EURASIA CRITIC APRIL 2010

April 2010

ENERGY SECURITY OR

GLOBAL CONTENTION

European Union Energy Expectations

By Dimitris Tsarouhas

Supply Perspectives of RussiaBy Ozer Cetinkaya

hub_globally_ing_21x27 3/8/10 11:07 AM Page 1

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C M Y CM MY CY CMY K

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EU-Turkey Energy Security

By Bahadir Murat Akin

New Energy Bridge: Pakistan

By Ali Kulebi

The EU’s Energy Politics

By Dr Dimitris Tsarouhas

Turkey-China: Towards onto an Energy Partnership

By Abdulkadir Emin Onen

Turkish Energy Industry Report

Supply Perspectives of Russia Kremlin Winking at NABUCCO

By Ozer Cetinkaya

Nuclear Energy Gift

By Prof. Dr. Sumer Sahin

Turkey’s Policies for New and Renewable Energy

By Emin Koramaz

Source of Conflict and Life: Energy Future of Iraq

By Volkan Güner

Liberalization Problems of Turkish Energy Market

By Sureyya Yucel Ozden

Hidden Cost of Dirty Energy

By Korol Diker

Choice of Ukraine

By Shemsey Vodinov38

4 EurasiaCritic April 2010

Coal, oil, natural gas, water and nuclear energy are still prior on constructing the international

strategy. This priority will be effective in the first quarter of 21st century. Part-ly determined rules on energy will be reshaped. Reconstructing the balances between suppliers and demanders will cause problems. This situation derives from the suppliers’ desire of having more control on their supplies. Region-al minor conflicts will be maintained if big demanders continue to insist about holding their advantages in energy market. This fundamental factor which will determine the energy security and stability in 21st century, may establish two options:

1. Global depression caused by sudden increase of prices which is a re-sult of climate change by the reactiva-tion of the coal.

2. Finding solutions by giving reciprocative compensations and es-tablishing stability after a international cooperation period.

Oil as DeterminerCountries’ hydrocarbon demand

is increasing in accordance with eco-nomic enlargement. With this picture, it is foreseen that Europe’s dependency on both oil and gas will increased to a huge amount at the year 2020. Devel-oping Eastern Europe will be effective on this increase. Another determiner of price increase is the slipping of the de-veloped countries’ investments towards

Eastern Europe because of the low la-bor cost. Those energy resources which are determiners of world powers’ strat-egy are mostly located in the Eurasia. %67 of world’s oil production is held in this region.

EU provides almost all of its oil demand from this region and this oil trafficking is so much effective on po-litical power struggles. Europe desires to affect the political transformation of Caspian Countries. Caspian countries are getting closer to Russia against this tendency of Europe. Oil demand will increased by %33 in the future 25 years and when this situation is taken into account with western pressure, an up-coming crisis can be predicted.

Crisis would be more destructive if the Iran threat and Iraq’s instability come into the account.

Developing Economies If US meets its energy demand,

EU economy have difficulties because US has the highest amount of demand chart. Results of a distribution clash will be negative for developing coun-tries especially Far East Market. Nega-tive effects of this progress on a devel-oped country Japan should be consid-ered as well as China’s growth rate will be harmed from it. Growth curve is one of the main determinants of the energy security and stability.

General situation of known oil re-serves in the world:

- Middle East oil reserves.

Energy Security Possibility of an Alliance

against China

Editorial

5EurasiaCritic April 2010

- North Africa oil reserves.- West Africa oil reserves.- Alaska oil reserves- Latin America oil reserves- Caspian oil reserves- West Siberia oil reserves- South China Sea oil reserves

should taken into consideration. These areas have vital importance

for US, EU and developing countries especially for China. Domination con-flicts upon those areas have a strategic importance.

Strategies which are built in op-position to each other are establishing threats among energy security. Coun-tries may risk the energy security be-cause of their clashing strategies. New arrangements may appear into the agenda for energy security. Negotia-tions such Kyoto which do not finalized may endanger energy security more.

Clash of NeedsIt is expected that US oil consump-

tion will increase to 27.5 million barrels per day towards the year 2020. On the other hand US natural gas consump-tion will be 1.020 billion cbm in 2020 according to the calculations.

Oil and Natural gas reserves are mostly in Middle East, Caspian Region and Central Asia. Countries located in these regions are seen as unstable because of their regimes according to the consumer countries. Energy agree-ments are usually objected by their functioning and their sustainability.

West Africa gains importance in this process. US and EU sensibility upon this region increases because of the oil reserves in this region.

Sao Tome which is known with its rich oil reserves faced with interven-tions in the recent years. Liberia is also stressed with internal conflicts. All these conditions brings the US in-tervention on the region as an option. US is trying to take gain the advantage before EU just like US did in the Iraq Case.

Events which are established by global economic crisis are appeared with the objection of Euro may lead a closed trade war between US and EU. US Dollar reserve advantage over Euro, enforces Europe to choose al-ternative ways. According to the per-spective of energy security and supplier countries, increasing demand of China and India should be considered.

Position of the SuppliersAmong the predictions brought

up, existence of 70-150 billion barrels of oil in the Central Asia and Caspian Region is assumed. According to some analyzes this amount may reach to 200 billion barrels. According to all assump-tions Central Asia oil reserves come up with its vulnerability to conflict just like West Africa.

After establishing bases in Afghani-stan, US action of establishing bases between Georgia and Central Asia threatens the energy security. Russia

and US are performing an open pro-file conflict while China and EU are performing low profile actions. Results of the struggle points out the Russia as the more powerful one. This situation may cause instability which could even affect China too.

US states may intervene on the sup-plier countries which will try to estab-lish partnerships against US interest. This kind of an action is a huge threat for European Energy Security.

Possibility of an Alliance against China

China’s growth rate and speed of growth shows the Chinese political and economic goal to own a hinterland in Eurasia. Transformation of China’s economic power into a political and military power will affect region coun-tries Russia and India as well as US and EU.

Chinese hunger to Eurasia oil re-serves and South China Sea oil reserves may direct this group of countries to establish a deterrent alliance in the re-gion. Just like Kissinger’s strategy of playing the China card against USSR. Reverse of the Kissinger case may hap-pen.

US behavior of breaking Russian Energy Monopoly may turn into a dif-ferent direction. Washington will act towards the transporting Caspian and Central Asia oil to the West for pre-venting China to use these oil reserves as a last resort.

Energy Security

The continual resistance of the main actors in Europe to show clear, coherent and a unified ini-

tiative concerning the need to enhance its relations with the resource rich Cen-tral Asian Republics through its advan-tageous relationship with Turkey, in spite of the encouragement of the US is causing the western hegemonic project to potentially wither away with the loss of “The Grand Chessboard”1 to Rus-sia and China’s common initiative, the Shanghai Cooperation Organization.

The strategic partnership between the EU and the US requires both to mutually help secure the opposites se-curity interests. The western hegemonic project requires not just the physical and border security of the EU which is being developed through the neighbor-hood policy attempting to expand Eu-ropean influence to the former domin-ions of Russia in Eastern Europe, the Caucuses and far as the Central Asian Turkic Republics (in opposition to the

Russian ‘Near Abroad’ policy and the Shanghai Cooperation Organization-SCO). A similar at-tempt is found in the development of the Euro-Mediterranean cooperation through the Barcelona Process (in opposition to in-creasing economic in-terests and influence of China in the region).

