesh could easily attack cleansing attempts by the puppets. the only country that on Germany or any other European country. The facts prove that the rest of the Europe lacks a powerful en- behaves somewhat in accordance with the The major ethnical cleansing spurt is accomplished by so called president Assad, who has ergy strategy regard- mastermind(s) since Daesh is never sending a suicide bomber to those nations. earned the biggest foe of humanity title for ing the reserves in the dreadful cruelty tuned by his forces and the hate for his own nation. His orders are a Another example is cooperation between the region.” reflection of his puppeteers that wildly claim USA-EU and Democratic Union Party many innocent lives of Arabs and Turkmen. (PYD) / People’s Defense Units (YPG). It Kurds, on the other hand, are safe and sound

ENERGY POLICY TURKEY Page 10 as they have no casualties from Assad’s at- ally the puppets? How real are the conspiracy “The application of a tacks, which brings out the unknown equi- theories? How can the energy game change Kurdish Corridor has librium between Assad and PYD/YPG. The the balances and alter the borders of the Syrian Kurds are, however, no one’s enemy political influence? Do Kurds have enough never been an easy as it has been stated especially by USA. Po- experience to cope with the dreadful end of task, which is why a litical trick behind PYD/YPG is a part of the disturbing Turkey, Iran, Iraq and Syria? ethnical cleaning of the “Kurdish Corridor” terrorist organization that would connect Kurdish Regional Gov- named Daesh took ernment (KRG) of Northern Iraq to Med- THE RELENTLESS AMBI- iterranean. The Arabs and Turkmen would TIONS FOR THE MIDDLE the stage. The suc- be eliminated from so called corridor and EAST the governing power would be delivered to cess of Kurds (PYD/ Kurds, who can easily be controlled either YPG) was dependent politically or financially since they have no The region and its people have been living state experience or toppling an unwanted through a disaster as many has already lost on its counterpart political figure would only require a twist of their lives, homes, lands and families as Daesh.” one’s little finger. many of them left for safer countries to only become refugees. The unrest not only has changed the ethnical and cultural distribu- The application of a Kurdish Corridor has tion but also it has reorganized international never been an easy task, which is why a ter- ties between allies or enemies. Never-ending rorist organization named Daesh took the ambitions of EU and USA have been a sub- stage. The success of Kurds (PYD/YPG) was ject of using differentiation techniques to dis- dependent on its counterpart Daesh. This mantle any possible rising power in the Mid- terrorist organization had to separate and dle East. They have been successful for over a occupy Iraq, Iran, Turkey and Syria so that century but the obvious has come forth and PYD/YPG by the help of the actuator PKK, “Never-ending ambi- shifting in powers started to recondition the could form a military that can place order game and changed the rules. Invade, separate tions of EU and USA within the corridor’s perimeter. The third, and rule to get all the energy related premi- but probably the most dangerous and indi- have been a subject ums by specifically trained puppets, who are gestible one, was Daesh’s demolishment of military officials, bureaucrats ranking high in of using differenti- culture, ethnicity and religion. The damage the governmental institutions or just the dic- Daesh has given to the region, has changed a ation techniques to tators, who are directly under control of the lot the balances in the region. How success- Western bloc (The puppeteers). dismantle any pos- ful the ugly game to prepare a Kurdish state/ corridor in the region is questionable since sible rising power the current picture suggests that all the op- FOREIGN ACTORS in the Middle East. ponents are fighting against Daesh but none of them except the Free Syrian Army (FSA) They have been and Turkey engage actively with Daesh and To be able identify the puppeteers and the successful for over a the fact that Turkey disagrees about PYD/ puppets, regional politics, main actors, their YPG and claims it a terrorist group, which key interests, military actions and their rela- century but the obvi- contends USA’s vision for the region. There tions with the terrorist organizations should ous has come forth seems to be hard days for USA to clean up be coherently analyzed on the bases of hu- its mess in the Middle East or be the state manity and changes in the regional balance. and shifting in pow- behind a few terrorist puppets that will even- Building the case on basic assumptions: ers started to recon- tually harm the puppeteer. USA, Turkey, Russia, Iran, Iraq, Northern Iraqi Government, Israel, Saudi Arabia, UK dition the game and So what is the main aim behind a Kurdish and France on behalf of EU, and as the ter- changed the rules.” corridor in the region? Why is there a neces- rorist organization PKK can be considered as sity for such corridor? Are those great powers the key foreign actors in Syria. really puppeteers and those fighting forces re-

11 Page SECOND ISSUE NECDET KARAKURT AND OĞUZHAN AKYENER

USA stand in the equation but Iran sur- vived through Russian intelligence.

• Apparently the most influential puppet- ०० Inability to configure and apply plans eer in the region. due to unreliable puppets that can easily change sides. ०० Shifts in the power distribution aggra- vates and loads more pressure. ▪▪ Oppressive support on illiterates to rule in the region is not working ▪▪ Mastermind of restructuring the anymore. Middle East, who is destined for failure. ▪▪ Intelligence agencies’ credibility is USA quickly overthrown by that of the ▪▪ New consensus with Russia altered “If its strategy fails, competitors’. the balance in the region. “The End” for USA ▪▪ Lost the edge to intimidate the peo- ▪▪ Not able to send troops to Syria but ple, and increased the hate against will rise from the Mid- encouraging other nations instead. the west. dle East!” ▪▪ Counting on PYD/YPG (Terrorist • Relentless efforts to accomplish “Greater groups) that endangers Turkey’s co- Middle East Project”. operation. ०० Ability to utilize North Atlantic Trea- ▪▪ Should avoid raising concerns for a ty Organization (NATO). “Undercompensated Shia-Sunnah or 3rd world war. for Iraq invasion due ▪▪ Allied Europe, Israel, Turkey, Sunni • Ability to utilize its contacts and relations Arabs and NATO members against to early withdrawal.” with different groups/organizations. Assad.

०० Should keep the upper hand commer- ▪▪ Deployed military bases in Syria cially and financially to have influence that are serving for the Kurds. in the region. “Miscalculated the ▪▪ Trying to load the war-costs on co- ▪▪ Inactivated EU in the region after alition forces and Russia. Shia population in allowing Russian military interven- Iraq and Iran’s Shia tion. ०० Created nearly a state in the middle of nowhere by a terrorist group named gains became inevi- ▪▪ Military occupation costs higher Daesh. as USA’s economy has been fragile table.” and Iraq invasion has not helped at ▪▪ Naming it an Islamic State was a all. very bad idea. ▪▪ If its strategy fails, “The End” for ▪▪ Aggregating Christians to form so USA will rise from the Middle East! called Islamic fighters is unethical and has to fail. ०० Lost most of its influence over Iraqi government (after Iraq invasion) to ▪▪ Pressuring Syrians to be refugees mainly Iran. was inhumanly. ▪▪ Undercompensated for Iraq inva- ▪▪ Blaming Turkey for supporting sion due to early withdrawal. Daesh was immoral.

▪▪ Miscalculated the Shia population ▪▪ Arming PYD/YPG and Daesh ter- in Iraq and Iran’s Shia gains became rorist groups was simply an under- inevitable. estimation of Turkish intelligence. ▪▪ Embargoes complicated Iran’s ▪▪ Dropping guns for Daesh and

ENERGY POLICY TURKEY Page 12 ENERGY GAME: SYRIA & KURDISH CORRIDOR

PYD/YPG using its military cargo gence Agency (CIA) has failed re- “Childish attempts planes severely damaged American structuring Turkish democracy and to overthrow Erdo- Intelligence and liability for Turks. government. gan yielded a huge ०० Childish attempts to overthrow Erdo- ▪▪ Conflicting its constitution, legisla- gan yielded a huge failure. tions and statements by making the failure.” head of the terrorist organization, ▪▪ Failed the attempts on well-de- Feto a USA citizen, and by coming signed slanders against ministers up behind all the terrorist groups in “Finding an equilibri- and government institutions. the Middle East and Asia. um between Arabic ▪▪ Finding an equilibrium between ▪▪ Using its puppets (Bureaucrats, countries and Tur- Arabic countries and Turkey in the politicians, high rank military offi- concept of Arab Upheaval switched cials, press, TVs and social internet key in the concept American intelligence to American sites) in Turkey to raise a campaign of Arab Upheaval illegitimacy. against the Turkish government played a key role to unite Turks as switched American • MIT crisis, February 2011. oppose to USA’s aim to work havoc intelligence to Ameri- • Gezi Park events, May 2013. upon democracy and peace in Tur- key. can illegitimacy.” • 17-25 December events, De- cember 2013. ०० Greater Middle East Project has become USA’s evanescence process. • MIT’s trucks event, January 2014. ०० Should make it clear to world that United Kingdom (Can a Kingdom be • Kobane events, September and united?) is included in USA’s affairs in October 2014. the Middle East. • 28 February event (A great shame served by Feto), February TURKEY 2015. • The successor state of Ottoman Empire. TURKEY • Live bomb attack on People’s “The ability, per- Democratic Party (HDP)’s ०० Access to the Ottoman soil should be meetings in Diyarbakir, June acquired through involving in all the haps high potential, and July 2015. matters regarding the region. of being the most • Murder of two policemen in ०० Mosul and Kirkuk have to return to influential actor in the Ceylanpinar, July 2015. the owner, and cannot be left in the hands of infidels. region.” • PKK is on stage again with terrorist attacks, September 2015. • The ability, perhaps high potential, of being the most influential actor in the “Turkey has histori- • Daesh is on stage with live region. bombs, October 2015. cal, ethnical, cultural ०० Has historical, ethnical, cultural and and religious ties with • Russian bomber downed by a religious ties with Arabs, Turkmen Turkish F-16, November 2015. and Kurds. Arabs, Turkmen and

• July 15 terrorist coup attack by ०० Should find a way to manipulate the Kurds.” the servant Feto, July 2016. visions of terrorist groups and cleanse the area from the fire-arms. ▪▪ Complicated the balances in the Middle East after Central Intelli- ०० Should use in depth background and knowledge regarding the races and

13 Page SECOND ISSUE NECDET KARAKURT AND OĞUZHAN AKYENER

cultures in the region in Turks’ favor. ▪▪ Has to reach the capability of competing with the western, Russian • The lack of political authority within the and Chinese energy companies. borders. ▪▪ Has to join the sectoral consorti- ०० Distillation of terrorists from military, ums and lead the way in the future. police and governmental institutions is a hard task but it has to be complet- ०० Should adapt latest technologies and ed in a timely manner. be able to create new technologies. TURKEY ०० Should progress faster on adopting a ▪▪ Multi-well and cracking technolo- new constitution for a civil democra- gy “Should reveal the cy. known details regard- ▪▪ Transporting electricity directly to ०० Should correctly inform the voters customers. ing puppets and serv- about what is really happening in and around Turkey. • Has to achieve defining Turkey’s interna- ants of the western tional classification. bloc in politics and ०० Should reveal the known details regarding puppets and servants of the ०० Should make Turks comprehend political parties.” western bloc in politics and political where the nation stands and reflect parties. the whole new attitude to the world.

“Should educate op- ०० Should educate opposition parties ०० Should analyze the international bal- about the international politics and ance and find its political and eco- position parties about interests. nomic place correctly.

the international poli- • Elimination of economic fluctuations. ०० Should analyze the energy game thor- tics and interests.” oughly and achieve being the game ०० Should be aware of the traitors ap- changer. pointed on international key roles. • Has to stop terrorism in and around the “Should make Turks ०० Should control foreign investors and borders. comprehend where ban the economy exhausters that fluc- tuate exchange rates. ०० Should define and concentrate on the the nation stands and roots of the terrorism not on terrorists ०० Should reevaluate and reconfigure themselves. reflect the whole new trade options with the neighbors, Ar- attitude to the world.” abic Peninsula, other Turkish states, ०० Should go against the puppeteers and Africa and Far-East countries. not just the puppets, servants or actuators. • Focus on investments for technology and “Should keep being a create or adapt new technologies to use ०० Should keep being a hope for Middle hope for Middle East- for trade purposes. Easterners for their future safety and wellness. erners for their future ०० Should shy away from seeing the world from the eyes of construction ▪▪ Hosting over 2 million of refuges. safety and wellness.” companies. • Has to analyze the political games in fa- ०० Should finally discover the energy sec- vor of Turks and Muslims. tor from scratch, not from the down- stream end. ०० Should have plans to unite Turkish states, Middle East and Muslim na- ▪▪ Has to gain the ability and experi- tions. ence to operate in exploration, extraction and trade chain. ०० Should decipher and reveal the relentless ambitions of the west and Christi-

ENERGY POLICY TURKEY Page 14 ENERGY GAME: SYRIA & KURDISH CORRIDOR

anity over Muslim world. region. RUSSIA “rying to not to allow ०० Should recover and adapt the Otto- • Strategically aiming to suppress Europe man logic against Protestants, Catho- as to mandate its biggest natural gas cus- American or Euro- lics and Jews. tomer to stay tuned. pean domination in ०० Giving options or alternative gas Syria.” RUSSIA routes (SGC, TANAP, TAP, etc.) to EU to reduce their security concerns while still being the major supplier. • One of the biggest military powers in the “Attacking strategic region. ०० Trying to intimidate EU for finding and secret USA- alternatives to Russian gas even if it ०० Has a naval base in Tartus (Russia’s might cost another world war. EU bases or sites only naval base in Mediterranean) since 1971. ▪▪ Against Iran-Iraq-Syria pipeline in Syria whenever project. it finds a diplomatic ०० Has an air base in Latakia since 2015. ▪▪ Against Egypt-Lebanon-Israel-Syr- and political gap left ०० A strategic ally of Syria since the Sovi- ia-Turkey pipeline project. et Union and supporter of the dictator by USA and EU.” Assad. • A strategical ally of Iran, where Russia has bases. • Trying to not to allow American or Eu- “Backing Assad ropean domination in Syria. ०० Using Iran and its ambitions of Shia union and domination in Arabic Pen- and his forces, who ०० Attacking strategic and secret USA- insula against Sunnis, Turkey and the always tend to bomb EU bases or sites in Syria whenever coalition. it finds a diplomatic and political gap Free Syrian Army’s left by USA and EU. ०० Trying to control Iraq and Syria by allowing Iranian military presence in affiliates and civilians ०० Definitely not fighting against Daesh the region. in accordance with as it executes its attacks on so called rebels. • Scared of losing its Mediterranean port the ethnical cleaning and influence perimeter in both Arabic ०० Claiming that the components of FSA Peninsula and the Mediterranean. process.” are Daesh and they are fed by Turkey.

▪▪ A strategic political move of play- IRAN ing the fool. IRAN “Has the urge to rule • Trying not to allow Turkish domination • Has the urge to rule the Islamic world by in Syria. subjugating all the Sunnis. the Islamic world by subjugating all the ०० Backing Assad and his forces, who al- ०० Spending all of its hydrocarbon rev- ways tend to bomb Free Syrian Army’s enues to succeed this illiterate ambi- Sunnis.” affiliates and civilians in accordance tion. with the ethnical cleaning process. ०० Evaluated well the American illegit- “Spending all of its ०० Oppose Turkish presence and deploy- imacy of invading Iraq as it had the ment of ground troops in the region. ability to lead the Shiites in Iraq and hydrocarbon reve- even extended the influence radius ०० Ability to partner with Turkey against over to Yemen. nues to succeed this USA and EU’S will and actions. illiterate ambition.” ०० Accomplished Saudi hate and gained • Known to be, at least partially, having a a real time enemy. share over illegal petroleum trade in the

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०० On the edge of creating a Sunnah-Shia ०० Sending/allowing armed Shia forces war. engaging against FSA in Syria.

IRAQ • Established good relations with Iraq and ०० Sending financial support and diesel Assad regime fuel aid to Assad. “Enabling its land and ०० Supports Shia dominated Iraqi gov- • Enabling its land and air spaces for in- air spaces for inter- ernment. ternational military aid to Assad regime. national military aid ०० In good relations with Talabani in • Unable to control NIG and petroleum to Assad regime.” Northern Iraq but Barzani is in power. trade chain over Northern Iraq.

०० Has military presence in Syria and • Trying to overpower NIG’s president “Unable to control Iraq against Daesh presence but they Barzani with Talabani. are mainly there to help Assad forces NIG and petroleum to fight against FSA. • Taking risks for clashes with Turkey at times by support of Iran and Russia. trade chain over ०० Has some shares from the illegal pe- Northern Iraq.” troleum trade trafficked by Daesh • Causing conflicts among the sects living since there is no clash between Iranian in Iraq. forces and Daesh militia. • Ironically, not able to completely remove • A strategic ally of Russia, however, is al- Daesh presence from the country and ways struggling with USA and EU sanc- gain the upper hand on its oil reserves tions. and trade. ०० Russian influence probably lacks of high intelligence or Iran’s internation- NORTHERN IRAQ GOVERN- al affairs is just complex to compre- MENT (NIG) hend. ०० Requires high-tech machinery and • Under the protection of USA, EU and equipment to increase hydrocarbon Turkey. production to support its military ac- NIG tivities but has to obey USA and EU. • Safer and stable comparing to surrounding area. “Against PKK and • Providing significant support both eco- • Against PKK and Daesh, which threat- Daesh, which threat- nomically and militarily to Syria and Shiites fighting in the region. en NIG’s presence, and oil reserves and en NIG’s presence, revenues. ०० Leading Hezbollah militia on the side and oil reserves and of the Assad forces. • Has trade agreements with Turkey and revenues.” provides oil for Kirkuk-Ceyhan Pipeline. ०० Causing instability in Lebanon and Yemen due to ambition of Shia dom- • Conflicts with Iraqi government. inance. “Has trade agree- ० Planning to get to Israel in the future. UK AND FRANCE (EU) ments with Turkey ० and provides oil for IRAQ • France was the former mandatory ruler Kirkuk-Ceyhan Pipe- of Syria. line.” • Under Shia and indirectly/directly Rus- • In the ethnical and religious distribution sian influence. of Syria, France had high influence in the past. • Directly supports Syrian regime

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• Both are included in the coalition forces PKK EU and co-sponsored a UN Security Coun- “UK is one behind the cil resolution for Syria. • Named after a political party but resides scene puppeteers • UK is one behind the scene puppeteers in the mountains of South-East of Tur- over the unrest in over the unrest in Syria. key, North-West of Iran and Northern Iraq and has never acted as a political Syria.” ०० Hiding its involvement by guiding party or has ever attended an election. USA to the front-line. • Stands as a shame of the west since its ०० History: Same actions staged on Ot- first terrorist attack in the 1980s. “Hiding its involve- toman and the successor, Turkey. ment by guiding USA • Used for destabilizing Turkey and dis- ०० Daesh never targets UK, perhaps, ter- mantling the South-East of Turkey for to the front-line.” rorists cannot swim across Manche the so called Kurdistan, however, the Channel. causalities from their attacks are mostly Kurds. “France called for ०० Eventually, sneaking around will be the end for UK (Ever heard a UNIT- • Feeding from the international drug military intervention ED kingdom?). trade and additionally, lately from Daesh after Assad used controlled illegal oil trade. • France called for military intervention chemical weapons in after Assad used chemical weapons in • Established PYD/YPG in Syria and Damascus in 2013, UK attended with having open support from the coalition Damascus in 2013, forces under the task of creating a Kurd- air strikes in 2015. UK attended with air istan that reaches Mediterranean. • EU and Syria talks on EU-Mediterra- strikes in 2015.” nean Program were never finalized but EU funded Syria’s democracy walk until ISRAEL 2011. PKK • After the public protests in 2011, EU • The quietest state in the region as it “Feeding from the minimized its involvement in Syria but shows no signs of involvement in the re- still takes place in the coalition, and at- gion. international drug tends air strikes. trade and additional- • Scared of Iranian growth around its bor- • Refuge crisis troubles EU as they had to ders and military intervention on its soil. ly, lately from Daesh cooperate with Turkey. • Performs alleged attacks or strikes in Syr- controlled illegal oil • Daesh attacks in Europe targets France ia at certain times against Shiite militia. trade.” and Belgium. • Directing the west to the Middle East ०० Indicating Daesh aims to discourage through its intelligence. France from interfering in Syria since ISRAEL it was the only EU country that pro- • A member of the hidden pact between “A member of the posed sending ground troops after As- USA and England that is master mind of sad chemical weapon attacks. July 15 coup attempt in Turkey. hidden pact between ०० Threatening EU (for not getting in- USA and England volved in coalition) by plotting at- ARAB LEAGUE that is master mind of tacks on EU’s heart, Brussels. July 15 coup attempt ०० Apparent CIA intelligence to leave • Consisted of Sunni countries adjoined EU out of Middle East matters by against Iran or Shiite ambitions over the in Turkey.” cooperating with Russia to establish a Islamic world. Kurdish Corridor. • Supporting arms for and funding FSA

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ARAB LEAGUE forces against Assad and Iran. • Almost each nation in the world fights “Consisted of Sunni against it but somehow it still manages • Jordan and Saudi Arabia executes air controlling large areas in Iraq and Syria. countries adjoined strikes on Daesh. • Ironically, it controls oil fields and feeds against Iran or Shiite • Qatar operates training camp run by from the oil revenues of Iraq and Syria. ambitions over the CIA. • None of the countries buys oil from Islamic world.” Daesh but it is managing to fund its am- DOMESTIC ACTORS bitions by oil revenues.

SYRIA & ASSAD • Serving as a puppet for ethnic, cultural In comparison to the exterior influencers, do- and religious cleaning in the region. “Assad has served mestic ones can be depicted as the dictator, Assad and his military forces, Daesh, PYD/ • Cooperates with PKK and PYD/YPG the country and its YPG and FSA. It is possible to acquire some terrorist organizations as USA’s arms aid people to the hands key definitions that can be inferred from the reaches all of them. action and roles that those countries or or- of foreign actors and • It will vaporize again in one night after ganizations shoulder in the region. the Kurdish corridor plot is achieved or become a puppet halted. that will eventually SYRIA & ASSAD FORCES be thrown away like PYD/YPG

Saddam Hussein.” • Assad has served the country and its people to the hands of foreign actors and • Accepted as terrorist organizations by become a puppet that will eventually be Turkey and trusted for fighting against thrown away like Saddam Hussein. Daesh by USA and EU. DAESH • Assad forces are only operative with the • Its objective is to connect NIG to the help of Russia and Iran. Mediterranean with the aggregation of “It came alive in one Turkish Kurdistan. night and paralyz- • Assad only sees Arab and Turkmen as the threat for Syria. He has no concerns for • Hard days awaits PYD/YPG. ed most of Iraq and Daesh. ०० PKK has gotten a great damage in Syria. It will vaporize • Millions of Syrian had to leave the coun- Turkey and Northern Iraq that signals again in one night try for security reasons, which is a shame its end. for Assad regime. after the Kurdish cor- ०० It will eventually move to PYD/YPG • A Kurdish corridor is plotted in North areas to survive, meaning clashes for ridor plot is achieved and his only concern is to fight against the authority. or halted.” Sunni rebels, which indicates that he is not worried about a Kurdish state be- ०० FSA and Turkey will fight against it tween Syria and Turkey. after exterminating Daesh from the region. PYD/YPG DAESH “Its objective is to FSA connect NIG to the • A terrorist group in regards with Mediterranean with world-wide-acceptance. • Consisted of a variety of oppositional the aggregation of forces including al-Nusra Front, which is • It came alive in one night and paralyzed known as the extension of al-Qaida. Turkish Kurdistan.” most of Iraq and Syria. • Possibly a best solution for the future of

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stability and democracy in Syria since it middle of Turk-Arab-Persian triangle. represents a diversity of ethnic groups living in Syria comparing to PYD/YPG Their non-unified language properties, lack presenting only Kurdish roots. of historical elements (such as literature, arts, music etc.) and tribal systems demonstrates • An effective group that has the ability to the above ideas are as unavoidable facts. execute and eliminate Daesh forces and FSA stop Shia influence in the region as Ja- “An effective group rabulus operation states this fact. Up to 1920’s, the whole geography used to be under Ottoman ruling. From the Otto- that has the ability to • Considering Turkish-NIG and Turk- man Empire archives, historically, Kurdish ish-FSA relations stand firm, changing tribes and their struggle with the Armenian execute and elimi- the plans to save the boundaries for Iraq societies in the region were clearly punctu- nate Daesh forces and Syria in accordance with Turkish ated. intelligence and visions will be the most and stop Shia influ- viable solution in the region. After the Ottoman Era, while the regions ence in the region as were the colonies of Britain and France, Jarabulus operation KURDS & KURDISH CORRIDOR Kurdish tribes have been segregated on a chess board among the mandators. In other states this fact.” words, they were used to lessen the influence In order to comprehend the claimed Kurd- of Turks in the region so that Kurds can be ish corridor in the Northern Syria, ethnical stationed between the Sunni Arabs & Shia distribution of Kurds, their historical proper- Turkmen and Turks. ties, political structures and similar references in the neighboring areas should be studied. This strategy can easily be observed by focusing on the Iraqi region as now, there is From the historical sight, although there are a nearly independent Kurdish State in the some unproved claims that Kurds used to be Northern Iraq. a specific nation with a state in the history, actuality relies on the orientation of Turk-Ar- ab-Persian mixture as they are located in the From the other sight, Turkey lets the state

“Kurds’ non-unified language properties, lack of historical elements (such as literature, arts, music etc.) and tribal systems demonstrates the above ideas are as unavoidable facts.”

Map 1: Geographic distribution of Kurdish and other Iranian languages spoken by Kurds. Source Wikipedia, https://en.wikipedia.org/wiki/Kurdish_languages.

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“After the start of civil war in 2011, so called Kurdish political parties and militia and terrorists have gained important certain grounds under possession in the region by the support from due international actors.”

Map 2: The current situation in Syria before Turkish military intervention. Source:http://stat - ic.birgun.net/resim/haber-ici-resim/2016/08/23/kuzey-suriye-kafkasyalasirken-176699-1. jpg.

in the Norther Iraq (KRG) to survive by not 2, on the other hand, shows current situation blocking their only revenue item: oil exports. in Syria before Turkish military intervention Behind this strategy lies the fact that Turkey on Daesh. “Kurdish groups ap- will never leave the current Kurdish ruling party in the hands of Iran. pear almost all of the It can be observed from Map 1 that Kurds Northern Syria, which are distributed as clusters over the Northern While focusing on Syrian matters, after the cities of Syria. By comparing the map with states the fact they start of civil war in 2011, so called Kurd- the current situation before Turkish inter- ish political parties and militia and terror- have served their vention (See Map 2): ists have gained important certain grounds purpose of ethnically under possession in the region by the sup- Kurdish groups appear almost all of the port from due international actors. Map 1 cleansing large areas Northern Syria, which states the fact they displays geographic distribution of Kurdish have served their purpose of ethnically along Turkish bor- and Iranian languages in the Middle East cleansing large areas along Turkish border. including Turkey. This linguistic map is stra- der.” tegically used as population map to mislead the world by stating that Kurds cover a very After realizing the current cleansing projec- large area in the region. Behind this logic, tion in Syria, Turkey stood up and warned there is the Great Middle East Project. Map the international coalition and the terrorist

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“15 July terrorist coup attempt aimed at dis- orientation of Turkey, which will eventually eliminate Turkish interference with the Great Middle East Project. After the 15 July terrorist coup and continuing terrorist attacks in Turkey, Turkish military has justifiably entered the Northern Syria for its Map 3: A future Kurdish corridor to the Mediterranean. Source: the Washington In- own security purpos- stitude http://www.washingtoninstitute.org/policy-analysis/view/rojavas-sustainabili- es and to stop such ty-and-the-pkks-regional-strategy. project threatening group of PYD/YPG about Turkey’s red line the region. Turkish borders.” that meant Turkey will never allow Kurdish forces to pass on the west of Euphrates. How- Although some authorities are never accept- ever, with the commercial and military sup- ing that there are plans on such a Kurdish ports of USA and some other international corridor in the Northern Syria. Map 3 is actors, those Kurdish terrorist organizations prepared by the Washington Institute that were able to overtake Manbij. outlines PKK and its counterpart PYD/ “Rojava (Claimed YPG’s ambitions to establish such corridor in name of Syrian Kurd- 15 July terrorist coup attempt aimed at dis- Northern Syria. However, the picture drawn orientation of Turkey, which will eventually on Map 3 gives important clues for the inter- istan) is going to be national experts. eliminate Turkish interference with the Great founded by the help Middle East Project. After the 15 July terrorist coup and continuing terrorist attacks of PKK that obses- As can be observed from the map; in Turkey, Turkish military has justifiably en- sively aims to estab- tered the Northern Syria for its own security lish Turkish Kurdistan purposes and to stop such project threaten- • Rojava (Claimed name of Syrian Kurdis- ing Turkish borders. tan) is going to be founded by the help in South East of of PKK that obsessively aims to establish Turkey.” Turkish Kurdistan in South East of Tur- Turkey’s military operation not only targeted key. the terrorist organization DAES but also its counterparts of the PYD/YPG terrorist or- • Achieving those, they both might ganizations, which are allegedly claiming to convince KRG to open its border to Ro- expel DAES threats but, in fact, making an java and adjoin the corridor. ethnic cleansing of Arabs and Turkmens in • Next step will be pushing for Rojava’s ex-

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tention to Mediterranean costs. ridor. Hence, has the rights:

• Succeeding such steps will break Turkey’s • To protect and cleanse its Southern direct connection with the Sunni Arab boundary from the terrorist groups. “With the Kurdish world. • To protect the Muslim and Turkmen so- State in the North cieties in the region. Now, it makes sense to analyze which actors and the Daesh in the can support or disagree on a Kurdish Corri- • Never to let such a Kurdish blockage in middle and Southern dor & Why? its influential area. Iraq, Iran’s ability to USA ISRAEL completely control the whole Iraq dimin- It is better to remember that history is always From the sight of security, Israel may sup- ished consequently.” enough to estimate the future. port of weakling neighbors and naturally a weakened and divided Syria. So, it may not be strictly but gently a supporter of such a By claiming to bring the democracy to Iraq, project. USA initially made the country fall into a chaotic environment. Then, USA had to leave the country due to high costs of war RUSSIA & IRAN and international pressure on barbarous like actions of the US Military in the region. It is not logical that it will support such a While leaving the country, USA have already corridor since it has been a strategic ally of shaped and establish a half independent Assad Regime. Kurdish State in the Northern Iraq. How- ever, to suppress the Shia hegemony in the region, USA plotted a new al-Qaida based NORTHERN IRAQI GOVERN- terrorist organization (Daesh) to actuate MENT (NIG) & PKK against the Iraqi Shia government. With the “From the sight of Kurdish State in the North and the Daesh in the middle and Southern Iraq, Iran’s ability It has the ability to support such a corridor security, Israel may to completely control the whole Iraq dimin- due to ethnical sights and nationalist ideas. However, it should be noted that NIG keeps support of weakling ished consequently. its borders closed to so called Rojava. neighbors and natu- The same scenario was to be followed in the rally a weakened and Syria. PYD/YPG has been supported in all UK aspects to control the Northern Syria. While divided Syria. So, it they turned out not to be as effective as ex- may not be strictly pected, Daesh had to be taken into the equa- UK holds its position usually in parallel with tion. Then, again PYD/YPG had to be pro- USA or vice versa. but gently a support- jected as fighting against Daesh. er of such a project.” As a result, such a corridor is mainly planned The whole information means that USA is and partially brought alive by USA. And the main supporter/plotter of the Kurdish now, Turkey has its own strategy to interrupt Corridor. on restructuring the region by such themes that were plotted in Northern Iraq. TURKEY It is clear that, today’s Iraq is not a secure and justifiable country to live as it was proposed Turkey is the key deterrent actor of such cor-

ENERGY POLICY TURKEY Page 22 ENERGY GAME: SYRIA & KURDISH CORRIDOR by the invaders (USA and EU). And high- partially impossible) Northern Iraqi and ly-likely Syria will not be one either even for Iran oil and gas resources are transported the Kurds! to the Mediterranean coasts through this corridor, that means creating another en- “If such a corridor ergy hub in the region, which will shad- KURDISH CORRIDOR FROM ow Israel’s energy hub claims. succeeds and (also THE SIGHT OF ENERGY • So, from the sight of energy, Israel is not partially impossi- a fan of such corridor. Regional energy importers or exporters have ble) Northern Iraqi to be analyzed while Kurdish corridor is eval- and Iran oil and uated from the sight of energy politics. In FROM THE SIGHT OF NORTH- this concept, as exporters (or potential ex- ERN IRAQ gas resources are porters) Israel, Northern Iraq, Central Iraq, transported to the Iran and other Gulf Countries will be eval- • KRG is securely, technically and com- uated. And as the biggest regional importer, Mediterranean coasts mercially exporting its oil via Ceyhan Turkey will be identified. port through Turkey. through this corridor, There are some interesting theories regarding • In addition, KRG is also developing that means creating Israel becoming a gas and electricity sup- some plans to transport some portion of another energy hub plier and an energy hub in the region, after crude production volumes to Iranian re- achieving its plans on generating a Kurdish fineries via a new pipeline. in the region, which corridor starting from Western Iran, adding • Then, for such a government to follow will shadow Israel’s Northern Iraq and including Northern Syria. such an incoherent, risky, uneconomic energy hub claims.” and fanciful option by accepting being Those theories might be used for psycho- an enemy of Turkey in the region looks logical manipulations on illiterate societies. impossible. However, such claims are inconsistent and can only be considered as a conspiracy theory • So, KRG may fantastically support such under current circumstances.1 a corridor from the sight of energy. How- ever, in reality, it does not support and take any steps on behalf of such project. To clarify the above claims and the energy sight of a Kurdish corridor: • In addition, while there are existing and cheaper transportation systems, none of “So, KRG may the operators would make extra invest- FROM THE SIGHT OF ISRAEL ments to follow another political route. fantastically support • And just for Northern Iraq’s energy re- such a corridor from • Israel does not have so much export po- sources, shall any of the actors try to the sight of energy. tential and huge reserves, by compar- open such a corridor. ing with the other suppliers’ potentials. However, in reality, it Around 5 bcma of stable gas export potential between the years 2020 to 2038 FROM THE SIGHT OF IRAN & does not support and cannot be accepted as a very important IRAQ take any steps on be- source of supply for the region. half of such project.” • There is no so much electricity demand • Iran does not support politically such in the due region. corridor claims. And naturally, it never makes a plan (which seems not very • Electricity export option may not be the economic and politically impossible) to best selection to develop its own resourc- transport her resources through such a es. corridor. • If such a corridor succeeds and (also

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FROM THE SIGHTS OF OTHER nis and suppress Shia influence in the region. GULF COUNTRIES July 15 coup attempt had started the awak- “Turkey had to get ening of the Middle East giant as Feto staged the puppeteer’s game to dismantle govern- involved in restruc- • None of the Gulf Countries will consid- ment institutions and agencies, topple Erdo- turing Syria using er such an incoherent, risky, uneconomic gan and the cabinet. The next step would be and fanciful option, while they generally opening the borders for the terrorist groups Daesh and PYD/ have existing export systems and good located throughout the Southern border of YPG terrorist groups political relations with Turkey. Turkey. Simply, PYD/YPG, Daesh and PKK would have chances to reign in Turkish ter- since it was obvious TURKEY ritory without any resistance from Turkish that the main aim of military and wreak havoc the country to suit the Greater Middle East Project. If succeed- those groups was to • Politically, commercially, culturally and ed, such actions would result in a smaller but redraw the nation- from the sights of energy politics, Tur- more controllable Turkey since there would key will never allow such a corridor to be a Great Kurdistan created on most parts al boundaries and be created. of Turkey, Iran, Iraq and Syria soil. insert a Kurdish state • In addition, while it is currently allow- between Sunnis and ing the transportation of Northern Iraq So Erdogan, as the opposer of the idea, had crude via Ceyhan port and in case of such to go and Turkey should have been gov- suppress Shia influ- option, crude trade will be re-routed via erned by the puppets, who would just obey ence in the region.” the terrorist corridor. Again, Turkey will the west’s orders. Thanks to the great world strictly block/prevent the idea. leader, Erdogan has united Turks and pre- vented covert actions of puppeteers. The plot against Turkish freedom is doomed to fail ADDITIONAL NOTE consequently because Turks, at any point in the history, had never been enslaved and will never been, either! The west, not being able “Turkey had to get • There may be potential, however, cur- to swallow that certain fact, still continues to rently the Kurdish corridor targeted area exhibit nonsense covert plans. involved in restruc- is not bearing important volumes of turing Syria using proved energy resources. The offensive on Manbij was designed for Daesh and PYD/ Kurdish gains over Daesh as the plot was As a result, while evaluating from the energy to claim the gains of the Kurdish territo- YPG terrorist groups sight, Kurdish corridor seems not directly to ry by moving Kurdish forces through each since it was obvious be related with energy policy targets. direction from Manbij. A turning point for so called Kurdish corridor would be ac- that the main aim of ALTERING BALANCES - complished by connecting Rojava to Afrin those groups was to to complete the corridor. Erdogan refused TURKISH MILITARY INTER- to join the Manbij operation unless PYD/ redraw the nation- VENTION YPG militia stayed on the East of Euphra- al boundaries and tes. PYD/YPG paid no attention to Turkey’s calls and operation started in 31 May 2016. insert a Kurdish state The game played over the Middle East en- Syrian Democratic Forces (SDF) including between Sunnis and couraged Turkey to take concrete steps in the PYD/YPG militia has led the offensive and international war game in Syria. Turkey had when SDF captured the West of the city, the suppress Shia influ- to get involved in restructuring Syria using calendar was showing date, 13 July 2016, ence in the region.” Daesh and PYD/YPG terrorist groups since which is just a day before the 15 July coup it was obvious that the main aim of those attempt in Turkey. If the attempt was suc- groups was to redraw the national bounda- cessful, the new authority in Turkey would ries and insert a Kurdish state between Sun- be dealing with interior clashes and chaos, so