The security of the European energy sup-ply, required for the maintenance of its in-dustry and economy, through diversification of sources of energy import by building new transit ways and se-curing the continuous flow through current ones is also an inseparable part of the above mentioned projects developed

to enhance European regional security and influence in its immediate region

through mutual de-pendence.

Most authors ana-lyzing energy security cite Turkey as crucial for Europe to main-tain its energy security by diversifying its gas sources, decreasing Europe’s dependence on gas provided by Russian Federation sources, in light of the clear utilization of energy supply as a po-litical tool to further Russian interests.

RussiaThe European

need to diversify gas supply has been apparent since the declaration of the new Russian mili-tary doctrine by Vladimir Putin in 2000 that outlined its new security objectives. This declaration was followed by the “Energy Strategy of Russian Federa-tion until 2030” in 2003. Which clearly constituted a warning to countries de-pendent upon Russia’s energy supply was made clear by the inclusion of the following in the preamble:

“Energy resources will constitute an instrument of Russia’s foreign poli-cy”2 This declaration was followed by the agreement of cooperation between Gazprom and the Russian Ministry of Foreign Affairs. Evidence suggests that this development was premeditated. All the Ambassadors of the Russian Fed-eration were recalled back to Moscow for the first time in 16 years to reassess Russia’s foreign policy concept where

EU-Turkey Energy SecurityBy Bahadir Murat Akin

bl p rt of th l h b

The western hegemonic project requires not just the physical and

border security of the EU which is being

developed through the neighborhood policy attempting to expand European influence to the former dominions of Russia in Eastern

Europe, the Caucuses and far as the

Central Asian Turkic Republics.

Energy Security

future relations with EU in the areas of economics, security and energy policies were discussed on 12 July 2002.3

Russia appears to have found its ultimate soft weapon against its opponents: Russia controls 33% of the world natural gas reserves and 5% of the world’s petrol reserves. Meanwhile it is one of the two countries geo-strategically positioned as an access route for Asian gas on route to Europe. As for pro-duction Russia’s share of the world gas market is 24% and 9% of the world pet-rol market. In respect of export Russian

petrol constitutes 7% and 56% of the gas exported in the world.4

The Ambassador of the republic of Ukraine to the Republic of Turkey

states: “energy resources

and energy policy be-came a geopolitical weapon even more dangerous than con-ventional military arsenal…it would take a middle sized war to leave millions of homes in Europe without heating and

hot water; and heavy industry almost ruined without sources of energy. But it took only two weeks for Russia cutting

off gas supply to the EU and Turkey to seed a chaos in Brussels, desperation in Sofia..”5

This statement bears witness to the current European energy insecurity, as 80% of gas going to Europe from Rus-sia (which accounts for 41% of Europe’s gas imports)6 passes through Ukraine.

ChinaThe overshadowing of western am-

bitions in the region by the progress of the Shanghai Cooperation Organiza-tion is becoming a more distinct possi-bility. China is acting faster than Europe in integrating the Central Asian Repub-lics economically to it. A gas pipeline is already being built to Kazakhstan7 and a new agreement has been reached for

f h ld h d

Russia appears to have found its ultimate

soft weapon against its opponents: Russia controls 33% of the world natural gas

reserves and 5% of the world’s petrol reserves.

Energy Security

a project that will bring Turkmen gas to China after passing through Uzbekistan and Kazakhstan.8 China and Russia have used the SCO skillfully by devel-oping it into a quasi OPEC for gas and security alliance. It was soon after the Astana SCO meeting in 2005 that Uzbeki-stan asked the US to leave its K-2 Airbase on its soil with support from the SCO.9 This gives the SCO a mas-sive advantage against Europe’s neighbor-hood policy as it sus-tains Central Asian economies and further integrates these states to Russia and China for its defense security. The EU could not provide any defensive advantages through enhanced relations while mak-

ing continuous demands for further liberalization and democratization of these states.

The EUThis predicament that the EU finds

itself in will only con-tinue as the forecasts reflect a 50% increase in energy require-ments by the year 2030.10 Unless there is a sudden shift in tech-nology rendering fossil fuels obsolete, Europe needs to secure alter-native sources of ener-gy in order to diminish Russia’s hegemonic objectives. At this

point the US perceives the EU’s energy dependency on Russia as a security risk to itself and is attempting to help the

EU secure diverse sources of energy. In spite of US support, it has so far

been the mistakes of the main actors of the EU that has hindered progress in securing energy sources needed for the rest of Europe. France has remained oblivious to the issue of securing al-ternative transit routes mainly because France derives nearly 80% of its energy demand from nuclear sources. France is also wary of the advantage Turkey would gain in its accession process to the EU if it becomes a vital route for energy for Europe. Germany has pre-ferred to sidetrack a common Europe-an energy initiative in favor of bilater-ally securing its energy needs through the Nord Stream Pipeline passing un-der the Baltic Sea that bypasses other transit routes. In order to avoid offend-ing the private arrangement made with Russia, Germany has declined to sup-port projects that would serve to benefit

Th EU ld i h US

The EU could not provide any

defensive advantages through enhanced

relations while making continuous demands for further

liberalization and democratization of

these states.

Energy Security

Europe as a whole.

The US and TurkeyThe overlap of American and Turk-

ish agendas and interests concerning Europe’s energy security allows the two to be studied in parallel. The coherent policy of the US has been the greatest driving force for Turkey becoming an energy hub for Europe. It has even been repeated that the Baku-Tiflisi-Ceyhan pipe project, the first to bypass Russia to bring Asian gas to Europe has been credited as the greatest achievement of the Clinton administration.

It is within the interests of the US and NATO to assist and support said projects as soft policy tools that can be used until the hard policy backing of the US is required. As it was the case dur-ing the 1991 Gulf war where even though it was not an NATO effort, it also involved France, Britain and Italy that sought to prevent Iraqi control over Kuwaiti oil fields and threats to the oil supply from Saudi oil fields.11. The successful implementation of European projects to secure energy sources and transit routes automati-cally secures energy sources and tran-sit routes to the US as well since any source that provides fuel for one would provide fuel for the other.

The economic security of Europe will continue to be supported by the US as long as Europe continues to be dependent on the US for its own se-curity (hence preventing Europe from becoming a military rival). At this point it is worth mentioning that the there is criticism in the US that ESDP could develop enough to compete with NATO, however US policy makers be-lieve they can keep such aspirations in check while simultaneously diversify-ing its military presence to other areas that might require it and is pressuring Europe to take on a greater share of its military burden (without actually taking on all of it).

All sources researched for this pa-per repeatedly state the need for EU not to push Turkey away. How Turkey has been a loyal ally to the US and Eu-rope since Turkey joined NATO in 1952 and supported allied efforts from Korea to Afghanistan. Repeatedly underlined is the necessity of the Nabucco projects implementation as the Main Oil Pipe-line (MEP) for gas and oil derived from

the Caspian Sea and the Central Asian Republics for building of a mutually de-pendent relationship.

This necessity has also been out-lined by the Marc Grossman, Former Ambassador to Ankara (1994-1997) in his paper written in 2007.