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“Hence, mending relations with Russia and Israel would be a win-win situation. Negotiations and agreements are realized with Russia and Israel. Indeed, Turk- ish military entered the Northern Syria, helped and guided Map 4: Military situation in Northern Syria as of 30 August 2016 after Turkish incursion. FSA against Daesh, Source: http://post.understandingwar.org/sites/default/files/Military%20Situation%20 and Jarabulus was in%20Northern%20Syria-30%20AUG%202016_2.png. freed.” there would be no interference from Turkish military entered the Northern Syria, helped side over PYD/YPG crossing the Euphrates. and guided FSA against Daesh, and Jarabu- However, it was unsuccessful, which meant lus was freed. New situation in the Northern that the west had to cooperate with Turks Syria can be viewed on Map 4, where Man- in the area. And that (for the west) made bij is also included as a Kurdish controlled everything complicated than it was before. territory. PYD/YPG, on the other hand, had to leave Manbij through Turkey’s warnings Following the coup attempt and placing or- regarding Erdogan’s statement that Kurdish “As a result, Kurdish presence on the West of Euphrates will never der in the country, Erdogan’s first steps were ambition to score aimed at cleansing government institutions be tolerated. It is quite incomprehensive why such as from its justice, police and military the maps still show Manbij as Kurdish terri- larger areas from functions from Feto’s secret agents. Erdogan, tory and additionally, Kurdish controlled ar- Daesh was ham- as a foreseer, started those actions in 2010 eas are rather exaggerated. Perhaps, all these after the 17-25 December events as to clear are conceptual designs to overload human mered by Turkish out the questions how fast Turkey were able perception. cooperated FSA to detect and detain that many Feto wretches in a short period of time. As a result, Kurdish ambition to score larger incursion. From now areas from Daesh was hammered by Turkish on, the plot for creat- cooperated FSA incursion. From now on, The next step had to be the Syrian civil war the plot for creating a Kurdish corridor from ing a Kurdish corridor and PKK-PYD/YPG game played in Syr- Iraq to Syria will have to be revised in ac- from Iraq to Syria will ia. Turkey were unable to deploy its troops cordance to Turkey’s will. to Syria due to Russian military threats, have to be revised in which was extremely important to stand accordance to Tur- firm against USA’s ambitions for a Kurdish CONCLUSION corridor. Hence, mending relations with key’s will.” Russia and Israel would be a win-win situation. Negotiations and agreements are real- The information and knowledge shared so ized with Russia and Israel. Indeed, Turkish far point only to ethnical, political, religious

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“Islamic world in- and economic ambitions that drive the cha- world. os in the Middle East. Therefore, there is no stinctively believes clue to relate the Middle East ridicule direct- Let’s remember “God is watching us! He that the whole mess ly to energy even though the vast majority of knows who is in GOOD or BAD faith.”. world’s oil reserves are located in the region. is about “Energy” as it was in the World REFERENCES Nevertheless, Islamic world instinctively be- War I and II, Cold lieves that the whole mess is about “Energy” as it was in the World War I and II, Cold 1 Oğuzhan Akyener, “Future of Israel gas export up War, Gulf incursions War, Gulf incursions and Iraqi invasion. The to 2050 & Turkey”, Energy Policy Turkey, Sep- and Iraqi invasion. future will reveal whether or not all related tember 2016, available from http://www.Energy- PolicyTurkey.com. to energy once the unrest ends and sharing The future will reveal of the energy resources takes its place. Most 2 Wikipedia, available from https://en.wikipedia. whether or not all re- probably, western companies will have the org/. most profitable reserves and projects on lated to energy once blood covered soil. At this point, countries 3 BBC News, “Syria Crisis: Where Key Coun- the unrest ends and like Turkey with no effective oil company tries Stand”, 30 October 2015, available from has to rethink about creating or designing a http://www.bbc.com/news/world-middle- sharing of the energy powerful energy company that will be able east-23849587. to harvest the Middle East’s fruits in Turkey’s resources takes its 4 favor. FOX News, “Russian Warplanes Reported- place.” ly Bombed US Base in Syria”, July 22 2016, available from http://www.foxnews.com/ Puppeteers seem to stage the game over eth- world/2016/07/22/russian-warplanes-reported- nical concerns since each country in the rely-bombed-us-base-in-syria.html. gion has a variety of ethnical minorities. And “It is inhuman to 5 the fact that polarizing people over ethnical Will Fulton and Sam Wyer, “Iranian Strategy in strangle innocent reasons is an easy task to disorganize a coun- Syria”, Institute for the Study of War, available from http://www.understandingwar.org/report/ try that refuses to obey the puppeteers’ way people and ridicule iranian-strategy-syria. of running business. Additionally, there is them in some other no harm to the puppeteers’ homeland and 6 Al-Jazeera News, “Iraq liaising with Russia, countries as refuges. no threats to their citizens since they have Iran and Syria against ISIL”, 27 September no idea what their nations are doing in the 2015, available from http://www.aljazeera.com/ Creating a corridor by Middle East. news/2015/09/iraq-liaising-russia-iran-syria- isil-150927032744633.html. perversely dictating a state that nobody However, it makes sense to focus on human- 7 Raymond Tanter and Stephen Kersting, “Syria’s itarian issues that are brought upon by covert Role in the Iraq Insurgency”, Jewish Policy Center, in the region really political and strategical activities. It is inhu- 2009, available from https://www.jewishpolicy- center.org/2009/02/28/syrias-role-in-the-iraq-in- accepts is a very man to strangle innocent people and ridicule them in some other countries as refuges. surgency/. very bad idea as it Creating a corridor by perversely dictating a 8 BBC News, “Iraq profile – timeline”, 7 June will spread worldwide state that nobody in the region really accepts 2016, available from http://www.bbc.com/news/ is a very very bad idea as it will spread world- world-middle-east-14546763. and became a bur- wide and became a burden on whomever has den on whomever come up with the idea. 9 Wikipedia, “Foreign involvement in the Syrian Civil War”, available from https://en.wikipedia. has come up with the org/wiki/Foreign_involvement_in_the_Syrian_ Debating behind closed doors about how to Civil_War. idea.” trade national weapons and arms that will be paid by blood and dirty oil by Middle East- 10 Rim Turkmani and Mustafa Haid, “The role of erners is not the best way to set peace in the the EU in the Syrian conflict”, Security in Tran- sition, 2016, available from http://www.feslon-

ENERGY POLICY TURKEY Page 26 ENERGY GAME: SYRIA & KURDISH CORRIDOR don.org.uk/cms/files/fes/img/publications/FES_ LSE_Syria_Turkmani_Haid_2016%2002%20 23.pdf. 11 Wikipedia, “Terrorism in Europe”, available from https://en.wikipedia.org/wiki/Terrorism_ in_Europe.

12 Marc Pierini, “In Search of an EU Role in the Syrian War”, Carnegie Europe, 18 August 2016, available from http://carnegieeurope. eu/2016/08/18/in-search-of-eu-role-in-syrian- war/j3q3.

13 Wikipedia, “Hristiyan mezhepleri”, https:// tr.wikipedia.org/wiki/Hristiyan_mezhepleri.

14 Fabrice Balanche, “Rojava’s Sustainability and the PKK’s Regional Strategy”, The Washington In- stitude, 24 August 2016, available from http:// www.washingtoninstitute.org/policy-analysis/ view/rojavas-sustainability-and-the-pkks-regional-strategy.

15 Jennifer Cafarella, “Turkish Incursion into Northern Syria Signals Turning Point in Anti-ISIS Fight”, Institute for the Study of War, 30 August 2016, available from http://post.understandingwar.org/backgrounder/turkish-incursion-northern-syria-signals-turning-point-anti-isis-fight.

16 Robert F. Kennedy, Jr, “Why the Arabs don’t want us in Syria”, Politico, 23 February 2016, available from http://www.politico.eu/article/ why-the-arabs-dont-want-us-in-syria-mideast- conflict-oil-intervention/.

17 Wikipedia, “Manbij Offensive”, available from https://en.wikipedia.org/wiki/Manbij_offensive.

27 Page SECOND ISSUE CHANGING BALANCES IN TURKISH ENERGY GAME BEFORE THE COUP by Oğuzhan Akyener

(as it did throughout history). These rapid INTRODUCTION strides may not have been observed specifically in the energy area, however, Turkey’s “In the last two Turkey, with its growing economy, nearly 80 expectations stands high in all involved areas. decades, Turkey million population and increasing energy demand is one of the most important countries Some international forces have been trying steadily and success- in energy politics of its region. Due to insuf- very hard in order to keep Turkey under control. At constant pace, steadily growing fully keeps leaping ficient proven oil and gas reserves, and not having a suitable environment to efficient- Turkey has been tussling with some politi- on economic – in- ly develop her renewable energy resources, cal troubles since 2012. These troubles can be exampled as: “the unrest at Gezi Park”, dustry – technology Turkey’s energy policies used to encapsulate only “sustainability on meeting the energy “17th and 25th December operations” and and trade areas, demand” item. “15 July coup attempt”. All of them aimed at weakening Turkey but none of these at- which, indeed, grows tempts were able to tackle the growing pow- the Turkish energy In the last two decades, Turkey steadily and er of Turkish Moon & Star. In contrast to successfully keeps leaping on economic – in- their goals, Turks has eagerly got united at demand faster and dustry – technology and trade areas, which, each planned attempt, however, each inter- faster.” indeed, grows the Turkish energy demand vention disintegrated the country as it had to faster and faster. While the demand is grow- concentrate on defying each attack. Turkey ing and Turkish influence in the region is had to defer some important items from its flourishing, Turkey has been trying to devel- agenda such as energy in the midterm. op and execute new energy strategies, for example; “to become an energy transit hub in In this paper, to be able to investigate if the “The unrest at Gezi the region”, “to support the domestic renew- 15 July terrorist coup were related with the able energy investments and technology pro- energy policies of Turkey, and if the key fac- Park, 17th and 25th ductions”, “to take part in more internation- tors expressed so far affect the Turkish ener- December operations al oil & gas projects”, “to construct nuclear gy equation before the coup. Naturally, this power plants”, “to actively support domestic will not mean that the main reason of the and 15 July coup coal investments”. coup was energy, however, possible interre- attempt: All of them lations will be tried to be emerged from the Naturally within the concept of some of outcomes. aimed at weakening these strategies, successful steps have been Turkey but none of taken that some of which have not yielded satisfactory results. However, in general, its Before starting to evaluate the key factors re- these attempts were visionaries in energy strategies and politics lated to Turkish energy equation, some clues able to tackle the are in harmony with its economic growth. about the subcontractor terrorist group Fet- ullah Gulen Terrorist Group (FETO), which growing power of is the apparent mastermind of the coup, will With its increasing influence in the region, be deciphered. Turkish Moon & Star.” flourishing of the productivity and of its populace, growing economy and political and strategical foresight rise young Turkey’ consciousness to focus on a global visionary FETO & 15 JULY TERRORIST

ENERGY POLICY TURKEY Page 28 COUP IN TURKEY members and a powerful structure in USA. • USA tries hard not to return the mas- FETO is the terrorist group, which organ- termind to Turkey, expecting Turkey to “FETO is the ter- ized the coup in 15th of July 2016. Some ev- prove his guilt while everything FETO rorist group, which idences point that the group has connections did all sound and clear, placing legisla- with international organizations and has tions and diplomacy as a backdrop. organized the coup been supported by some of them. Perhaps, • An indirect connection that USA backs in 15th of July 2016. it has unofficial ties with some countries as YPG, which has the same roots with well. Some evidences PKK, against Turkey’s will in Syria. FE- TO’s militants infiltrated the key gov- point that the group Off course, such an effective and well or- ernment institutions actively worked has connections with ganized (intelligence service alike) group has together with PKK and DAESH. many contacts and relations with the interna- international organi- tional key actors in the region. Without the permissions and unofficial support of those About Israel: zations and has been actors, it will not be easy for such a group to supported by some be able to establish a hidden, strong, effec- • Unlike the other Islamic groups or lead- of them. Perhaps, tive, well organized global structure. In ad- ers, FETO’s leader or members abstain dition, a group in that measure cannot take from criticizing Israel’s cruelties in Pal- it has unofficial ties the risk of being unsuccessful in such inter- estine. vention without having some words and/or with some countries • No problem is observed between FETO support of the big actors. as well.” & Israel.

That’s why, initially, main international key political actors in the region have to be iden- About EU (Including UK & Vatican): tified to determine the most suitable actors and to examine their intimacy level with these infidels. • EU includes many countries in its structure. By assuming as the UK (as used to be) is also a member in the analysis; By the first look, as the international key political actors in the region (except Turkey) • FETO has good relations with EU. Or- can be assumed as: USA, EU (assuming EU ganization has many companies, schools “By the first look, as contains UK & Vatican), Russia, Israel and and a great number of members inside Iran. the borders of EU. the international key • FETO also has close relations with the political actors in the Then, to determine the intimacy level, some Vatican, which is a key actor in EU (also region (except Tur- public key clues will be overlooked as fol- is not an official EU member). lows: key) can be assumed • FETO is one of the subcontractors of Vatican’s popular project: “Interreligious as: USA, EU (assum- About USA: Dialogue” from the Islamic sight. ing EU contains UK & Vatican), Russia, • The leader of the FETO has been living About Russia: in USA more than 10 years. Israel and Iran.”

• The leader of FETO and the affiliated • Russia has closed the FETO schools in- organizations usually make declarations side its boundaries in 2006 by claiming parallel to global USA strategies. they have relations with CIA. • Organization has a great number of

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About Iran: tween governments that would have changed the balances in Turkish energy equation. These can be expressed as the ongoing TAN- “FETO is obviously • Due to temperate Islamic model of AP pipeline project, possible recuperations FETO, Iran always seems repulsive for with Israel–Russia–Egypt–Syria relations, closer to or a part of the group members. weakling EU, nuclear and domestic coal strategies. Western Bloc (includ- • There can be seen some declarations of ing the USA & EU). the FETO group in favor of Israel, USA and some EU countries. But it is not easy These events are going to be analyzed inside We may add Israel to to find such statements in favor of Iran the energy window, on a base of possible the western bloc due and Russia. (also weak) reason for the 15 July Turkish coup to weaken Turkey. to its regional policies By the way, with the light of very general are parallel with the public clues, it seems easy to determine the TANAP – A CONCRETE STEP Israel’s.” intimacy level of FETO with the due interna- ON BEING A GAS TRANSIT tional key organizations in the region. As can HUB be observed from the items above, FETO is obviously closer to or a part of Western Bloc (including the USA & EU). We may add Is- TANAP is the ongoing pipeline project, rael to the western bloc due to its regional which is going to transport Shah Deniz Stage policies are parallel with the Israel’s. 2 gas to Turkey (6 bcma) and Turkish western borders (10 bcma), then with TAP to It- aly market. The project is to be completed at Important note: “This does not officially the beginning of 2019. mean that: Turkish coup was organized by “The importance of the western block. For such declaration more evidence is necessary. Here by taking into ac- According to the capacity of the pipeline, the pipeline project count, only some small public clues are used although there are plans for extensions, 10 for Turkey is the to make assumptions.” bcma is a very small volume for EU’s energy security issue, while considering, this is a pipeline to carry an project supported by EU & USA. In the next chapter, by assuming there is a additional 6 bcma possibility of the western bloc to be behind The importance of the pipeline project for for Turkey and to be of the FETO and FETO’s last strike as the 15 July coup was organized to weaken Turkey’s Turkey is the pipeline to carry an additional the first internation- power (while unsuccessful) or to subjugate 6 bcma for Turkey and to be the first international transit gas line through the bounda- al transit gas line the government and make it vulnerable to all the targets of the supporting actors (while ries. The second important point is that this through the bound- successful). From this point of view, key pipeline will be the first concrete step of Tur- key being a gas transit hub. Moreover, from aries. The second factors expressed that affect Turkish energy equation will be evaluated in order to deter- the sight of EU, it is also the only and the important point is that mine the possibility of having relations with first concrete step again in the concept of the the reasonings of the coup. “Southern Gas Corridor Project”. this pipeline will be the first concrete step KEY FACTORS EXPRESSED From the sight of Russia, while some experts of Turkey being a gas AS EFFECTING TURKISH claim that Russian government is against transit hub.” the TANAP due to their strategic and com- ENERGY EQUATION mercial targets (and expressing that TANAP is the rival to Russian gas export routes), it is better to remind that Luk Oil (a Russian Before the 15 July terrorist coup, some agree- Company) is a partner of the Shah Den- ments and proceedings were on the talk be-

ENERGY POLICY TURKEY Page 30 CHANGING BALANCES IN TURKISH ENERGY GAME BEFORE THE COUP iz Project. TANAP is not a rival project for considering the expected increasing domestic Russian strategies, hence: consumption, there will be around 5 bcma export capacity (for a 20 years sustainable supply capacity)1. This volume is very small • TANAP is going to transport Russian gas to alter the international strategies. However, produced in Azerbaijan. as described in the same reference, although there are difficult political milestones to han- • TANAP has an insignificant capacity dle, Turkey is commercially the best option comparing the Russian gas export vol- for Israel’s oil fields to be developed and ex- umes to EU. ported. • Azeri gas transported to EU via TAN- AP will never be able to find a chance So, what do the mending relations with Israel to compete with Russian gas price in EU bring to both sides from the sight of energy? markets. • From the sight of Turkey; Hence, none of Russia, EU, and USA is against TANAP. As a result, this project can- ०० She will supply additional 5 (or 10) not be associated with the coup. bcma gas to feed her domestic market.

०० And according to the unit costs, Isra- POLITICAL RECUPERATION el gas may be cheaper than the Iran’s, WITH ISRAEL which means a positive affect for the domestic gas markets. As described above, Israel is assumed to be ०० In addition to such project, the gate in the western block, which has more possi- for the possibility of long term (by bility of being behind the FETO group. By considering possible future discover- the way, before the coup Turkey and Israel ies) supplies of Israel and other West- relations has got in a recuperation period. As ern Mediterranean resources to flow a result of this period, many experts claimed to Turkey will be opened. This may be their expectations about Israeli gas transport- a good step for Turkish energy strategy ed to Turkey, and via TANAP to EU. In this of being an energy transit hub. concept, the conflicts for the Cyprus were anticipated to be solved. • From the sight of Israel;

०० Besides the disputes in the political Meanwhile, in order to claim Israeli gas be- sight, Turkey root is the best selection ing transported to Turkey and EU; initially, for Israel’s future exports. Hence other commercial estimation and export capacity options are usually more complex or has to be studied. The total export capacity very huge investments are needed. of Israel after meeting her domestic demand ० Turkey is the most stable, most trust- and feeding the neighbors’ demands (which ० able and the biggest market in the re- will be more economic for the seller while gion. considering the high transportation costs) have to be identified. ०० Turkey is the only gate for Israel to economically reach her gas exports to EU markets. Currently, Israel has around 1 tcm proved and possible gas reserves. Current daily production is around the domestic consump- While such a win-win situation exists be- tion. In the midterm (in 2020), by develop- tween the two sides, what can be supposedly ing the new fields (mainly Leviathan); and in for Israel in the 5 July coup attempt?

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“But no one can Initially, it is clear that Israel wishes such a re- They are located in the both North and South; one being in the northern German say that if the coup cuperation with Turkey. And it is engrossing that Israel usually is on the side of western boundary and the other in the Northwest of was successful, the block and about the coup it was so silent. the Turkish boundary. To the Northern hub, Russia is supplying gas via Nord Stream and occupier terrorist is planning to supply additional volumes via government in Turkey But no one can say that if the coup was suc- Nord Stream2. To the southern part, Turkish cessful, the occupier terrorist government in Stream is going to transport the gas for the would have bad re- Turkey would have bad relations with Israel. Southern Europe and the Balkan countries. lations with Israel. In In addition, this situation makes some ana- lysts think if Israel is not happy with some As can be understood from the explanation addition, this situation items in the concept of recuperation with above, by considering the possible long term Turkey. makes some ana- market struggles in EU, sustainability in gas lysts think if Israel is supply security and importance of bypassing However, hence there is no evidence about Ukraine, Turkish Stream is almost a vital not happy with some these claims, political recuperation with Is- project for Russian energy security. rael cannot be directly related with the coup items in the concept attempt in Turkey. By the way, aren’t there any other options of recuperation with instead of Turkish Stream? Yes there are but Turkey.” POLITICAL RECUPERATION Turkish Stream seems less complex, more WITH RUSSIA stable and strategic.

Another important item these days that af- If so, why US and some of the EU countries fects the Turkish energy equation is the re- are against Turkish Stream? sults of the political recuperations with Rus- sia. Because:

As described above, Russia is one of the most important members of the eastern bloc. And • They do not want EU to be dependent far from the end of cold war, holding its po- on Russian gas supplies. sition of being an unofficial enemy of the western bloc. • EU in the mid and long term, is targeted to be the most important market for “As described above, USA’s gas supplies (Unconventional). After a 7 months of straining period, as a Russia is one of the result of some diplomatic attempts, Turkish • However, USA’s gas has no chance to win most important mem- relations with Russia has started to be nor- over a price struggle with Russian gas.2 malized (before the coup). Due to normali- (While all EU gas markets are on the way bers of the eastern zation efforts, main items discussed by both of having hub price mechanisms.) sides have been the Syria policies, tourism, bloc. And far from • If Turkish Stream (and Nord Stream 2) trade and energy. the end of cold war, can be constructed, Russia will continue to be the leader supplier for all EU mar- holding its position Focus on energy item consists of two main kets in the long term. sub items, which are the Turkish Stream of being an unofficial Pipeline and Akkuyu Nuclear Power Plant. • Although Russian gas is the most eco- enemy of the western nomic option for EU markets, western political targets are more important. bloc.” TURKISH STREAM PIPELINE: • By Russia bypassing Ukraine (where Ukraine seems like the most strategic Russia is planning to have 2 gas supply hubs castle of the western bloc against Rus- for the EU markets that bypass Ukraine.

ENERGY POLICY TURKEY Page 32 CHANGING BALANCES IN TURKISH ENERGY GAME BEFORE THE COUP

sia), Ukraine will lose power & around gies for the military issues, which can be annually 2 billion $ transit fee, will need accepted as a vital risk for western bloc. Russian gas in the midterm and these will make Western Bloc leave their castle in the hands of Russia. As a result, only the realization possibility “Similar to western of the last item above, is enough for western bloc to assume having a chance to be related bloc’s anxieties on In addition, similar to western bloc’s anxie- with the coup attempt. Turkish Stream, also ties on Turkish Stream, also in Nord Stream 2, although Germany seems the leader of EU in Nord Stream 2, and takes place on the western bloc’s side, POLITICAL RECUPERATION although Germany USA, UK and some EU members do not RUMOURS WITH SYRIA AND want Germany to be an energy hub and get EGYPT seems the leader of stronger. EU and takes place

By the way both Germany and Turkey are Before the coup, there were of rumors about on the western bloc’s the biggest customers for Russian gas. Turkey to recuperate her relations with Syria side, USA, UK and and Egypt. However, after the coup it is understood that, those rumors means that: some EU members So, Turkish Stream Project to turn back to life, which is a result of political recuperation do not want Germany • Turkey will have a more active role in with Russia, can be accepted to relate with to be an energy hub the coup attempt in Turkey. Hence, the west- the solution for the chaos in Syria. In the ern bloc might favor a successful coup. concept of this; and get stronger.” ०० Continue to support unity of Syria. AKKUYU NUCLEAR POWER PLANT ०० Not let a terrorist Kurdish corridor or a dependent Kurdish government to be realized. First Turkish nuclear power plant, which will supply Turkey an additional electricity capac- ०० Support the composition of a demo- ity equivalent to 4 bcma gas, was suspended cratic Syria government. due to corrupted relations with Russia. ०० And after such a government achieved, again have close intercourses. This power plant has some strategic advantages for Turkey. Which are: • From the sight of Egypt, with low level relations, Turkey wants to communicate with the current Egypt government. • Hence, being the first nuclear power plant, this will be an important step for “Turkey will have a Turkey on gaining knowledge and expe- So, how these steps can affect the Turkish en- rience on nuclear technology and nucle- ergy equations? more active role in ar power plants. the solution for the • After that, new nuclear power plant pro- Neither Syria nor Egypt is a key energy sup- chaos in Syria.” jects are to be constructed. plier in the region. And only Egypt has sort of important volumes of energy resources. • All nuclear power plants can be accepted On the contrary, due to its huge consump- as independency steps for Turkish energy tion, these resources do not seem strategic for demand. the regional energy politics. • Turkey has qualified human resources capacities to develop nuclear technolo- In addition, Neither Syria nor Egypt is geo- strategically important places from the sight

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of energy politics of Turkey. and short term fluctuations in energy prices. As a result, recuperation rumors of Turkey • Weakened international energy diplo- with Syria and Egypt, from the sight of en- macy ability. Which will effect: ergy cannot be referred to the coup attempt ०० Southern gas corridor strategies. “If unity of the Europe in Turkey. ०० Russian relations. is disrupted, then his- A WEAKLING UNITY: EU AF- tory shows that, there TER BREXIT ०० Energy import price negotiations. is always a possibility ०० World’s carbon and climate issues. to turn into a chaot- If unity of the Europe is disrupted, then history shows that, there is always a possibili- • Unpredictable new milestones for the ic environment and ty to turn into a chaotic environment and a “single energy market” vision and the energy unity. a cold war (usually cold war (usually effecting the whole world). effecting the whole Initially, by checking the GDP change of EU While focusing on the results of Brexit on world).” after and before the Brexit (from CIA Fact- the Turkish energy issues, there seems no book), EU used to have the second GDP in direct short or midterm affects. But Turkish the world with 19,18 Trillion $. And after Stream and southern gas corridor strategies the Brexit, the GDP rate is expected to be can only be accepted as indirect effects. around 16,5 which makes EU to come after USA again in the GDP ranking (Remains From the sight of Turkish Stream, as de- unchanged but the figures have got smaller). scribed in above due part, with a weakened EU diplomacy and with the absence of UK In addition to decrease in GDP, the possibil- (which is strictly against to new Russian gas ity of some other countries to leave the EU is export strategies), the legislatives and agree- the most important risk for the unity. How- ment milestones of the project will be han- ever, such a possibility is not likely to occur dled easier. in the near term. “While focusing on From the southern gas corridor’s sight, the the results of Brexit Before the Brexit, EU has already started the only concrete step TANAP and Shah Deniz negotiations on the major climate and ener- 2 (also the operator of the project is a UK on the Turkish energy gy framework targets for 2030. In this con- company: BP) does not seem to be effected. issues, there seems cept, while shortly touching the results of the However, for the other possible resources Brexit upon EU energy targets and policies; such as the western Mediterranean, northern no direct short or Iraq and etc. may not be able to find a chance midterm affects. But • By considering the influence and to reach the European markets without a strong diplomatic and political support. So, Turkish Stream and self-success application potential of UK in the EU’s energy targets, the power of a diplomatically weakling EU may affect the southern gas corridor the unity on achieving the agreed targets southern gas corridor strategies. is weakened. strategies can only • Hence, UK’s future position in the im- As a result, by considering the effect level and be accepted as indi- plementation of EU’s existing energy tar- the importance of the results, Brexit and the rect effects.” gets and legislations is not clear, some de- weakening unity of EU may not be related to lays are expected to happen in the agreed the coup attempt. strategies. (For example: In emissions trading and effort sharing negotiations.) DOMESTIC COAL UTILIZA- • Midterm weakening in dealing ability TION STRATEGIES

ENERGY POLICY TURKEY Page 34 CHANGING BALANCES IN TURKISH ENERGY GAME BEFORE THE COUP

Before the coup attempt, in order to reduce ergy, which are Turkish Stream and Akkuyu “From another re- Nuclear Power Plant, might be accepted as the imported natural gas dependency, Turkey spect, domestic coal has prepared legislations to encourage the the key energy items that can be referred as investors for domestic coal burning power the indirect reasons of the coup. Because, utilization strategy the more intimate group for the terrorists of plants. may result in a de- FETO: western bloc is strictly against these issues. crease in coal im- However, due to general technical handicaps of the Turkish coal reserves, with the com- ports. Where Russia mon technologies and commercial condi- The other adverted issues cannot be referred is again the biggest tions, by adding the possible sanctions of the with the coup. Moreover, may not have im- Paris Climate Conference, these encourage- portant effects on Turkish energy equation. coal supplier for Tur- ments will not seem so effective in the mid- key (as it is of natural term. As a result, energy and Turkish steps on energy cannot be accepted as the main reasons gas).” Although there are some investments due to for the 15 July terrorist coup. However, the the governmental supports, however, this at- results of the Russian recuperation gives tempt does not seem to have a big effect in some clues about how energy is important Turkish energy politics. for the international policies.

From another respect, domestic coal utilization strategy may result in a decrease in coal WHAT ABOUT FOR TUR- imports. Where Russia is again the biggest KEY? coal supplier for Turkey (as it is of natural gas). This issue can only find a chance to be The analyses above show that; although en- related with the due key actors in the region. ergy issues cannot be directly accepted as the However, again the results of such strategy main reasons for the coup attempt, energy and the market volume shows that, this item continues to be one of the most important also cannot refer the coup attempt. items for the international policies.

RESULTS Turkey with the due diplomatic, political, “As a result, energy economic and technological leaps, continues and Turkish steps to be more powerful and influential country As studied above, 15 July terrorist coup is in the region (as it was before). 15 July ter- on energy cannot be attempted to be tied to the main energy is- rorist coup and the previous coups in Turkish accepted as the main sues in Turkey. By this way, most important history were organized by some key actors (?) events, which are assumed to affect the Turk- in order to weaken the Turkish expansion in reasons for the 15 ish energy equation before the coup attempt the region. July terrorist coup. are analyzed. Due to those effects, Turkey had to delay However, the results Before these analyses, main actors and some strategies and has become late for some of the Russian recu- groups, having influence in the region (ex- important leaps on energy sector. Perhaps, cept Turkey) are determined. And those ac- with the correct attitude and feasible ap- peration gives some tors’ possible approaches and positions on proaches in politics, economics, culture and clues about how the due energy issues are tried to be estimat- religion, Turkey will reach out and grab its ed. potential of being an energy giant that it has energy is important been longing for. for the international According to the estimations and analyses, policies..” only Turkish recuperation with Russia and As it can be understood from the findings the natural results of this recuperation on en- above, the main reason of the last coup was

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not the energy. However, to continue delay- ing the Turkish leaps in the energy game in “Perhaps, with the the region can be accepted as one of the general important reasons for the coup attempt correct attitude and when the different energy policies are very feasible approach- active in the region. es in politics, economics, culture and REFERENCES religion, Turkey will 1 Oğuzhan Akyener, “Future of Israel Gas Export reach out and grab up to 2050 & Turkey”, Energy Policy Turkey, 2nd its potential of being Issue, September 2016. an energy giant that it 2 Oğuzhan Akyener, “ABD Kaya Gazi & AB Gaz Piyasasina Etkisi”, TESPAM, 2016. has been longing for.”

ENERGY POLICY TURKEY Page 36 CHANGING BALANCES IN TURKISH ENERGY GAME BEFORE THE COUP

37 Page SECOND ISSUE FUTURE OF ISRAEL GAS EXPORT UP TO 2050 & TURKEY by Oğuzhan Akyener

INTRODUCTION step and other due items have been negotiat- ed and accepted by both governments.

Despite its small population and territory, Is- With this alteration in the affairs between rael is one of the most influential countries in Israel and Turkey, energy, as it is stated, the region. This is mostly due to global lob- has become the most important issue that bying achievements, strong economy, high prepared both sides to have been eager to technology and military products, having solve the problems in between. And now support of ultra-rich Jewish people around there are quite different scenarios, claimed “Until the last dec- the world and additionally being a natural by the experts, about the Israel’s gas ex- ade, Israel’s name strategic partner of USA. port route to Turkey and EU. In addition to these scenarios, unfortunately, the solu- could not be asso- Until the last decade, Israel’s name could not tion for the long-lasting Cyprus matter that ciated with energy be associated with energy resources although stands against Turkish red lines, might find she has owned the same features above and a ground to be asserted according to some resources although the strong influence in the region. After Turkish experts. she has owned the some discoveries such as Tamar, Leviathan, Tanin and Karish inside its offshore bounda- same features above However, are these scenarios coherent from ries, Israel has started to be introduced as the the point of reserves, export potentials, eco- future’s important gas exporter in the region. and the strong influ- nomics and other sights? What might hap- ence in the region. pen in the future? For a possible gas transit From the sight of international affairs be- or gas sales situation, may a country allow its After some discov- tween Turkey (who is also another strategic red line policies to be relinquished? partner of USA) and Israel; after the 2009 eries such as Tamar, Davos statements of the Turkish President Leviathan, Tanin (as a result of Israel’s cruelties in Palestine) In this study, after analyzing the reserves, ex- and Mavi Marmara irruption of Israel, rela- port potential of Israel, and possible export and Karish inside its tions come to a rupture. options, Turkey’s positioning, Cyprus matter and sales to EU conditions are tried to be offshore boundaries, detailed with the technical and economical After the end of 2015, while Turkey’s rela- Israel has started to sights in addition to politics. tions were strained with Russia and natu- be introduced as the rally, gas import security raised alerts. And by adding this situation some other political future’s important reasons, Turkey and Israel have taken steps RESERVE AND RESOURCE gas exporter in the forward to reestablish good relations (by the POTENTIAL? way, it has been claimed that Israel also needs region.” Turkey for an economic gas export to the due Currently, there are 4 main producing gas markets). fields in Israel, which are: Tamar, Mari, Noa and Zohar (onshore). Total current production is estimated to be around 10 bcma. It Before the coup, Israel has agreed to pay is estimated to have around 1 tcm (possible compensations to the families of the Mavi Marmara victims. And after the coup, this and probable) gas reserves, as seen in Table 1.

ENERGY POLICY TURKEY Page 38 “Currently, there are 4 main producing gas fields in Israel, which Map 1: Some gas fields in Israel offshore. (Source:http://www.politicsforum.org ). are: Tamar, Mari, Noa and Zohar (onshore). Which are mainly: Leviathan, Tamar South- Type Field Reserves west, Tanin, Karish, Dalit and Hanna. Total current produc- Name (bcm) tion is estimated to Producing Tamar 283 All the fields’ reserves (proved and possible be around 10 bcma. reserves) are calculating and given in Table 1. Producing Mari 12 It is estimated to

Producing Noa 20 As seen from Table 1, Leviathan and Tamar have around 1 tcm are the biggest reserve containing fields in Is- (possible and proba- Producing Zohar 2,5 rael. And Israel seems to have around 1 tcm gas reserves. ble) gas reserves, as Development Leviathan 623 seen in Table 1.” Development Tamar 25 While estimating the production profiles of Southwest these fields by benchmarking with the current producing fields and the due plans for Development Tanin 17 each project below assumptions are made: Development Karish 36 • For each field, production is assumed to Development Dalit 14 be done technically in full capacity. No market, transportation limitations taken Development Hanna No data into consideration. available “There are discov- • Development plans and plateau rates are ered new fields in the TOTAL ALL 1032,5 evaluated to reach the recovery rates be- FIELDS tween 70% and 85%. In addition, some country, which are public statements about the due projects are to be taken under consideration. mainly: Leviathan, • Decline rates are assumed by bench- Tamar Southwest, Table 1: Main Fields & Reserves of Israel. marking the current producing fields in Tanin, Karish, Dalit the region. And for bigger structures (reserve volumes) decline rates are assumed and Hanna.” In addition to current producing fields, there to be lower. are discovered new fields in the country.

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• For smaller fields (except Tamar, Levia- volume. than) plateau periods are assumed to be • Only Tamar and Leviathan fields are lower, hence, less investment is expected strategically important. to keep the plateau period longer. • While comparing the time gap between • Commercial – political – security and the discovery and first production date international oil & gas price issues to be of the fields seems longer than the inter- able to produce these fields are not taken national standards. This is mostly due to into consideration. the lack of infrastructures to reach the available markets and Israel’s tiring leg- • All fields are assumed to be produced up islations (including anti-trust commis- “With the activation of to the life of the field by not considering sion) which means a worse investment the economical limitations to abandon Leviathan field, Israel environment. So, some precautions have or license periods. to be applied in order to take the first will be able to have a • Leviathan second phase is assumed to production dates of the fields to an ear- gas export volume.” be in production with the beginning of lier stage. 2030. • Only Hanna license is not taken into After evaluating the reserves potential and consideration due to lack of information future production profiles of the important and a not approved discovery. fields in Israel, by considering the demand profile, export potential have to be analyzed. “Only Tamar and As a result of these general assumptions, with Leviathan fields are the limited data those can be reached from WHAT IS THE EXPORT PO- strategically impor- the internet and the suitable benchmarks, TENTIAL UP TO 2050? showing each important potential gas fields’ tant.” production forecast, is shown in Graph 1. To be able to evaluate the gas export potential of Israel, domestic gas demand scenario As shown on the graph: should be characterized. Generally, difference between the production capacity and • With the activation of Leviathan field the domestic demand will give the export Israel will be able to have a gas export

Graph 1: Israeli gas production forecast up to 2050.

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“Israel will have a gas supply capacity to the Graph 2: Israel’s production vs. demand profile. world markets only between 2020 and potential (by not taking any possible imports As a result, as shown in the Graph 2, produc- 2040.” into consideration). tion values in Graph 1 and the 2050 demand profiles are combined. For future demand profile, a study of Isra- el’s Ministry of Energy and Water Resources, named “Israel’s Natural Gas Demand Fore- As seen from the Graph 2: cast 2011-2040” is used. Between the years “Only if some new 2041 to 2050, average incremental rate of • Israel will have a gas supply capacity to the existing forecast (0,6 bcma) is added to the world markets only between 2020 giant discoveries can the previous year’s value. and 2040. change the scenari- • Only if some new giant discoveries can os.”

Graph 3: Israeli export potential up to 2050.

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change the scenarios. the export potentials and demand volumes. By checking the possible export volumes in • There is no chance for Turkey to import a clearer way, Israel’s export potential can be gas from Israel before 2020. calculated (See Graph 3). • After 2040 Israel will have to check for solutions to fill the gap of its gas demand. According to the Graph 3:

• As mentioned above; Israel will only have After defining the export potential of Israel “Export potential a chance of 20 years to be a gas exporter up to 2050, in the next section possible ex- graph proves that; in the region. port options will be evaluated. Israel cannot be an • Export volume potential, in comparison, is not as high and important as of the EXPORT OPTIONS important gas suppli- other gas exporters in the region. er for neither Turkey • By putting a downside limit for long After specifying the annual export volumes nor EU, by consider- term gas sales agreements; as shown with of Israel up to 2050, some export options in the orange line in Graph 3, 5 bcma is different phases can be evaluated as follows: ing the export po- available for Israel to make such con- • Keeping the produced gas in existing tentials and demand tracts (from the sales of Leviathan). In the next sections, the possibility of con- phase. volumes.” structing a pipeline with this volume of • Exporting the gas after liquefying to gas will be studied. LNG. • The extra volume of gas, which can be accepted as the upside potential after ex- • After producing electricity in the power tracting the 5 bcma long term volume, plants and making electricity export via can be sold in spot markets or with short cables. term agreements. “There is no chance • Export potential graph proves that; Israel In the concept of each phase, export desti- for Turkey to import cannot be an important gas supplier for nation and the due markets will also be ana- neither Turkey nor EU, by considering lyzed. gas from Israel before 2020.”

Map 2: Middle East (Source: Google maps).

ENERGY POLICY TURKEY Page 42 FUTURE OF ISRAEL GAS EXPORT UP TO 2050 & TURKEY

“First scenario: By constructing an offshore floating production facility near the Leviathan Map 3: Possible offshore & onshore production plants and due export pipelines. (Note: Field, where Aphro- Google Earth is used to prepare the map). dite, Tamar and other near fields will have EXPORTING AS NATURAL GAS will be evaluated. chance to be linked, • For the commercial evaluations, costs – exporting the gas to tariffs – market prices are estimated as Export as natural gas means; pipeline struc- oil prices are assumed to be around 70 Turkey, Egypt and tures will be used for transportation but to $/bbl levels and according to this price Greece will be stud- which destinations? level, (although will change according to the balances in the region) generally, gas ied.” 3 Notes & Some Assumptions: prices are estimated to be 350 $/1000 m and LNG prices to be 500 $/1000 m3. • For this scenario, hence, transportation • Average unit production cost is assumed is going to be done by the pipelines and as 120 $/bbl for Leviathan field in 2020 such investments are more feasible with with the 70 $/bbl oil prices (by consider- higher volumes and longer term con- ing the water depth), and the same with tracts. That’s why, in addition to Israel’s 5 Leviathan for Aphrodite and other closer bcma downside gas potential after 2020, fields also. Aphrodite field’s possible production is • For cost estimations of the pipelines, due also assumed to fill the free volume of offshore pipeline cost with the due oil the pipeline. And the pipeline is assumed prices are benchmarked. to have 10 bcma capacity. Although for some specific periods Israel fields and • For tariff calculations, pipeline project is Aphrodite may have more production assumed to have an IRR equal to 10. capacity but hence, those volumes will not be sustainable for minimum 20 years, for economic considerations 10 FIRST SCENARIO: bcma capacity will be the best solution. • In the below scenarios, possible risks as By constructing an offshore floating produc- resource potential, market, infrastruc- tion facility near the Leviathan Field, where tures, commercial and political issues Aphrodite, Tamar and other near fields will

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have chance to be linked, exporting the gas Distance to 400 km to Turkey, Egypt and Greece will be studied. Destination Volume 10 bcma

EGYPT Pipeline Di-28” ameter Estimated 6,5 billion $ Distance to 250 km Cost Destination Estimated 95 $/1000 m3 Volume 10 bcma Tariff Pipeline Di-28” To decrease the economic risks, ca- ameter pacity of the pipeline is selected as Estimated 4,1 billion $ 10 bcma. However, without Aphro- Cost Resource dite, Israel cannot fulfill such a pipe- Estimated 65 $/1000 m3 Risks line capacity from 2020 to 2040. So, Tariff by considering the risk of Aphrodite To decrease the economic risks, ca- not to be developed and taken into pacity of the pipeline is selected as production in 2020s, there seems to 10 bcma. However, without Aphro- be a low risk in this scenario. Resource dite, Israel cannot fulfill such a pipe- There is no market risks in Turkey. Risks line capacity from 2020 to 2040. So, In 2020s, Turkish gas demand is by considering the risk of Aphrodite expected to be around 60 bcma. In not to be developed and taken into Market addition, if the commercial envi- production in 2020’s there seems a Risks ronment and the capacity of TAN- low risk in this scenario. AP will be suitable there may be a Hence, transporting the gas to Egypt chance to transport Israel gas to Market LNG ports means there is going to EU (Source: Turkiye Gas Denklemi Risks be a chance to liquefy and then ex- 2050, O. Akyener, TESPAM). port the gas, there is no market risks. The main obstacle in this scenario is Although there are some political the political issues. Hence, for such Political disputes with Egypt, those may not a pipeline to be constructed Leb- Risks affect the commercial projects with anon, Syria, both governments of the current government. Cyprus and Turkey have to officially Transportation of the gas up to the agree on. The dispute with Lebanon Egypt’s ports does not have any over maritime boundaries and the commercial risks however, after war in Syria are ongoing. From the adding the liquefaction and storage sight of Turkey, although some con- costs, the total LNG price of Israel flicts have solved and the relations gas in the Egypt’s ports will natural- turn into a normal level with Israel, ly have the risk of price competition Cyprus will still hold its position on Commer-with other suppliers. By the way gas being another subject that seems not cial Risks price @ Egypt LNG Facility = 120 + Political easy to solve because, Turkey cannot 65 = 185 $/1000 m3. By adding an Risks leave the Northern Cyprus Turkish average 120 $/1000 m3 liquefaction Republic Government to the bloody and storage costs (by assuming to hands of Southern Cyprus and Eu- use existing facility’s capacity) then rope all alone. That’s why, without the price will be 305 $/1000 m3. For the solution of Cyprus and Lebanon the estimated LNG prices in 2020, conflicts and having a stable Syr- again the scenario can be commer- ia, politically, construction of such cially feasible. pipeline does not seem to be appli- In addition to the small risks, this cable. Results option has a chance to be success- In addition no one will aim to solve fully applied. these issues only for 10 bcma gas capacity. Some other reliable reasons have to encourage all the parties to TURKEY work on the solutions.

ENERGY POLICY TURKEY Page 44 FUTURE OF ISRAEL GAS EXPORT UP TO 2050 & TURKEY

From the commercial sight, by as- Directly transporting the gas to the onshore suming gas price in Turkish market and by constructing an onshore facility in Commer-is around 350 $/1000 m3 and in Hayfa, exporting gas to Jordan and Lebanon. cial Risks such condition, net back unit price However, in this scenario, the main obstacle is 350 – 120 (unit production cost) is the market. Hence the estimated market – 95 = 135 $/1000 m3; project com- capacity in Jordan is 1 bcma in 2020 and 0,7 mercially is feasible. From the resource, technical, com- bcma in Lebanon. So, there is no market to mercial and market sights, project sale the gas with this option even if this sce- has low or no risks. However, mul- nario is studied to enrich the concept. In ad- tinational political issues are mainly dition, for its own consumption and for the Results the obstacles. By the way, as being upside volumes, shown as the orange line in claimed in the international affairs the Graph 3, gas sales to Jordan and Lebanon “Second Scenario: terminology: There is always an can be the most economic options for Israel. open gate to solve the political dis- Directly transporting putes. As defined in this scenario, Israel is going to the gas to the on- transport all its offshore gas production to shore and by con- GREECE the onshore facility in Haifa. No gas from Aphrodite is accepted into the system. After structing an onshore Haifa, gas can be sold to West Bank, Gaza, Distance to 1000 km facility in Hayfa, ex- Jordan and Lebanon. However, all the de- Destination porting gas to Jordan Volume 10 bcma mand volumes of these regions are estimated to be lower than 3 bcma. So, there is an im- and Lebanon.” Pipeline Di-28” portant market obstacle. Then the remaining ameter volume may be transported to Egypt’s LNG Estimated 16,5 billion $ facilities for export, by using (after some Cost maintenance works) the existing old pipeline Estimated 210 $/1000 m3 network (El Arish to Ashkelon Pipeline and Tariff additional pipeline system in Egypt). To decrease the economic risks, capacity of the pipeline is selected as 10 bcma. However, without Aphro- 150 km to Haifa (offshore) Resource dite, Israel cannot fulfill such a pipe- Distance to + 35 km to Lebanon border Risks line capacity from 2020 to 2040. So, Destination (onshore) + 70 km to Jordan by considering the risk of Aphrodite Border (onshore) not to be developed and taken into production in 2020’s there seems a 8 bcm up to Haifa + 1 bcma low risk in this scenario. Volume to Lebanon + 1 bcma to Jor- Market By only considering Greece, there dan Risks are market risks while considering the gas demand volume. Pipeline Di-22” to Haifa + 12” to Leba- There are no political risks if the ameter non and Jordan Political route of the due pipeline does not Risks go through the maritime bounda- Estimated 2,5 billion $ to Haifa + 200 ries of Turkey. Cost million $ to Lebanon + 350 Total gas price @Greece = 120 + million $ to Jordan Commer-210 = 330 $/1000 m3. However, by cial Risks considering the transportation cost Estimated 35 $/1000 m3 to Haifa + 8 inside the due EU markets, project Tariff $/1000 m3 to Lebanon + 16 will not be economically feasible. $/1000 m3 to Jordan Results Due to economic obstacles, there is no chance this project to be realized. Resource No risks in resources. Hence, Risks only Leviathan is going to be developed. SECOND SCENARIO:

45 Page SECOND ISSUE OĞUZHAN AKYENER

If there is no chance to trans- RESULTS OF THE THREE GAS port the remaining volume of PHASE SCENARIOS gas to Egypt’s LNG facilities Market Risks for LNG export, after the Jordan-Lebanon-West Bank As a result, the main milestones are politi- sales, there is a high market cal issues, commerciality and the market de- risk in this option. mand. After eliminating the first scenario’s Greece option, which has no chance to be Hence, the sales are related applied, with the countries which have Political Risks political disputes with Israel, • According to political issues: First Sce- such project politically has nario, Egypt option is the best. medium level risks. • According to commercial issues: Third From the commercial sights, Scenario and the First Scenario Turkey cumulative gas price @Hai- options are the best. fa = 155 $/1000 m3, @Jor- dan Border = 171 $/1000 • According to overall results: First scenar- m3, @Lebanon Border = 163 io, Turkey option seems as the best appli- $/1000 m3, @ Egypt LNG cable and commercial selection. Howev- Commercial Facilities (for 5 bcma volume, er, there are huge political obstacles and Risks before liquefied and by using milestones on the way. the existing pipeline structure with an average length of 400 EXPORTING AS LNG km) = 195 $/1000 m3. So, all cases are commercially feasible. Export as LNG means; by constructing a floating LNG facility in the same location This option is very complex (linked with the offshore production facili- Results and risky by considering the ty) marked with pink color in map3 between market and political issues. the Leviathan – Aphrodite and Tamar Fields, and then exporting produced LNG to the THIRD SCENARIO (COMBINED world markets. In addition, with a smaller SALES): capacity floating LNG facility, Israel also has a chance to export its gas without bearing of the Aphrodite field. However, in this scenar- “Third Scenario In this scenario, Turkey option of the first io, 10 bcma capacity is studied. Hence, while scenario and the second scenario will be capacity doubles, the unit costs decrease. (Combined Sales) combined. So, only downside level of the In this scenario, export potential of Israeli gas, which is 5 bcma under the orange line in Graph 3, and Volume 10 bcma Turkey option of the Estimated 11 billion $ Aphrodite gas will be transported to Turkey Cost first scenario and the between the years 2020 – 2040. And the remaining portion of Israeli gas is going to be second scenario will This cost consists of liquefac- exported to Jordan – Lebanon – West Bank tion & storage (180 $/1000 be combined.” and Gaza as described in Second Scenario. Estimated m3) + transportation & insur- Unit Trans-ance (60 $/1000 m3) + regasi- portation fication (80 $/1000 m3) costs. By this scenario, although being more com- Cost And as total = 320 $/1000 m3 plex and politically difficult, better commer- (for Turkey markets). For oth- cial savings and higher influence of Israel in er markets transportation costs the region is expected or gained. will differ.

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Low risks due to the wait for shore gas plants for electricity genera- Resource Aphrodite field development. tion. Risks However, by decreasing the ca- • After electricity is generated, by con- pacity to the Leviathan limits, structing electricity export lines to due this risk can easily be handled. customers and making sales. Market No market capacity risks. All • These customers may be its neighbors, Risks EU and Turkey are possible other Middle East countries and Greece. markets to reach. In this scenario: Political No political risks. Risks • By giving a general approach “to generate 1 kwh in an average power plant, Huge investment needed. Fur- 0,01011 mcf gas is needed” (Source: thermore, by considering the https://www.eia.gov/tools/faqs/faq.cf- “Directly transport- total gas cost for the nearest m?id=667&t=3). market Turkey; 120 + 320 = ing the gas to due 3 • While generating electricity from the 440 $/1000 m is an acceptable onshore gas plants LNG price by considering the stable downside potential of Israeli ex- assumed 2020 conditions. port volume, which is 5 bcma (not deal- for electricity gener- ing with Aphrodite); then there is an average capacity of producing 17,5 billion ation by constructing By comparing with the LNG kwh (after assuming the due demanded sales in Egyptian port, LNG electricity export lines power plants are constructed). cost at such facility is 120 + to due customers and 180 = 300 $/1000 m3, seems • Then the targeted markets’ electricity a little more economic option. imports are (Source: CIA Factbook): making sales.” Commercial Risks ०० West Bank = 4,9 billion kwh Note that: Hence, it was assumed that in Egypt option, ०० Jordan = 381 million kwh existing capacities of the due facilities are going to be used, ०० Lebanon = 323 million kwh liquefaction and storage costs ० Syria = 1,2 billion kwh of Egyptian port assumed low- ० er than this scenario. ०० Iraq = 8,2 billion kwh

From another point, hence, ०० Greece = 4,7 billion kwh being floating and moveable, such facility can be sold to an- • However, these values belong to 2013 es- other producer and can be used timations. So, the situations, production for future projects. capacities, and demand volumes may differ from current estimations. Never- Hence, has lower political theless, by excluding the political issues, and commercial risks, seems there may be nearly enough market ca- Results conceivable. However, while pacity by considering 17,5 billion kwh thinking the extra huge costs, export capacity and all above markets ac- seems unpreferable. cept to make all their imports from Isra- el. However, this idea seems unrealistic. EXPORTING AS ELECTRICITY • That’s why, supplying some of the generated electricity to West Bank and selling the other portion with an electrical line Export as electricity means; to EU markets may be a more suitable selection, by considering the market ob- • Directly transporting the gas to due on-

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“A huge investment is stacles in the neighboring areas. selection, although it is very expensive. needed for gridding • However, again a huge investment is needed for gridding such an electricity Electricity import, in addition to have lots such an electrici- line project. By considering the 2020 of investment, is very complex to be able to manage. ty line project. By conditions, around 4,4 billion $ cost is estimated to be paid only for the un- considering the 2020 derwater cable project, which is around SOME ANALYSIS conditions, around 1150 km. This huge cost does not include the construction of due power 4,4 billion $ cost is plants needed to generate the electric- In this part, after defining the export po- estimated to be paid ity. After adding those items, the cost tential of Israel and evaluating the possible will be higher. Moreover, the increasing export scenarios, some popular claims and only for the under- costs will augment the unit costs of the questions related with these topics are tried exported electricity prices. So, what this water cable project, to be analyzed. means for Israel as being an electricity which is around 1150 supplier, with a higher unit cost she will KURDISH CORRIDOR AND IS- have less advantage in price competition km.” within the EU market. RAEL AS A GAS & ELECTRICI- • As a result, this scenario is also very com- TY SUPPLIER? plex and many related different items, such as the effect of gas power plant construction on the unit prices, unit tariffs There are some interesting theories regarding of the underwater cable (by assuming Israel becoming a gas and electricity sup- such an investment to be unprofitable), plier and an energy hub in the region, after other transportation – tax – extra costs in achieving its plans on generating a Kurdish the EU markets and the unit sale prices corridor starting from Western Iran, adding in the targeted markets in EU have to be Northern Iraq and including Northern Syria. “There are some studied. Those theories might be used for psycho- interesting theories logical manipulations on illiterate societies. regarding Israel RESULTS FOR EXPORTS However, such claims are inconsistent and can only be considered as a conspiracy theory becoming a gas and under current circumstances. As a result after eliminating the weak market electricity supplier demand or commercially impossible scenar- Hence; and an energy hub ios, in the region, after • From the economical sight: Exporting in • Israel does not have so much export po- gas phase and export to Turkey option is tential and huge reserves, by comparing achieving its plans on the best. with the other suppliers’ potentials. generating a Kurdish • From the political sight: LNG export is • There is no so much demand in the due corridor starting from the best. region.

Western Iran, adding • From the complexity sight: LNG export • In the concept of such a Kurdish corri- Northern Iraq and is the best. dor, Israel’s boundaries are not the best location for the oil and gas exports for including Northern Iraq and Iran resources. So, decision makers are going to follow the Syria.” political tendencies. If the due disputes with • In addition, while there are existing and Turkey can be solved, then gas export via cheaper transportation systems, none of pipeline to Turkey will be the best selection. the operators would make extra invest- If not, LNG seems easier and less complex ment to follow another political route.

ENERGY POLICY TURKEY Page 48 FUTURE OF ISRAEL GAS EXPORT UP TO 2050 & TURKEY

• Neither Turkey nor Iran – Iraq and Syr- Israel, both Southern and Northern Cy- ia will not allow generation of Kurdish prus Governments may not claim an ap- corridor. proval of the pipeline laid through their officially disputed and proposed exclu- • Even though ethnicity in the region has sive economic zones (EEZ). been tried to be changed by use of terrorist forces as Daesh and KDP, such corri- • Hence, Turkey will not be positive about “Turkey has no vital Aphrodite gas field being developed and dor is never possible. but an important role produced gas being transported to Tur- key, but Turkey can be inserted as a part- for Israeli and possi- As a result, Israel may supply gas and elec- ner to the project. By this way, Turkey tricity within the region. However, this will will be in a position for transporting and ble Southern Cypriot not have a huge potential. selling its own gas. gas exports.”

TURKEY’S POSITION IN EX- In addition to the sight of Turkey: PORT BALANCES • It is clear that Israel’s export potential is not too high and very important for As can be understood from the sections Turkey. above, Turkey has no vital but an important role for Israeli and possible Southern Cypriot • Turkey is aware of its advantage over gas exports. By considering: Israel in any negotiations related with these topics. • More profitable net back prices from the sight of seller. • Opening a gate for Israel to export its gas means opening the gate also for South- • Huge Turkish gas demand market. ern Cyprus. • Turkey being a good customer, a stable • Cyprus for Turkey cannot be evaluated and an honest country. with any price and its rightful due disputes will not be relinquished for any • Except the political sight, this scenario project. to have less complexity and low investments. • From another point, Israel is not a stable country by evaluating its decisions, which provides investors with an unreli- Turkish option seems to be the best selection. able environment. Israel, as easily chang- In addition to these properties, via TANAP ing items of the existing international ex- or extension of TANAP, there is always a ploration agreements signed with other chance to transport the Israeli gas to EU. countries, can be analyzed as an example of this situation. This fact also is the “Opening a gate for CYPRUS POLITICS same for its international affairs. That’s why both Turkey and other partners may Israel to export its act more gingerly about the joint pro- gas means opening Although asserted that, solution of the dis- jects with Israel. putes on Cyprus is necessarily an important the gate also for milestone for the Turkish gas export scenar- • One another point: Israel is the only Southern Cyprus.” io to be achieved, perhaps some back doors chance for Southern Cyprus to develop may be opened before trying to elaborate on its discovered fields. difficult solutions. POSSIBLITY OF EU SALES For example:

• With the initial agreement of Turkey and The most important issue for Israeli gas to

49 Page SECOND ISSUE OĞUZHAN AKYENER

be sold to EU via Turkey is economics. And Baumgarten is 305 $/1000 m3. Which is economics can be checked with very small feasible in assumed conditions. estimations. • Moreover, for such export projects, Rus- • As identified above, the total cost of Is- sian gas supply politics, Turkish Stream, raeli gas in the Turkish border is estimat- EU’s gas pricing policies & pricing ten- ed as being 215 $/1000 m3. dencies and the markets’ demand expectations have to be studied. • After this point, by assuming that 5 “The most important bcma of 10 bcma Israel + Aphrodite gas issue for Israeli gas is sold in Turkish domestic market, then As a result from the current view, it seems the half portion of 5 bcma is assumed possible to export Israeli gas through Turkey to be sold to EU via to be transported to the western Turkish to EU. Turkey is econom- border for sale to EU markets via: ics.” ०० Existing free capacity in TANAP: CONCLUSION This option seems not possible due to Azerbaijan’s national strategies and the current agreement items. None- Israel is one of the most important and influ- theless, if assuming there is a free ca- ential countries in the Middle East. In addi- pacity due to unexpected situations tion, after the offshore gas discoveries in its maritime boundaries, she has asserted to be and some amendments made to use that free capacity to transport 3rd par- the shining energy hub and important ener- “As a result from the ty volumes in the existing agreement, gy supplier in the region. current view, it seems then estimated transportation cost is estimated as (including the possi- However, was this assertions really coherent? possible to export ble costs to reach the TANAP): 120 What was the export capacity of Israel? Yes, 3 Israeli gas through $/1000 m . some mid-level huge gas fields have been discovered, however is there a suitable envi- Turkey to EU.” ०० A new standalone pipeline is con- ronment to develop those fields and export structed to transport Israeli gas: After the gas? Initially, these questions have to be such an investment, with 32” diame- answered. ter and 1000 km length with 5 bcma capacity, cost of such pipeline will be While reviewing the literatures, there are 6 billion $ and the tariff is 65 $/1000 many studies related to the export options m3. of Israeli gas. However, there is not enough ०० Turkish gas distribution system is up- studies on how much export potential Israel graded: In such a case, the tariff to pay has. the BOTAS is estimated as 30 $/1000 m3 (without making investment in the upgrade operations). That’s why in this study, after evaluating the production and reserve properties of the Is- ०० So, third option is the best choice for rael fields, its export potential up to 2050 is such export volume according to eco- tried to be estimated. nomics. • Then the total costs in Turkish western According to this export potential, several border with the 3rd option will be 245 export scenarios are studied. According to $/1000 m3. Gas from that point easi- the results of the studies, Turkish route is se- ly can be sold to Greece, Macedonia or lected as the best option. Bulgaria. In addition, with other new projects can be transported to Baumgar- However, hence this route to have may poten market with an additional cost of 60 litical disputes, some other items such as Cy- $/1000 m3. This means the total cost at prus were adverted.

ENERGY POLICY TURKEY Page 50 FUTURE OF ISRAEL GAS EXPORT UP TO 2050 & TURKEY

In addition, the possibility of exporting Isra- el gas to EU is also studied.

As a result, export and reserves potential of Israel is not so high while compared with that of the other important suppliers’ in the region. Additionally, for better commercial solutions in their projects, both Israel and “Export and reserves Southern Cyprus need Turkey to succeed their goals. potential of Israel is not so high while That’s why Turkey has to keep these facts in mind during any negotiations with Israel & compared with that Southern Cyprus. of the other important suppliers’ in the region. Additionally, for better commercial solutions in their projects, both Israel and Southern Cyprus need Turkey to succeed their goals.”

51 Page SECOND ISSUE CONTRADICTORY POLITICS OF KRG & NEW AS- SUMED ENERGY CORRIDOR THROUGH IRAN by Oğuzhan Akyener

INTRODUCTION dictory discourses and decisions between her relations with Turkey – Iran – Central Iraq Government (CIG) and USA. In addition to its estimated 40 billion bbl oil and 8 tcm gas reserves (according to OPEC In this article, after giving brief information reports), Northern Iraq is one of the most about the geostrategic position of North- strategic areas for Turkey by considering the ern Iraq (to be able understand why and for “Turkey has tried to historical, ethnical, commercial, security and whom the region is important), key local and international actors having influence in the improve social, cul- other political issues. Due to this importance, in the last decade, Turkey has tried to im- region will be tried to be identified. After tural and economic prove social, cultural and economic relations having basically clarified the key actors’ main with the regional government of Northern expectations in the region, some political relations with the re- Iraq (KRG), sometimes by having the risk contradictions of KRG in her relations with gional government of of disrupting the relations with the Central those key actors will be analyzed. Moreover, Iraqi Government (CIG). As a result of this Northern Iraq to Iran oil pipeline (which is Northern Iraq (KRG), strategy, Turkey let KRG to export around assumed as the new energy corridor through sometimes by having 500 mb/d oil from Turkish Ceyhan port, Iran) as one of the actual contradictions will which is the vital step for KRG’s presence. be evaluated. the risk of disrupting the relations with the However, the region, being also strategic GEOSTRATEGIC POSITON Central Iraqi Govern- for other actors, increases the complexity of OF NORTHERN IRAQ the relations. That’s why KRG’s ruling party ment (CIG).” KDP has been slogging on taking the steady and stable political steps and having contra- To understand why Northern Iraq is impor-

“Turkey let KRG to export around 500 mb/d oil from Turkish Ceyhan port, which is the vital step for KRG’s presence.” ment (CIG).”

Map 1: Kurdish areas of Northern Iraq. (Source: http://www.lib.utexas.edu/maps/iraq.html).

ENERGY POLICY TURKEY Page 52 tant for her neighbors and other key actors in item for the region. Hence, as can be ob- “Ethnicity is one of the region, geostrategic position will shortly served from the Map 3; both Turkey and the most strategic have to be analyzed. In the concept of ge- Iran have Kurdish population linked to ostrategic position; geographical, ethnical, the Kurds in Northern Iraq. item for the region. religion, energy and political sights with the Hence, both Turkey following items will be analyzed over the • This means that there is always a risk for maps given below. Iran and Turkey to lose their populations and Iran have Kurd- as a result of Kurdish nationalism as if an independent Kurdish government ish population linked FROM THE GEOGRAPHICAL founded in Northern Iraq. So, both to the Kurds in North- SIGHT Turkey and Iran (naturally Central Iraq ern Iraq.” • As can be observed from Map 1; North- Government) will never agree on allow- ern Iraq is located in the middle triangle ing such attempts. of Turkey, Iran and Iraq. • There are also some Turkish (green color on the map) and Arabic (yellow color on • Iran does not need Northern Iraq as a the map) societies in the region. Those link to the other neighbors, however have lost their influences and populous from the sight of Turkey and Iraq, the after the USA’s ethical engineering de- bridge can only be connected through sign studies in the region. the boundaries of Northern Iraq. • In addition to above neighbors, there is • That’s why, Northern Iraq is more im- also a Kurdish population in Northern portant for Turkey, and Central Iraq’s Syria. The war continuing has changed relationship by considering the Iran’s. all the balances in favor of the Kurdish society. Because, the USA’s support for “Kurdish nationalism FROM THE ETHNICAL SIGHT Kurds in the region against the Daesh at- as if an independent tacks, make Kurds to extend their acting Kurdish government • Ethnicity is one of the most strategic boundaries. Which can be an expressed founded in Northern Iraq, both Turkey and Iran (naturally Central Iraq Government) will never agree on allowing such attempts.”

Map 2: Religion Distribution of the Region. Dark green refers to Shia, light green to Sun- ni and pink to Christian societies. (Source: https://thegulfblog.com/tag/sunni-shia-middle- east-map/).

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“Iran has a strong Map 3: Ethnicity Map of Iraq. (Note: Yellow means Arabs, whereas dark red shows Kurds). influence on the Shia (Source: http://www.islamianaliz.com/ortadogu/). societies and as a action taken in the content of the “Kurd- • Energy is main answer to the question: result on the CIG ish Corridor to the Mediterranean” idea “Why USA is in the region?” Hence the because it constitutes (to which Turkey is strictly against). region has as estimated 40 billion bbl oil and 8 tcm gas reserves (according to of Shia majority.” FROM THE RELIGION SIGHT OPEC reports). And it has better potential to produce more in the future. • Religion is another key element having • In addition, the energy flow in the region to be studied in the region. Hence, Iran has also direct effects on Turkey, CIG has a strong influence on the Shia socie- and Iran. ties and as a result on the CIG because it constitutes of Shia majority. • Hence the USA’s gap in the region will naturally be filled with other players, • As it can be understood from the map, which is why it is a necessity for USA “Energy is main nearly all the Kurdish society in North- to continue to push her limits to control answer to the ques- ern Iraq, Turkey and Iran are Sunni. Northern Iraq to be able to survive in the However, Turkey does not have such in- region. tion: “Why USA is in fluence on the Sunni society in Northern • Oil exports from Ceyhan port of Turkey Iraq, as Iran has on Shias in CIG. the region?” Hence is the only revenue item for KRG to sur- • Conversely, Turkish population in the region has as vive, which gives them a good opportu- Northern Iraq are Shias. However, they nity to only deal with Turkey comparing estimated 40 billion are affiliated more to Turkey despite the to how many countries/actors it has to Shia Iran’s influencing attempts. bbl oil and 8 tcm gas obey if it tried to use other export routes. • As can be analyzed from the above ex- • Current daily production is around 570 reserves (according planations, ethnicity is more effective mbbl and this value is planned to be in- to OPEC reports).” element in the region by comparing to creased up to 1 mmbbl/d levels in 2020’s. that of the religion. However, with the current oil prices and the political and security risks in the re- FROM THE ENERGY SIGHT gion, this plan seems unachievable. For

ENERGY POLICY TURKEY Page 54 CONTRADICTORY POLITICS OF KRG & NEW ASSUMED ENERGY CORRIDOR THROUGH IRAN

gas, the expectations are to reach 15 key items giving clues about the key actors in “KDP currently holds bcma levels in 2020’s, which also seems the region will be described below. the management of difficult to accomplish. • Energy is the main economy driving KRG. KDP’s main item in KRG, current low oil prices DOMESTIC ACTORS supporters are Tur- caused the unrest in the country and directly affected the political balances. key, USA and Israel.“ Domestic actors in Northern Iraq can be accepted as the main political parties in KRG, FROM THE POLITICAL SIGHT which are Kurdistan Democratic Party (KDP), Patriotic Union of Kurdistan (PUK) • In KRG, there are 3 main political par- and Gorran Movement (GM). In addition to ties, which are KDP, PUK and Gorran these 3 parties, there are also 3 Islamic parties “PUK and GM has Movement (GM). which are not effective due to being separat- • KDP currently holds the management of ed from each other. Moreover, the Turks in assigned an agree- Northern Iraq is represented by 5, Christians KRG. KDP’s main supporters are Tur- ment to make a key, USA and Israel. by 5 and Armenians by 1 members in the Parliament. The key properties of 3 main collaboration in May • PUK and GM has assigned an agreement parties will be tried to be described below. to make a collaboration in May 2016. 2016. And both And both parties are mainly supported parties are mainly by Iran. KDP: supported by Iran.” • The influence of PUK and GM is in- • The ruling party in KRG. (With presi- creasing in KRG and this situates an un- dent Barzani). predictable environment in the region. • Ascendant in the Erbil, Dohuk and Sala- • CIG has many uncompromised prob- haddin Cities of Northern Iraq. lems with KRG and tries to connect KRG to the CIG as oppose to becoming • Has apparent support of Turkey and an independent country. USA. • Turkey and Iran are trying to follow care- • Has good relations with the official ful steps in their political relations with Kurdish Political Party in Iran. KRG. Both do not want KRG to be independent (as CIG) and both are trying to be active in the region. On the other PUK: “KDP is the ruling hand each of them are trying to prevent • Second effective party in KRG. (With the other from getting the full control party in KRG. (With president Talabani). of KRG. Moreover, both are trying to president Barzani).” balance their relations with CIG due to • Ascendant in the Sulaymaniyah. their policies on KRG. • In addition, terrorist organizations such • Currently with some ministries, is a part as PKK and PJAK have their main bases of the cabinet. in the region. This issue alerts both Tur- key and Iran to actively ensure their pol- • On May 2017 had a cooperation agree- “PUK is the second itics for security. ment with Gorran Movement against KDP and the presidency of Barzani. effective party in • Has apparent support of Iran & UK. KEY ACTORS IN KRG KRG. (With president • Has good relations with PKK. Talabani).”

After giving brief information about the geostrategic properties of Northern Iraq, some GORRAN MOVEMENT:

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“TURKEY is against • Founded by a group divorcing from • Permission for KRG’s oil to be export- an independent Kurd- PUK. (with president Novşirvan Musta- ed via Ceyhan port, which means the fa) permission for KRG to stand on her istan, has own legs. In addition, this means an • Initially claimed to be in the side of the good relationships open gate for the future possibilities of civil populace and stop all the malprac- independent Kurdistan, and also a safe with KRG and mostly tices. gate for possible clashes the central Iraqi with current ruling • Then made a cooperation with KDP and government. However, Turkey seems to became a part of the cabinet. keep the upper hand as: party KDP.” ०० This oil trade continues pumping the • Due to conflicts with KDP and losing heart of the KRG to the independen- the voters support, left her floor to PUK. cy but the pump is in her hands.