“There are many other pipeline projects in and around Turkey that can have a direct impact on us and Euro-

ist and support said

l i l d F

US perceives the EU’s energy dependency on

Russia as a security risk to itself and is attempting to help

the EU secure diverse sources of energy.

Energy Security

pean energy security...new East-West oil pipelines, in addition to the return to full capacity of the Kirkuk-Ceyhan pipeline, will bring more crude to mar-ket. East-West natural gas pipelines, including the proposed south Caucasus gas pipeline (Baku-Erzurum-Ceyhan) and the Turkey-Greece-Italy Gas Pipe-line will transport this key commodity west. Projected North-lines, including the Samsun ceyhan oil pipeline and, perhaps some day, a Turkey-Israel oil gas pipeline, could also add to the West’s energy security…

No one knows what the future holds in Russia, but dreams of a democratic Russia tied positively to Europe have faded, at least for now. Russia’s intimi-dation of natural gas customers, distor-tion of the goals of missile defense de-ployments and such makes it vital that NATO remains strong and that Turkey remains strongly committed to NATO.

Instead, the EU must leave the door open to Turkey’s membership as-pirations and make them dependent on Turkey’s own performance. Turks will need to work for another decade to fully meet EU standards. If the EU does not have its goal posts, Turkey will be a stronger society in 10 years, ready for full EU membership and even more ready to contribute to a Europe, and a neighborhood, whole, free and at peace…

The Turkish government can act to promote tolerance in ways that are symbolically crucial, for instance open-ing the land border with Armenia and opening the Greek Orthodox training school for priests in Istanbul. Ankara also needs to support basic freedoms by abolishing the sec-tions of the penal code which restrict freedom of speech. Taking these steps would demon-strate that Turkey con-tinues on the road to a more open, pluralistic and tolerant society.

By paying active attention to Turkey’s future today, US and European leaders can shape a positive out-come and Turkey’s success will further en-hance and European security”.12

The accuracy of the predictions of Marc Grossman, Former US ambas-sador to Turkey, makes concerning the future function of Turkey is surprising, especially when one considers that just recently the Kirkuk-Ceyhan pipeline was reopened and an agreement was signed with Israel to develop a new pipeline the previous week.13

The lack of alternative energy corri-

dors also does not prevent the pressure for foreign policy concessions (in the form of opening the borders with Ar-menia for example). In spite of the fact that the EU and the US hegemonic am-bitions require Turkey as a policy tool in order to succeed, more than Turkey

needs them. The pressures

on the Turkish state continue to mount in spite of the opportu-nity to make demands of its own. Turkey is a net energy importing country that needs to secure its energy in-terests by the middle of the next decade. Energy security is one of the few areas where the US and Turkey are in absolute agreement. The insis-tence of US President

Obama towards the EU to allow Turkey to join reflects this.

The US foresees European interests better than the EU itself does. The join-ing of Turkey and the EU will secure transit lines for Europe while enhanc-ing European relation with the east in general. With Turkey as a member the neighborhood policy can be expanded to include Azerbaijan and the Central Asian Republics which are wary of Russian monopolistic and imperialistic tendencies concerning their resources, as Russia prevents or attempts to block these states from diversifying their cli-ent base and enhance their relations with Europe.

This arrangement will prove to be mutually beneficial for Turkey as well, since it would be difficult for Turkey to enhance its own relations with these states currently under Russian patron-age without western backing, while se-curing energy at a lower cost for itself.

The “diversification with Europe-anization through Turkey”14 Should become the EU’s main foreign policy goal in order to achieve several objec-tives. Unless Turkey is used as the main bridge to Central Asian energy sources,

di i f Ob d

Unless Turkey is used as the main bridge to Central Asian energy

sources, the advantage of acquiring energy

from its primary source with lower

overhead costs will seem a lesser loss then the loss of the Central

Asian Republics politically to Russia

and China.

Energy Security

the advantage of acquiring energy from its primary source with lower overhead costs will seem a lesser loss then the loss of the Central Asian Republics politi-cally to Russia and China.

Europe needs to immediately tone down its demands on Turkey concern-ing the accession process and speed up the Nabucco project in order to, at this point not catch up but at least secure some vital resources in Central Asia. Anything less will make Europe noth-ing but a minor actor in world affairs and entirely dependent on Russia to sustain its economy, while also burden-ing and weakening the US for its lack of ability in defending its own borders.

The inability of the EU to show clear initiative in developing a unified energy foreign policy in spite of clear warnings over the past ten year of fu-ture developments concerning its en-ergy security interests, will continue to hinder the trans-atlantic hegemonic

project to a degree that if continued will cause irreversible damage to the project and even the trans-atlantic alliance it-self once the control of the lifeline that sustains the European economic engine is out of reach.

References1 The title of the book by Zbigniew Brezinski

written in 1997 that was meant to be a guide for American primacy and its geostrategic impera-tives in “the only place where the pieces of the puzzle have not been set yet”

2 Sergiy Korsunsky, “Pipeline diplomacy: it is time to choose or get prepared”, The Diplomatic Observer, No:14, April 2009, p. 14

3 Nazım Cafersoy, “Bölgeler ve olaylar – Rusya –Ukrayna”, Stratejik Analiz, No:28 August 2002, p. 127

4 All information listed summarized from:http://web.worldbank.org/WBSITE/EXTER-

NAL/COUNTRIES/ECAEXT/RUSSIANFEDERATIONEXTN/0,,contentMDK:20888536~menuPK:2445695~pagePK:1497618~piPK:217854~theSitePK:305600,00.html , accessed on 25/5/2009

5 Sergiy Korsunsky, “Pipeline diplomacy: it is time to choose or get prepared”, The Diplomatic

Observer, No:14, p. 14 6 J. Bielecki / The Quarterly Review of Eco-

nomics and Finance 42 (2002) 235–250 2477 Kazakistan-Çin doğal gaz boru hattı inşaatı

başladı (Kazakh-Chinese gasp iple construction has begun), Referans, 09.07.2008

8 Türkmenistan-Çin doğal gaz boru hattının inşaatına başlanacak(Turkmen-Chinese gas-pipline construction will commence), Referans, 08.04.2009

9 http://www.hindu.com/2005/07/08/stories/ 2005070800711400.htm , retrieved 04.06.2009

10 TMMOB: “ Enerji Raporu- 2006” (Energy Report-2006), yağmur ofset, Ankara, 2006, p.11

11 Paul Gallis, “NATO and Energy Security”, CRS Report for Congress, 2006, p.5

12 Marc Grossman, “Tur-key: Key to US and EU Security and Defense Inter-ests A Reflection”, CROSSROADS The Mace-donian Foreign Policy Journal ( CROSS-ROADS The Macedonian Foreign Policy Jour-nal), issue: 03 / 2007, pages: 116123,

13 Hurriyet, 2/6/200914 Vokan Özdemir, “Turkey’s role in Euro-

pean Energy Security”, Europe’s Energy Security, Central Asia – Caucasus Institute & Silk Road Studies Program, 2008

,p.108

Turkey-China

An energy partnership agree-ment signed between Turkey and China while the Turkish

President Abdullah Gül’s visit to China. A new era has been started between Turkey – China relationship with the signing of this agreement which can be seen in the analysis of the agreement below.