• On May 2017 had a cooperation agree- ०० If Turkey stops the trade, Iran is ready ment with PUK against KDP and the to fill the gap. “KRG’s oil to be presidency of Barzani. ०० Officially, as a CIG dependent region- exported via Ceyhan • Has apparent support of Iran & UK. al government, KRG has to be supported to survive since Turkey does port has annual trade • Has good relations with PKK. not have direct influence in CIG. capacity of around 9 ०० In good relations with KRG, Turkey billion $.” INTERNATIONAL ACTORS can make cooperation in: (LONG TERM PROJECTS) ▪▪ Anti-terrorism activities (against PKK). After shortly describing the local actors in the game, in this part, main items for the ▪▪ More trade and commercial activi- international key actors and their national ties (there are lots of Turkish service “IRAN is strictly security policies regarding the region will be and construction companies work- identified in general. ing in Northern Iraq). against an independ- ▪▪ Increase effective boundaries in the ent Kurdistan, has CENTRAL IRAQ: region.

good relationships • Strictly against an independent Kurdis- ▪▪ Find a better chance to support the with PUK and Gorran tan. Turkmen society in the region. Movement.” • Good relationships with Iran and high Shia influence in the government au- IRAN: thorities. • Strictly against an independent Kurdis- • Existing conflicts with KRG about the tan. share of oil revenues and KRG’s exports • Good relationships with PUK and Gor- “Iran has good rela- from Ceyhan. ran Movement. tionships with and TURKEY: • Gives some declarations about warning influence on the CIG, KDP to support PJAK. • Against an independent Kurdistan. has annual trade • Good relationships with and influence capacity of around 6 • Good relationships with KRG and most- on the CIG. ly with current ruling party KDP. billion $ with CIG.” • Annually has a trade capacity of around • Annually has a trade capacity of around 6 billion $ with. 9 billion $.

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• Unrest about the Turkish influence in also KDP to support it, reveals the ongo- “After the increasing ing steps to set a Kurdish corridor in the the region. Shia influence from Northern Syria. • Trying to use Shia influence to be able to Iran on CIG, it has have more control in Iraq and the Mid- changed its outlook dle East. POLITICAL CONTRADICTO- supporting the unity • Will be more effective in the region after RIES & ANALYSIS the disposal of the sanctions. of Iraq, which will put As can be understood from the chapters above, due to the strong key actors and the whole Iraq under ISRAEL: policy makers, the balances are not easy to Shia management.” estimate in Northern Iraq. Her strong and • According to her national security pol- influential neighbors: Turkey and Iran, her icies; needs a divided, weak, conflicted official authority: Central Iraq Government, and disordered Middle East (and natu- Israel and USA’s policies and the strengthen- rally Iraq) in order to ing opponents of the ruling party puts KRG ०० Be able survive with her small popu- into a difficult and complex situation. “USA reveals the lation. ongoing steps to set ०० Be able to have to find higher market All political steps can easily be hindered by a a Kurdish corridor in capacity for her arms production. key actor in the region. And this makes KDP to fall into unavoidable contradictories in the Northern Syria ०० Not to be faced with an Arab or Mus- her decisions and international relations. lim unity against Zionist policies. by supporting PYD in Syria and making • Encourages the ethnical, religion and In addition, with the new cooperation agree- political conflicts for her strategy in the ment between PUK and Gorran Movement, also KDP to support region. there is a higher risk for Barzani to secure it.” his position and to keep his influence in the governmental structure. While adding the USA: low oil prices, Daesh threat, increasing na- • Supports Israel’s security policies. tionalism and the July 15 coup - terrorism in Turkey places KDP in a worsening situation. • Officially supports the unity of Iraq but in reality, the perception of its politics This unpleasant worsening situation and “All political steps is different. However, after the increas- increasing contradictories can easily be ob- ing Shia influence of Iran on CIG, it has served in the declarations of the KRG’s offi- can easily be hin- changed to support the unity of Iraq not cials. For example, 18 days after the terrorist dered by a key actor to let the whole Iraq to be under Shia coup in Turkey, Education Ministry of KRG management. stated that she will not close the FETO (Fet- in the region. And • After the Iraq invasion, left the CIG in ullahist Terrorist Group) schools. However, this makes KDP to the hands of (her enemy) Iran. 5 days after that statement, again, declared that she will capture all FETO schools before fall into unavoidable • Let Iran to extend her acting borders up the Turkey’s official request. This sample case contradictories in her to Syria – Iraq - Yemen – Bahrain and also gives lots of clues about the situation of with a stronger Iran (Which also makes KDP, KRG and the region. decisions and inter- the experts think as US wants to encour- national relations.” age a Sunni – Shia war in the region). In addition, Northern Iraq to Iran oil pipe- • Seems supportive for both KDP and line project, which is expressed as the “East- PUK. ern Kurdish Corridor” is another unsolved and contradictory issue that has to be exam- • By supporting PYD in Syria and making

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“Iran and KRG have ined. Hence, current situation shows that volumes (during these low oil prices). due to influence of Iran; PUK and Gorran agreed on basics ०० Disposal of the Iranian sanctions Movement and naturally Iran directly sup- might relate to a more powerful Iran to construct an oil ports the project. Due to her Turkish rela- in the region. Politically and commer- tions, KDP has a weaker support. CIG seems export pipeline with a cially this situation has to be rejoiced not being opposed to the project. USA and in. capacity of 250 mb- Israel’s attitudes are not clear yet. So, being interested by nearly all the actors and poten- ०० Importance of having an alternate bld from Koysinjag to tial to have long term effects on the regional root for sustainability of oil exports. policies, the project has to be technically and Kermanshah City of ०० Iranian influence and Iran’s promises commercially analyzed as an addition to the on: Iran; however, up to politics. date, an agreement ▪▪ The electricity supply to Sulaima- nia except the technical NEW KURDISH ENERGY parameters of the CORRIDOR: IRAN? ▪▪ More commercial activities pipeline could not be ▪▪ Financial support to KRG. Assumed new Kurdish Energy Corridor achieved.” through Iran, with another name Northern ०० PUK and Gorran Movement’s affect. Iraq to Iran oil pipeline will be evaluated from the historical, technical, economical, • From the sight of Iran: market, resource and political sights below. ०० To increase her role on being a greater energy hub in the region. HISTORY ०० To have more influence on the region. “IRAN is strictly Iran and KRG have agreed on basics to con- ०० To weaken the Turkish influence. against an independ- struct an oil export pipeline with a capacity ent Kurdistan, has of 250 mbbld from Koysinjag to Kerman- shah City of Iran. The export volume will be TECHNICALITIES good relationships transmitted through Iranian existing pipeline system or utilized in the northern refineries. with PUK and Gorran From the technical sight, most probable The idea of such a project had been initiated root (by considering the river crossings and Movement.” in 2014, during the political crisis between the elevations) from Koysinjag to Kerman- KRG and CIG about the conflicts on utili- shah City of Iran is marked and shown on zation of the Ceyhan pipeline. In addition, Map 4 below (by using google earth). As there is also a continuing oil trade from KRG shown from the map and elevation graph, to Iranian refineries by trucks. in Koysinjag and in around the 130th km of the pipeline (before the border) 2 pumping “Iran has good rela- After 2014, some meetings are followed to stations are demanded. For 250 mmbbld ca- tionships with and agree on the political - technical and com- pacity, 48” pipeline diameter is selected and around 10 river crossings are assumed to be influence on the CIG, mercial aspects of the pipeline project; however, up to date, an agreement except the encountered. has annual trade technical parameters of the pipeline could not be achieved. While checking the main capacity of around 6 As shown from the elevation graph, after the reasons for constructing such a pipeline: 150th km of the pipeline, due to the moun- billion $ with CIG.” • From the sight of KRG: tains, construction problems are expected to be faced with. However, there is no technical ०० PKK attacks to current Iraq – Ceyhan limitation for such a project to be completed. Pipeline and unpleasant loss in export

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“According to the assumed technical properties above, such 292 km – 48” pipeline around 3,5 billion $ capex is calculated after benchmarking the Map 4: Northern Iraq to Iran Pipeline. due projects in the region.” ECONOMICS From the resources sight, currently Kirkuk to Ceyhan pipeline handles the export volumes of KRG. Only for unexpected situations According to the assumed technical prop- such as the attacks and hot taps, the flow will erties above, such 292 km – 48” pipeline be interrupted for some period and this will around 3,5 billion $ capex is calculated after make KRG to need a spare transport capacity benchmarking the due projects in the region. to reach a market. However, by calculating the economics of loosed sales volume capac- However, due to the current conditions, ity in those situations and comparing to the “From the resource KRG does not have enough finance to con- cost of a new pipeline to Iran, then being sight, current construct such project. By generally assuming currently not having a necessity for such an KRG is going to handle to costs up to the investment will be observed. ditions marks such border, again minimum 1,7 billion $ is a big investment as un- investment for KRG (While she is suffering However, in the midterm, if the investment to pay her officers’ salaries). necessary but it can environment will be better and oil prices go up to 80 $/bbl levels again, export potential be evaluated again May be Iran can handle all the costs and ap- of KRG is expected to be around 1000 mb- in the future depend- ply a tariff to KRG exports. However, this bld and such an investment will be salvaged. choice can also take some years to decide and ing on the changes prepare for Iran. So, from the resource sight, current condi- in economic conditions marks such investment as unnecessary As a result, from the finance sight there but it can be evaluated again in the future tions.” seems a high risk for the pipeline project to depending on the changes in economic con- be constructed. ditions.

RESOURCES

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POLITICS also current real capacity of the Kirkuk – Ceyhan Pipeline is around 600 mbbld, with the revising of the pump stations, “From the politics From the politics sight, Turkey’s position is this capacity can be increased up to 1200 sight, Turkey’s po- unclear for such a pipeline project. Some mbbld). Not as the alternate to current agencies claim that CIG is not against, how- export route, which may cause Turkey to sition is unclear for ever, this does not mean she is supporting. take it as an attempt to find an alternative to Kirkuk - Ceyhan. But also there such a pipeline pro- is no reason for Turkey to give a political Mainly Turkey’s and CIG’s positioning will ject. Some agencies permit for such project except getting determine the political risks of the project. some other gainings. Hence, Turkey al- claim that CIG is not Hence, from the sight of Iran, Islamic Re- ready has shown his good face to KRG public does not want to make a conflict with against, however, this by shouldering all the risks even if it may CIG. And Turkey always has the power in disrupt her relations with CIG by allow- does not mean she is her hands to cut the current oil export flow, ing current export flow. which is the financing and survival issue for supporting.” KRG. • CIG also seems as not negative to the project, would not politically support That’s why, there is currently unsolved politi- such project which will be another step cal risks for the future of the project. for her dependent region to independency. However, by officially being a partner MARKET to the project, Iran’s insistence, having a free transportation capacity or other gainings may change her situation. Hence the volume is not so high and it may • In order to handle the economic risks be more economic for Iran to transport her and finance the project, Iran may wait existing production from the southern re- for the nearest elections and take slow gions to the northern refineries, there will be actions. With an ally of the ruling party no market obstacle. in KRG, she may be able to make further effective plans and get more risks. RESULTS CONCLUSION “In order to handle As a result, by summarizing the analysis the economic risks above; Northern Iraq is one of the most important and finance the • From the technical and market sights, regions for her neighbors and key players in there are no risks for the project. Howev- the region. In addition to energy resources, project, Iran may er, finance and politics will be the main ethnical and religious structures are also key wait for the nearest milestones that cannot be achieved eas- elements for some security issues. That’s why, ily. inside the region; the political parties and elections and take • Project will not be an easy going project. outside the region; key actors are willing to slow actions. With an Steps taken seem to have more time to make all the efforts to struggle at each different and difficult situation. ally of the ruling party continue. in KRG, she may be • PJAK and other terrorist activities in Iran will continue to break the ongoing Turkey, initially due to her historical back- able to make further relations with KDP and Iran and this ground and her cognates in the region, ethni- effective plans and will affect the project. cally has all the rights to influence in North- ern Iraq than any other players. In addition, get more risks.” • Capacity of the pipeline seems as the with her developing economy, geostrategic spare route for KRG’s oil export. (Hence, position and current balances show that as of

ENERGY POLICY TURKEY Page 60 CONTRADICTORY POLITICS OF KRG & NEW ASSUMED ENERGY CORRIDOR THROUGH IRAN today and also in the future, Turkey will be “Turkey, initially due one of the rulers or main actors in the region. to her historical background and her cog- From this sight of view, with the current risks on hand, Northern Iraq to Iran oil pipeline nates in the region, does not seem to be brought to life in the ethnically has all the near term. However, if the variables such as the commercial and political obstacles, oil rights to influence in prices and investment environment change Northern Iraq than the equation, all might well be different. any other players. As an additional item, as some experts sug- In addition, with her gest: “Construction of a gas pipeline from developing economy, Northern Iraq to Iran” will not seem to be possible not only in the near term but also in geostrategic position the midterm. Hence, while there is a huge gas and current balances demand in Iraq and Northern Iraq markets, while there is an extreme lack of electricity show that as of today generation in the region and the fastest solu- and also in the future, tion is gas plants, while nearest market, Tur- key may be a more economic option, none of Turkey will be one the producers will be tending towards selling their gas to Iran. of the rulers or main actors in the region.” As a result, it is neither easy to have politically stable actions in Northern Iraq nor to apply strategic projects (such as N. Iraq – Iran pipeline, which also cannot be accepted as a Kurdish energy corridor) with any assumptions that leaves Turkey to stay out of the equation.

61 Page SECOND ISSUE THE LEGAL STATUS OF THE CASPIAN SEA: IM- PLICATIONS ON CASPIAN RESOURCES DEVEL- CASPEAN SEA OPMENT AND TRANSPORT by Sohbet Karbuz

mining. Navigation and fishing rights should INTRODUCTION not be confused with the right of using the mineral resources. With mineral resourc- “Caspian Sea’s loca- The Caspian Sea, the largest landlocked body es, the seabed is taken to consideration and of salty water in the world, is surrounded by not the water layer. Failed consensus due to tion at the crossroads five “Caspian States”: Russia in the north; diverse motives and interests paved the way Iran in the south; Azerbaijan in the west, and for unilateral actions, bilateral and trilateral of Asia, Europe, and 3 Kazakhstan and Turkmenistan in the east. agreements, and consequent disputes. the Middle East has Caspian Sea’s location at the crossroads of kept the region’s stra- Asia, Europe, and the Middle East has kept The legal headache of dividing up the sea the region’s strategic importance to interna- tegic importance to continues to pose a serious obstacle to the tional geopolitics. development of several fields and blocked international geopol- many projects including trans-Caspian oil and gas pipelines. After all, how the Caspi- itics.” Before the breakup of the Soviet Union in an seabed is divided among the littoral states 1991, Soviet-Iran treaties governed the ex- will determine which hydrocarbon fields will ploitation of the Caspian Sea, but since then fall into whose sector. a legislative black hole in governance and delimitation has been created. All littoral states agree that a multilateral treaty is the ideal DIFFICULTIES INHERENT way to resolve their dispute over the division of the sea bottom and the delimitation of IN ESTABLISHING A LEGAL surface waters. FRAMEWORK

“The legal headache For more than two decades, the Caspian lit- Any investigation about the legal framework of dividing up the sea toral states have been working on resolving of the Caspian Sea should make distinction continues to pose the Caspian problem in numerous meetings between legal status and legal regime. While at various levels including the summit confer- the legal status, whether a particular body of a serious obstacle ences of the heads of states and governments. water is a lake or a sea, relates to the sover- to the development However, despite over 40 ad hoc working eignty, the legal regime relates to using rights group meetings at the level of deputy foreign and obligations. In the absence of a definitive of several fields ministers and four Summits1 of Caspian Sea determination of such regime the Caspian and blocked many Heads of State, they have been unable to find Sea legal status will continue to be discussed a solution that would satisfy all.2 with no end. projects including trans-Caspian oil and There are great difficulties in resolving this Can the disputes over the legal status and re- gas pipelines.” issue since even international laws fail to gime of the Caspian Sea be resolved by the provide an adequate framework. All the trea- international laws? Although the relevance of ties in the past relate to navigation and, to a international maritime laws to the Caspian lesser extent, fishing rights, but not to seabed case is another disputed subject, the likeli-

ENERGY POLICY TURKEY Page 62 hood is somewhere between very difficult ternational law. and impossible. All littoral states have some • Seventh, the Caspian Sea does not fall legal grounds for their arguments, but taking clearly under the definition of enclosed, the matter to the international legal tribunal semi-enclosed, or open seas as set out in would perhaps create more problems than Articles 1, 2, and 122 of UNCLOS. By solutions because: the way, except for Russia none of the Caspian littoral states ratified that Con- • First, the real headache is the division of vention. natural resources under the seabed and laying pipelines on it. But there has nev- • Eight, application of UNCLOS to the er been an agreement accepted by all the Caspian Sea would also be complicated littoral states on these issues in the past. by the sea’s dimensions. • Second, which international law would • Ninth, the entire Iran-USSR land be the reference? Since the name of the boundary on both sides of the Caspian Caspian is still not legally set as sea or Sea was delimited by the agreements lake, no international law is applicable. concluded in the mid-1950s. The 1954 Although, the weight of historical evi- Iran-USSR Agreement defined an ad- dence indicates the Caspian rather as an ministrative borderline (the so-called As- international lake, it is neither a sea nor a tara-Hasankuli line5) between the USSR lake. Therefore, neither the international and Iran on the Western and Eastern law of the sea nor the law of inland lakes side of the Sea. However, no provisions applies directly to it. were made to demarcate the Caspian • Third, even if we set the name today, its Sea. Interestingly, the aviation agree- “Since the name of legal regime needs to be solved according ment concluded in 1964 between the the Caspian is still to the international law, which existed at two countries upheld this imaginary line the time of the problem. for determining the flight information not legally set as sea region as the marine border. • Forth, how can an unsolved problem in or lake, no interna- the past between two parties (Russia and • Tenth, in the early 1970s, the Soviet tional law is applica- Iran) be solved today with three addi- Ministry for Oil and Gas Industry divid- tional parties? ed the north of the Astara-Hasankuli line ble.” into four regional sectors by utilizing the • Fifth, there is the problem of the defi- modified median line principle: Russia, nition of these three new players. If we Azerbaijan, Kazakhstan and Turkmeni- accept that 1921 and 1940 agreements stan. These Republics were also granted are not anymore valid because a funda- the right to develop the fields in their mental change in circumstances took own sectors. However, this had a mere place, then are Azerbaijan, Kazakhstan administrative value and could not be in- and Turkmenistan new successor states terpreted as awarding the republics any or newly independent states (vis-à-vis proprietary rights, since according to the the 1978 Vienna Convention)? If the lat- Soviet constitutions exclusive ownership ter is accepted then how would it fit into of all natural resources belonged to the the Minsk Agreement of the Common- Union. wealth of Independent States as well as the 1991 Alma-Ata Declaration? If they are recognised as new independent states In fact, it is because of many unique fea- then how can they use arguments to fit tures that the Caspian Sea may need a special into Customary International Law?4 framework that would define its legal status and regime. This, however, would depend • Sixth, the 1982 UN Convention on the entirely on the unanimous agreement of all Law of the Sea (UNCLOS) provisions littoral states. regarding enclosed or semi-enclosed seas are not regarded as part of customary in- The littoral states have their own interpreta-

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tions and views on the demarcation of the ing of the Sea itself but also partitioning the Caspian Sea. Kazakhstan and Azerbaijan multiple interests involved. The position of “The position of Azer- were in favour of the complete division (sea- Azerbaijan, Kazakhstan and Turkmenistan baijan, Kazakhstan bed or subsoil, water layer and air space) by has been driven first by commercial then po- applying the UN Convention on the Law of litical considerations. The positions of Iran and Turkmenistan the Sea of 1982 to the Caspian Sea. Russia and Russia indeed involve greater political has been driven first and Iran wanted the Caspian Sea to remain a and security components than the commer- shared sea (except for 10-mile coastal zones), cial. This is because they have much larger by commercial then in which all littoral states would be equally reserves outside the Caspian Sea. Particularly political considera- entitled to make use of both its waters and its for Iran, it is more of a national security is- seabed. When its proposal for joint control sue. tions.” over the entire Caspian by all littoral states was not accepted, Iran suggested dividing the In the absence of a stable legal framework, a Caspian Sea into five equal parts regardless military conflict over the disputed hydrocar- of the length of the coastal line of each state. bon fields and perhaps trans-Caspian pipe- This means, Iran has always defended the le- lines cannot be downplayed. As new fields gal status of a lake. are discovered in the future, even the bilateral treaties can become a conflict issue. When After offshore discoveries in its territorial the late Turkmen President Saparmurat Ni- waters Russia has changed or modified its yazov said in 2002 that “the Caspian smells opinion and has started to defend the idea of blood” he was pointing out the possibility joint ownership in the undivided water layer that territorial spats could one day get out of and dividing the seabed (and the oil and gas hand. Let us hope the future will prove him resources underneath) into national sectors wrong. through a modified median line. This new proposal of Russia has been supported by DISPUTED FIELDS Azerbaijan and Kazakhstan. Turkmenistan, meanwhile, has been holding a swinging and variable stance. All Caspian littoral states have been involved in ownership disputes over a small number of oil and gas fields. The most serious ones “All Caspian littoral In reality, the issue is not only the partition- are between Azerbaijan and Turkmen and states have been involved in ownership disputes over a small number of oil and gas fields. The most serious ones are between Azerbaijan and Turkmen and between Azerbaijan and Iran.”

Table 1: Distribution of hydrocarbon reserves depending on legal status of the Caspian Sea. Source: Eugene Petrov and Nikolay Amelin (2015). Gaining a Regional Perspective Caspian. GEO ExPro. Vol. 10, No. 5.

ENERGY POLICY TURKEY Page 64 THE LEGAL STATUS OF THE CASPIAN SEA: IMPLICATIONS ON CASPIAN RESOURCES DEVELOPMENT AND TRANSPORT between Azerbaijan and Iran. The Russia-Ka- dispute still continues but the real dispute zakhstan dispute has been managed diplo- between Azerbaijan and Turkmenistan is in- matically when Presidents of both countries deed over another field - the Kapaz (known signed a protocol in May 2002 to jointly de- as Serdar in Turkmenistan) field. velop the three fields located on the median line between the two countries. When the State Oil Company of the Azer- baijan Republic signed an agreement in 1997 The first dispute between Azerbaijan and with Lukoil and Rosneft for joint explora- Turkmenistan concerns three major offshore tion and development of the Kapaz oil field,8 6 fields – Azeri, Chirag and Guneshli. On 20 Turkmenistan strongly reacted and declared “When the State September 1994, Azerbaijan and a consorti- that the field belongs to Turkmenistan. The um of foreign oil companies signed the so- same year, the late Azeri President Heydar Oil Company of the called “Contract of the Century” to develop Aliyev proposed to develop the field together Azerbaijan Republic these fields. Turkmenistan, however, claimed with Turkmenistan but his offer was reject- that Azeri and (partly) Chirag fields are ined. The relations between the two countries signed an agreement deed in Turkmen territorial waters. Turk- deteriorated so badly that the two presidents in 1997 with Lukoil menistan even suggested to agree on a long- did not meet for over a decade. In 2007, the term leasing arrangement since Azerbaijan new Turkmen President Berdymukhamedov and Rosneft for joint has already started work on these fields.7 This exploration and development of the Kapaz oil field, Turk- menistan strongly reacted and declared that the field belongs to Turkmenistan.”

Figure 1: The Uncertain Status of the Caspian Sea.

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invited Chevron executives to discuss developing the field. In 2009 Azerbaijan repeat- TRANS-CASPIAN ENERGY “The tone between ed its offer to Turkmenistan to develop the field together but received no reply. Instead, PIPELINES the two states in- in 2009 Turkmen President announced that There have been talks in Western political creased until an his government would be taking Azerbaijan to the International Court of Arbitration to and economic circles about trans-Caspian Iranian warship and resolve this dispute. energy pipelines since the mid 1990’s - one transporting Kazakh/Turkmen gas and the two military aircraft other transporting Kazakh oil to Europe via Another field, Alov (called Alborz in Iran)9 threatened two Azeri the Caucasus and Turkey. is a dispute subject between Azerbaijan and vessels exploring the Iran. In July 1998, a Production Sharing Agreement signed with Azerbaijan and a In August 2007 the US Agency for Interna- field on behalf of BP consortium of oil companies gave permission tional Development awarded a $1.7 million on 23 July 2001. As a to the consortium to conduct seismic oper- grant to the SOCAR to conduct a feasibility ations on Alov.10 Iran strongly opposed the study on the construction of trans-Caspian result, BP suspended decision and asked Azerbaijan to stop activi- oil and natural gas pipelines. Also, during a drilling in the area ties until the establishment of a legal regime meeting between Presidents Clinton and Ni- for the Caspian. When this call was ignored, yazov on 23 April 1998, the US Trade and and the develop- National Iranian Oil Company formed the Development Agency awarded a $750,000 ment of the field was KEPCO (Khazar Exploration and Produc- grant to conduct a feasibility study by Enron tion Company) consortium with Shell, Las- for a natural gas pipeline from Turkmenistan frozen.” mo plc and Weba to conduct similar studies to Azerbaijan. But nothing concrete has hap- in the same area. Azerbaijan protested that pened, yet. some of the studies were conducted within its territorial borders. The tone between the Interests and agendas of players inside and two states increased until an Iranian warship outside the region have particularly been re- and two military aircraft threatened two Aze- flected in a series of pipeline plans. Pipelines ri vessels exploring the field on behalf of BP can, in a way, be a tool to build relationships on 23 July 2001. As a result, BP suspended between countries. As is case in the Caspi- drilling in the area and the development of an and Black Sea regions, however, pipelines the field was frozen. can become to symbolise political domi- “Interests and agen- nance over the countries rather than being Meanwhile Iran has started its own explora- just commercial outlets for hydrocarbons. das of players inside tion plans for Alborz. Reportedly, Iran has When seen from a geopolitics perspective, and outside the resumed in November 2015 talks with Bra- pipelines may have a stabilising effect and zil’s Petrobras. In 2010 Khazar Exploration can prevent wars, but they can be the reason region have particu- & Production Company had reached an for instability, a conflict and even a war. To larly been reflected agreement with Petrobras on developing two which category would a trans-Caspian pipe- exploration blocks in deep-water Caspian, line fall in? This is hard to guess. in a series of pipeline but international sanctions forced the Brazil- plans. Pipelines can, ian major to leave Iran. A stable and predictable legal environment in a way, be a tool to that preserves corporate confidence in the legal validity of such projects is vital for the build relationships On 23 February 2016, following the visit of realisation of these pipeline projects. Moreo- Azerbaijan’s president Ilham Aliev to Tehran, between countries.” ver, several of the Caspian littoral states are it was announced that Iran and Azerbaijan opposed to trans-Caspian pipelines on envi- have agreed in principle to develop jointly ronmental grounds, fearing that such pipe- this disputed field without giving any de- lines could potentially cause an ecological 11 tails. disaster in the region.

ENERGY POLICY TURKEY Page 66 THE LEGAL STATUS OF THE CASPIAN SEA: IMPLICATIONS ON CASPIAN RESOURCES DEVELOPMENT AND TRANSPORT

TRANS-CASPIAN OIL PIPE- from the Tengiz field in Kazakhstan would LINE also link to the line at Aktau in Kazakh- stan, as suggested by the US in 1997. USA and Turkmenistan signed a feasibility study The idea of constructing a trans-Caspian agreement in 1998. Turkey and USA agreed oil pipeline goes back to the second half of to support the project. the 1990s. Clinton administration’s 1998 initiative for an East-West trans-Caspian energy transport corridor was foreseeing an In 1999, Turkey and Turkmenistan signed a Aktau-Baku-Tbilisi-Ceyhan oil export route 30-year agreement to export gas from Turk- stretching from Kazakhstan to the eastern menistan to Turkey. In addition, the same Mediterranean. year Azerbaijan, Georgia, Turkey and Turk- menistan signed an Intergovernmental Dec- laration on laying the legal framework of the On 16 June 2006 leaders of Azerbaijan and construction of the trans-Caspian pipeline. Turkmenistan signed a framework agreement to create a trans-Caspian project for sending Kazakh oil via the BTC. In April Unfortunately, the parties failed to reach a 2007 a memorandum was signed to carry oil common agreement and negotiations col- extracted from Kashagan and Tengiz fields to lapsed in 2000 – due to payment and price “The strong Russian Sengachal terminal near Baku through the issues, the lack of a legal framework govern- 700 km undersea pipeline between Aktau ing the use of the Caspian Sea, and capacity opposition to the and Baku. But after so much talk and ink allocation among Turkmenistan and Azer- concept of laying the trans-Caspian oil pipeline project has not baijan. Oppositions from Russia and Iran been realised due to several reasons, includ- to such a project had also impacted to the a physical pipe on ing political and commercial. shelving of the project. the Caspian seabed based on environ- TRANS-CASPIAN GAS PIPE- However, after the Russia-Ukraine gas dis- LINE putes in January 2006 the project has started mental and legal to reappear. Turkmenistan signed a mem- grounds has made orandum of understanding in April 2008 So far three options have been considered to with the EU to supply gas starting in 2009, the pipeline option bring Turkmen gas to the Western markets; presumably through a trans-Caspian pipe- rather problematic.” by pipeline, via LNG or via CNG. However, line. In December 2008, two Nabucco gas the strong Russian opposition to the con- pipeline project partners, OMV and RWE cept of laying a physical pipe on the Caspi- established the Caspian Energy Company to an seabed based on environmental and legal assess options for the building of a trans-Cas- grounds has made the pipeline option rath- pian pipeline and to look for partners for a er problematic. And the other two options project which would build and operate such are considered too costly when the transport a pipeline. volume and the distance travelled are considered. When Turkmenistan stressed in a statement in April 2009 (following the Russia-Turk- In the early 1990s, Turkish and Turkmen menistan gas crisis) that it wishes to see “the leaders suggested the concept of a Trans-Cas- shortest and most convenient routes” to pian Gas Pipeline Project, which would tran- market the developed gas, hopes were raised sit Turkmen gas westward to Baku across again for revitalizing the trans-Caspian gas the Caspian Sea for transhipment further pipeline. west through Georgia and Turkey. Support- ed by the US, this pipeline would be linked In addition, several favourable developments with the Baku-Tbilisi-Erzurum pipeline and helped building this feeling: Turkmen gas through it to the Nabucco Pipeline. Gas

67 Page SECOND ISSUE SOHBET KARBUZ

sales to Russia ceased, sales to Iran reduced, cussing for two decades how the problems operator of Turkmenistan’s Block One fields, related to the demarcation (who gets what Petronas took a 15.5% stake in Shah Den- and how), the issue has not yet been set- “The whole issue iz, high level European Commission officials tled. After 43 “going nowhere” sessions of boils down to the paid frequent visits to Turkmenistan, and the special working groups and a handful of Turkmenistan involved in TAPI pipeline. summits, the positioning of the countries is question of how to The latter is significant because it meant the very well-known. This situation has blocked demarcate or share end of Turkmenistan’s long supported policy many projects including trans-Caspian pipe- of not been involved in pipeline projects. lines and many oil and gas fields situated in the Sea among the areas contested by neighbouring states. littoral states by Besides, Turkmenistan and Azerbaijan have taking into account of demonstrated interests to deliver their gas When international oil companies entered to Southern Gas Corridor. In May 2015, the region in the early 1990s, their main the past treaties and the Ashgabat Declaration12 brought Turkey, worry was commercial as well as political risks and challenges they would be faced current realities.” Turkmenistan, Azerbaijan and the EU together in a statement that recognised the im- with. In less than a decade, managing these portance of equally and mutually beneficial risks has turned out to be only a small part cooperation in ensuring reliable natural gas of a risk chain, which is tied to the uncertain supplies from Turkmenistan to Europe but legal framework of the Caspian Sea. without any serious talks, let alone taking any tangible steps. It is still not clear whether trans-Caspian pipelines will ever be built. If at least one of them is built, USA and the EU will be likely CONCLUDING REMARKS to support the construction as it will boost Western influence and hence may change the balance of power in the region. That is why The legal status and regime of the Caspian the Western powers speak out in favour of Sea was ruled by the Soviet-Iran Treaties of non-Russian and non-Iranian export outlet 1921 and 1940 until the breakup of the So- for Caspian hydrocarbon resources. viet Union. Since then it has become a legal uncertainty and a headache, even if the past Treaties are still binding for all Caspian states While the big powers such as USA/EU, (including the newly independent states). “Western powers Russia and China will shape the region’s geopolitical future, the regional players in- speak out in favour As far as Caspian Sea’s legal status is concluding Turkey and Iran will try to advance cerned, the past Treaties do not provide any of non-Russian and their interests. Since the players in the region specific answer. They only mention that it is have conflicting interests and priorities, the non-Iranian export a Soviet-Iranian sea. Also, no marine bound- trans-Caspian pipelines are likely to ignite aries or delimitation lines in the Caspian Sea outlet for Caspian conflicts of interests and a geopolitical com- between Soviet and Iranian parts are provid- petition between the different players. hydrocarbon resourc- ed in any of the past Treaties. es.” As for its legal regime, the past treaties relate Political disagreements among the players solely to regulation of navigation and fishing are inevitable in the region and will surface but do not address the issue of the seabed sov- once their interests and priorities clash. Un- ereignty or delimitation of seabed resources. less military security in the Caspian basin is The whole issue boils down to the question ensured, Iran and Russia will delay by any of how to demarcate or share the Sea among means the process of the resolution of the the littoral states by taking into account of legal framework. Iran, on the other hand, is the past treaties and current realities. likely to delay any agreement on the Caspian Sea legal framework until its relations with Although the littoral states have been dis- the US is put on track. With sanctions being

ENERGY POLICY TURKEY Page 68 THE LEGAL STATUS OF THE CASPIAN SEA: IMPLICATIONS ON CASPIAN RESOURCES DEVELOPMENT AND TRANSPORT lifted on Iran, it is not yet clear what influ- the Iran-Soviet maritime boundary was drawn. “Political disagree- ence that might have on Tehran’s position, 4 For instance, Azerbaijan mentions its oil ex- ments among the though it is likely that Iran, which now has ploitation in the Caspian Sea since 1956 as a cus- become a competitor, will continue to op- tomary practice. But how can a newly independ- players are inevitable pose the construction of any trans-Caspian ent state perform customary practice and yet not in the region and will pipeline. be a successor state? surface once their in- 5 This imaginary line connects the Astara village Multidimensional aspects of a legal frame- (in Azerbaijan) on the western shore with the terests and priorities work in terms of theoretical and practical ba- Hasankuli village (in Turkmenistan) on the east- clash. Unless military sis require the political will of the key players ern shore. for a consensus. As Vladimir Putin stated in 6 security in the Caspi- 2002, the future of the Caspian – whether Azeri and Chirag fields are called respectively Hazar (Omar) and Osman in Turkmenistan. an basin is ensured, it is a sea of cooperation or a clash of interests – will depend on how the littoral states 7 Yolbars A. Kepbanov, “The New Legal Status of Iran and Russia will untangle the tight Caspian knot of problems. the Caspian Sea is the Basis of Regional Cooperation delay by any means Although some argue that a five-way treaty and Stability”, Perceptions, Volume II - Number currently seems highly unlikely, there is still 4, December 1997-February 1998. the process of the hope. 8 Mineable reserves of Kapaz field are assessed at resolution of the legal over 350 million barrels of oil. framework.” The general consensus so far is that the seabed (and the oil and gas resources underneath) 9 The field actually consists of three fields: Sharg, should be divided into national sectors and Alov and Araz. the sea’s surface and water layer should be 10 shared. But how this division may be accom- The field is estimated to hold 2.6 billion barrels of oil and 2.4 billion cubic meters of gas. plished still remains a challenge. 11 Natural Gas Europe, “Iran, Azerbaijan Dis- cuss Joint Caspian Projects”, 24 February 2016. REFERENCES Available at http://www.naturalgaseurope. com/iran-azerbaijan-discuss-joint-caspian-projects-28328 1 Up to now, the summits have been held in Ash- gabat in 2002, Tehran in 2007, Baku in 2010 and 12 The Ashgabat Declaration, which provides a Astrakhan in 2014. The next one is planned to be foundation for the practical implementation of held this summer in Astana. the project, launched the work of the intergovernmental committee. 2 Adopted agreements so far cover the conservation and sustainable use of marine biological resources of the Caspian Sea, cooperation in the field of prevention and liquidation of emergency situations in the Caspian Sea, and cooperation in the field of hydrometeorology of the Caspian Sea.

3 Following the bilateral treaties they concluded in the second half the 1990s, Russia, Kazakhstan and Azerbaijan signed in May 2003, a tripartite agreement dividing the northern 64% of the Cas- pian Sea seabed and subsoil into three unequal parts, and left the waters of the Caspian open to shared use for maritime commerce and fishing. Kazakhstan obtained 27%, Russia 19%, and Azerbaijan 18%. Iran rejects the suggested share of 14% but lays claim to 20%, transferring the boundary 80 km north of the line along which

69 Page SECOND ISSUE PROSPECTS FOR RENEWABLE ENERGY IN TUR- KEY AFTER PARIS COP21 SUMMIT by Serhat S. Çubukçuoğlu

OVERVIEW OF COP21 SUM- perity, and better lives will be made possible with low carbon-footprint. MIT’S IMPLICATIONS The UNFCCC COP21 summit in 2016, Turkey is a developed OECD country in the held in Paris, set a cornerstone in global ener- league of G-20 with close to 4% projected gy revolution as for the first time, it brought GDP growth rate per annum in 2016-17.1 175 countries into a common cause to curb “Ten years after its Global warming due to greenhouse gas net CO2 emissions and limit global temper- (GHG) emissions constitute a common inauguration, Tur- ature rise to 2°C, however optimistic this tar- problem of mankind and draws attention get may still seem to be. Adoption of renew- key ratified only the from countries at the top of the industrial able and clean energy technologies plays a league to emerging ones alike, and Turkey is key role to implement this action plan. From Annex-I of the UN- no exception to this. Since 1994, UNFCCC2 that perspective, Turkey’s active participation FCCC in 2004 and is treaty obliges adopting parties to reduce the and contribution to gradually phase out coal impact of global warming caused by human and fuel power to replace them with solar, therefore exempted activities through “common but differenti- wind, geothermal, and hydro power will help from the obligation ated responsibilities.” Ten years after its in- preserve the environment for our future gen- auguration, Turkey ratified only the Annex-I erations and for the world as a whole. As a to undertake GHG of the UNFCCC in 2004 and is therefore growing economy, Turkey has demonstrated emissions reduction exempted from the obligation to undertake significant progress in its efforts to combat GHG emissions reduction commitments.3 climate change through sustainable develop- commitments.” Likewise, after tense negotiations and only ment principle, which is to “meet the needs then in 2009 following the third conference of the present without compromising the of the parties (COP3), Turkey became a sig- ability of future generations to meet their natory to Kyoto Protocol, but limited its own needs”.6 Turkey should continue to fos- responsibility to Annex I of the UNFCCC ter environmentally friendly, innovative pol- without introducing new commitments. icies to decarbonize energy through market liberalization, public-private partnerships, “Research reveals technology transfer, carbon taxation, and Research reveals that 71% of CO2 emissions financial assistance for green investments. that 71% of CO2 in Turkey are caused by the industry and With Paris accord, Turkey has declared to coal-based power plants4 that contribute to emissions in Turkey commit up to 21% further reduction in car- 29% of electricity generation. On the glob- bon emissions rate from its current levels by are caused by the al scale, well-established scientific evidence 2030.7 It is crucial to emphasize that Paris shows that the world’s human-induced COP21 is a non-binding treaty and intended industry and coal- GHG emissions, of which CO2 makes up national contributions are determined solely based power plants 80%,5 that cause an enhanced greenhouse by each participating country on a voluntary effect come from combustion of fossil fuels. basis. It is expected that the treaty will be rat- that contribute to These facts provide invaluable forecast about ified by signatories and enter into force with- risks and courses of possible action to insure 29% of electricity in the next year. against them. By looking at current trends, it generation.” is not difficult to estimate that production of conventional oil & gas will peak and decline in the 21st century. Economic growth, pros- RENEWABLE ENERGY POLI-

ENERGY POLICY TURKEY Page 70 CY IN TURKEY tribute to the mitigation of urban pollution “Access to cheaper, and CO2 emissions.14 cleaner, and more Turkey still has abundant potential to in- sustainable energy crease efficiency in energy production, dis- According to IEA,15 46% of global CO2 16 supply would help tribution, and consumption.8 Therefore, it emissions resulted from coal as of 2013, is imperative to adopt solutions that address and in order to meet COP21 criteria 80% Turkey to ease its energy supply and demand inefficiencies in of coal reserves must remain untouched. current account defi- order to reduce carbon emissions. From an Although coal has been replaced by shale economic perspective, the impact of further gas using fracking technologies in the US, cit and help to realize market liberalisation and higher efficiency for instance, 40% of electricity generation 17 its vision for the cen- would be to reduce import bills and waste- worldwide still comes from coal, he us- ful fuel subsidies, thus contributing to GDP age of which is high especially in emerging tennial anniversary in growth. The responsibility to adopt renewa- countries like India and China. In a simi- ble energy also lays with the private sector, lar fashion, Turkey planned to construct 86 2023.” which has been encouraged and incentivised new coal-fired power stations as of 201318 by the government to invest and participate that can increase coal-based GHG emissions in power generation. Yet, there is more work by 60% until 2030, ranking Turkey as the to be done to update the legislation, further fourth largest polluter in the G-20 league.19 develop the transmission infrastructure, and According to sector players, the govern- increase investor awareness to attract poten- ment reintroduced a number of incentives tial suppliers.9 and exemptions from environmental regulations until 2020 for privatized coal-fired power plants.20 These plants threaten the “According to IEA, There has been an unprecedented decline achievement of already inadequate targets 46% of global CO2 in global oil investments in two consecutive and suggest that emissions from coal could years, and lower oil prices will remain as a more than double.21 Although the intention emissions resulted reality for years to come.10 The forecast for behind building coal-fired plants is to reduce crude oil price this year is that it will hover import dependency, especially on natural from coal as of 2013, around $45-$52 band.11 However, this tem- gas, Turkey readily imports 32%22 of its total and in order to meet porary situation should not preclude policy coal consumption and is dependent on hard- makers from adopting long-term measures coal imports to meet 90% of this demand, COP21 criteria 80% to reduce reliance on fossil fuels. Turkey which in fact presents a policy inconsisten- of coal reserves must is a net importer of energy, with a gaping cy. 23 Also, majority of lignite coal reserves in current account deficit at 4.5% of GDP in Turkey are of low quality and unsuitable for remain untouched.” 2016,12 part of which, despite substantial enrichment, which render these unfit for in- improvement since 2014, is due to price of vestment for electricity generation.24 fuel imports and has been exacerbated by the turmoil within Turkey’s neighborhood. Turkey’s EPDK25 should no longer grant li- Access to cheaper, cleaner, and more sus- censes to coal-fired plants; at least it should tainable energy supply would help Turkey ban construction of inefficient plants. To to ease its current account deficit and help incentivize coal power generation while the to realize its vision for the centennial anni- World Bank and EIDB26 limit project fi- versary in 2023. Turkey should maintain a nance is against the spirit of the COP21. disincentive through carbon taxation against Even Chinese investors, now that their own consumption of oil by private entities. Tax- economy has slowed, do not pay great ination is a better, non-distorting, and trans- terest in such projects any more. Subsidized parent way to reduce emissions than policies coal-power plants create overcapacity, inef- such as subsidies or mandates for renewable ficiency, and perpetuate imported energy. energy.13 To the extent that renewable energy Turkish Ministry of Energy should engage replaces carbon-intensive fuels, Turkey can well-financed private sector actors such as further diversify its energy supplies and con-

71 Page SECOND ISSUE SERHAT S. ÇUBUKÇUOĞLU

“The cost of solar TUSIAD27 to develop sustainability prac- gy costs to support diffusion, enable policy tices and technologies that enable energy frameworks and power system integration, power is now cheap- innovation to install larger, more efficient and mobilize finance in order to triple the er by 80%, and wind plants. Special attention should be devot- deployment level of renewable energy by ed to SMEs that represent 46% of Turkish 2030.35 power by 30%. IEA industry energy consumption and require estimates that 60% of mid-to-long term financing, such as Euro- pean-funded Climate Turkey program or Research reveals that each unit of electricity energy investments the World Bank’s Green Bond funding, to produced by solar power creates eight times higher employment than coal and natural gas, globally in the next raise awareness, subsidize renewable energy 36 projects28 and address climate risk. With the and seven times more than nuclear power, 25 years will be on 202329 vision, Turkey should aim to increase which are interesting facts to note especially in the wake of recent bilateral discussions renewable energy the rate of total electricity supply capacity from renewable energy sources to 30%.30 Al- between Turkey and Russia about reviving sources.” though Turkey ranks in the top three among Turkish Stream and Akkuyu Nuclear Plant South and Central Asian states for installed projects. On the other hand, Turkey’s largest hydropower capacity,31 much of its potential solar power plant has opened in 2016 in the capacity remains unutilized. By 2023, the province of Konya to meet the electricity de- government should provide technical advice mand of more than 20,000 households and help prevent an average of 18,000 tons of and assistance needed by the private sector to 37 respond to the priorities of reducing GHGs CO2 emissions every year. The Mediterra- nean basin, including Turkey, is fortunate to “Research reveals while polluting industries such as Cement Producers Association32 should incorporate receive significant amount of solar light con- that each unit of carbon pollution costs into their long-term vertible into electric power. Turkey has the financial planning. This, in turn, requires second largest sunshine duration (7.5 hours electricity produced 38 assigning a quantitative value to carbon and per day) in Europe after Spain. The main by solar power transparency on its use. incentive for investors to solar energy in Tur- key are feed-in tariffs, whereas other types of creates eight times energy generation facilities such as wind, hy- higher employment RENEWABLE ENERGY TECH- dro, and biomass may be also subject to pur- NOLOGIES IN TURKEY chase guarantees, connection priorities, and than coal and natural license exemptions.39 Despite high upfront costs, if by 2023 Turkey reaches 20,000 MW gas, and seven times Technology diffusion is apace at an unprece- of installed wind power capacity by revis- dented rate. Globalization helped to acceler- more than nuclear ing its investment and licensing model, this ate adoption of renewable energy technolo- would reduce its natural gas bill by around power, which are gies unlike before compared to just five years US$ 3 billion annually.40 Moreover, Turkey ago. The cost of solar power is now cheaper interesting facts to is ranked 7th in the world in terms of geo- by 80%, and wind power by 30%.33 IEA esti- thermal energy potential41 and is a founding note especially in mates that 60% of energy investments glob- member of IRENA.42 Also, the energy stock ally in the next 25 years will be on renewable the wake of recent exchange of Turkey, established in 2015,43 is energy sources. Even the oil-rich Emirate set to enhance market liberalization, increase bilateral discussions of Abu Dhabi in the UAE demonstrated at the sector’s competitiveness, and facilitate a recent climate change meeting that it is between Turkey and emissions/carbon trade. economically, environmentally and socially Russia about reviving beneficial to invest in clean energy and other carbon mitigation strategies.34 Decentralized From a more conventional perspective, Turkish Stream and 44 power provision for areas without access to IAOGP suggests that greater use of natu- Akkuyu Nuclear Plant electricity grid and measures to prevent price ral gas is essential in reducing GHG emis- hikes for consumer protection are sine qua sions and providing the backup power, on projects.” 45 non for a sustainable energy policy. G20 En- which wind turbines rely, which should be ergy Ministers recognized at a recent summit preferable over coal power. Nevertheless, to in 2016 the need to drive down technolo- improve coal combustion efficiency in min-

ENERGY POLICY TURKEY Page 72 PROSPECTS FOR RENEWABLE ENERGY IN TURKEY AFTER PARIS COP21 SUMMIT imizing GHG emissions, the World Coal “Part of the challenge Association also supports the G8 / G20 tar- CONCLUSION is to find possible get of 20 industrial scale carbon capture and storage projects operating by 2020. Since ways to de-couple this is a costly measure, financing for official In overall, if Turkey takes the right steps, it economic growth development assistance and private sector in- has a substantial potential to undertake re- vestment in developing countries like Turkey newable energy revolution, realize its vision from rising carbon that extensively burn coal is consistent with to become an energy trade hub in an impor- emissions. Turkey, international climate protection goals and tant geostrategic location, fuel its economic will require creating investment opportuni- growth and enhance energy supply secu- rightly to a certain ties.46 rity. Turkey’s gradual shift to renewables in its energy mix should be sustained through extent, argues that Despite improvements in sustainable devel- usage of domestic resources more likely uti- addressing the envi- opment, it is important to highlight that lizing wind and solar power instead of coal, ronment reduces its Turkey is still not a forerunner in global incentives for the private sector, and better efforts to tackle climate change, nor has it financing mechanisms to facilitate green in- development space.” made any legally binding commitment to re- vestments. duce GHG emissions from its current levels at COP21. Developed countries such as the Diversification of supply sources especially EU and the US have maintained leadership with a focus on local renewables would ce- in setting mitigation goals to reduce CO2 ment robust economic development while, emissions by varying degrees up to 40% 47 at the same time, large scale projects would compared to 1990 levels by 2030. Some undoubtedly bring economies of scale in developing countries like Mexico, Morocco, procurement, installation, hence driving Kenya, and Ethiopia formulated metrics to down costs and increasing efficiency. In an describe a fair contribution, such as project- 48 era of low energy prices where pressures are ed emissions per capita. high to undertake cost-cutting measures and scrap extravagant projects throughout the “Turkey’s gradual Part of the challenge is to find possible ways Middle East, it is crucial to take advantage of to de-couple economic growth from rising local resources, increase infrastructure capac- shift to renewables in carbon emissions. Turkey, rightly to a certain ity, and competitiveness. These coupled with its energy mix should extent, argues that addressing the environ- Turkey’s strategic location at the cross-roads ment reduces its development space, and that between major producers of the Middle East be sustained through developed countries have less right to claim and demand centers of Europe, make it an usage of domestic protected environmental space that might ideal target of energy import and export pro- be needed for development.49 Green goods ject proposals as well as a potential energy resources more likely trade facilitation, carbon storage, taxation, transit hub. With a more liberal market, re- utilizing wind and and trade are among mitigation options sug- newables trade, and emission reductions ef- gested by climate scientists, but even if Tur- forts, Turkey has all the potential to put itself solar power instead key meets its 21% reduction commitment on the map as an ever more important player of coal, incentives by 2030, the per capita emission will still in energy geopolitics. be higher than developing countries such as for the private sector, China, Mexico, South Africa, and South Ko- and better financing rea. Moreover, higher carbon footprint might REFERENCES implicate indirect export barriers in the form mechanisms to fa- 50 of tariffs from lower footprint countries. 1 OECD, “Turkey Economic Forecast Summary cilitate green invest- According to EBRD, Turkey must increase (June 2016)”, Economy, Available from: http:// its non-hydro renewables output about sev- www.oecd.org/economy/turkey-economic-fore- ments.” enfold by 2023 in order to meet its objective cast-summary.htm of 30% renewable-generated power.51 2 The UN Framework Convention on Climate Change.

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3 Ministry of Foreign Affairs, Republic of 17 Fatih Birol, IEA Executive Director, Hard- Turkey, “UNFCCC and the Kyoto Proto- talk, Available from: https://www.youtube.com/ col”, Available from: http://www.mfa.gov.tr/ watch?v=j1lplW7QSo4&feature=youtu.be (25 united-nations-framework-convention-on-cli- min) mate-change-_unfccc_-and-the-kyoto-protocol. en.mfa 18 Hürriyet (2014), “Thermic Power-Plant report is intimidating”, Health, 16 November 2013, 4 WWF, “Turkey’s Climate Policy”, Available Available in Turkish from: http://www.hurriyet. from: http://www.wwf.org.tr com.tr/saglik-yasam/25136158.asp

5 World Coal Association, “Climate Change”, 19 Turkish Electricity Producers Foundation, Available from: http://www.worldcoal.org/ Available in Turkish from: http://www.eud.org.tr coal-the-environment/climate-change/ 20 American-Turkish Council, “Bi-week- 6 Harvard Kennedy School, “Making Technolog- ly Economic Briefing,” Issue 13, 16 May ical Innovation Work for Sustainable Develop- 2016, Available from: http://us5.cam- ment”, 17 August 2016, Belfer Center for Sci- paign-archive2.com/?u=09b537bb9c6e5d- ence and International Affairs, Environment and c91e157ad3a&id=65a9aeb8ea&e=0ced6da845 Natural Resources Program. 21 Climate Action Tracker, “The Coal Gap: 7 Güler Sabancı, Opening Address, IICEC 7th planned coal-fired power plants inconsistent with International Energy and Climate Forum, İstan- 2 ̊C and threaten achievement of INDCs”, 1 bul, 10 June 2016. December 2015, Available from: http://clima- 8 Ibid. teactiontracker.org/assets/publications/briefing_ papers/CAT_Coal_Gap_Briefing_COP21.pdf 9 Republic of Turkey Ministry of Energy and Nat- ural Resources, “Energy Supply Security”, Availa- 22 Mücella Ersoy, “The Role of Coal in Turkey”, ble from: http://sp.enerji.gov.tr/tema1.html Workshop on Best Practices in Production of Electricity from Coal, Geneva, 29 October 2015 10 Fatih Birol, IEA Executive Director, Hard- (accessed 28 August 2016), Available from: talk, Available from: https://www.youtube.com/ https://www.unece.org/fileadmin/DAM/ener- watch?v=j1lplW7QSo4&feature=youtu.be (25 gy/se/pp/clep/ge11_ws_oct.2015/8_M.Ersoy_ min) TURKEY.pdf

11 Hürriyet (2016), “Energy should be further lib- 23 WWF, “Paris Anlaşması Sonrası Türkiye’de eralized”, Ekonomi, 10 June 2016, Available in Kömüre Yer Var Mı?”, Available from: http:// Turkish from: http://www.hurriyet.com.tr/ener- www.wwf.org.tr ji-daha-da-serbestlesmeli-40116067 24 Ibid. 25 Energy Market Regulation Authority of Turkey. 12 Trading Economics, Turkey: Current Account to GDP (accessed August 14, 2016); Available 26 European Infrastructure and Development from: http://www.tradingeconomics.com/tur- Bank. key/current-account-to-gdp 27 Turkish Industry and Business Association.

13 Qamar Energy, “Carbon Tax Would Kill Sev- 28 AFC, “Climate Turkey: Investments for the eral Birds with One Stone”, Robin Mills, 10 July reduction of greenhouse gases emissions in Tur- 2016. key”, Available from: http://www.afd.fr/webdav/ site/afd/shared/PORTAILS/PAYS/TURQUIE/ 14 Energy Information Administration, “Tur- Fiches%20projets/Fiche%20programme%20 key: Environment”, Turkey in the 21st Century, Turqu ie%20Climat%20ENG.pdf Available from: http://www.nuce.boun.edu.tr/ turkey.html 29 100th anniversary of the proclamation of the 15 International Energy Agency. Republic of Turkey (1923-2023).

16 WWF, “Paris Anlaşması Sonrası Türkiye’de 30 Ministry of Foreign Affairs, Republic of Kömüre Yer Var Mı?”, Available from: http:// Turkey, “UNFCCC and the Kyoto Proto- www.wwf.org.tr col”, Available from: http://www.mfa.gov.tr/

ENERGY POLICY TURKEY Page 74 PROSPECTS FOR RENEWABLE ENERGY IN TURKEY AFTER PARIS COP21 SUMMIT united-nations-framework-convention-on-cli- www.hurriyetdailynews.com/turkey-can-re- mate-change-_unfccc_-and-the-kyoto-protocol. alize-renewable-energy-target-by-chang- en.mfa ing-investment-model-company.aspx?page- 31 International Hydropower Association, “Hy- ID=238&nID=97050&NewsCatID=348 dropower Status Report”, 2016, Available from: 41 Ministry of Foreign Affairs, Republic of Turkey, https://www.hydropower.org/2016-hydropow- “Turkey’s Energy Profile and Strategy”, Availa- er-status-report ble from: http://www.mfa.gov.tr/turkeys-energy-strategy.en.mfa 32 Cement Producers Association, “Climate Change Conference in 2013, Warsaw: Conclu- 42 International Renewable Energy Agency. sions for Turkey”, Available in Turkish from: http://www.tcma.org.tr/index.php?page=icerik- 43 Hürriyet (2015), “Türkiye’nin enerji bor- goster&cntID=365 sası EPİAŞ kuruldu,” Ekonomi, Available from: http://www.hurriyet.com.tr/turkiyenin-ener- 33 Hürriyet (2016), “Energy should be further lib- ji-borsasi-epias-kuruldu-28504697 eralized”, Ekonomi, 10 June 2016, Available in Turkish from: http://www.hurriyet.com.tr/ener- 44 International Association of Oil & Gas Produc- ji-daha-da-serbestlesmeli-40116067 ers.

34 Green Prophet, “Oil-rich Abu Dhabi to mo- 45 IAOGP, “Berlin EGM Focuses on industry bilize climate action at UN Climate Summit,” challenges and opportunities”, 26 November Available from: http://www.greenprophet. 2013, Available from: http://www.ogp.org.uk/ com/2014/02/oil-rich-abu-dhabi-to-mobi- news/2013/november-2013/berlin-egm-focus- lize-real-climate-action-at-upcoming-talks/#st- es-on-industry-challenges-and-opportunities/ hash.62himaHV.dpuf 46 William Moomaw and Mihaela Papa, “Cre- 35 International Renewable Energy Agency, “G20 ating a mutual gains climate regime through Energy Ministers Recognise Progress on Renew- universal clean energy services”, Climate Policy, ables, Set Stage for More Action”, Press Releas- 1-16, 2012. es, 30 June 2016, Available from: http://www. irena.org/News/Description.aspx?NType=A&m- 47 COP21, “188 countries have committed to nu=cat&PriMenuID=16&CatID=84&News_ reducing their greenhouse gas emissions”, Paris, ID=1456 December 2015, Available from: http://www. cop21.gouv.fr/en/185-countries-have-commit- 36 WWF, “Paris Anlaşması Sonrası Türkiye’de ted-to-reducing-their-greenhouse-gas-emissions/ Kömüre Yer Var Mı?”, Available from: http:// www.wwf.org.tr 48 GreenBiz, “How COP21 Country Commit- ments Stack Up”, Eliza Northrop and David 37 American-Turkish Council, “Bi-week- Waskow, 8 September 2015, Available from: ly Economic Briefing,” Issue 13, 16 May https://www.greenbiz.com/article/how-cop21- 2016, Available from: http://us5.cam- country-commitments-stack paign-archive2.com/?u=09b537bb9c6e5d- c91e157ad3a&id=65a9aeb8ea&e=0ced6da845 49 Prof. W. Moomaw, Prof. Charles C. Chester, “Transnational Social Issues: Environment”, Lec- 38 Turgut Cankorel, “Turkish Solar Update”, Re- ture 4, GMAP, The Fletcher School, Tufts Uni- newable Energy World, 18 January 2016, Avail- versity, 2014. able from: http://www.renewableenergyworld. com/articles/2016/01/turkish-solar-update.html 50 WWF, “Paris Anlaşması Sonrası Türkiye’de Kömüre Yer Var Mı?”, Available from: http:// 39 Investment Support and Promotion Agency www.wwf.org.tr of Turkey, “Energy and Renewables”, Sectors, Available from: http://www.invest.gov.tr/en-US/ 51 European Bank for Reconstruction and De- sectors/Pages/Energy.aspx velopment, “EBRD supports Turkey’s shift to renewable energy”, News, 16 February 2015, Avail- 40 Hürriyet Daily News (2016), “Turkey can re- able from: http://www.ebrd.com/news/2015/ alize renewable energy target by changing invest- ebrd-supports-turkeys-shift-to-renewable-energy. ment model: Company”, Available from: http:// html

75 Page SECOND ISSUE ENERGY ISSUES IN THE USA & EU COMPETI- TION by Serdar Gürüzümcü and Oğuzhan Akyener

INTRODUCTION in Ireland, and another USA company, Mc Donald’s, is also about to face tax penalty in Luxemburg, but contrarily the USA files for “The European Union The European Union (EU) and the United toxic mortgages between 2005 and 2007 on Deutsche Bank. (EU) and the United States of America (USA), as the most powerful economies in the world, have common States of America history, ancestors, and many economical In the light of explicit competition being (USA), as the most partnerships. However, there have always been competitive issues between two sides. escalated through political and economic powerful economies By analyzing this competition from the his- issues between two allies, this study will try torical window, such as it happened in the to focus on how it may affect their energy in the world, have Second World War, USA and some of EU policies. common history, members (which can be assumed as the leader of EU, Germany for example) had to fight ancestors, and many against each other that has been affecting the POLITICAL AND ECONOMI- economical partner- current situations in the background. CAL ISSUES ships. However, there On the contrary, during the Cold War they There are some political and economic issues have always been had accelerated economic relationships. emerged from or led to such competition be- competitive issues Moreover, after the Cold War they had also tween the USA and EU. Such issues were maximized their economical partnership and confronted first in 2013 when Germany between two sides.” decided to have a comprehensive trade agree- complained bitterly as whistleblower, Ed- ment to increase this partnership to a higher ward Snowden revealed the extent of USA level. spying on Europe, which reportedly included monitoring Chancellor Angela Merkel’s cellphone.3 Then, it was revealed that Bun- “in 2013 when Ger- For accomplishing such target, Transatlantic Trade and Investment Partnerships (TTIP) desnachrichtendienst (BND) had spied on many complained bit- was announced by USA President.1 And the France and the European Commission on behalf of USA’s National Security Agency terly as whistleblow- announcement was later endorsed by the Eu- ropean Commission President Barroso. The (NSA). But according to the new reports, er, Edward Snowden first round of TTIP negotiations took place BND has also spied on allies under its own initiative.4 revealed the extent in the week of July 8 in Washington, D.C., under the leadership of the Office of the U.S. of USA spying on Trade Representative2, and such negotiations There were also some opposite claims from Europe, which re- are still continuing. Der Spiegel, which confirmed from some sources that the spying went further than portedly included previously reported. Since October’s revela- During this period, the spy scandals occurred monitoring Chancel- tions, it has emerged that the BND spied on between EU and USA. Following that, the the United States Department of the Interior lor Angela Merkel’s penalty for Volkswagen’s Emissions Scan- and the interior ministries of EU member dal came out, then Brexit happened (while cellphone.” states including Poland, Austria, Denmark waiting for the negotiations). Currently Eu- and Croatia. The search terms used by the ropean Union says Apple broke EU tax rules BND in its espionage also included commu-

ENERGY POLICY TURKEY Page 76 nication lines belonging to USA’s diplomatic As it can be seen from the above informa- outposts in Brussels and the United Nations tion, economic and political issues are linked in New York. The list even included the US to each other in the scope of ongoing EU- “Those developments State Department’s hotline for travel warn- USA competition. These open and easy to 5 clearly indicate a ings. analyze issues are so clear to be defined as the competition items. trust issue confronted Those developments clearly indicate a trust by German intelli- issue confronted by German intelligence that In addition, Syria and the other Middle East has been steadily growing. It can be stated policies and also the immigrant issues can gence that has been that the situation may be an initial reflection also be analyzed in the concept of this com- steadily growing.” of the competition and it will have other fol- petition. lowing reflections as stated below: However, this study mainly wants to focus • Volkswagen’s Emissions Scandal: After on the energy issues, which can be accepted the scandal was revealed at the end of as the competitive and disagreed items be- 2015, according to US Environmental tween US and EU politics. Those issues are Protection Agency (EPA) in two related going to be identified in the following sec- settlements, one with the United States tion. and the State of California, and one with the U.S. Federal Trade Commission (FTC), German automaker Volkswagen MAIN ENERGY ISSUES AG and related entities have agreed to spend up to $14.7 billion to settle allegations of cheating emissions’ tests and On energy issues, main competition between deceiving customers.6 USA and EU are related with the USA’s future possible LNG supplies to EU and the • Brexit: United Kingdom (UK) is the position Ukraine in EU’s supply chain. These closest ally of the US in the EU- want- issues are evaluated under the titles of Nord ed to exit from the EU (mostly under Stream 2, Ukraine bypass politics, Turkish the influence of France-Germany). Ac- Stream and Bulgaria transit option. “On energy issues, cording to the result of the referendum (non-binding) in June 2016, UK is wait- main competition being for the exit negotiations. NORD STREAM 2 tween USA and EU • Apple tax issue in Ireland: In August 2016, Apple has warned that future in- are related with the vestment by multinationals in Europe Nord Stream 2 is the pipeline project, which USA’s future possi- could be hit after it was ordered to pay a aims to double the current gas transportation record-breaking €13bn (£11bn) in back volume of Nord Stream. In this concept, an ble LNG supplies to taxes to Ireland.7 additional 55 bcma Russian gas volume is EU and the position planned to be transported to Germany and • Mc Donald’s tax issue: McDonald’s the other countries in Northern and Western Ukraine in EU’s sup- could face an order to pay nearly $500m Europe. in back taxes to Luxembourg according ply chain.” to a Financial Times analysis of an investigation by Brussels into state-supported As the most influential country of the EU, tax avoidance.8 Germany strictly supports the Nord Stream 2 project. On the contrary, USA, Britain • Deutsche Bank penalty issue: The U.S. (about to be non-member of EU) and addi- Justice Department wants the bank to tional some other weaker partners of EU are pay $14 billion over allegations for pack- against of the project. aging toxic mortgages between 2005 and 2007.9 The “against” group claims that:

77 Page SECOND ISSUE SERDAR GÜRÜZÜMCÜ AND OĞUZHAN AKYENER

“EU’s gas demand EU’s gas demand is decreasing due to re- The USA attaches importance to Ukraine as is decreasing due to newable energy and energy efficiency invest- a political borderline castle against Russia. ments. Furthermore, alternative gas resourc- From the political and security sights, the renewable energy es thanks to LNG are increasing. Therefore, loss of Ukraine means that USA will lose an and energy efficiency EU does not need to increase trade volumes important foothold in the region. Such proof Russian gas, which means a lower depend- ject will help Russia’s bypass politics that will investments. Further- ency on Russia. weaken the hands of the key USA support- more, alternative gas ers in Ukraine, which means in the medium Nord Stream 2 helps the Russian Ukraine term, USA will completely leave Ukraine un- resources thanks to bypass policies, which means EU and mostly der the control of Russia. LNG are increasing. USA politically loose Ukraine against Russia. Therefore, EU does As a result, while Nord Stream 2, helps Project seems positive only for Germany. EU to continue meeting its gas demand in not need to increase Hence, with Nord Stream 2 Germany will the cheapest way in the long term, USA is trade volumes of be the largest gas hub in EU. against to this project by concentrating on the side effects of political issues. Russian gas, which However, in reality: means a lower de- On the contrary, the most influencing EU pendency on Rus- partners Germany and France seem support- Although EU’s total gas demand may de- ers of the project. sia.” crease, hence, the domestic supplies are decreasing, gas import volumes will continue to be as high as todays. UKRAINE BYPASS

Other possible supplies, as an alternative to As described above, as a result of Russian by- Russian gas, will not be able to be as cheap as pass politics, Ukraine will lose annually an the Russian supplies, while considering the average $2 billion of transit fees. In addition “Ukraine always net back prices of each gases. to loss of those commercial gainings, hence, not having domestic resources, Ukraine will uses its geostrategic have to continue to import Russian gas to Although EU is expected to have the high- meet its own demands. position in the nego- end on the table while Ukraine is a chess tiations with Russia. pawn on Russian politics, EU is not the gaining side while considering the gas cuts While currently being a transit country, By this way, Russia due to Ukraine’s domestic needs. This means Ukraine always uses its geostrategic position in the negotiations with Russia. By this way, usually has to let the main ruler and the winner of such game would be USA. Russia usually has to let Ukraine get cheap Ukraine get cheap gas, not pay the bills for the purchase and follow after some political steps (with the So, while looking at Nord Stream 2 from the gas, not pay the bills support of USA and EU) against to Russian sight of USA; for the purchase and interests. follow after some As a potential LNG supplier in the medium After Ukraine to lose its geostrategic position political steps (with term, USA targets the European coasts for of being the main gas transit country for Rus- its export. And Russian gas is/will be the un- sian sales, in addition to the economical and the support of USA beatable opponent in price and also volume gas demand issues, Russian opposer domes- and EU) against to competition. This means with such pipeline tic groups (which are supported by USA and projects, Russia will continue to hold the Eu- some partners of EU) will lose their power. Russian interests.” ropean markets in its hands and will not let And this means USA loses its one of the east- the USA supplies have a competition chance. ern castles against its ex-enemy Russia.

ENERGY POLICY TURKEY Page 78 ENERGY ISSUES IN THE USA & EU COMPETITION

TURKISH STREAM held between the EU Energy Commission, Bulgarian and Russian authorities before the December 2016. “As a result of Turk- Turkish Stream will be the second opening ish Stream, in adgate of Russian gas sales to EU. That’s why the political situations are similar with the As can be understood from the main topic of dition to the Nord Nord Stream 2. the meeting, the aim of EU Energy Commis- sion to organize such a meeting is to change Stream 2, Russia will future Russian gas supply politics and to hin- successfully com- With Turkish Stream, Russia again is going der Turkish Stream Pipeline Project. to transport its gas up to Western Turkish plete its Ukraine by- border and then sell its gas to the Southern and Eastern Europe via other planned infra- Russian position and possible supporters pass strategies and from the side of EU are not clear at this structures. By extracting the 16 bcma Turk- reach all the Euro- ish volume, the long term capacity of the Eu- point. However, this new concept, without ropean portion via Turkish Stream is planned facing with legislative problems, plans to pean markets via the make Bulgaria a new gas transit country for to be 48 bcma. newly constructed the Eastern Europe. As a result of Turkish Stream, in addition pipelines.” to the Nord Stream 2, Russia will success- From the sight of politics and economics, fully complete its Ukraine bypass strategies such an option may be beneficial by con- and reach all the European markets via the sidering less cost to reach the European bor- newly constructed pipelines. This also means ders and EU’s general position on behalf of that, in addition to the Northern and West- Turkey. However, from the market potential ern markets, Russia will not let USA supplies sight, this option means Russia does not tar- compete with its sales in the Eastern and get its second largest customer Turkey but Southern markets of EU in the long term. target mostly future potential customer Italy (by considering gas to be easily transported via Turkish Stream to extended TAP to Italy From the sight of EU, hence, not being market). against the third energy package and being the supplier of the cheapest possible resourc- “As can be under- If the EU puts such step in the frontline es without the Ukraine gas cut risks, Turkish stood from the main Stream will be an important step for EU gas that will successfully emerge Ukraine bypass, demand security. it means that EU is currently not strictly topic of the meeting, against on Russian gas export strategies and the aim of EU En- holds in a negotiable stand. This also im- By the way, hence, Turkish Stream being plies the political separation of USA and EU ergy Commission against to USA interests and being in favor against Russia. of both Russia and Turkey, by some Turkish to organize such a experts claiming that Russian plane being hit meeting is to change down by Turkish jets (which resulted in the In addition, Russia is sure about EU needing suspension of Turkish Stream) and 15 July its supplies in the medium and long term. future Russian gas terrorist coup attempt (which was staged supply politics and while the Russian relations were normaliz- By leaving aside the possibility of such an oping) were planned by USA. tion to be selected and realized, in the con- to hinder Turkish cept of such an option there are 2 main items Stream Pipeline which are related with the USA’s interests. BULGARIA GAS TRANSIT OP- Project.” TION Which are:

A meeting about Varna, Bulgaria to be a gas transit hub for Russian gas, is planned to be • The USA is against both Turkish Stream

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and the Bulgarian alternative. will change the main stones in the game of new world order. New Turkey has to deeply • However, in the worst case: The USA se- analyze and consider those issues for being lects this option and wants Russian gas one of the future leaders of the new world. to be supplied into the Balkan markets and not to reach Italian markets. REFERENCES • USA’s future supplies will commercially find a chance to have an impor- “There is clearly a tant share in Italian markets. 1 http://rosalux.gr/sites/default/files/publications/ttip_web.pdf. competition between • Turkey’s geostrategic importance will 2 USA and EU, and it not be raised. https://ustr.gov/trade-agreements/free-trade- agreements/transatlantic-trade-and-invest- has been escalated ment-partnership/readouts/round1. Both Russian and European sides have to day by day as it can consider these items before developing deci- 3 http://www.theglobeandmail.com/news/world/ be understood in the sions on their ideas. spy-scandal-tarnishing-german-publics-trust-in- angela-merkel/article24311273/. political and econom- CONCLUSION 4 Then is revealed that the BND spied on France ic issues.” and the European Commission on behalf of the US’ National Security Agency (NSA). But ac- There is clearly a competition between USA cording to the new reports, BND also spied on and EU, and it has been escalated day by day allies on its own initiative. as it can be understood in the political and 5 economic issues. http://www.spiegel.de/international/germany/ german-bnd-intelligence-spied-on-friends-and- vatican-a-1061588.html. From the sight of economics, main indica- tors are public and easy to be analyzed. How- 6 https://www.epa.gov/newsreleases/volkswa- ever, from the sight of energy, the situation is gen-spend-147-billion-settle-allegations-cheat- somehow different. Hence, USA wants to be ing-emissions-tests-and-deceiving. an important LNG supplier and EU is the 7 https://www.theguardian.com/business/2016/ biggest market in the world. At that point, aug/30/apple-pay-back-taxes-eu-ruling-ireland- “As a result, there is Russia is the most effective rival for USA’s state-aid. gas suppliers (by considering the price, vol- a continuing com- ume and political issues). In addition, again 8 https://www.ft.com/content/6346575e-7d90- Russia can be the supplier of cheapest gas to petition over the 11e6-8e50-8ec15fb462f4. EU. USA’s future LNG can be helpful only hues on EU & USA for decreasing the hub prices and naturally 9 http://money.cnn.com/2016/09/16/investing/ making Russia to also decrease its prices. deutsche-bank-us-14-billion-mortgages/. matters. And the possible deepening In addition to USA’s future LNG supply of this competition strategies, the position of Ukraine, which seems to be the western castle of USA pol- will change the main itics against the sleeping giant enemy Rus- stones in the game of sia, is another key point related to the energy sight of the competition. new world order.”