Memorandum of Understanding on Cooperation in the Energy Sector which was signed between Republic of Turkey, Ministry of Energy and the National Energy Administration of the People’s Republic of China is primarily a cooperation memorandum. Coopera-tion areas and route map of Turkey – China partnership had been decided. According to the memorandum:

Proposed Cooperation Areas1. Renewable Energy2. Energy conservation and en-

ergy productivity3. Rehabilitation of transformer

substations and hydroelectric power plants jointly

4. Manufacturing electricity gen-eration systems for the utilization of

renewable energy sources such as wind, solar, small water sources etc.

5. Hydrocarbon exploration and production

6. Mining Technologies7. Boron Technologies 8. Production of solar energy

equipment 9. Thermal power ( coal, oil and

natural gas as power)10. Hydroelectric Power Plants11. Nuclear EnergyThis memorandum of understand-

ing consists of 6 articles and it bases on the parties’ agreement to encourage their enterprises to discuss possibilities for bilateral and mutually beneficial co-operation in the energy sector in line with applicable laws and regulations of both countries. Memorandum of Un-derstanding has a constructive prop-erty.

Importance of the Memorandum of Understanding

MoU is important edge point for Turkish Foreign Policy and Turkey’s Asian Policy since the year 2003 but firstly it is important for bilateral rela-

tions of Turkey and China. Turkey for-mulated a new strategy towards Asia which is based on a economy – energy survey during the Justice and Develop-ment Party Government. Trade volume between Turkey and Asian Countries increased by 25% -30% between 2003 - 2009, this is a clear success of the new strategy of Turkey. Also Turkey’s inter-est is so much increased towards the Asia according to the Turkish Govern-ment visits to Asia. These visits do not only arranged for strengthen the diplo-matic relations, they also have concrete results such as signing of Memoran-dum of Understanding. This MoU was signed during the President Abdullah Gül’s visit to China at 23-29 June. This was the first presidential visit to China after the Demirel’s visit in 1995.

Important points come forward when interpreting the Turkey’s Energy Policy during Justice and Development Party Government. It should be under-lined that Turkey is no more develop-ing strategies on basis the of being an energy bridge but Turkey focuses on becoming an energy corridor and being a thermal country. Turkey is not only concentrating on becoming an energy corridor on east-west direction, Turkey also developing strategies to become a multidirectional energy corridor which includes north – south direction just like general Foreign Policy Strategy of Turkey. Turkey aims to become a global actor on energy with taking parts at the regional and global energy projects.

Turkey – China Relations To understand the China’s impor-

tance for Turkey, it should be stated that China is the biggest trade partner of

Turkey-China: Towards onto an Energy Partnership

By Abdulkadir Emin Onen

Turkey-China

Turkey in the Far East and China is the 3rd country within the Turkey’s import ranking. Trade volume between Turkey and China is increased by 40% in 2008 in spite of the global financial crisis. In 2002, Turkey’s trade volume with China was $ 1.4 billion dollars, this trade vol-ume is increased by 7-8 times and it is $ 14-15 billion dollars today. Briefly this MoU is signed in accordance with the developing economic relations between Turkey and China.

This MoU is expected to strengthen the development and diversification of Turkey – China relations on a collabo-ration perspective. This collaboration memorandum will be a step on bearing Turkey – China relationship to a strate-gic level in the future. Turkey – Russia relations is a good example for proving the fact that developing energy-trade relation has a significantly positive af-fect on the development of political relations. China which has veto power in UN Security Council, has a potential for being a superpower in the near fu-ture. Cooperation between Turkey and China on politics become a stronger possibility by the development of en-

ergy cooperation between Turkey and China.

On the other hand, China will invest to Turkey according to the MoU and these investments will help Turkey to meet the deficits of Turkey-China trade relation. According to the Chinese Per-spective, energy cooperation with Tur-key and designation of Turkey as a stra-tegic base (after the Turkey President Gül’s signing of a agree-ment on establishing a investment base in Turkey with Chinese Huawi Company) will be an important boost for developing China’s Middle East Initia-tive. Turkey’s cooperation with world’s potential superpower China in Middle East is not only an issue of energy sec-tor, it also provides important advan-tages in world politics for Turkey.

ConclusionEnergy Memorandum Article is a

turning point for bilateral relations of Turkey and China in general and it is

also a turning point for energy relations in private. Countries which can provide energy security will be the main actors of international politics according to the energy security aspect. This Mem-orandum is a milestone for providing Turkey’s energy security. China invest-ment to energy sector of Turkey, is an important contribution to efforts on

satisfying Turkey’s en-ergy need and proving Turkey’s energy securi-ty. Chinese investment of renewable energy and nuclear energy will give the ability of mul-tiplying energy sources for Turkey. Energy is becoming the most im-

portant cooperation issue between Tur-key and China in this sense. Coopera-tion on producing energy with China is strategically beneficial for Turkey. Tur-key – China energy cooperation is based on the strategy of bilateral cooperation and win – win approach. Benefits which will gained through energy cooperation in the future will give positive opportu-nities to both state and individuals.

Chinese investment of renewable energy and nuclear energy will give the ability

of multiplying energy sources for Turkey.

Nuclear energy is the main en-ergy source of universe because all stars including sun produce

their energy from fusion nuclear reac-tions. Fusion is the producing engine of the energy resources. All energy sourc-es are transformation of the energy which is derived from fusion in the sun. World’s energy future will be shaped by nuclear energy for certain because density of nuclear energy is significantly higher than any other energy types. The main cause at heading towards nuclear

energy in the 21st century is that nuclear technology is the locomotive engine of developing high level technology and electricity is a by product energy. The ratio between the need of science and technology and the need of technology is equal. If you need high level science and technology, you will need nuclear energy absolutely. Alterna-tive energy sources cannot replace the role of nuclear en-ergy.

Hydraulic en-ergy and wind power have a very low density of energy when they are com-pared to conventional thermal energy, which is produced by chemical burning (coal, natural gas, oil) and its density is

higher than both hydraulic energy and wind power by ~ 10000 times. Thermal energy has been the main energy type used in the 19th and 20th centuries. Den-sity of nuclear energy is 10 million – 100 million times higher than conventional

thermal energy. Chemi-cal energy production per reaction is in the range of few electron volts, but energy pro-duction from fission per reaction is 200 million electron volts and en-ergy production from fusion is 17 million elec-

tron volts. 1/5000 of natural waters are heavy water. If extract deuterium from 1 lt of natural water and burn it in fu-sion reactor, produced energy will be equivalent to the energy which will be

produced from burning of 300 lt of benzine.

Load factor of nuclear en-ergy is also another important is-sue which shows the superiority of nuclear energy. Load factor of

Nuclear Energy GiftBy Prof. Dr. Sumer Sahin

Density of nuclear energy is 10 million

– 100 million times higher than

conventional thermal energy.

Nuclear Turkey

nuclear reactors is around 90 % - 98 %.Developed countries use nuclear

energy widespread but underdevel-oped countries still producing energy from chemical thermal energy or hy-dro power. The block which has most widespread use of nuclear energy is EU. Among the countries US is the leading country in nuclear energy use. EU and US are giving a high level of importance to nuclear energy. For in-stance, Belgium which can be counted as a small country by its territory size has 7 nuclear centrals. Europe does not have the raw material resources needed for producing nuclear energy; Europe takes needed raw material from Afri-ca. The raw nuclear material is mainly uranium. In spite of its resources Af-rica does not have any nuclear power plants except two nuclear Load factor in South Africa.

There are great discrepencies in dis-tribution of energy worldwide. There are 1.5 billion people who have not interacted with electrical energy and there are 750 million people who have

not even seen the electrical light. This is a big inequality on sharing the energy among humanity.

Nuclear energy production does not have that much danger which environ-mental associations mentioned. Nucle-ar power plants are constructions of high level technology and there are no safety problems about any issue. Argu-ments which defend that nuclear power plants are deadly dangerous are a piece of slanders. The worst disaster caused by nuclear energy was the Chernobyl Disaster which was happened in 1986. Nearly 30-40 people died by immedi-ate effects, and some more thereafter. This death count is very near to a dead count which will be caused from a plane crush. Radioactive nuclear waste mate-rial produced by world’s nuclear reac-tors is 500 cubic meters/year; amount of industrial hazardous materials which consist of extremely highly toxic, carci-nogenic materials are 10 million cubic meters measured in a year. Other in-dustrial waste is measured as 1 billion cubic meter per year. Danger caused by

highly toxic industrial waste is not less than the danger may be caused from radioactive nuclear waste. Nuclear ra-diation exists since the universe’s exis-tence; it comes from sun, space, human, from stones, etc. There are radioactive materials everywhere so everybody is exposed to radiation at any place or situation. Intensity of radiation is the determining factor for the danger rate of nuclear energy.

Discussions on the danger of nucle-ar energy production are not scientific based discussions. Ideological aspects are coming forward while discussing this issue. There is a tendency towards anti-nuclear idea within some marginal groups in Turkey. These people, who are against nuclear energy, have not much information on nuclear energy so they can be called as half enlight-

Nuclear Turkey

ened people. Anti-nuclear movements have no rational base actually. Even Patrick Moore (http://www.greenspirit.com/index.cfm) who is the founder of “Greenpeace” (an environmental-ist association), admitted that nuclear energy is a need for future demand in his article published in The Wash-ington Post in 2006. Moore also adds that environmentalist movements are opposing to all high technology and heavy machines and this leads world to a blind alley. In his Nuclear Statement to the US Congressional Committee http://www.greenspirit.com/logbook.cfm?msid=70, he states wordly “I want

to conclude by emphasizing that nucle-ar energy – combined with the use of other alternative energy sources like wind, geothermal and hydro – remains the only practical, safe and environ-mentally-friendly means of resolving America’s energy crisis. If America is to meet its ever increasing demands for energy, then the American nuclear in-dustry must be revitalized and allowed to grow. The time for common sense and scientifically-sound leadership on the nuclear energy issue is now.”

The main aim of international trea-ties which were on nuclear energy is to develop nuclear energy for commercial

uses. Treaties were functioned well in 60s and they prevented a potential nu-clear weapon production spread over the world. Also they contain articles on helping no-nuclear countries to devel-op their nuclear energy. But developed countries generally offer alternative en-ergy sources to underdeveloped coun-tries. This behavior is honest. Countries which do not have nuclear energy such Turkey signed the Nuclear Non-Pro-liferation Treaty (NPT), although Tur-key did not need to sign this kind of a treaty because Turkey has no nuclear energy production so it is a mistaken and meaningless policy for Turkey, be-fore the start of the construction of a nuclear reactor. International treaties about nuclear energy are adequate for today but there is a problem in their functioning. Countries which have nu-clear weapons have an intention to not signing these treaties such Israel. These treaties are expected to control the Pro-liferation of nuclear weapons but they are not effective on the countries which have nuclear weapons.

As stated before, most developed countries on producing and using nu-clear energy are within the EU. US is the another country which has a high level of nuclear energy technology. Nu-clear energy is an important gift given by God to people, every people on the world should benefit from nuclear en-ergy. There are countries which have broken this nuclear energy monopoly. Those countries such as Japan and South Korea achieved their success by applying methodical state policies. The safest and most developed nuclear re-actors are designed and constructed by Japan. Canada and South Korea can be counted also as other most success-ful countries about designing and con-structing very safe nuclear reactors.

Turkey has been signing protocols to construct a nuclear power plant for 40 years. The first agreement on construct-ing a nuclear power plant in Akkuyu - Turkey was signed in 1960s with Swe-den. All issues negotiated and finalized between Turkey and Sweden. There was a road problem to Akkuyu that roads were not sufficient to carry heavy

Nuclear Turkey

loads and Turkey was expected to solve this problem because this issue was not included in the nuclear reac-tor construction pack-age proposal given by Sweden. Turkey simply did nothing to solve this problem. Agree-ment between Turkey and Sweden is then cancelled by Sweden. Protocols on construc-tion of nuclear centrals in Turkey were signed with various countries like Canada, France, Germany, US but none of them finalized in the near past. There are no expecta-tions of a nuclear energy development in Middle East until the year 2050. Iran and United Arab Emirates are excep-tional. UAE came to an agreement on building a nuclear power plant with South Korea. Iran is studying on nucle-

ar energy by its own. .Shah Regime was

giving a particular im-portance on nuclear energy production in Iran. Shah regime was overthrown by Kho-meini while France – Germany Partner-ship was constructing two nuclear reactors in Iran. 60% of the construction was fin-ished at the time when Khomeini became the leader of Iran. Khomeini govern-ment stopped nuclear power plant construc-tion because of their

anti-western ideas. In 90s, Iran signed a treaty with Russia for finishing up the constructions of these reactors. In a speech of Iran Energy Minister which was made in 2009 stated that “Russia did not finish the nuclear centrals for 20 years and Russia is not likely to fin-

ish them in the next 200 years.” Iran decided to develop nuclear fuel needs by its own after Russia’s unwillingness to complete the Iranian nuclear reac-tors. Iran started the uranium enrich-ment program at last. Iran’s studies on nuclear energy aim at commercial use of nuclear energy, so far. This uranium enrichment only provides the needed fuel for the nuclear reactors which were not finished yet.

There are chances for countries which do not have nuclear energy pro-duction yet actually if they choose and come to an agreement with a quali-fied country or partnership for build-ing nuclear power plants on their ter-ritory. Qualifications of the countries which are capable of building nuclear centrals are important at this point. For instance, Russia has an unsuccessful past on building nuclear power plants with the Iran case. Japan Hitachi Com-pany can be called as the most success-ful company on building nuclear power plants. Hitachi Company is able to fin-ish a nuclear power plant in 39 months

Countries which do not have nuclear

energy such Turkey signed the Nuclear Non-Proliferation

Treaty (NPT), although Turkey

did not need to sign this kind of a treaty because Turkey has no nuclear energy production so it

is a mistaken and meaningless policy for Turkey, before the start of the construction of

a nuclear reactor.

Nuclear Turkey

if agreement is signed, this speed can be called as a record in nuclear power plant building. Canada finishes building up a nuclear power plant in 60 months, US lost its capability of building nuclear reactors within the last 30 years so US orders nuclear reactor com-ponents from South Korea. On the other hand France – Germa-ny partnership builds nuclear power plants in 5 or 6 six years in their own countries but their past about build-ing centrals abroad is unsuccessful. Build-ing of a nuclear power plant to Brazil took 24 years and 6 months for France – Ger-many Partnership. This partnership has not finished building of another reac-tor in Finland which was started ~ 15 years ago. If Turkey or countries like

Turkey have plans for building nuclear power plants, they have to have correct knowledge about nuclear power plants and they are obliged to design a well-planned program for nuclear energy fu-

ture. Qualifications of companies and coun-tries should be exam-ined well and deci-sions should be taken carefully with a stable government policy. A nuclear power plant produces electricity for a century; it is a long term and produc-tive investment.