As a result, there is a continuing competition over the hues on EU & USA matters. And the possible deepening of this competition

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81 Page SECOND ISSUE A BRIEF LOOK ON THE ENVIRONMENTAL EF- FECTS OF SHALE GAS EXTRACTION by Fatih Temiz

ABSTRACT amount of shale gas reserves is difficult to -as sess and it is still discussed if shale gas can secure energy consumption of countries in Shale gas can still be considered as one of the years to come. Like the oil boom in the the hot topics today. Some people believe in past, countries such as the USA have start- the pros of the subject, whereas some others ed taking advantage of shale gas by taking stand on the cons’ side. Each party is firmly advantage of this source of energy with the “Shale gas can still supporting their own side of the story. It is addition of clusters of work opportunities around. Whereas, dread of the possibility of be considered as possible to express that there is more to the researches that are needed to determine the environmental problems sets other countries one of the hot topics math about shale gas. The question of “Are back from fast exploitation of their shale gas we experiencing a shale gas revolution or is it reserves. Hydraulic fracturing is the technol- today. Some people another earth polluting source of energy?” is ogy associated with shale gas extraction; there believe in the pros of yet to be answered. are some findings that this technology brings environmental problems to areas where frac- the subject, whereas turing is done without regulations. Next, this some others stand on INTRODUCTION process’s effects are felt in water. Water usage in water-scarce areas of shale gas reserves puts the cons’ side.” further distress in the hydrology of the area. Geology, current technology, accessibility, Additionally, when there is not enough wa- transportation alternatives, demands, and ter to run the shale gas production, then this effective prices all affect the hydrocarbon water is needed to be carried from a distance market. Natural gas extraction takes its share (Hoffman et al., 2014). from recent world events as well. It was 1821 when the first natural gas well was dug in The fluid used in hydraulic fracturing is the state of New York in the US (New York mostly water and the proppant (sand or sim- Department of Environmental Conserva- ilar particulate material suspended in water) tion, 2007). It was not until 1930s that hori- used – up to 99.5% – and between 5% and zontal drilling took place and the year was 2% is made up of the chemicals used (usually 1947 when the hydraulic fracturing started proprietary). The difference in the concen- in the United States (Stevens, 2012). Shale tration is due to the differences in the local gas is among the unconventional sources of “An environmental geology. Correspondingly, acid is an addition energy (like coal-bed methane and tar sands) to “unclog” the gas reservoir and biocides are impact and a sustain- and extraction technologies had their devel- used to stop microorganisms from forming opment in progress in 1970s (Clark, 2012). ability assessment in the fractures. Then, more chemicals are are required for any added to stop corrosion and scale buildup; Next, it is possible to find in-depth reports viscosity enhancers and chemicals reducing place developing about hydraulic fracturing and shale gas ex- friction are also in the blend (Hoffman et al., shale gas industries.” traction. Starting with the report of Stock- 2014). holm International Water Institute (SIWI), it summarizes the current situation about An environmental impact and a sustaina- this hot issue. The report starts by saying it bility assessment are required for any place is not yet known if the world is experienc- developing shale gas industries. According ing a so-called shale gas revolution. The total

ENERGY POLICY TURKEY Page 82 to European Union’s (EU) environmental the Southeast Anatolia Basin – as shown in and public health assessment for the indus- Figure 1 below. These two basins are studied try, vigorous regulations are needed since the and undergone for exploring oil and natural risks are greater than those of conventional gas by the state-owned Turkish Petroleum natural gas. EU endorses member states to Corporation (TP) and other privately owned prepare sustainability assessments before per- local and international companies. U.S. En- mitting shale gas production. Public health ergy Information Administration (EIA) pro- “Shale gas is sup- assessment, short and long term environ- vides the following map of shale gas reser- posedly a better mental impact analysis, effects to commu- voirs of Turkey. nity and economy need to be considered alternative than coal. (Dernbach and May, 2015). TP is leading the hydrocarbon exploration However, the chemi- activities in Turkey. The Salt Lake Basin and cals used during the There was mixed feelings from the environ- the Sivas Basin still need to be further ex- mentalist’s point of view. Shale gas is suppos- plored. There have been limited studies on extraction process edly a better alternative than coal. Howev- pick up some frowns. More to add to the public worries, the composition of these chemicals are usually protected due to commercial reasons.”

Figure 1. Shale Gas Assessment of Turkey. (Source: EIA, 2015). er, the chemicals used during the extraction these two basins. As it can be seen in the map, process pick up some frowns. More to add to some large metropolitan areas in Turkey are the public worries, the composition of these located in the locality of shale gas basins – chemicals are usually protected due to com- Istanbul, Ankara, Edirne, Konya, Sivas, Ga- mercial reasons. ziantep, Hatay, and Diyarbakir. Therefore, the obscurity of the safety or danger of shale There are two major prospective basins of gas is a matter of concern. shale gas in Turkey – the Thrace Basin and

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In the USA, currently, shale gas production gas. Greenhouse gases and the natural gas is rapidly increasing. It has come to a quarter itself (the composition varies) go into the at- “In the USA, current- of the nation’s total natural gas production. mosphere (Alvarez and Paranhos, 2012) and Yet, concerns are growing. In 2010, a mov- methane (CH4) makes up majority of the ly, shale gas produc- ie showed tap water being set on fire and in mixture of natural gas; also, methane is the tion is rapidly in- 2012, a gossip claiming hydraulic fracturing main air pollutant resulting from the natural could intoxicate drinking water of New York gas industry. creasing. It has come was caught up. However, due to unease from to a quarter of the public, countries such as France and Bulgar- Succeeding, volatile organic compounds ia forbid hydraulic fracturing. Nevertheless, nation’s total natural (VOC) and nitrogen oxides (NOx) cause Australia gave the green light to hydraulic ozone pollution near the surface of earth. In gas production. Yet, fracturing (Clark, 2012). areas extensively extracting natural gas the concerns are grow- concentrations of VOC and NOx may become significant – the biggest producers of Breakthroughs in horizontal drilling tech- ing.” ozone precursors in Colorado (according to niques combined with developments in Colorado Department of Public Health and fracking technology gradually increased the Environment) and in Texas (Alvarez and Pa- economic feasibility of shale gas and Ameri- ranhos, 2012). Additionally, in the Haynes- can production started soaring around 2005. ville Shale formation (stretching between This – combined with rising energy pric- Arkansas, Louisiana, and Texas) air pollution es and increasingly vast estimates of global models propose rising of ozone pollution due reserves – led to growing an interest in the to ozone conveyance near natural gas pro- unconventional energy source around the duction fields (Kemball-Cook et al., 2010). world. Harmful emissions also include VOCs such as BTEX (Benzene, Toluene, Ethylbenzene, And about the public concerns; popularized and Xylene) that escape from the equipment used. Benzene is a compound that is known “Harmful emissions method of unconventional gas production surely worries large numbers of the public. to cause cancer in humans. Natural gas pro- also include VOCs Possibility of spillages and leakages, increased duction areas experience higher concentrations of benzene. This was observed in Texas such as BTEX wastewater production, water distress and water withdrawals, air pollution, plummet- (Whitelet and Doty, 2009) and in Colorado (Benzene, Toluene, ed water quality, impact to the surrounding (Coons and Walker, 2008). Ethylbenzene, and ecosystems, increased traffic (especially heavy duty machinery and trucks), chemicals used, Particle pollution also rises in the air because Xylene) that escape aesthetic worries, erosion, and earthquakes of these operations. With the handling of from the equipment are some of the probable problems coming proppants, silica dust becomes an issue. Sili- to one’s mind while thinking about hydraulic ca dust causes silicosis when it hits the lungs used. Benzene is fracturing. This paper will try to bring pros of people (Hoffman et al., 2014). and cons to the reader as it is mostly a litera- a compound that ture and press review what opinions and facts Some of the hazardous air pollutants found is known to cause are available regarding the subject. in the neighborhood of natural gas and oil cancer in humans. wells are H2S (hydrogen sulfide) and hydrocarbon compounds. Natural gas produc- AIR POLLUTION AND THE tion areas experience CLIMATE CHANGE Compressor engines produce formaldehyde higher concentrations in their exhaust gases. Likewise, formal- Air pollution is caused by leakages, main- dehyde is a hazardous air pollutant and it of benzene.” tenance exhausting (as in pneumatic valves, was reported that a 37%-solution of 30 mL storage tanks, during dehydration etc.), rou- caused death in adult humans (Centers for tine processes and transferring the natural Disease Control and Prevention, 2016).

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Concerns were born as the unconventional hint there is “something” there but nobody natural gas production increased. The is- can put a finger on it. There is still ambiguity sue is on the table for only two decades, so, in both public and scientific worlds. still, further research is needed. Air emission problems were analyzed and it was seen that “There is a growing Furthermore, there is still this debate – Is people residing within 800 m (0.5 miles) shale gas good or bad for global climate public opinion against from unconventional natural gas wells carry change? One side of the story sticks to their a bigger health risk than people living further fracturing and shale claims of shale gas emits less CO2 than burn- than 800 m (0.5 miles) from these developing oil or coal. On the other hand, the envi- gas production. ments. The same study reported 67% more ronmentalists stand by their statement that excess cancer risk for people living within the People living around this might not be so. The latter claim is based 800 m (0.5 miles) radius of natural gas wells on studies suggesting vast methane gas leak- natural gas devel- than the people residing outside the circle – ages into the atmosphere. Additionally, the increasing from 10 per one million residents opment sites claim environmentalist side says this production to 6 per one million residents (Mc Kenzie et does not guarantee to cut coal consumption. al., 2012). to be suffering from But then again, the pro-shale gas flank ad- being nauseated, vocates for the idea that shale gas will lower On the contrary, Sierra Research Inc.’s re- greenhouse gas emissions and will slow down feeling lightheaded, port on health risk assessment suggests that effects of global climate change till there is a excess risk cancer risk and non-cancer health full scale solution (Clark, 2012). and even claim their hazard indices did not show a significant dif- noses bleeding.” ference according to their calculations when Like every industrial activity, any drilling compared with Environmental Protection activity pollutes the air. Exhaust gases from Agency’s (EPA) data for given areas (Walther, the heavy machinery and trucks with the January 2011). addition of lifted dust are risks to human health. It is reported that ozone levels near There is a growing public opinion against some shale gas wells are competing with ma- fracturing and shale gas production. People jor cities with pollution problems. Methane living around natural gas development sites pollution rises with back flows and well test- claim to be suffering from being nauseated, ing; also by flaring the excess amount of gas feeling lightheaded, and even claim their (Hoffman et al., 2014). noses bleeding (Shogren, 2011). The report- er also adds that people cannot locate the ex- act source of the pollution although they are Advocates of shale gas are in favor since it feeling the downsides. produces half the CO2 of what coal produces and 2/3 of CO2 what oil burning does. “Advocates of shale In the total balance, when considering the Moreover, another news story includes peo- methane leakages during production of shale gas are in favor since ple having muscle spasms because of the gas, using shale gas as an energy source still it produces half the natural gas industry. The complaining par- has a large impact on the atmosphere. While ties also show their dead farm animals and we are cutting down our CO2 emissions, this CO2 of what coal claiming it is the natural gas industry’s fault process emits a more powerful greenhouse produces and 2/3 of (Olsen, 2011). Olsen interviews the officials gas i.e. methane. Although, a life cycle analy- and they say the health issues are taken seri- sis is yet needed to assess the combined effect CO2 what oil burning ously. Dr. Adgate from Colorado School of of shale gas to the atmosphere, a report writ- does.” Public Health co-authored a report on the air ten in 2013 states a promising improvement quality of the region and states that the air in 190 hydraulically fractured natural gas quality impacts are difficult to verify (Olsen, wells in USA have managed to lower their 2011). methane emissions by 99% (Hoffman et al., 2014). As it is mentioned above, both story lines

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In the report titled “Can Shale Gas Help Ac- and nutrient weathering in the water bodies. celerate the Transition to Sustainability?” it is A horizontal hydraulic fracturing well con- inscribed that in ten years between 2005 and sumes great amounts of water – 15 to 30 2015, the greenhouse gas emissions dropped thousand tons of water – which is mostly “Depletion of fresh by 10%. Replacing highly polluting energy drawn from water bodies in the surrounding area within a short time frame of about water and contami- sources with natural gas contributed to this improvement. The same report also adds a week. This drastic interference changes nation of these water that by switching coal with natural gas the the system especially during low water flow seasons. Next, this withdrawn water mostly resources cannot be USA is showing promise of reaching its goal (lowering its greenhouse gas emissions by stays inside the fractured well, yet, what is sustained forever. around 17%) of the 2009 Copenhagen Ac- returned from the well must be treated off its added chemicals before being discharged A drastic finding by cord under the United Nations Framework Convention on Climate Change. This was into the water system. Moreover, nitrogen Prof. Ingraffea of possible by building new combined-cycle emissions tend to increase as the shale gas natural gas plants that emit only 1/3 of CO2 wells are developed which may cause depo- Cornell University gas produced by coal power plants. Up till sition in the local area. Following, up to 1/5 states that all natural now, methane leakage is a big step back in of the fluids used during shale gas well devel- the positive contribution to lowering green- opment tend to reappear on the face of the gas wells leak sooner house emissions (Dernbach and May, 2015). earth. Next, this fluid contains up to 1/4 of a or later, some of this million total dissolved solids, toxic materials, and cancer causing chemicals (Gottschalk happens immediately WATER POLLUTION AND et al., 2012). Nonetheless, when fracturing and some in a few finds an already existing fault, then chemi- HYDROLOGICAL PROB- cals used in the process would travel along years.” LEMS these faults and contaminate freshwater aquifers. While boring for shale gas, multi-layered steel casings are used to protect underground Garfield County in Colorado is home to shale aquifers of water. This minimizes – if not gas production. Studies were undertaken and eliminates – physical and chemical contact possible contact with hazardous emissions is between shale gas and the chemicals used seen in these various studies. Still, this pa- with the underground water bodies. Adding per underlines that there are no planned ob- “A horizontal hydrau- to the problem, there are tens of thousands servations of surface and sub-surface waters of new shale gas wells are projected on the re- and the authors request a water monitoring lic fracturing well con- serves. These new wells will be closely located scheme of whose results must be made avail- sumes great amounts and will withdraw massive amounts of water able to public (Witter et al., 2008). On the from the system. Depletion of fresh water other hand, it is stated that concentrations of water – 15 to 30 and contamination of these water resources lower than regulatory standards in Garfield thousand tons of wa- cannot be sustained forever. A drastic finding County in Colorado still cause health prob- by Prof. Ingraffea of Cornell University states lems and if health risks are to be aimed to be ter – which is mostly that all natural gas wells leak sooner or later, lowered this issue should be taken seriously drawn from water some of this happens immediately and some (Glass et al., 2005). in a few years (The Water Footprint of Shale bodies in the sur- Gas Development, September 10, 2012). Without misgiving, moving immense rounding area within amounts of water from the surrounding sys- Water quantity and water quality are likely tem will cause problems. This is because of a short time frame of to be altered in the surrounding area of shale the fact that this water is mostly not recycled about a week.” gas extraction. Roads and well infrastructure back into the water system. Especially, in wa- cause disturbance to the surface structure. ter-scarce regions the withdrawal of millions These disturbances alter hydrology and sedi- of gallons of water will bring distress into the ments and these may change sedimentations hydrology of the area. Additionally, some

ENERGY POLICY TURKEY Page 86 A BRIEF LOOK ON THE ENVIRONMENTAL EFFECTS OF SHALE GAS EXTRACTION

Figure 2. Water Use in Hydraulic Fracturing Operations. (Source: US EPA, 2011). companies in the US have managed to treat water contamination - transportation spills, the water they contaminated and reuse it in leaks from well casings, leaks through frac- order to lower their hydrological impact (En- tured rock, drilling site surface discharge, ergy and Climate Change Committee - Fifth and wastewater disposal. These trails of con- Report, Shale Gas, 2011). tamination were studied statistically. The “The biggest cogni- biggest cognitive ambiguity was for waste water disposal and the infrequent but severe tive ambiguity was for In the figure below, a diagram of possible wa- effect-causing retention pit failures (Rozell ter pollution issues are presented. It is a brief waste water disposal and Reaven, 2011). summary of ways of water contamination. and the infrequent The same study above suggests probability of but severe ef- Once again, different reports come about the contamination by fracture migration is mi- safety of hydraulic fracturing for shale gas. nor to the risk of contamination by waste- fect-causing retention For instance, drinking water contamination water disposal problems. Therefore, the au- pit failures.” with the chemicals used during processes or thors call for further research in the area of with methane gas is the strongest debate. water disposal pointing out that each well EPA admitted there is an existing connection discharges around 200 tons of water that is in the example of Wyoming community. chemically contaminated (Rozell and Reav- Though, more recent articles from Universi- en, 2011). ty of Texas determined that these issues can be lessened by improved drilling operations (Clark, 2012). Once again, on the opposition side, The Ge- ological Society states there is no proof of aquifers being polluted by hydraulic fracturing In the study “Water Pollution Risk Associ- operations since shale gas formations are lo- ated with Natural Gas Extraction from the cated hundreds of meters below aquifers (En- Marcellus Shale”, the authors list trails of ergy and Climate Change Committee - Fifth

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“the journalist reports EPA’s findings of synthetic chemicals and oil (such as methane, ethane, propane, diesel oil, and phenol) remainders in the drinking water supply Figure 3. Water Withdrawal and Consumption for Different Fuel Productions. (Source: The in a shale gas zone.” United Nations World Water Development Report, 2014).

Report, Shale Gas, 2011). However, even if In addition, in Figure 3, the impact on water fracturing fluids do not reach an aquifer, still by different energy sources is given. The min- their travel outside the aimed area is called imum amount of water needed for shale gas “fluid leak off” and is a pollution source. extraction is shown to be minimal according

ENERGY POLICY TURKEY Page 88 A BRIEF LOOK ON THE ENVIRONMENTAL EFFECTS OF SHALE GAS EXTRACTION to the graph. the recovered water coming from the un- “Once more, the derground carries chemicals from the shale companies can Figure 3. Water Withdrawal and Consump- formation – sodium, chloride, bromide, ar- tion for Different Fuel Productions. (Source: senic, barium, and radioactive materials that keep their fracturing The United Nations World Water Develop- are naturally found in the shale formations. fluid formulas secret. ment Report, 2014). One of the radioactive materials identified was Radium-226 with a half-life of 1,600 Then, there is the years which can cause lymph, blood, and In the Norwegian press (Stavanger Aften- potential risk of meth- bone cancer (The Water Footprint of Shale blad, 28.09.2012) the journalist reports Gas Development, September 10, 2012). ane contamination of EPA’s findings of synthetic chemicals and oil (such as methane, ethane, propane, diesel oil, drinking water.” and phenol) remainders in the drinking water supply in a shale gas zone. SOIL POLLUTION, EARTH- QUAKES AND SURFACE Coming back to SIWI’s report, it continues RUNOFF by stating that regulations and regulators have been lenient. Noting that, the shale gas industry is exempt from the Clean Water Following, hydraulic fracturing is under op- Act, the Safe Drinking Water Act and five eration in countries like Australia, Poland, more regulations in the USA. Once more, the United Kingdom, and China. Neverthe- the companies can keep their fracturing fluid less, the British felt many tiny earthquakes formulas secret. Then, there is the potential in 2011 which put the hydraulic fracturing risk of methane contamination of drinking operations on hold briefly – in April 2012 water. Methane catches more heat than car- the UK government advisers admitted these bon dioxide but it has a shorter half-life in tremors (tiny earthquakes) were associated the atmosphere. This leakage can occur if the with these operations, conversely, their report advised these processes could start again well and the pipes are not properly built or “Following, hydraulic maintained. Also, the amount of produced (Clark, 2012). waste water that returns alternates between fracturing is under 15% and 300% according to the geological Worries about earthquakes brought new reg- operation in countries structure; this recovered water is transferred ulations in the USA declaring requirements into tanks or pits to be later pumped into like Australia, Poland, for horizontal well drillings up to 5 km away deep wells. The flowback water spillages af- from confirmed faults or other earthquake the United Kingdom, fect well workers and the population in the zones to first install seismic detectors before surrounding area (Hoffman et al., 2014). and China. Never- getting their permits. If there are earthquakes recorded greater than the Richter scale of 1.0 theless, the British It is possible to say that there is a wide spec- in the bed of the shale gas then the hydraulic felt many tiny earth- trum of chemicals used in fracturing fluids. fracturing will be halted for the foreseeable The number can go as high as 750. Due to future. Due to an increase in the number of quakes in 2011 which secrecy of the composition of these fluids it recorded earthquakes in Middle USA, the put the hydraulic frac- can be a challenge to identify all of them. In states of Oklahoma, Ohio, Texas, and Kan- Commonwealth of Pennsylvania and State of sas are looking forward to having more strict turing operations on legislations and standards for hydraulic frac- West Virginia in the USA more than 300 of hold briefly.” these chemicals that are used in the Marcel- turing operations (Hoffman et al., 2014). lus Shale have been acknowledged. Carcino- genic properties of some of the chemicals are According to The Wall Street Journal, more known, besides, these chemicals also affect than 15 million people in the USA live with- the endocrine system, the nervous system, in a radius of 1.6 km (1 mile) shale gas well the respiratory system and harm the organs. drilled since the year 2000. This is more than Still, even if non-toxic chemicals were used, the population of New York City. Anything

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going wrong in this area almost immediate- out that there are always positive and nega- ly affects this population due to closeness of tive views on every aspect of hydraulic frac- “Storm water and houses, schools, farms and other settlements turing and shale gas extraction. Starting with (Dernbach and May, 2015). well boring and well casing… A properly surface runoff occur cased well is intact, therefore, if its integri- ty is sustained, it should possess little risk naturally. Howev- Reports also suggest deforestation of shale of contamination of water sources from the er, interruptions of gas sites is also a problem. This brings wish- casing itself. Still, as mentioned before, all es for suspension of hydraulic fracturing by wells are prone to leaking and harming their fracturing practices the environmental activists (Clark, 2012). surroundings. upsurges volume and When considering ten thousands of wells being drilled close to each other, then, this SIWI’s detailed report makes a good sum- chemical composition deforestation problem grows within a con- mary. The authors express that there is a fined area and propagates outwards. Besides, of runoff. There is requirement for robust policies and an in- approximately 30,000 m2 of land is cleared depth check list (complying with the most also contamination for one shale gas well pad. There is also extra recent and scientific findings) of benefits and land usage for roads, storage units, retention by contact with the practices of the hydraulic fracturing process. pits, vehicle parking, and equipment usage Furthermore, there is no doubt that there is equipment, and stor- and so on (Cooley and Donnelly, 2012). a hole on potential effects of hydraulic frac- age units” turing and this hole needs to be filled as soon The Pacific Institute’s report on fracturing as possible to make sound decisions possible. underlines some issues about spillages, leak- The effects include water problems, air qual- ages, and surface water runoff. According to ity damage, global climate change, increased the report, spillages can happen at any phase earthquake occurrence, and negative effects of the process. Transportation of chemicals on the human population and the ecosys- and on-site preparation of fluids are prone tem. Encouraging newer hydraulic frac- to spillages. Storage tanks and retention pits turing technologies is necessary in order to may also leak if not properly handled. Also improve production and to lessen its reverse to mention, human error and deliberate effects. Companies should be willing to share dumping of contaminated fluids may cause the information of their water use and other disasters in the surrounding. Industrial waste natural impacts to be observed and measured discharges, wastewater impoundment con- (Hoffman et al., 2014). struction regulation violations, and defective pollution prevention applications are among violations of shale gas producers (Cooley and Natural gas capturing technology should be Donnelly, 2012). applied to necessary production sites in or- “Then again, like der to reduce greenhouse gas emission and environmental impact. EPA’s Natural Gas every system and Storm water and surface runoff occur nat- STAR program lists recommended technol- urally. However, interruptions of fracturing technology there are ogies and practices for methane emission practices upsurges volume and chemical lessening. These references list suggested imperfections with composition of runoff. There is also contam- compressors, engines, dehydrators, direct- ination by contact with the equipment, and ed inspection and maintenance, pipelines, fracturing.” storage units (Cooley and Donnelly, 2012). pneumatics, controls, tanks, valves, and wells Storm water runoff ends up in water bodies for low-cost and effective methods and tech- in the surrounding, and when the runoff en- nologies in combatting reverse effects of nat- ters streams they can travel further. ural gas production (epa.gov, 2015).

CONCLUSION Then again, like every system and technology there are imperfections with fracturing. Dr. Jonathan Craig of the Geological Soci- Concluding the article, it is vital pointing

ENERGY POLICY TURKEY Page 90 A BRIEF LOOK ON THE ENVIRONMENTAL EFFECTS OF SHALE GAS EXTRACTION ety states that less than 1/3 of the fractures delay an all-inclusive investigation of envi- “The European produced contribute to gas production; ronmental and health related risks. Thus, risk environmental leg- therefore, he is underlining the necessity of minimization is further postponed. As a final developing improved methods that would point, it is important to note that there are islations are stricter be more efficient, thus, using less water and misperceptions in the definitions related to than their overseas less chemicals. Once more, cooperation of hydraulic fracturing and shale gas extraction. companies extracting shale gas would bring For instance, it is argued by the American Pe- counterparts. The more applicable solutions to waste handling troleum Institute’s (API) constricted descrip- European population and co-owned wastewater disposal units tion of hydraulic fracturing that there is no would cut the distance travelled by the waste connection between shale gas extraction and density is greater itself and energy costs (Energy and Climate groundwater pollution. API and other indus- Change Committee - Fifth Report, Shale tries deny witnessed proofs of groundwater than in remote areas Gas, 2011). contamination – as in Commonwealth of of Texas or Colorado, Pennsylvania and State of Wyoming (Cooley and Donnelly, 2012). for example. Hence, Moreover, the American and the European in Europe fewer wells methods of approach to fracturing are different due to some nuances such as the density Overall, further studies in this specific area are to be developed, are necessary to clear out questions over the of population, strictness of environmental improved technolo- legislations, available land area etc. The Eu- potential risks caused by hydraulic fracturing ropean environmental legislations are stricter and the shale gas extraction. Only after shed- gies such as multi- ding light on the potential risks, we can low- than their overseas counterparts. The Euro- well pad technology pean population density is greater than in er the impact of shale gas risks and proceed remote areas of Texas or Colorado, for ex- to mitigate environmental stress it has been are to be used.” ample. Hence, in Europe fewer wells are to causing. be developed, improved technologies such as multiwell pad technology are to be used (En- ergy and Climate Change Committee - Fifth Report, Shale Gas, 2011). It would also be wise to use experience of older and current ABBREVIATIONS practices. There is no need to reinvent the wheel at this point; however, this approach API: The American Petroleum Institute may not be approved by companies that see their practices as their intellectual property. BTEX: Benzene, Toluene, Ethylbenzene, and Xylene “Business owners Most importantly, there is deficiency of EIA: U.S. Energy Information Administra- strongly prefer keep- sound data which is a key obstacle in deter- tion ing their methods and mining or assessing shale gas and hydraulic fracturing related risks. Business owners EPA: Environmental Protection Agency of operations secret in United States strongly prefer keeping their methods and order to holding on to operations secret in order to holding on to EU: European Union their own advantages. Furthermore, the oth- their own advantag- er limitation to assessment of environmental NOx: Nitrogen oxides es.” risks is that there are inadequate quantity of peer reviewed articles or academic work. It SIWI: Stockholm International Water Insti- is also observed that writings about environ- tute mental risks about the issue are one sided, written by industry-sided or environmen- TP: Turkish Petroleum Corporation talist-sided authors. Also, the papers on this issue are not peer reviewed. Thus, it can be VOC: Volatile organic compounds said that opinions are told by authors who

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11 McKenzie, L. M., Witter, R. Z., Newman, L. REFERENCES S., Adgate, J. L., Human health risk assessment of air emissions from development of unconventional natural gas resources, Science of The Total 1 Alvarez, R. A., Paranhos, E., Air Pollution Issues Environment, Volume 424, 1 May 2012, Pages Associated with Natural Gas and Oil Operations, 79–87. Air & Waste Management Association EM 22- 25, June 2012. 12 Olsen, E., Natural Gas and Polluted Air, New York Times, 26.02.2011, www.nytimes.com/vid- 2 Clark, D., Q&A: Shale gas and fracking, The eo/us/100000000650773/natgas.html, retrieved Guardian, 17 April 2012, www.theguardian. on 01.05.2016. com/environment/2012/apr/17/shale-gas-fracking-uk, retrieved on 26.04.2016. 13 Rozell, D. J., Reaven, S. J., Water Pollution Risk Associated with Natural Gas Extraction 3 Cooley, H., Donnelly, K., Hydraulic Fracturing from the Marcellus Shale, Risk Analysis, DOI: and Water Resources: Separating the Frack from 10.1111/j.1539-6924.2011.01757.x. the Fiction, Pacific Institute, June 2012. 14 Shogren, E., Air Quality Concerns Threat- 4 Coons, T., Walker, R., Community Health Risk en Natural Gas’s Image, 21.06.2011, www.npr. Analysis of Oil and Gas Industry Impacts in Gar- org/2011/06/21/137197991/air-quality-con- field County, 2008. cerns-threaten-natural-gas-image, retrieved on 01.05.2016. 5 Dernbach, J. C., May, J. R., Can Shale Gas Help Accelerate the Transition to Sustainability?, 15 Stevens, P., The ‘Shale Gas Revolution’: Devel- Environment Science and Policy for Sustainable opments and Changes, Chatham House Briefing Development, January-February 2015, www. Paper, August 2012. environmentmagazine.org/Archives/Back%20Is- sues/2015/January-February%202015/shale-gas- 16 Walther, E., Screening Health Risk Assessment full.html, retrieved on 06.04.2016. Sublette County, Wyoming, Sierra Research, Inc., January 2011. 6 Glass, D. C., C. N. Gray, et al., Health Watch exposure estimates: do they underestimate ben- 17 Whitelet, T., Doty, T., Barnett Shale Formation zene exposure?, Chemico-Biological Interactions Area Monitoring Projects; Texas Commission on 153-154: 23-32, 2005. Environmental Quality, Mobile Monitoring Op- erations Division, Austin, TX, 2009. 7 Gottschalk, K. et al., Exploring the Environ- mental Effects of Shale Gas Development in the 18 Witter, R., Stinson, K., Sackett, H., Putter, S., Chesapeake Bay Watershed, STAC Publication Kinney, G., Teitelbaum, D., Newman, L., Poten- 13-01, Scientific and Technical Advisory Com- tial Exposure-Related Human Health Effects of mittee Workshop Report, April 11-12, 2012. Oil and Gas Development: A White Paper, Sep- tember 15, 2008. 8 Hoffman, A., Olsson, G., Lindström, A. 2014. Shale Gas and Hydraulic Fracturing: Framing the 19 Air Quality Control Commission; Regulation Water Issue. Report Nr. 34. SIWI, Stockholm. Number 7, Section XIX.K, Colorado Department of Public Health and Environment, www.cdphe. 9 Kemball-Cook, S.; Bar-Ilan, A.; Grant, J.; Park- state.co.us/regulations/airregs/5CCR1001-9.pdf, er, L.; Jung, J.; Santamaria, W.; Mathews, J.; Yar- retrieved on 04.04.2016. wood, G. Ozone Impacts of Natural Gas Devel- opment in the Haynesville Shale; Environ. Sci. 20 Draft to Study the Potential Impacts of Hy- Technol. 2010, 44, 9357. draulic Fracturing on Drinking Water, US Envi- ronmental Protection Agency, February 2011, p 10 Kongsnes, E., Shale gas drinking water pollution 14. proven, Stavanger Aftenblad, 28.09.2012, www. aftenbladet.no/energi/aenergy/Shale-gas-drink- 21 Energy and Climate Change Committee - ing-water-pollution-proven-3039417.html, re- Fifth Report, Shale Gas, 10 May 2011, http:// trieved on 06.04.2016. www.publications.parliament.uk/pa/cm201012/ cmselect/cmenergy/795/79502.htm, retrieved on

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16.04.2016. 22 Formaldehyde (HCHO) CAS 50-00-0; UN 1198, UN 2209 (formalin), Centers for Dis- ease Control and Prevention, 2016, www.ats- dr.cdc.gov/MHMI/mmg111.pdf, retrieved on 04.04.2016.

23 Natural Gas STAR Program, www3.epa.gov/ gasstar/tools/recommended.html, retrieved on 26.04.2016.

24 New York’s Oil and Natural Gas History – A Long Story, But Not the Final Chapter, New York Department of Environmental Conservation, 2007.

25 Technically Recoverable Shale Oil and Shale Gas Resources: Turkey, U.S. Energy Information Administration, September 2015.

26 The Water Footprint of Shale Gas Develop- ment, EcoWatch, September 10, 2012, www. ecowatch.com/2012/09/10/the-water-footprint-of-shale-gas-development/, retrieved on 06.04.2016.

93 Page SECOND ISSUE TURKEY’S NUCLEAR ISSUE - THE PAST AND FUTURE DYNAMICS by Gizem Ebrar Özel

ABSTRACT energy future, the current state of energy resources and electricity generation should be overlooked and analyzed thoroughly so that “Turkey has had This article analyzes Turkey’s whole nuclear substantive analyses, suggestions, and con- issues in conjunction with nuclear history, clusions can be realized. plans to build a nuclear future plans, possible risks, scenar- nuclear power plant ios, and suggestions as nuclear energy is a subject, which is of strategic and compre- Lignite, pit coal, asphaltite, oil shale, crude since the 1970s. A hensive character. Turkey has had plans to oil, natural gas, Uranium and Thorium are nuclear power has build a nuclear power plant since the 1970s. all present as fossil resources whereas hydrau- A nuclear power has been a strategic aim for lic energy, geothermal energy, solar and wind been a strategic Turkey since then. All these years, restraints, power, and biomass energy all represent po- aim for Turkey since economic deficiencies, diplomatic troubles, tential renewable energy resources. Natural and technological deficiencies have delayed gas and lignite have a high rate in distribu- then.” Turkey’s nuclear targets and plans. Within tion of installed capacity of fossil fuel plants the last decade, economic growth and stable by resources as it can be seen from Figure development signified a new turn in terms of 1. Imported coal, fuel oil, and pit coal exist nuclear energy. The article aims to examine subsequently. When the energy source po- the utility of nuclear energy in Turkey and to tential of Turkey is examined, it can be seen present whether or not nuclear energy might that lignite has highest potential with 12.5 offer an important solution for Turkey’s en- gigaton and pit coal follows it with 1.34 gi- ergy future. gaton. Renewable energy potential takes its “Lignite, pit coal, place as having a high rate in pie chart fol- asphaltite, oil shale, lowing these two fossil fuels. Wind power is TURKEY’S ENERGY RE- gradually expanding in capacity, mainly in crude oil, natural gas, SOURCES AND ELECTRICI- the Aegean and Marmara regions. Turkey has Uranium and Tho- reached to 6.6 GW of installed capacity as of TY GENERATION - GENERAL July 2016. Turkish government has a target rium are all present OUTLOOK to increase wind capacity tenfold by 2020. If as fossil resources the target reached, anticipated futurity energy leader becomes the wind power. whereas hydraulic Turkey’s energy consumption and exports are rapidly increasing and this increase in energy, geothermal demand on energy makes all the issues stra- Renewable energy sources have a high share of energy supply in Turkey and especially energy, solar and tegical in terms of energy politics. The development of economy and finances places hydroelectric power accounts for about 35% wind power, and energy as a premium in political spheres. (as of July 2016) of the electricity demand. The percentage of solar energy power ca- biomass energy all Various factors affect both the demand and supply side of the global energy sector, where pacity is also continuously rising in that pie represent potential Turkey is one of the main actors on the con- chart. Turkey is located at a sufficient zone that makes it a sun-soaked country. The to- renewable energy sumer side. Consequently, economical developments in Turkey are expected to continue tal yearly insulation period is approximately resources.” in the upcoming years and Turkey’s energy 2,460 hours per year and 7.2 hours per day. needs as well. In order to understand Turkey’s These qualities functionalize Turkey to be a great solar power. High solar energy poten-

ENERGY POLICY TURKEY Page 94 “Hydropower holds an important advantage on lower operational costs, rather than its opponent thermal sources. It is perfectly superior to the rest of the sources in terms of fuel cost, which is zero in hydro plants.”