If Turkey had started a nuclear en-ergy program 40 or 50

years ago, today per capita of Turkey would be around 30000 – 40000 dollars. Also EU would open its gates to Tur-key, if Turkey becomes a country which has high level of technology. If Turkey

prepares and applies a nuclear energy program efficiently for forthcoming 5 years, Turkey’s membership of the EU will be approved before the year 2015. Nuclear energy usage is a determining factor for a country’s respect in inter-national area. Turkey will not face with problems such as Armenian Genocide arrogations if Turkey focuses on high level technology and succeeds.

Foreign approach on Turkish tech-nology development should be inter-preted carefully. Western countries have a subtile tendency to undermine some technological developments be-cause they will benefit from an increased dependency of Turkey. It should not be forgotten that Turkey had stopped de-veloping airplane industry because the US offered airplanes practically free of charge in 50’s.

If a country wants to achieve a high level of technology and development, the one and only guide is science lead-ing to industrial production.

Iran’s studies on nuclear energy aim at commercial use of nuclear energy,

so far. This uranium enrichment only

provides the needed fuel for the nuclear reactors which were

not finished yet.

Nuclear Turkey

Iraqi Energy Future

Planning and managing an en-ergy future is a hard quest for a country like Iraq. Iraq is in a

conflict zone which maintains various religious and ethnic groups. Conflict in the country is based on political, ethnic and economic problems. Especially af-ter the US invasion in 2002, Iraq energy resources became a bigger question for the sides of this conflict. Iraq is ex-pected to have sta-bility after the elec-tions held in March 7th, 2010. There are also some analysts who state that after the elections and US army withdrawn from Iraq there will be a state of conflict. The attacks and deaths on the Election Day can be un-derstood as signals of an upcoming civil war in Iraq. All these issues will strongly affect the energy future of country. For understanding and interpreting the situation of energy, Iraq’s energy evo-lution should be examined, especially situation on oil and natural gas.

Iraq was the world’s 13th largest oil producer in 2008, and has the world’s third largest proven petroleum reserves after Saudi Arabia and Canada. Just a fraction of Iraq’s known fields are in development, and Iraq may be one of the few places left where vast reserves, proven and unknown, have barely been exploited. Iraq’s energy sector is heav-ily based upon oil, with approximately 94 percent of its energy needs met with petroleum. According to the Interna-tional Monetary Fund, crude oil export

revenues represented over 75 percent of GDP and 86 percent of government revenues in 20081.

Sanctions undermined Iraq’s oil sec-tor and Iraq’s oil infrastructure needs to be reformed. US allocation of $ 2.05 billion to Iraqi oil and gas sector

started a kind of reforma-tion but it was ended in 2008. In 2009, Iraqi bud-get accepted $ 3.2 billion allocation to Ministry of Oil it was a %50 percent increase from the 2008 base budget. US govern-ment agencies reported

that Iraqi reconstruction of oil, gas and electricity sectors cost $ 100 billion or higher. International oil companies are expected to be aided according to the

Hydrocarbons Law in accordance with their investments.

OilOil and Gas Journal announced that

Iraq has oil reserves which contain 115 billion barrels but statistics have not been revised since 2001. In the unex-plored territories of Iraq (western and Southern Deserts) there may be addi-tional coverable oil of 45 to 100 billion barrels.

One of the main problems on oil is the division of resources across sectar-ian demographic lines. Hydrocarbon resources are mostly found in the Shi-ite areas of the South and resources of Northern Iraq which is ethnically Kurd-ish is controlled by Sunni minority.

Eastern edge of Iraq is known as the oil and gas depot of the country. There are 9 fields which are called as “Super Giants” (over 5 billion barrels) and there are 22 fields which are known as “Giant” fields (over 1 billion barrels). Southeastern Iraq con-tains the largest known concentration of such fields. This region also has the 70 to 80 percent of the Iraq’s proven oil sources. 20 percent of oil resources are locat-ed in the north of Iraq, near Kirkuk, Mosul, and Khanaqin. This area is controlled by the Kurds and other groups living

Source of Conflict and Life: Energy Future of Iraq

By Volkan Guner

The attacks and deaths on the Election Day can be understood as

signals of an upcoming civil war in Iraq.

Iraqi Energy Future

in that region.

Oil ProductionState owned oil companies were

producing oil at an average of 2.4 mil-lion barrels per day. In 2008, produc-tion was 2.1 million barrels per day in 2007. Pre-war production capacity level still not reached which was 2.8 million barrels per day in 2003. Nearly 66% of the production comes from the south-ern fields. Actually, three giant fields are the major production areas: North and South Rumelia and Kirkuk.

Currently, the Min-istry of Oil has central control over oil and gas production and development in all but the Kurdish terri-tory through its three operating entities, the North Oil Company (NOC), the South Oil Company (SOC), and the Missan Oil Com-pany (MOC), which was split off from the South Oil Company in 2008. According to the NOC’s website, their concession and juris-diction extends from the Turkish borders in the north to 32.5 degrees latitude (about 100 miles south of Baghdad), and from Iranian borders in the east to Syrian and Jordanian bor-ders in the west. The company’s geo-graphical operation area spans the fol-lowing governorates: Tamim (Kirkuk), Nineveh, Irbil, Baghdad, Diyala and part of Babil to Hilla and Wasit to Kut. The remainder falls under the jurisdic-tion of the SOC and MOC, and though smaller in geographical size, includes the majority of proven reserves. MOC’s oil fields hold an estimated 30 billion barrels of reserves. They include Ama-ra, Halfaya, Huwaiza, Noor, Rifaee, Di-jaila, Kumait and East Rafidain.

DevelopmentIraq government aims to increase

oil production by 300.000 barrels per day 70 2.7 million barrels by the end of

2010. Crude oil production capacity is expected to become 1.5 million barrels per day within 3-4 years and by an ad-ditional 2 million barrels per day to a total of 6 million barrels per day within 10 years according to the Iraq’s 10 year

strategic plan (2008-2017). As part of this plan, Iraq planned three licensing rounds. The first was announced June 30, 2008, and included plans to rehabili-tate six giant producing fields with re-serves of over 43 billion barrels. These

One of the main problems on oil is the division of resources across

sectarian demographic lines. Hydrocarbon

resources are mostly found in the Shiite areas of the South and resources of

Northern Iraq which is ethnically Kurdish is controlled by Sunni

minority.

Iraqi Energy Future

contracts were planned to be awarded by mid-2009. The second bidding round was announced in December 2008 for fields that were explored but not fully developed. Iraq also plans to sign delin-eation agreements on shared oil fields with Kuwait and Iran. It would like to set up joint committees with its neigh-bors on how to share the oil. In April 2009, Iraq started work on the Safwan field with Kuwait.

Kurdistan Regional Government Issues

The Kurdistan Re-gional Government (KRG), the official rul-ing body of a federated region in northern Iraq that is predominantly Kurdish, passed its own hydrocarbons law in 2007. Despite the lack of a national Iraqi law governing invest-ment in hydrocarbons, KRG has signed oil production sharing, development and exploration contracts with several foreign firms. In addition, more than a dozen contracts signed by

the central government with interna-tional companies during Saddam Hus-sein’s regime are being renegotiated or may come under review when Iraq’s oil law and investment framework is in place. In the interim, the Iraqi Ministry of Oil has approved a request from the KRG to send 60,000 barrels per day of crude oil from the Tawke and Taq

fields in the Kurdish region to the northern Iraq export pipeline, effective June 2009. KRG Natural Re-sources Minister Ashti Hawrami expects Kurdish production to reach 250,000 barrels per day by early 2010.

Refining Iraqi refineries,

with a total capacity of almost 600,000 bar-rels per day, have anti-quated infrastructure, and their output does not reflect the current demand mix. Despite improvements in re-cent years, the sector

has not been able to meet domestic demand for most refined products, and the refineries produce too much heavy

fuel oil. As a result, Iraq relies on im-ports for about one fourth of the petro-leum products it uses, with total petro-leum product consumption averaging about 600,000 barrels per day in 2008. To alleviate product shortages, Iraq’s 10-year strategic plan for 2008-2017 set a goal of increasing refining capac-ity from 600,000 barrels per day to 1.5 million barrels per day. Iraq has plans for 5 new refineries, as well as plans for expanding the existing Daura and Bas-rah refineries.

Natural Gas Reserves

According to the Oil and Gas Journal,Iraq’s proven natural gas re-serves are 112 trillion cubic feet (Tcf). An estimated 70 percent of these lie in Basra governorate in the south of Iraq. Probable Iraqi reserves have been esti-mated at 275-300 Tcf, and work is cur-rently underway by several IOCs and in-dependents to accurately update hydro-carbon reserve numbers. Iraq’s proven gas reserves are the tenth largest in the world, and two-thirds of resources are associated with oil fields including, Kirkuk, as well as the southern Nahr (Bin) Umar, Majnoon, Halfaya, Nas-siriya, the Rumaila fields, West Qurna, and Zubair. Just under 20 percent of known gas reserves are non-associated; around 10 percent is salt “dome” gas. The majority of non-associated reserves are concentrated in several fields in the North including: Ajil, Bai Hassan, Jam-bur, Chemchemal, Kor Mor, Khashem

ti t t has not been

Iraq government made agreements with 45 companies from 23

countries in December 2009 which is on

oil reserves worth $ 41.2 billion. Russian giant oil production

company LUKoil which was withdrawn

from Iraq after the Iraq War in 2002,

has been returned to west Kurna-2 region with the cooperation of Norwegian Statoil

(ASA) Company.

Iraqi Energy Future

al-Ahmar, and al-Mansuriyah.

ProductionIraqi natural gas production has ris-

en since 2003, and has returned to levels reached during the mid-1990’s. Howev-er, its 2006 dry natural gas production of approximately 104 billion cubic feet (Bcf) per year is still far below its peak level of 215 Bcf reached in 1989. The Ministry of Oil reported that approxi-mately 60 percent of associated natural gas production is flared due to a lack of sufficient infrastructure to utilize it for consumption and export. Significant volumes of gas are also re-injectedto en-hance oil recovery efforts. In addition, the flaring of the natural gas has meant lost Liquefied Petroleum Gas (LPG) output of an estimated 4,000 tons per day, while at the same time there are LPG shortages requiring imports of 1,200 tons per day. To reduce flaring, the state-owned South Gas Compa-ny signed an agreement with Shell in Sep-tember 2008to implement a 25-year proj-ect to capture flared gas and provide it for domestic use, with any sur-plus sent to an LNG project for export.

Upstream DevelopmentThe non-associated gas fields re-

portedly slated for priority development are mostly in the northern governorates near Kirkuk, including: al-Mansuriyah and the nearby Khashem al-Ahmar and Jaria Pika, Kor Mor, Akkas, Chemche-mal and Siba. It is also been reported that the government of Iraq plans to capture more associated gas at Rumaila and Az-Zubair within five to ten years.

Iraq’s 10-year strategic plan for 2008-2017 set a goal of increasing natu-ral gas production to 2.5 trillion cubic feet per year, and to end the flaring of natural gas. As part of this plan, Iraq planned three licensing rounds. The first was announced June 30, 2008, and

included an expected $5 billion invest-ment for natural gas fields with 22 Tcf of reserves, including Akkas in the western desert and al-Mansuriyah in the east. The contracts to develop these fields are planned for mid-2009. The second bidding round with 26 Tcf of reserves was planned for 2009, and includes the Siba field in the Basra area.

Iraq signed an agreement on produc-ing oil in Bedra Region with a consor-tium which is a partnership of Russian Gasprom Neft Turkish TPAO, South Korean Kogas and Malaysian Petronas. Iraqi State owned oil companies have a share of %25 in this consortium. This consortium won a bid which was held in December 2009. This agreement will

LNG j f

US is planning to withdraw from Iraq until 2011, after US withdrawn, Iraq is

expected have more problems about

internal security.

Iraqi Energy Future

last for 20 years of time which is made for oil production of oil. Production is 170.000 barrels per day in Bedra region. Iraq government made agreements with 45 companies from 23 countries in December 2009 which is on oil reserves worth $ 41.2 billion. Russian giant oil production company LUKoil which was withdrawn from Iraq after the Iraq War in 2002, has been returned to west Kurna-2 region with the cooperation

of Norwegian Statoil (ASA) Company. Russia had cancelled the payment of Iraq’s dept of $ 10 billion.

It is clear that Iraq is getting more and more privatized on producing and selling energy. International status and US effect on energy obliges Iraq to that kind of a policy. Iraq’s energy policy cannot be designed by Iraq’s own. Not only international pressure but home affairs of Iraq are so much complicat-

ed. Election cannot solve those inter-nal problems in a short – time period. Energy games on Iraq will expected to continue after the election but actors and roles are a bit changing.

Iran was the most benefited country from the US invasion of Iraq in 2002. Actually, Iran got stronger and stronger after the invasion. Iran started the ura-nium enrichment program which seen as a possible threat especially by US. Iraq is so much problematic because of the conflicts and stability problem in its territory. So Iraq becomes more vul-nerable to outside pressures. Iraq does not have the enough power to solve its problems by its own. Iraq needs to arrange new laws for preventing con-flicts and to construct a political stabil-ity. Iran’s pressure on Iraq is based on forming a Anti-American government in Iraq. Iran is investing on Iraq’s en-ergy sources and making donations to religious associations to increase their

Iraqi Energy Future

effect on Iraq. US is planning to withdraw from Iraq

until 2011, after US withdrawn, Iraq is expected have more problems about in-ternal security. So Iraq will expect aid from its neighbors, Iran is preparing for this kind of an invita-tion and Iran would definitely use Iraq’s unstable situation to use Iraq’s energy resources and Iran would intervene Iraq policies. Russia is an another matter of fact on energy in the region. Russia will try to dominate natural gas production and exportation with using the advan-tage of its stability.