Figure 1: Installed capacity percentages for electricity generation by sources in Turkey as of July 2016. (Source: TEIAS). tial and land availability give an opportuni- by the end of 2023.2 ty for solar energy to be the most important clean energy resource for Turkey as it has a If all energy resources and the markets are puissant demand in energy. The country also considered, it can be seen that nonrenewable develops its hydropower potential, which is resource reserves are utilized more compar- actually the only renewable source that is ca- ing to the renewable energy sources. Natural pable of providing huge amounts of renewa- gas has especially been the most used energy ble power. Hydropower holds an important resource in the electricity market in Turkey. advantage on lower operational costs, rath- Statistics show that its demand is expected er than its opponent thermal sources. It is to increase by 2.9% annually until 2020.3 “Statistics show perfectly superior to the rest of the sources In spite of this rising demand, Turkey has a in terms of fuel cost, which is zero in hydro limited natural gas production capacity. Nat- that natural gas plants. But, despite this advantage, and low ural gas production is operated in accordance demand is expected construction and labor costs, investments in with the Petroleum Law. Pursuant to the and operations of hydro plants in Turkey are statics of EMRA, the highest market share to increase by 2.9% lower compared to developed countries. Ge- in natural gas production belongs to Turkish annually until 2020. othermal energy is set to grow rapidly against Petroleum Corporation (TPAO).4 Moreover, hydropower. Turkey is one of the hottest Turkey sustains average of 98% of its nat- In spite of this rising markets for geothermal plants with its theo- ural gas consumption from the imports. It demand, Turkey has retical geothermal potential of 31,500 MWt can, thus, be said that Turkey is dependent according to Turkey’s Mineral Research and too much on foreign natural gas. However, a limited natural gas Exploration Agency (MTA). With this high thanks to its geostrategic location, Turkey resource potential, Turkey ranks 7th in the provides opportunities for investments in production capacity.” 1 world and 1st in Europe. Turkey has a po- pipeline projects such as TANAP. The similar tential for 1.000-2.000 MW but only 160 circumstances are true for the oil resources MW are currently installed and the govern- and markets as well. Turkey has a limited oil ment plans to have 600 MW more installed production capacity because of geographical

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“Turkey’s main en- factors that are extremely affected by active main energy suppliers are Russia, Iran, Azer- fault systems. This situation makes the coun- baijan, Algeria, Nigeria, Qatar, Saudi Arabia ergy suppliers are try poor of oil supplies and, for this reason, and Iraq with Russia and Iran being the big- Russia, Iran, Azerbai- all market activities such as refining, storage, gest suppliers. Turkey’s energy security axis distribution, and transmission depend on is, therefore, highly dependent on Russia jan, Algeria, Nigeria, imports (more than 90% of total liquid fuels and Iran. The reliability of these suppliers Qatar, Saudi Arabia being imported). Despite its terrestrial lack is a subject of argument in terms of energy of fossil fuel reserves, Turkey is well placed to diplomacy. Probable and mature disagree- and Iraq with Russia serve as a hub for oil and natural gas supply ments with these suppliers put energy securi- and Iran being the headed to Europe and other Atlantic mar- ty at risk. The formula to keep energy under kets from Russia, the Caspian region and the control is to highly diversify the suppliers. biggest suppliers.” Middle East.5 The country is located in be- Turkey is trying to find new suppliers to di- tween energy consumers and producers. Tur- versify its gas and oil supplies and signing key’s oil pipelines extend beyond 3,400 km long-term contacts with many countries like and are part of an international and domestic Nigeria, Egypt, Azerbaijan, and Turkmen- web. Turkey’s oil pipelines are of the utmost istan.8 These pursuits represent attempts to significance for Azerbaijan and Iraq since Ba- decrease dependency on the main suppliers ku-Tbilisi-Ceyhan (BTC) and Kirkuk-Cey- and can be seen as the first step to achieving han are their main export outlets.6 The BTC, energy security. thus, allows Azerbaijan to become less dependent on Russia and Iran for its exports. The limited production from domestic “Despite the limit- Turkey’s geographical advantages might con- sources have resulted in a high dependency struct the regional energy web in and around on energy imports. Hence, (2) another im- ed production from the country. portant challenge for the country is high de- fossil fuel resources, pendency on imported fossil fuels. While the first problem was about the reliability of sup- Turkey’s demand is ANALYSIS OF THE ENERGY pliers, the second focuses on energy supply rapidly rising, caus- PROBLEM IN TURKEY varieties. Turkey’s domestic oil and gas production is insufficient to meet the country’s ing increase in oil Energy is an essential component of all eco- energy need. Despite the limited produc- and gas imports. nomic activity and the provision of all ser- tion, the country’s demand is rapidly rising, vices. Hence, preserving energy is one of causing increase in oil and gas imports. The The solution lies in the most vital actions for governments and solution lies in the diversification of ener- the diversification of energy security and thus it is linked with all gy sources. The rate of imported fossil fuels political activity. If we examine Turkey’s ac- must be decreased by adding more sources energy sources.” tions to provide energy security for present to the energy supply equation. In this sense, and future, the major problems appear as it can be said that creating an energy source to be fossil fuels as the country has limited mix is vital to solve the problem because de- reserves whereas infinite reserves are highly pendency on a single resource harbors both concentrated in certain regions in the World. economic and political risks. At this point, Middle Eastern countries and the Russian Turkey should evaluate its renewable energy Federation possess almost 70% of the world’s alternatives such as wind, solar, geothermal, oil and gas reserves.7 Thus, each parameter of and hydro and independent energy types like the energy security can be accepted as having nuclear. Without this type of energy formu- a direct connection with geographical distri- la, Turkey will be under risk of energy supply bution of energy resources and reserves. distribution and be volatile to energy prices.

Turkey’s energy security challenges can be Other challenges in terms of energy for Tur- classified into two main categories. (1) The key are energy saving and resources plan- above-mentioned energy supply problem ning. Energy saving is completely involved represents the first category here. Turkey’s with energy efficiency and storage capacity.

ENERGY POLICY TURKEY Page 96 TURKEY’S NUCLEAR ISSUE - THE PAST AND FUTURE DYNAMICS

It is generally understood as less consuming, environment. A little amount of Uranium, “The amount of loss though actually evaluating energy wastes and a raw material of nuclear energy, produces a and illegal electricity preventing energy loss.9 According to statis- great amount of clean energy and a small- tical analyses, Turkey can save up to 25% of er use of fossil fuels means lowering green- usage is higher than its energy consumption10 and this ratio can house gas emissions (like carbon dioxide and 20% and the average thus bring a remarkable acquisition for Tur- methane) that are largely responsible for the key’s economy. On top of that, the amount greenhouse effect. The most promotive fu- annual damage from of loss and illegal electricity usage is higher ture for nuclear energy is actually reliability. these represents a than 20% and the average annual damage Traditional sources of energy like solar and from these represents a big deficiency for the wind require sun or wind to produce ener- big deficiency for the economy. Moreover, the economic measures gy. They need fertile dates. However, nuclear suggest that storage is a big problem. Energy energy doesn’t require a special time. Nuclear economy.” storage provides short-term security against energy can be produced continuously from unexpected disruptions, accidents, sabotag- the plants even in case of rough weather con- es, and technical failures. For such reasons, ditions and the production can be provided Turkey generated its first underground stor- 7/24. Aside from these main advantages, nu- age facility in Silivri. Despite its functional- clear energy presents other benefits such as ity, capacity of the facility is not enough to powerful and efficient output, cheap electric- meet the demand against mentioned risks. ity, low fuel cost, economic advantages in set- Accordingly, Turkey should enhance its stor- ting up nuclear power plants, and easy trans- age capacity. portation. Optimal and minimal utilization of energy resources in generation is preferred Finally, possible and more valuable energy condition for any nation. The economic ad- resources should be discussed for Turkey’s vantages in favor of the countries prompt energy future. There are too many promi- to choose rational variants. From that point nent energy types for the solution like bio- of view, Turkey will be able to significantly fuels, GTL (Gas to Liquids), CTL (Coal to reduce energy bills due to the high rates of Liquids), Hydrogen, fuel cells, and nuclear production. As economic advantage, the raw energy. All these types offer advantages for materials import for nonrenewable energy “The most promotive Turkey. Non-conventional energy types are will be decreased accordingly. The amount future for nuclear mostly dependent on technical develop- of energy production depending on a vari- ments and economic structure comparing ety of raw materials addresses that raw ma- energy is actually to those of conventional energy resources. terial of nuclear power generates more elec- reliability. Traditional With all these keys mentioned above, it can tricity than any other raw materials. TAEK be understood that nuclear energy is one of provides figures on electricity generation by sources of energy the most common solutions for countries types of raw materials as follows: 1000 gram like solar and wind that aim to succeed energy security. Turkey coal produces 3 kWh electricity, 1000 gram has many reasons to go nuclear. It is an un- oil produces 4 kWh electricity, 1000 gram require sun or wind deniable fact that nuclear power is the main Uranium produces 50,000 kWh electricity. to produce energy. source of energy in some of the major devel- The figures prove that nuclear materials are oping countries in the world.11 In this regard, a highly efficient source to produce energy They need fertile France will make of a good example thereby, at a very little cost. These figures are given dates. However, nu- generating %75 of its electricity from nucle- on Figure 2. ar energy. France now claims a substantial clear energy doesn’t level of energy independence and almost the require a special time lowest cost electricity in Europe.12 Nuclear Uranium, Thorium and specifically their cer- technology can have an important role to tain isotopes are called radioactive raw ma- and can be produced terials that are used as resources in nuclear enable an increase in the share of renewable continuously.” energy sources as well as fossil fuels to meet a plants. Uranium is considered as the main more sustainable energy mix demand.13 raw material of nuclear fuel and today, it is commonly consumed as fuel in nuclear Nuclear energy has the lowest impact on the power plants. To use Uranium in electricity

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“The cost of solar power is now cheaper by 80%, and wind power by 30%. IEA estimates that 60% of energy investments globally in the next 25 years will be on renewable energy sources.”

Figure 2: Comparison on electricity generation by types of raw materials. (Source TAEK).

generation, U235 isotope, which has ability is 0.21% that totals to 380,000 tons.14 Most “According to Gen- of divisibility (fissile material) of Uranium, of the radioactive raw material reserves are must be occurred with enrichment process. situated in the western parts of Turkey. The eral Directorate of If Thorium is not a fissile material, it cannot largest known Uranium bed is located in Ko- Mineral Research be just used alone. It requires a neutron and prubasi area, Manisa. Thorium bed lays in a fissile material like U233 isotope to be able Beylikahir, near Eskisehir-Sivrihisar region. and Exploration’s to use as nuclear fuel. According to General (MTA) technological Directorate of Mineral Research and Explo- ration’s (MTA) technological and scientific and scientific works ORIGINS OF TURKEY’S NU- works and findings since 1958, there is quite CLEAR HISTORY and findings since important radioactive raw material reserves in Anatolia. See Figure 3 for reverse distribu- 1958, there is quite tion of nuclear materials. Turkey’s Uranium The world has stepped into nuclear age on important radioactive reserves has 0.07% rate that equals to 9,129 December 20th, 1942 by realizing self-feed- 15 tons. The Thorium potential of the country ing chain reactions. This age was going to raw material reserves in Anatolia.”

Figure 3: Turkey’s Radioactive Raw Materials Map. (Source: TAEK).

ENERGY POLICY TURKEY Page 98 TURKEY’S NUCLEAR ISSUE - THE PAST AND FUTURE DYNAMICS

“Today, the world meets 11% of its energy needs from nuclear energy and this number is 21% for OECD countries.”

Figure 4: Nuclear electricity production in the World. (Source: World Nuclear Association). bring too many alterations to Earth and this power plants like the Mersin NPP. All these nuclear movement has affected a lot of coun- plans were delayed not any less than eight- tries. The movement changed the meaning of fold between June 1998 and April 2000.17 power and security, so that obtaining power The abandonments of these plans were about meant obtaining nuclear for some countries economic conditions and unsteady politic and security meant national responsibilities circumstances. In 2006, the government an- and international obligations. If we want nounced that it had planned to have three “Turkey’s nuclear to look at nuclear history and the changes nuclear power plants built. Sinop and Ak- history shows us that it has brought, we must also look at where kuyu in Mersin were chosen cities to host the we stand now. Today, the world meets 11% nuclear power plants (See Figure 5). Turkey there were several of its energy needs from nuclear energy and has thus concluded two of the three planned attempts to build this number is 21% for OECD countries.16 regions. Drafts passed the parliament in 2007 A graphic chart showing the world’s nucle- and subsequently, a civil nuclear cooperation power plants like the ar electricity production throughout years is agreement was signed with the USA in 2008. Mersin NPP. All these given in Figure 4. In the same year, TETAS (Turkey Electric- ity Trading and Contracting Co.) called for plans were delayed offers and TAEK (Turkish Atomic Energy not any less than Like all affected countries, Turkey also want- Authority) issued specifications for the first ed to come in contact with the nuclear age. NPP in Akkuyu. Only one bid was received eightfold between Along with the constantly changing parame- from 14 interested parties and TAEK and June 1998 and April ters, the country has been generating strate- ROSATOM (Russian Nuclear Energy Cor- gic plans to possess nuclear energy since the poration) signed the agreement for the Aes- 2000. The aban- feasibility studies conducted in the 1970s. 2006 NPP. In the following years, the other donments of these After the denomination of nuclear plans, nuclear cooperation agreement was signed Turkey decided to build its first nuclear re- with South Korea in June 2010 and then two plans were about actor with a 80 MW capacity in 1973. The such agreements with China in April 2012. economic conditions intended address was the city of Mersin, li- In May 2010, Russian and Turkish head of censed for NPP (Nuclear Power Plant) in states signed a 20 billion USD intergovern- and unsteady politic 1976. However, that plan failed because of mental agreement to build the Akkuyu NPP. circumstances.” lack of financial guarantees by the Turkish The decision was for Rosatom to finance the government. Turkey’s nuclear history shows project. Following all the agreements and in- us that there were several attempts to build tergovernmental contracts being signed, start

99 Page SECOND ISSUE GIZEM EBRAR ÖZEL

“From Turkey’s historical data, it is understood that the country’s motivation for nuclear power is triggered by the

energy dependency Figure 5: Nuclear power plants planned to be built in Turkey. (Source: Google). mentioned in the of the Akkuyu’s construction is expected at 4th section and the OVERVIEW OF NUCLEAR the end of 2016, Sinop in 2017, and the last changing dynamics determined region for the third NPP is de- POWER POLICY IN TURKEY cided to be in Igneada, Kıklareli in 2019. of the world.” Turkish energy policy can be summarized in six main topics that shapes the three objec- From Turkey’s historical data, it is understood tives of the Ministry of Energy and Natural that the country’s motivation for nuclear Resources (MENA). power is triggered by the energy dependency mentioned in the 4th section and the chang- 1. Minimize the dependency on the supply ing dynamics of the world. Turkey’s rapidly of energy sources from foreign countries. growing energy demand requires an imme- 2. Diversify of energy sources and routes. diate solution and Turkish policymakers are determined that solution can be nuclear en- 3. Increase the rate of domestic and renew- ergy. The nuclear security issue is considered able energy sources. by the Turkish government along with nu- “Turkey’s peaceful clear supply advantages that the country has. 4. Generation, transmission, and consump- stance and aim clear Ankara is one of the parties that signed the tion of energy efficiency. Treaty on the Non-Proliferation of Nuclear doubts about any Weapons, the Comprehensive Test Ban Trea- 5. Increase state’s and private industry’s ca- struggles caused ty, the Wassanaar Arrangement, the Missile pabilities under a liberalized energy mar- Technology Control Regime, the Zangger kets framework. by possible uses Committee, the Nuclear Suppliers Group, 6. Activate policies that enforce measures to of nuclear power in and the Treaty banning nuclear tests in the provide Turkey’s energy demand in a safe Atmosphere and so on.18 This active diplo- military activities as manner. matic support for international nonprolifera- noted by the nuclear tion accounts Turkey as a reliable country for the uses of nuclear power. Turkey’s peaceful The main aim of these strategies is meant to authority.” stance and aim clear doubts about any strug- ensure the supply security, competitiveness, gles caused by possible uses of nuclear power and sustainability. Under these circumstanc- in military activities as noted by the nuclear es, it’s very easy and strategic to reach nucle- authority. ar energy as a reliable solution. The essential

ENERGY POLICY TURKEY Page 100 TURKEY’S NUCLEAR ISSUE - THE PAST AND FUTURE DYNAMICS disputes in Turkey’s nuclear energy is com- Some countries changed their minds about “The nuclear indus- pletely about nuclear risks. nuclear, while some proceeded with their try is surrounded plans by making improvements. As for Tur- key, the country has not changed its nuclear by a variety of risks The nuclear industry is surrounded by a va- agenda. riety of risks related to safety, operation, fi- related to safety, op- nance, and strategy. All the risks that might eration, finance, and threaten Turkey’s nuclear program can be In spite of all the potential risks, Turkey has classified in five categories: rich Uranium and Thorium reserves as men- strategy.” tioned above. This big and vital advantage, 1. Political. along with other above-mentioned energy problems all are dragging Turkey to this 2. Regulatory. compulsive nuclear power. However, nuclear 3. Commercial and financial. is also related to authorities and other countries, as well as Turkey’s domestic decisions. 4. Safety. In that sense, conjunctures should be looked at to ensure the process. Iran was a key actor 5. Public risks. for countries newly stepping into nuclear. The nuclear deal between Iran and the West generated a new circle, thus the mainstream The most significant of these risks is certain- suspicions on Turkey was mostly eliminated. ly the political one, since the loose interna- Therefore, the proliferation domino theory tional diplomacy can be altered at the least was under control. If we look at the IAEA expected moment. For instance, the conflict (International Atomic Energy Agency)’s con- between Turkey and Russia following the clusion about Turkey, additional protocols airspace incident changed the Akkuyu NPP’s can be seen. Turkey’s nuclear activities have fate and we cannot talk about absolute pro- been subject to a comprehensive IAEA safe- gress for the future. guards agreement since 1982. That long process is shaped by two causes. “In spite of all the po- Another significant risk is regulatory, since national safety requirements, site permit re- • First, the bilateral nuclear cooperation tential risks, Turkey quirements, reactor licensing requirements, between Turkey and Pakistan in the has rich Uranium and safety requirements, discharge authoriza- 1980s.20 According to the USA, these tions, hate management, storage transport, were corrupt trade relationships between Thorium reserves as and disposal requirements all need to be the two countries. The investigations mentioned above. clearly specified as part of the regulatory went on until Turkey finally took meas- framework.19 In that sense, the most substan- ures for a crackdown. This big and vital ad- tive fact is prudential, well-though regulato- • Second, the IAEA’s drilling into front- vantage, along with ry works. Commercial and financial risks de- end materials processing and experi- pend on the company that runs the project. menting. Despite all the suspicions and other above-men- If an example needs to be mentioned, we can investigations, the IAEA found no evi- tioned energy prob- look at Akkuyu’s financier, Rosatom. The dence of any undeclared or clandestine company’s commitment and financial risks, nuclear activity.21 The IAEA asked ques- lems all are drag- thus, indirectly represents Russia’s commit- tions about centrifuges to Turkish sci- ging Turkey to this ment and risks. This is why financial risks entists and still did not find any nuclear are involved with diplomatic risks. Safety latency. compulsive nuclear risk is concerned with engineering process. power.” The most dangerous disadvantage of nuclear energy is without a doubt the radioactivity The conclusion then ended with; “... no indi- issue. After the 1986 Chernobyl and 2011 cations have been found by the IAEA that, in Fukushima incidents, the nuclear reactor its judgement, would constitute a safeguard technology was immediately controlled. concern.”

101 Page SECOND ISSUE GIZEM EBRAR ÖZEL

After all the historical arguments in Turkey, er, yet. The country thus needs to use all en- nuclear policies must include reliability and ergy sources. The hazardous energy sources “Suggestions for technical steps should take the safety of the are fossil fuels like coal and oil and the envi- world, thus, not be allowed the energy at- ronmentalist argument must actually oppose nuclear power are titude that creates insecurity in the region. fossil fuels since these are more polluting and mostly related to per- Possible scenarios and constructive critics on damaging than nuclear energy. Thirdly, it is security issues as like “Long term reliability important to prove the good intention be- ception management. of the factors that kept Turkey from acquir- hind the use of nuclear. It must be asserted Adverse opinions ing nuclear weapons” should be considered that nuclear would supply all energy needs for stable and reliable energy policy. and all investments are for technology to must arise to clearly generate electricity. These arguments for and increase awareness against nuclear power should be considered POLICY SUGGESTIONS AND by the authorities because this perception about breaking the CONCLUSIONS management can bring the end of public taboos on nuclear.” risks. Nuclear fuel and waste management hold an important place in suggestions. Tur- Turkey as a middle power in Eurasia has some key has improved nuclear cooperation rela- aspiring purposes for the future. The Turk- tions in terms of policy. Safety and security ish government aims to become a regional should also be processed in a synchronized power in the Middle East. That essential aim way in order to ensure reliable nuclear energy concerns the energy sector and policy. The areas. objective of becoming a regional power then turns into becoming a transit country for en- As a result, Turkey’s energy demand is rapid- ergy policy issues. That strategic future goal ly rising and the energy security problem is requires some professional decision making surviving with all remarkable effects. Thus, to be achieved and nuclear power is, thus, a solutions should be immediately rearranged very important step towards the realization for a reinforced energy future. Turkey lacks “Turkey lacks domes- of the Turkish objective. domestic energy reserves and this fact causes a dependency on energy imports, accompa- tic energy reserves Suggestions can be gathered under the man- nied by supply security risks. The national and this fact causes agement process. Nuclear energy requires and local formula seems more likely to be nuclear power. In that sense, nuclear energy a dependency on robust management and control systems. These are not completely about policy, thus offers a powerful solution and has many ben- energy imports, ac- the technical containment needs engineer- efits for Turkey. companied by supply ing suggestions. In that sense, the suggestions for nuclear power are mostly related security risks. The In this aspect, nuclear energy appears to be to perception management. Adverse opin- one of the most efficient and effective solu- national and local ions must arise to clearly increase awareness tions. Turkey has rich Thorium reserves and about breaking the taboos on nuclear. Ener- this fortune must not be omitted as men- formula seems more gy authors and the Ministry should labor on tioned above. likely to be nuclear nuclear as a future energy source for Turkey. Arguments against nuclear power mostly in- power. In that sense, clude unsafety. This thesis must be changed REFERENCES nuclear energy offers into a perception of safe nuclear energy. This argument can be supported with the latest 1 a powerful solution Orhan Mertoglu, Sakir Simsek, Nilgun Basarir generation of nuclear reactor designs that are “Geothermal Country Update Report of Turkey and has many bene- getting safer every day. Another argument (2010-2015)”,Melbourne, Australia, 19-25 April against nuclear is about supporting renew- 2015. fits for Turkey.” able energy. Though renewable energy is indeed environmentalist, renewable energy 2 http://www.mfa.gov.tr/turkeys-energy-strategy. supplies aren’t able to take over nuclear pow- en.mfa (data accessed on 22 April 2016)

ENERGY POLICY TURKEY Page 102 TURKEY’S NUCLEAR ISSUE - THE PAST AND FUTURE DYNAMICS

3 HERDEM, “2013 Turkey Energy Report”, Feb- 24 Kumbaroglu G. 2015, Turkey and Nuclear En- ruary 2014. ergy, Carnagie.

4 EMRA, “Natural Gas Market Report”, 2012. 25 Ministry of Energy and Natural Resources, «Turkish Nuclear Power Programme», Report. 5 US Energy Information Administration “Tur- key”, Report, 6 August 2015.

6 BOTAŞ, 2013a, 2013b.

7 Demirbas A., ”Global Renewable Energy Pro- jections” Energy Sources, Part B, 2009.

8 Gurbuz O., “Critical Assesment of Europe’s En- ergy Market- Turkey”, Czech Republic, 2007.

9 Narin M., Akdemir S., “Energy Efficiency in Turkey”, Ankara, September, 2006.

10 Onaygil S., “The Importance of Lighting Among Energy Efficiency Studies in Turkey”, October, 2009.

11 Asif M., “Energy Supply”, p.1388-1413, 2007.

12 WNA, “Nuclear Power in France”, July 2017.

13 Soentono S and Aziz F, “Expected Role of Nu- clear Science and Technology to Support the Sus- tainable Supply of Energy in Indonesia”, 2008.

14 Dr. Safak Ozkan, Mining Bulten, available at www.maden.org.tr

15 Anonymous, “Nükleer Enerjinin Tarihçesi”.

16 World Nuclear Association, “World Energy Needs and Nuclear Power”, December 2015.

17 World Nuclear Association, “Nuclear power in Turkey”, report, 22 March 2016.

18 Gerge P., Sinan U., “Turkey’s Nuclear Future”, Carnagie, 2015.

19 Gürkan Kumbaroglu, “Turkey and Nuclear Energy”, Carnagie, 2015.

20 Mark Hibbs, “The IAEA’s Conclusion about Turkey”, Carnegie, 16 April 2015.

21 Hibbs M., Arms Control Wonk., April 2011.

22 EUAS. 2013a, 2013b.

23 Gerge P, Ulgen S. 2015, Turkey’s Nuclear Fu- ture, Carnagie.

103 Page SECOND ISSUE USING OIL SHALE AS AN ALTERNATIVE RAW MATERIAL FOR ENERGY PRODUCTION AND POTENTIALITY OF TURKEY by Abdurrahman Murat

open-pit, conventional underground mining WHAT IS OIL SHALE or by in-situ methods. Oil shales have a wide range of organic content and oil yield. Com- mercial grades of oil shale, as determined by Oil shale is commonly defined as a fine- their shale oil yield, ranges from about 100 grained sedimentary rock containing organ- to 200 liters per metric ton (l/t) of rock. The ic matter (kerogen) that yields substantial U.S. Geological Survey has used a lower lim- amounts of oil and combustible gas upon it of about 42 lt/ton for classification of fed- destructive distillation (retorting). Most of eral oil-shale lands. the organic matter is insoluble in ordinary organic solvents; therefore, it is decomposed by heating to release such materials. What USES, RESERVES AND STA- derives the importance of oil shale to pro- TUS OF OIL SHALE IN “What derives the im- duce energy including combustible gas and a number of procured products is how eco- WORLD portance of oil shale nomic it can be recovered.

to produce energy Oil shale researches that fired up the energy including combustible Deposits of oil shale having economic po- sector during the crisis experienced all over tential are generally those that are at or near the world draw a sinusoidal curve. First re- gas and a number of enough to the surface to be developed by searchers of the oil shale started producing procured products is how economic it can be recovered.”

Figure 1: A display of oil shale rock samples.

ENERGY POLICY TURKEY Page 104 shale oil and reached the maximum level in THERMAL POWER PLANTS the 1800s, but the production declined in 1859 upon the discovery of raw oil. In Canada, fluidized-bed technology has been tested in the Lurgi’s design. Coal with Oil shale studies that gained importance high sulfur content and oil shales with car- again during World War I (1915) entered bonate have been burned. In Israel, the en- the recession period with the discovery of ergy has been produced in a power plant of “Industry uses of new oil fields in the coming years and shale 12 MW. In Jordan, the feasibility studies of oil produced from oil shales gathered all at- oil shale-based power plant and also in Mo- oil shale is in Bra- tentions on it once again during the World rocco, the laboratory and pilot power plant zil, China, Estonia War II years (1940-1945), but production studies have been completed. Oil shale pro- works of shale oil have been suspended with duction in Estonia began in 1916 and the and to some extent the start of the stabilization period on the oil annual output reached 41 million tons in in Germany, Israel, prices after the war. 1980. Oil shale with Kukersite type is used in Estonia in order to produce electricity, gas, and Russia. Several liquefied hydrocarbon and other chemical additional countries The crisis occurring in oil production in the products. Also residual shale is used as a raw 1970s and the price increases encountered material of high quality cement in Estonia, started assessing after this crisis have been caused shale oil Germany, and China. production to become the main topic of the their reserves or had agenda and these developments have given built experimental acceleration to the research activities. COUNTRIES RESERVES production plants, (Million tons) while others had USES OF OIL SHALE: USA 3,340,000 phased out their oil AUSTRALIA 32,400 UTILIZATION OF THE SHALE shale industry.” OIL AND GAS PRODUCTION BRASIL 9,646

ISRAEL 15,360 Shale oil production from oil shales is carried out by means of making the pyrolysis in the THE REP. OF 73 places where oil shales are available (in-situ) SOUTH AFRICA or after oil shales are extracted from the place where they become available (ex-situ) subse- JORDAN 40,000 quently during mining activities. Industry MOROCCO 12,200 uses of oil shale is in Brazil, China, Estonia and to some extent in Germany, Israel, and THAILAND 18,668 Russia. Several additional countries started assessing their reserves or had built experi- TURKEY 1,641 mental production plants, while others had phased out their oil shale industry. Oil shale ALBANIA 6 serves for oil production in Estonia, Brazil, and China; In 1920s, in Fushun, Liaoning ESTONIA 1,500 Province, China, shale oil indus¬try was set UKRAINE 2,674 up. The Fushun-type retort, combined with pyrolysis and gasifi¬cation sections was developed. Figure 2: The distribution of oil shale reserves all over the world. UTILIZATION AS SOLID FUEL IN

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“In the system established in Dottern- hausen in Germany and called as “Rohr- bach Process”, electric energy is generated by burning the oil shale and residual shale is used as raw material of cement.” Figure 3: The distribution of oil equivalent reserves of oil shale all over the world.

in Figure 2 and 3. Apart from these, oil shales are used with success as fertilizer and soil stabilizer after various operations are carried out and also When resource reserve distribution of poten- they are used in the neutralization of acidic tial shale oil that can be produced from oil soils since 1964. shale reserves in the world is examined, it is seen that United States is ranked as the first with total 4.9 trillion barrel reserves and Tur- The residual oil shale is produced more than key is ranked as the last with 1.985 million 11 million tons every year by means of burn- barrel reserves. Commercial production of ing Kukersite in the Baltic basin. A portion shale oil is occurring in Estonia, China and “70% of oil shale of produced residual oil shale is evaluated as Brazil. production in the raw material in the construction industry and its remainder is destroyed by methods world is carried out in that will not harm the environment. STATUS IN ESTONIA Estonia. Estonia has In the system established in Dotternhausen approximately 100 in Germany and called as “Rohrbach Pro- 70% of oil shale production in the world is years of business cess”, electric energy is generated by burning carried out in Estonia. Estonia has approxi- the oil shale and residual shale is used as raw mately 100 years of business experience and experience and 30 material of cement. In this way, the oil shale 30 years of commercial experience. Oil shale years of commercial is both used as raw material of energy and ce- is Estonia’s most important energy source ment is produced by using the residual shale. and 93% (550 TWh / year) of the electric experience.” used in the country is produced from two Also, the precious metallic components (va- thermal power plants that are fired with oil nadium, uranium, etc.) are obtained from shale (2,800 MW). residual shales in the same complex. The distribution of oil shale reserves all over the world and oil equivalent reserves are shown Enefit Company, which is a government agency, has performed the oil shale mining

ENERGY POLICY TURKEY Page 106 USING OIL SHALE AS AN ALTERNATIVE RAW MATERIAL FOR ENERGY PRODUCTION AND POTENTIALITY OF TURKEY

Figure 4: Model pictures belonging to Enefit280 shale oil production facilities.

“Enefit280 facility has planned to produce 290,000 tons / year (1.8 mil. bbl / year) shale oil in a year by using 2.3 mil. tons Figure 5: A view of oil shale-fired power plants in Enefit-Narva. oil shale. In addition, activities and produced the shale oil through Estonia has carried out the shale oil produc- 280 GWh of elec- superficial retorting method by means of tion in Enefit140 facilities until today. A new tricity production will using vertical and horizontal integrated sys- and important project of Enefit Company is tems in Estonia and also it has carried out Enefit280 facility that will work with an op- be carried out in the the electric production in significant quan- erating life of 30 years. same facility.” tities by burning the oil shale in the thermal power plants and has exported the electricity Enefit280 facility has planned to produce produced to the Baltic Region and Finland. 290,000 tons / year (1.8 mil. bbl / year) shale oil in a year by using 2.3 mil. tons oil shale. Enefit Company has produced approxi- In addition, 280 GWh of electricity produc- mately 1 billion ton oil shale together with tion will be carried out in the same facility. 3300 workers employed in a field of 12,000 The total cost of the investment is approxi- hectares in 2 open pits and 2 underground mately EUR 240 million. Also average cost mines until today. Supplying almost all of of oil shale production is 14 EUR/ton. 1 electrical demand of Estonia, Enefit Compa- MW of electricity generation costs 45 EUR. ny has carried out the shale oil production more than 200 million barrels as a result of retorting process ongoing during a time ex- Oil shale industry was established in Estonian ceeding 30 years. The retorting plant called in 1918. 2/3 of oil shale reserve with total 1.5 as Enefit140 is already an active plant even billion tons capacity of Narva open pit was today. Also second plant Enefit280 has start- used and it is estimated that approximately ed the trial productions. 500 million ton of reserves are still available.

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Overburden thickness in open pit mines is ing the Guchengzi Formation is the Eocene averagely 30 meters while average thickness Jijuntun Formation that consists of oil shale of oil shale seam is 2.8 meters. There are oil of lacustrine origin. shale seams in various thicknesses under this seam and their intercalations are generally composed of limestone. Production is car- The oil yield of the oil shale ranges from “In Chına, The first ried out by dragline + trucks. The oil shale about 4.7 to 16 percent by weight of the industry provides employment opportunities rock, and the mined shale averages 7 to 8 commercial pro- for 10,000 people in the country. percent (~78-89 lt/ton) oil. Coal mining at duction of shale oil Fushun began in 1901. For the first 10 to 15 years of mining coal at Fushun, oil shale After Estonia has obtained the shale oil and began at Fushun in was discarded due to the overburden. Pro- electricity production from oil shale, it elim- duction of oil shale began in 1926 under the 1930 with the con- inates the ash by using it in different areas Japanese and peaked in the early 1970s with in order to reduce the environmental ef- struction of “Refin- about 60 million tons of oil shale mined an- fects of remaining ash. The ash used in im- nually, then dropped to about 8 million tons ery No. 1, this was portant cement factories can be used in the in 1978. This reduction was partly due to in- brick-making at the rate of 20-30% as well. followed by Refinery creased discovery and production of cheaper Oil shale ash is used in the blocks drawing crude oil within China. No. 2,” which began attention due to its light feature that is used in building construction through autoclave production in 1954, (pressure vessel) method by means of adding In 2002, Fushun shale oil plant produced and a third facility to cement and dry mixes. about 90,000 tons shale oil. In the case of Fushun type retort, for producing 1 ton shale that began producing oil, 33 tons oil shale are consumed (Fischer shale oil at Maoming STATUS IN CHINA oil yield about 6 %). As the oil shale mining cost is no more than 10 yuan RMB per in 1963.” In China, oil shale deposits are widespread in ton (as a by-product of coal mining), the oil many regions, the proved re¬serves amount shale feed cost for producing 1 ton shale oil to about 32 billion tons presenting a potential accounts for about 330 yuan RMB. Addition energy source. In Chına, The first commer- of the production cost (manpower, electric- cial production of shale oil began at Fushun ity, steam, mainte¬nance, etc.), 750 yuan in 1930 with the construction of “Refinery RMB per ton shale oil, gives about 1000 No. 1, this was followed by Refinery No. yuan RMB for the total cost. Shale oil is sold 2,” which began production in 1954, and a as fuel oil at the cost 1500 yuan RMB/ton, third facility that began producing shale oil and so the plant gains the benefit for 1 ton at Maoming in 1963. A new plant for retort- shale oil about 500 yuan RMB, that makes ing oil shale was constructed at Fushun, with 45 million yuan RMB per year. Due to the production beginning in 1992. 90 Fushun good economic situation, Fushun shale oil type retorts, each having a capacity of 100 plant is now planning to double its produc- tons of oil shale per day, produce 90,000 tion capacity, and is seek¬ing for advanced tons of shale oil per year at Fushun (J. Qıan and elaborated technology with larger re- and J. Wang, s., 2002). torts. At present, besides the oil shale combustion plant, Huadian plans to build shale oil plant with the annual processing capacity The Fushun oil shale and coal deposit of Eo- of 1,500,000 tons oil shale (5,000 tons oil cene age is located in Northeastern China shale daily). just South of the town of Fushun in Liaoning Province. In this area, subbituminous to bituminous coal, carbonaceous mudstone and Harbin Gas and Chemical Company, in shale compose the Guchengzi Formation of Heilongjiang Province, a com¬pany dealing Eocene age. In the West Open Pit coal mine with gasification of Yilan brown coal for pro- near Fushun, 6 coal beds are present. Overly- ducing town gas for Harbin City, is also

ENERGY POLICY TURKEY Page 108 USING OIL SHALE AS AN ALTERNATIVE RAW MATERIAL FOR ENERGY PRODUCTION AND POTENTIALITY OF TURKEY

OIL SHALE SONG- FUSHUN HUADIAN LONGKOW YILAN YASAN

Province Liaoning Jilin Shandong Heilongjiang Age Tertiary

Burial Coexists with coal Oil shale Coexists with coal

Condition Open pit mining Underground Underground Open pit mining mining mining

Recoverable reserves 2,000 200 40 10 20 (million tons)

Table 1: Properties and Reserves of China oil shales.

OIL SHALE INDICES “Longkow Coal FUSHUN HUADIAN LONGKOW YILAN Mining Company in Fischer Assay, % (dry basis) Shandong Province, Water 4.00 13.10 13.40 7.20 Shale oil 7.93 16.15 14.40 7.98 producing brown Char 84.80 64.30 66.70 80.39 coal for more than Gas + losses 3.07 6.45 5.50 4.43 Proximate analysis, % (dry basis) twenty years already, Water 2. 70 8.49 9.39 3.74 Ash 73.82 49.77 50.92 58.46 also plans to mine its Volatile matter 20.13 37.37 39.00 23.32 by¬product - oil shale Fixed carbon 3.35 4.37 14.48 Elemental analysis, % (dry basis) for producing shale Oil shale kerogen composition: C 79.07 76.94 73.41 77.38 oil (2,500 tons oil H 9.93 10.54 8.28 6.38 shale daily).” O 7.02 8.77 14.73 12.26 N 2.12 1.21 1.05 2.02 S 1.86 2.54 2.53 1.96 H/C mole ratio 1.51 1.64 1.35 0.99

Table 2: Chemical Properties of Chinese Oil Shale. now intended to utilize their coal mining producing brown coal for more than twenty by-product oil shale for retorting to produce years already, also plans to mine its by¬prod- shale oil (1,000 tons oil shale daily). Song Ya uct - oil shale for producing shale oil (2,500 San Coal Mining Company in Heilongjiang tons oil shale daily). At the end of 2008, the Province is a large coal mining company with company operated the largest oil shale plant yearly production of 10 million tons coal, in the world consisting eleven retorting units also plans to develop the oil shale business with 20 retorts in each unit, total 220 sets of (1,000 tons oil shale daily). Longkow Coal Fushun type retort. Annual oil shale process- Mining Company in Shandong Province, ing capacity is designed to be 11 million tons

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“In 2006, Jordan of oil shale, and annual shale oil yields to be are minor; solid fossil fuels are the primary 2,075,000 barrels. potential energy resources. These resources assigned fields for 4 include a wide variety of bituminous coal, different foreign com- lignite, oil shale, asphaltite, and peat depos- Feasibility studies indicate that due to rel- its and vary in reserve quality and physical panies (Shell, Enefit, atively low mining costs (as a by¬product characteristics. Petrobras, Incosin) of coal mining) commercial production of Fushun and Yilan oil shales is profitable, for the purpose of in spite of low Fischer Assay oil yield (only Oil shale comprises the second largest potential fossil fuel in Turkey after lignite. techno-economic about 7.9 %). As for Huadian and Longkow oil shales, in spite of much higher mining The main oil shale resources are located in report preparation in costs, their commercial production will also the middle and western regions of Anatolia. The amount of proved explored reserves is order to bring the oil be profitable as their Fischer Assay oil yield is high. Certainly, it is important to utilize around 1,641,381 tons (Table 1). Among shale resources in advanced and elaborated retorting technol- the potential resources Beypazari, Seyi- tomer, Himmetoglu and Hatildag deposits Attarat and El Lajun ogies at these shale oil plants. The world’s increasing need in the liquid fuel stimulate are of major importance in terms of quality, region into the econ- shale oil production in China. More oil shale amount and exploitability which constitute around 50% of the total oil shale potential of omy.” retorting plants for producing shale oil will be built. Turkey. Other potentially important resources are in Mengen (Bolu), Ulukisla (Nigde), Bahçecik (İzmit), Burhaniye (Balikesir), Bey- STATUS IN JORDAN dili (Ankara), Dodurga (Çorum) and Çeltek (Amasya).

The Jordanian government still maintains its Lacustrine oil-shale deposits of Paleocene investment activities for the establishment of to Eocene age and of late Miocene age are new production facilities to evaluate oil shale widely distributed in the middle and western resources. Anatolia in western Turkey. The host rocks are marlstone and claystone in which the organic matter is finely dispersed. Data on the In 2006, Jordan assigned fields for 4 different oil shale resources are sparse because only a foreign companies (Shell, Enefit, Petrobras, few of the deposits have been investigated. Incosin) for the purpose of techno-econom- The oil shale resources of Turkey might be ic report preparation in order to bring the larger, but further studies are required before oil shale resources in Attarat and El Lajun reliable resource estimates can be made. On region into the economy. Estonia-Enefit “Lacustrine oil-shale the basis of available data, total resources of Company, one of the companies mentioned in-situ oil shale for eight Turkish deposits are deposits of Pale- above, and Near East Investment Company estimated at about 2.0 billion bbls (Dyni, established by the partnership of Malaysian ocene to Eocene age 2005). government has started their works and they and of late Miocene have planned to begin to the electricity gen- age are widely dis- eration through oil shale-fired thermal power Oil shale studies in Turkey have begun with plant with 2X230 MWe installed capacity in the establishment of the Instıtute of Miner- tributed in the middle 2017. al Research and Exploratıon (MTA) and the first studies in our country have been started and western Anatolia in order to carry out the shale oil production in western Turkey.” RESERVES, USES AND STA- along with the world’s. Oil shale exploration TUS OF OIL SHALE IN TUR- activities intensified in the 1970s; geological KEY map of 1/25,000 scale for 1,370 km2 area and 1/10,000 scale for 561 km2 area that will have potential power in the future has The oil and natural gas reserves in Turkey been prepared. 89 split type drillings and 42

ENERGY POLICY TURKEY Page 110 USING OIL SHALE AS AN ALTERNATIVE RAW MATERIAL FOR ENERGY PRODUCTION AND POTENTIALITY OF TURKEY drilling activities with total depth of 4,870 ing technologies (fluidized bed, CFB) have m, have been performed throughout the demonstrated that oil shale located on lignite researches as the prospecting works. Apart in Seyitomer field may be burned with lig- from these drillings; 204 drilling activities, nite. In tests carried out in a pilot power plant total depth of which reaches up to 12,350 m, with 2 MWe, it has been observed that the aiming to explore lignite have been evaluated high calcium content of oil shale and lignite in terms of oil shale. It can be said that with had a positive impact in reducing the pol- the new detailed oil shale exploration project luting emissions generated during burning in or near the coal production licence areas process. In the studies fulfilled, it has been in Turkey, oil shale reserves can be powered determined that in case of mixing of 20% of up to 15 billion tons. Seyitomer oil shale and 40% of Himmetoglu oil shale with lignite, they can be used in a “With regard to the With regard to the evaluation of oil shale re- fluidized-bed thermal power plant. evaluation of oil shale sources in Turkey, the studies were fulfilled by German experts in order to produce shale resources in Turkey, Despite the fact that oil shale becomes one oil in Mengen (Bolu) district of our country the studies were during World War II. Due to the oil crisis en- of the known alternative energy sources, it countered in the 1970s, oil shales have come neither takes place among primary energy fulfilled by German sources nor in the long-term energy demand to the fore again and scientific-technological experts in order to projects have intensified in the same year. Be- projections and strategies in Turkey. cause of burning technologies developing in produce shale oil the forthcoming years, the evaluation of oil In this section, we have tried to present in Mengen (Bolu) shale in the thermal power plants with lignite samples from resource assessment activities has become the main topic of agenda. as well as bringing in the economy activi- district of our country ties launched in many countries regarding during World War II.” oil shale and as a result of these activities it The detailed organic geochemistry-petrog- has been observed that a sufficient awareness raphy studies and burning tests were carried could not be raised yet, in Turkey, while all out in Beypazari, Seyitomer, Hatildag and studies have been implemented in a com- Himmetoglu fields in the frame of “Turk- prehensive way throughout worldwide. As ish-German Technical Cooperation Agree- a result, oil shale might be eliminated from ment” between 1986-1988. Advanced burn-

Table 2: Chemical Properties of Chinese Oil Shale.

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assessment together due to its low calorific kcal / kg), is discarded without consideration value. together with the overburden rocks.

“It has been believed OIL FIELD RESERVE AVERAGE It has been believed that oil shale resources (1000 ton) CALORIFIC in Turkey can be evaluated at least by means that oil shale resourc- VALUE of burning in oil shale fired thermal pow- es in Turkey can be (kcal/kg) er plants and thus be brought in country’s economy and accordingly to contribute to evaluated at least Beypazarı 327,684 966 the country’s energy raw material variety and (Ankara) by means of burn- available resource reserves as it becomes in Afsin-Elbistan lignites with average 1,100 ing in oil shale fired Seyitömer 122,170 860 (Kütahya) kcal/kg used heavily in electricity generation thermal power plants purpose. Hatıldağ 359,959 774 and thus be brought (Bolu) in country’s econo- OIL SHALE PROJECTS IMPLE- Himmetoğlu 65,968 1,390 MENTED IN TURKEY my and accordingly (Bolu) to contribute to the Ulukışla 130,000 851 FIRST PROJECT country’s energy raw (Niğde)

material variety.” Mengen 50,000 1,000 Turkish Coal Enterprises (TKI) and Turk- (Bolu) ish Petroleum Corporation (TPAO) jointly conduct a project having the topic of “Ob- Bahçecik 42,000 1,060 taining shale oil from oil shales through re- (İzmit) torting process and/or energy productıon opportunities”. In this project; geological Burhaniye 15,600 732 (Balıkesir) survey, mapping, well logging, exploration activities and sampling procedures have been Beydili 300,000 800 completed. Analysis and testing process still (Ankara) continues.

Dodurga 138,000 365 (Çorum) The project has been carried out in oil shale licenses that belong to TKI. The total cost Çeltek 90,000 541 of the project has been determined in TL 6 (Amasya) million and TKI and TPAO has taken part as a strategic partner in this project. Service TOTAL 1,641,381 procurement from MTA has been carried out and implementation activities related to Table 3: Oil Shale reserves in Turkey. geological survey and drilling services in the licensed fields as well as preparation activities related to the operable reserve reports has Detailed studies have been maintained in been conducted. In the scope of this project, order to evaluate and urgently bring in the analyses shall be carried out to determine economy the domestic coals in Turkey. How- the hydrocarbon potential of oil shales and ever, although Turkey’s oil shale resources the production quantities of shale oil. In the take place in the same environment with coal event that technological tests result in the mine areas, mostly over and/or among coal economic dimensions and also open pit re- seam levels, during the coal production, due serve determines in a sufficient amount, the to the low-calorific value (avg. 1000-2000 feasibility report for the investment shall be

ENERGY POLICY TURKEY Page 112 USING OIL SHALE AS AN ALTERNATIVE RAW MATERIAL FOR ENERGY PRODUCTION AND POTENTIALITY OF TURKEY prepared. After the nature and sizes of in- in first phase until today and totally 4,146 vestment is determined in the oil shale fields, m has been progressed. Among these bore- TKI and TPAO (in joint venture) shall ad- hole drilling logs, 3,964 samples have been join domestic and foreign investors from pri- compiled. Analysis and laboratory test works vate sector by declaring the project finance have been maintained in the laboratories of models and share rates. The project is the Turkish Petroleum Company (TPAO). first project realized in our country, which aims to generate energy by using oil shale Also 6 exploration borehole drilling have under partnership of public institutions and been carried out in Ankara-Nallihan oil shale it is aimed to contribute to diversity of our fields and totally 3,617 m has been pro- domestic energy raw material chain. gressed. The presence of live heavy oil filling the cracks in the range of 134-137 meters has “General Directorate been observed in drilling activity numbered SECOND PROJECT of Mineral Research TKIB-1, while weak natural gas (methane) output has been observed in drilling activity and Exploratıon numbered TKIB-4. 36 month term R&D project on “Obtaining (MTA) team con- Liquid Fuel from Turkey’s Oil Shales with Solvent Extraction Method” is carried out tinues the activities Pyrolysis analysis of oil shale samples tak- between TKI and TUBITAK-MAM Chem- carried out in the field istry Institute”. In the scope of this project, en in the scope of the project is carried out it is aimed to determine the effects of factors in Research Center laboratories of TPAO. (geological survey, Fisher Assay analyses (oil yield %) are per- such as the most appropriate solvent type, well logging and core extraction temperature, time and pressure, formed in the gasification lab. of MTA in the solvent-oil shale ratio, grain size and addi- first phase, then Fisher assay analyzer is pur- sampling), according- chased by TPAO and delivered to support tional additive type through studies to be ly reporting studies done on samples taken from oil shale fields the project after its installation was complet- in Turkey by using autoclave. ed. At the present time, 3,891 pyrolysis anal- related to apparent + yses and 385 Fisher Assay analyses have been completed. Evaluation and data processing recoverable reserve It is aimed at making the discrete pilot scale activities in order to complete the analysis account of oil shales trial by means of performing pilot scaled re- studies are maintained. actor pressure works in the samples received and reporting studies from several oil shale fields determined pos- related to the reserve itive as a result of extraction activities. In General Directorate of Mineral Research addition, studies on the recoverability of the and Exploratıon (MTA) team continues the of oil productive oil activities carried out in the field (geological valuable elements found in inorganic struc- shale zones.” ture in the oil shales will be made. These survey, well logging and core sampling), ac- studies shall be continued with additional cordingly reporting studies related to appar- samples to be obtained from oil shale fields ent + recoverable reserve account of oil shales in 2016. and reporting studies related to the reserve of oil productive oil shale zones.

THIRD PROJECT According to the first results obtained from the analysis of oil shales in the Bolu-Goynuk region; important data have been acquired Final Situation in the ‘Obtaining shale oil to produce shale oil from oil shale rocks in from oil shales through retorting process this region. According to obtained data, it and/or energy production opportunities’ is understood that oil shales of Bolu-Goynuk Project. field comply with the world standards in the context of shale oil production (SCO). In Bolu-Göynük oil shale field, 20 exploration borehole drilling have been completed The short analysis needed in searching of

113 Page SECOND ISSUE ABDURRAHMAN MURAT the opportunities to produce electricity by untouched domestic resource. means of establishing the oil shale-fired thermal power plant (moisture, ash, volatile in 4. In the scope of oil shale project conduct- the ash and total sulfur, fixed carbon, vola- ed jointly by TKI/TPAO; in case that the tile matter, upper and lower calorific value) reserve determination studies and trial are carried out in TKI GLI-Tunçbilek labo- production test studies that are carried ratories. According to Fisher Assay analysis out in the oil shale fields in Bolu-Go- results, 48 samples are selected for ultimate ynuk and Ankara-Nallihan have been and proximate analysis by means of putting deemed suitable in terms of both econo- aside the samples at the rate of 4% oil yield my and investment. It has been planned and above. Selected samples have been sub- to establish a shale oil production facili- jected to analysis for Thermal Power Plant in ty and/or a thermal power plant in this TKI/GLI Tunçbilek laboratories. According region to produce the shale oil through to the analysis results, lower calorific values retorting method on surface. It has been of samples (AID) change between 500 and determined in shale oil yield (Fisher As- 2,114 kcal/kg values in the dry sample. Also, say) analysis of oil shales in these fields analysis studies are maintained. that oil yield changes in the medium and high economic level and between 750- In addition, interviews aiming to develop a 2,250 kcal/kg calories. Analysis and per- joint project together with TUBITAK-MAM forming tests still continue. Material Institute are continued in order to minimize the impact caused by wastes to be 5. In the scope of the TKI/TPAO joint obtained from facility to be established at the project, the interviews in various levels end of the project and to assess these wastes have been scheduled with the countries economically. having shale oil production technology and accordingly studies in order to determine the domestic/foreign investors RESULTS as well as environment friendly technology and production type are maintained in accordance with time schedule of the 1. The lignite and hard coal that take place project. Works required to bring these among fossil energy sources, the exist- facilities in our country’s economy are ence of which is known in Turkey, have continued. been given necessary importance till the day. Although they have been brought 6. In case of using of oil shales as domestic in the country’s economy for years, the raw material, it has been believed that same importance for oil shale as an ener- increasing in the energy raw material di- gy raw material may not be the case. versity and energy supply security will be able to play an important role to reduce the current deficit arising from energy 2. In today’s world where the procurement import by means of obtaining liquid fuel of oil and electricity gradually get dif- and generating energy from oil shales. ficult; the attractiveness of producing the shale oil and/or electric energy from oil shales has increased at the point of 7. TKI/TPAO and MTA provide the nec- increasing the energy diversity of our essary support for the joint projects and country in terms of both economic and it is aimed to conclude the investments strategic. to be carried out in order to produce shale oil and/or to install oil shale-fired thermal power plants by means of bene- 3. Oil shales in Turkey form the energy raw fitting from our oil shale resources until material that has the second largest re- the year of 2023. serve after lignite and also it is, yet, an

ENERGY POLICY TURKEY Page 114 USING OIL SHALE AS AN ALTERNATIVE RAW MATERIAL FOR ENERGY PRODUCTION AND POTENTIALITY OF TURKEY

REFERENCES

1 Ballice, L, Yuksel, M. and Saglam, M., 1995, “Mevcut enerji ve kimyasal hammadde kaynak- ları arasında bitümlü şistlerin yeri ve önemi”, H. U. Muhendislik Fak., sayı: 14 Ekoloji (Çevre Dergisi).

2 Sengüler, İ., 2004, “Asfaltit ve bitümlü şeylin Türkiye’deki potansiyeli ve enerji değeri”, TM- MOB Türkiye VI. Enerji Sempozyumu, Kuresel Enerji Politikaları ve Türkiye Gerçegi, 186-195.

3 Murat, A. 2007, “Ereğli (Konya)-Bor (Niğde) Neojen Havzasında Yeni Belirlenen Petrol Bul- gusu Üzerinde Ön Jeolojik Değerlendirmeler”, Kapadokya Yoresinin Jeolojisi Sempozyumu bildiri özleri, Nigde.

4 Murat, A. 2008, “MTA’nın çalışmaları sırasın- da tespit edilen yeni bir petrol bulgusu (Niğde- Bor-Badak sahası)”, MTA Dogal Kaynaklar ve Ekonomi Bülteni, Sayı.4, 23-25, Ankara.

5 Murat, A. and Kadınkız, G., 2009, “Petrold- en hidrojen ve yenilenebilir enerji kaynaklarına geçişte köprü niteliğindeki alternatif petrol ve Doğalgaz kaynağı: petrollü şeyl”, Mavi Gezegen, JMO yayını, Ankara, (to be published).

6 Murat, A., 2010, “Ülkemizde yeni belirlenen Petrollü şeyl potansiyel rezervi ve yerinde şeyl petrolü üretiminin araştırılması”, MTA Dogal Kaynaklar ve Ekonomi Bülteni, sayı, 9.

7 Köker, A ve Tola, N., (1989), “Bolu, Göynük Bitümlü şistlerinin detay analizleri ve retortlama yöntemi ile sentetik ham petrol eldesi imkan- larının araştırılması”, MTA raporu, Ankara.

8 Şengüler,İ., 2011, Petrollü şeyl’den (Bitümlü şeyl) Ham Petrol (SCO) üretimi, MTA Doğal Kaynaklar ve Ekonomi Bülteni, sayı,12.

9 John R. Dyni , 2005, “Geology and Resources of Some World Oil-Shale Deposits“, USGS Sci- entific Investigations Report -5294.

10 J. Qıan, J. Wang, s., 2003, “Oil shale development in China”, Petroleum University, Vol.20, No:3 pp.356-349.

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FOREWORD heat content of more than 3,000 kilocalories per kilogram (LHV). In 2012, around 68 “It is foreseen that million of metric tons of lignite were pro- coal will come to Whereas coal constitutes a 25% share of the duced annually. About 40% of the Turkey’s lignite is found in the Elbistan Basin. increase its share in global energy supply market, second only to petroleum, which is the first in the global global markets in the electricity generation market, with a share PRODUCTION AND CON- future thanks to new of 40%, locally, coal ranks first with a 40% share in the primary energy generation mar- SUMPTION “Clean Coal Technol- ket, but fourth in the electricity generation ogies”.” market, with a 16% share. It is foreseen that The Turkish Hard Coal Institute operates coal will come to increase its share in global five underground mines in Turkey, and is the markets in the future thanks to new “Clean only hard coal production entity in the coun- Coal Technologies”. As a matter of fact, coal try. The two most important lignite fields in is the most important indigenous fossil fuel Turkey -the Afsin-Elbistan and Sivas-Kangal in Turkey, therefore, with the best applica- coal fields- are owned by EÜAŞ and operated ble use of advanced technologies, it should by private companies under contract. be utilized countrywide for greater electricity generation at a cheaper rate. Even though there is significant production of lignite and some production of hard coal In this article, we will strive to evaluate the in Turkey, not enough coal is mined to meet new lignite, hard coal and/or imported-coal domestic demand. firing thermal power plants in our local market, explain operational problems, and rec- “The Turkish Hard ommend that new coal firing technologies As a result, Turkey imports more than 25 be implemented for the best use and most million tons (2013) of hard coal each year, Coal Institute op- efficient application of local coal in the new mostly from Russia (33%), Columbia (24%), the USA (14%), South Africa (11%), erates five under- thermal power plant investments from 2016 onward. and Australia (5%) as of 2012. Imported ground mines in Tur- hard coal is used mainly for electric power steelmaking, and cement production. About key, and is the only RESERVES AND MINING 75% of the Turkey’s lignite is used as a fuel hard coal production source for electricity generation. entity in the country.” Turkey has both hard coal and lignite deposits. The hard coal reserves are mostly locat- COAL TECHNOLOGY AND ed in the western part of the country, in the COAL MARKETS Zonguldak Basin, which has more than 1.6 billion metric tons of workable reserves, 512 Seeing that there is relatively little investment million tons of which are proven and about in coal fired power plants in the global liber- 80% of which can be coked. Lignite depos- alized markets, or at least investment priority its are widespread and plentiful throughout is given to natural gas fired combined cycle the country: reserves are estimated at more power plants due to their relatively cheap than 14 billion metric tons, 7th largest in the installation-costs and faster construction pe- world, most of which are economically mine- riods, foreign dependency increases in coun- able, though only about 7% thereof have a

ENERGY POLICY TURKEY Page 116 tries which depend on imported fuel. For potential for local fabrication and site con- “The energy tech- that reason, demand for more natural gas has struction. We must design, fabricate, con- nologies of Western also triggered the demand for more coal. struct, install, and operate our own thermal power plants that fire our own indigenous European as well as fuel. This urge for greater utilization of coal has North American com- also necessitated the application of new coal panies are becoming technologies. We are now witnessing an ob- In the past, we have prioritized attracting for- vious evolution in clean coal technologies. eign investors that had the financial capabil- too expensive to ity to cover power plant investment projects When we look at the available technology export; soon these and new trends in market demand, the most although their products were not the best of important sector in the field of energy re- their kind, not the most efficient, and not countries will not be designed to incorporate the latest technolo- volves around the development of new tech- able to sell their prod- nologies. It has now become a new tendency gies that would utilize our local coal. These for such leading technologies to be developed plants have not been suitable when it comes ucts on the global to using our local fuel, whether lignite or and applied not only in the advanced coun- market.” tries, but also in the developing countries, hard coal, and hence they have aged quickly, which are consuming more and more energy. very quickly, faster than the acceptable market norms.

The energy technologies of Western Euro- pean as well as North American companies Reputable western energy companies do not are becoming too expensive to export; soon exist anymore, as they are either in bank- these countries will not be able to sell their ruptcy, or unable to compete with the mar- products on the global market. Even in their ket players beyond their national borders. In home markets, protective measures such as recent years, Asian companies have present- high import taxes and strict labor codes will ed increasingly cheap offers in thermal pow- need to be implemented in order to avoid an er plant tenders. If such an eastern company influx of cheap labor from abroad. In recent is prequalified in the pre tender procedure, years, China, India, South Korea, and many western companies certainly hesitate to par- other Asian countries have increasingly come ticipate in the process as, in the end, it would to compete in the global energy markets. be a waste of time and resources to go head on against such competitive players. “It is often forgotten, The companies in these countries already as- sert dominance in their home markets with In this way, it is increasingly difficult to -at or ignored, that the their self-made fabrications supported by ad- tract western technologies although they best design which vanced technology and fabrication licenses. may certainly be desired. Price is of little im- Although their products are cheap, they have portance to the new players; they are often allows for the use of serious difficulties in fabricating the latest unaware of the prevailing market figures, and local fuel is accom- and the most efficient designs in compliance hence, they quote extravagantly low prices. with environmental standards that are largely Their labor costs for design and fabrication is plished by tapping adopted across the globe. However, we can extremely low. They seriously have effective into one’s own local predict that these companies will completely market policies that allow them to infiltrate reach these targets soon with the price ad- the global energy market. engineering capital, vantage that they already possess in the first place. namely, local engi- It is often forgotten, or ignored, that the best neering and local design which allows for the use of local fuel We need to reposition our local energy mar- is accomplished by tapping into one’s own construction compa- ket in Turkey, keeping these new develop- local engineering capital, namely, local engi- nies.” ments in mind. We have the engineering and neering and local construction companies. intellectual capacities as well as the market Foreign contractors design the facility, com-

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“Local market forc- mence construction, engage in site installa- independently, in harmony with local inves- tion, and then wait for the guarantee peri- tors, financial institutions and academicians, es should facilitate od of 2-3 years to come to an end. Having engineers, engineering unions, and contract- that these activities fulfilled their obligations, they then leave the ing service providers. We need to take the site. initiative, not to leave it to the foreigners. can be handled We should not employ foreign contractors independently, in just because their labor is cheap. Our ener- On the other hand, the local operator re- gy markets and our energy potential should harmony with local mains in site, running the plant alone for be protected against foreign domination and the long term. It is very difficult to pursue investors, financial incursions. long term rehabilitation and programmed institutions and acad- repair works without the design/fabrication support of the original equipment supplier. emicians, engineers, HOW TO COVER PROJECT Therefore, local design and fabrication are engineering unions, indispensable when it comes to long term FINANCING operations. and contracting ser- Financially, we have serious reasons to sup- vice providers.” port such an end-goal. We have genuine ex- UPCOMING ENERGY CRISIS pectations that Turkey will have an electricity market based on real costs. Seeing that crude oil prices are immediately reflected in local We all know that we are in the midst of an petroleum byproducts, and that the consum- energy crisis; we lack a sufficient energy sup- ers accept this burden in their cost calcula- ply. Our resources are unable to generate the tions, the same will similarly be applied in necessary amounts of energy. In other words, all phases of the price structure for electricity such a huge energy demand is not able to be generation. met by our limited energy supply.

Here, the growing demand for renewable When we evaluate the projections for the technologies, such as wind/solar, cannot supply and demand of electricity for the next “Currently, more than be fulfilled quickly. These technologies will 10-15 years in Turkey, there is no new po- only enter the local energy market with time. tential primary energy resource that could 50% of the electricity Fast/easy/cheap solutions are not available, reduce the ever increasing prices. Hence, the generated in the local nor are they practical or feasible. short term electricity prices are expected to hover in the range of US$ 0.04 - US$ 0.08 market is dependent We must design our own thermal power per kWh in our local electricity market. on imported natu- plants, through the efforts of our own design Considering their rehabilitation and renew- ral gas. Due to the teams, to operate using our own fuels that are available locally, whether they be lignite al costs, the newly privatized thermal power delays in hydro- and or hard coal. We must fabricate the necessary plants will not help to reduce overall electricity prices in the short and medium terms. coal-based power equipment by ourselves in our own fabrication shops. We must take on site installa- plant investments, tion, and ultimately, operate the facilities by Currently, more than 50% of the electricity those imported-natu- ourselves. Our local engineers are capable of generated in the local market is dependent handling the formulation and implementa- on imported natural gas. Due to the delays ral gas firing thermal tion of such plant designs. in hydro- and coal-based power plant in- power plants are op- vestments, those imported-natural gas firing thermal power plants are operating at base We need to create a positive investment cli- erating at base load.” load. Unfortunately, this will increase the de- mate in the local market in order for this to mand for more combined cycle power plant be achieved. Local market forces should fa- investments. cilitate that these activities can be handled

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combination and management of local nat- PREVAILING COAL PRICES ural and socio-economic resources in parallel with the implementation of the latest tech- ON THE GLOBAL MARKET nology.

Thanks to the latest developments in technology, coal fired thermal power plants based It is difficult to think that a country can on PC (Pulverized Coal) and CFB (Circulat- protect its borders if its energy investment ing Fluidized Bed) designs have reached 46% policy is fully import-oriented. Turkey has efficiency and beyond, with the application many energy resources but they are not easy of supercritical pressures and temperatures. to exploit. For example, hydro power in Tur- key, while exhibiting great potential, requires “Energy security is a Imported coal at the prevailing market careful and intelligent policies taken into ac- price of US$ 40-55 per ton, or spot price of count for the impact of such projects on the major parameter that environment and on local rural and urban US$ 2-3 per MMBtu, are now comparable qualifies a country as with the prices of natural gas, at US$ 7-8 areas. per MMBtu, that is used in combined cy- independent. Ener- cle power plants generating electricity with Our local coal mines have varying specifi- gy security can only 60% efficiencies. However, imported coal is cations, even if they are in the same basin. indexed to oil prices and there is no reason be achieved by a Therefore, for better and more efficient firing to expect any drastic change in these price of the available coal in these thermal power prudent combination ranges in the medium and long terms. There- plants, we need to apply more expensive and fore, we should not expect any decrease in and management selective mining techniques rather than our coal prices any time soon. traditional, cheap mining methods. This is of local natural and an expensive investment that is only observa- socio-economic In any case, one should keep in mind that ble in a few private operations in Turkey. the raw coal price of our local Afşin-Elbistan resources in parallel coal is less than US$ 1.80 per MMBtu as of with the implemen- 2014. Nonetheless, firing this coal in our The traditional mining method involves the thermal power plants located nearby is not extraction of coal complete with a host of tation of the latest so easy; this is supplemented by the fact that undesirable and non-burnable materials such technology..” these plants are not so efficient. Specially as sand, ash, moisture, etc. All new import- tailored academic and commercial methods ed-coal fired power plant investors are major need to be explored and enforced to amend players in other sectors which are in need of these deficiencies. cheap electricity. Therefore, they consume almost 60-70% of electricity generated within their own plants. The remainder is then NEW TECHNOLOGIES FOR sold on the national market; and this is not a FIRING DIFFICULT COAL problem seeing that there is always a need for more energy in our ever shrinking energy environment. Generally, local investments are IGCC (Integrated Gasification Combined realized by methods of “corporate finance”. Cycle), CFB, Oxy-fuel firing, and under- Between 1993 and 2005, power plant pro- ground gasification methods could be ap- jects exhibiting an overall installed capacity plied to our local coals with low calorific val- of more than 4000 MW have been realized. ues. CFB, for example, has proven to allow These natural gas firing, cogeneration plants up to an output of 165 MWe per unit. pay for themselves quickly, thus freeing up more money for the use in further invest- Energy security is a major parameter that ments in new plants. qualifies a country as independent. Energy security can only be achieved by a prudent CONCLUSIONS AND RECOM-

119 Page SECOND ISSUE HALUK DIRESKENELI

MENDATIONS

The energy policies of today’s administration prioritize the securement of the best quality, most reliable electricity for the local market at the cheapest rate. Considering this, the effective and rational use of local fuel resources is of vital importance as domestic energy planning is synonymous with planning for the future of the country, allowing us to “We do not have avoid any foreseen economic crises. the luxury to make mistakes in our We do not have the luxury to make mistakes in our energy policies, as any misstep will energy policies, as have severe repercussions down the road. any misstep will have While securing a steady supply of energy is the first priority, it is our sincere and humble severe repercussions opinion that new investments based on im- down the road. While ported-coal are too risky. The construction of such facilities on the coasts of the Black Sea securing a steady adds more up to this risk due to increased supply of energy is coal prices on the world markets and the limited routes through which coal can travel in the first priority, it is the ever-congested Turkish Channels. Rus- our sincere and hum- sian coal is not cheap and it never has been. Moreover, we have bitter relations with Rus- ble opinion that new sians due to downing of SU-24 jet fighter. investments based We must be very careful in issuing Environ- on imported-coal are mental Impact Report certifications as well too risky.” as regulatory licenses. Plants should never be placed on forested lands. Any new and significant increases in a plant’s capacity and any fuel changes from local coal to imported coal should be carefully evaluated. Seaports where the unloading of cargo occurs should be carefully selected. The deep sea discharge of thermal plant bottom ash should also be avoided.

The best price is not the best choice for the long term, consistent, and cheap generation of electricity.

ENERGY POLICY TURKEY Page 120 TURKEY’S 2016 NATIONAL COAL POLICY

121 Page SECOND ISSUE TURKEY’S ENERGY STRATEGIES AND POLITICS RESEARCH CENTER (TESPAM)

FROM A COUNTRY AS BEING A FOLLOWER OF THE INTERNATIONAL ENERGY POLICIES AGENDA

TO THE IDEAL OF MAKING TURKEY AN AGENDA-SETTER COUNTRY

We are on the web. Visit Us @ www.Tespam.org TESPAM is Turkey’s first and only civil organization that is focused on energy policies.

The idea was brought to the public’s attention in 2005 as a civil platform founded by a few students that pursued the goal of contributing to determination of Turkey’s energy politics and strategies and being responsive to the need for training specialists in energy politics that Turkey has been longing for.

In 2015, TESPAM’s main identity was brought alive among energy specialists, who are currently working in governmentally and privately owned energy industry, and academicians from several universi- ties. TESPAM values and brings together a group of young, dynamic and solution-based professionals with the capability of both being self-driven and working in multi-dimensional environments and disciplines.

TESPAM is highly motivated to fill the gap for setting “Turkey’s Energy Agenda”.

TESPAM governs the mission of being an organization that:

• plays an effective role in development of energy policies and strategies,

• executes independent –scientific-realistic studies, conducts useful analyses,

• conducts useful analyses,

• produces projects for Turkey,

• enables training of energy specialists that Turkey needs.

• being a referred organization in determination of energy policies with its analyses and comments,

• being an organization that steers the energy policies.

Address: Phone: +90 312 394 8139 GMK Bulvari, No: 36/11 Fax: +90 312 230 8513 Kızılay, Ankara, Turkey E-mail: [email protected]

We are on the web. Visit Us @ www.Tespam.org FROM THE FIRST AND ONLY CIVIL ORGANIZATION FOCUSED ON ENERGY POLICIES: TESPAM

“from a country as being a follower of the international energy policies agenda to the ideal of making Turkey an agenda-setter country”

Energy Policy Turkey

NEW TURKEY: ONE-STEP FORWARD TO INTERNATIONAL POLICY MAKING

Contact Information

Phone: +90 312 394 8139 Fax: +90 312 230 8513 E-mail: [email protected] Address: GMK Bulvari, No: 36/11 Kızılay, Ankara, Turkey

Visit us @ http://www.EnergyPolicyTurkey.com