Iraq should find a solution to pre-vent a possible state of conflict solution may include delaying US withdrawn too. Consolidative laws for ethnic and religious groups and powerful support for efficiency of these laws may be ef-fective for assuring stability. If stability cannot be assured energy exploitation over Iraq will become more widespread on oil and natural gas resources. It should be stated that Iraq is privatiz-ing its energy production infrastructure with the agreements which are signed with foreign companies. This is a re-sult of globalized world economy but Iraq’s policy seems to be a result of the conflicts within the region. Iraq cannot administrate its energy resources but privatize them. It seems to be hard to form a new government in Iraq, accord-

ing to the unofficial results al- Iraqqiya coalition which is leaded by former prime minister Iyad Allawi is going ahead with a minor difference, Na-tional Iraqi Alliance and State of Law Coalition will be the second and third parties. Election results are hard to be predicted but a coalition government will be inevitable in Iraq. If Iraq can-not form a strong government after the

elections then Iraq would lose its sover-eignty on its energy resources so Iraq’s sovereignty in its borders will become suspicious.

Statistics and Charts are taken from Energy Information Administration

http://www.eia.doe.gov/emeu/cabs/Iraq/Full.html

i R i ill

Consolidative laws for ethnic and religious groups and powerful support for efficiency of these laws may be effective for assuring

stability.

S.Eastern Asia

2/3 of world population lives in Asia. World’s important natural resources are in this continent

and 30% of the world trade is within the Asia as well. Japan is one of the five biggest economies in the world so it is expected that there will be three Asian countries in the five biggest economies of the world in the near future. Asia continent will be a matter of fact on shaping world economy and politics in the future.

There is also an important country in Asia which do not become a giant

power but affective on world politics. Regional power Pakistan is a very im-portant country with its high popula-tion, its strategic location which con-nects Central Asia to open seas, South-ern and Western Asia. Pakistan which is observer member of Shanghai Coop-eration Organization, also connects Shang-hai Cooperation Or-ganization’s member countries to Arab Sea so Pakistan cements

its strategic location with this condition too. Pakistan is only Muslim nuclear power in the world in respect with its memberships to international organiza-tions and its military power.

Besides all those important issues, Pakistan has a stra-tegically important role for the countries China, Japan and In-dia which are called as Asian Tigers, with its potential place in the energy transportation and supply network of those countries. It would be a appropri-ate approach to say that India which is in a serious conflict with Pakistan for years, cannot solve its energy problems without hav-

ing a cooperation with Pakistan. Its clear that Pakistan has some ma-

jor problems in contrast with its rising strategic importance on energy trans-portation routes and transportation of fossil fuels to Arab Sea.

Pakistan’s some major problems are spreading radical religious terror which is spreading inside the country, ethnic terror in Belucistan which has foreign origins, Pakistan had constructed and developed nuclear power as a result of Keşmir problem with India which can-not be solved since 1947. This nuclear power increased the US pressure on Pakistan.

New Energy Bridge: Pakistan

By Ali Kulebi

ART International Politics Director

ing a cooperati

Japan is one of the five biggest economies

in the world so it is expected that there will be three Asian

countries in the five biggest economies of the world in the near future. Asia continent

will be a matter of fact on shaping world economy and politics

in the future.

S.Eastern Asia

In spite of its nuclear technology and three nuclear power plants, Paki-stan will need more energy with it high-ly increasing population. This friendly country seems to be a energy corridor in the future but Pakistan will have a huge electricity need in the future.

Having nuclear technology gives the advantage of producing its own need for Paki-stan, if only Pakistan makes the appropriate investments and devel-opments. For having this advantage Pakistan needs to build nuclear power plants which have higher capac-ity. Nuclear power plants of today usu-ally have a capacity of 1200 Megawatts, each nuclear power plant unit of Paki-stan has a capacity of 300 megawatts. This capacity seems to be enough for today’s Pakistan but Pakistan will need more energy in the near future. Thus Pakistan is planning to have nuclear

power plants which have 1000 Mega-watts capacity. As a result of those stud-ies, Pakistan’s electricity production from nuclear power plants will increase

from 500 megawatts to 8000 megawatts in 2020s. Briefly, Paki-stan will produce 16 times more electric-ity by nuclear power plants ten years later. This precisely means an important produc-tion and having liber-ation against foreign dependence for an undeveloped country like Pakistan which has not fossil fuel re-

sources. Pakistan which can deal with its en-

ergy hunger with the nuclear energy production, has also so much advantag-es deriving from its important geopoliti-cal location on fossil fuels. Pakistan is in the middle of the Central Asian Coun-tries which has rich oil and gas resourc-es. Turkistan countries in Central Asia

have oil reserve of 24 billion tons and have natural gas reserve of 3300 billion cubic meters. These Turkistan countries can reach open seas and world markets limitedly, Pakistan is also a path for this countries with Turkey.

On the other hand, not only Cen-tral Asia, Middle East which has 58% of the world oil reserves and has 25%

It would be a appropriate approach

to say that India which is in a serious conflict

with Pakistan for years, cannot solve its energy problems

without having a cooperation with

Pakistan.

S.Eastern Asia

of the world natural gas resources, also dependant on Pakistan’s geopolitical location.

As a result, Pakistan can serve for three main energy cor-ridors,

- A north-south oil corridor which will connect Middle East and Central Asia to China.

- A east-west corridor which will connect India to Mid-dle East

- A north south oil and natural gas cor-ridor which will con-nect India to Turkistan countries is a future plan with building a pipeline link inside Pakistan.

Importance of Fossil Fuels on China – Pakistan Relations

When the issue of connecting Mid-dle East and Central Asia with an oil corridor comes into the account, Gwa-dar Harbor which is located in south-west of Pakistan, gains importance.

This harbor in the west of Karaci and has a distance of 400 km, its distance to Iran Border is 60 km and its distance to Hurmuz Strait is 350 km. Gwadar

Harbor has a perfect strategic location for transportation and storage of petroleum. This harbor is also ideal for petroleum transportation be-tween Turkistan coun-tries and China. China contributed the con-struction of Gwadar Harbor with an aid of $198 million in 2006. Chinese officials also stated that they will contribute to the con-struction of Gwadar Harbor with serious

investments in the future. China energy demand increased

from 8.5 million barrels per day to 9.1 million barrels per day which means an increase of 3.5 % in 2009. China can supply a part of its energy demand through Pakistan and Gwadar.

Gwadar Harbor is also safe for transporting the petroleum which is

produced by China in Sudan against the threat of African Pirates.

Efforts of Pakistan for being an Energy Corridor

Pakistan which tries to handle both its own fossil fuel need and Southern and Southeast Asia countries fossil fuel need, was first started working on the Iran-Pakistan-India (IPI) natural gas pipeline with Iran in the beginning of 1990s. Russia Federation supported this project for Iran to sell natural gas to east instead of Europe because of Russia’s desire to establish a natural gas monopoly over Europe. India first leaned towards this pipeline project which was supposed to be an 2.775 km long energy link passing through Ka-raci and connects Iran’s Pars Region to India. India stated withdrawn signals with using the natural gas prices as an excuse for not to lose nuclear technol-ogy opportunity which was offered by US. Pakistan’s strategic ally China has a high energy demand and started work-ing on finding solutions to maintain the project without India.

Another project on energy is which sustains on a less problematic survey than IPI is aiming at carrying Turkmen-istan natural gas to Pakistan through Afghanistan since 2002. Because US aims to harm Iran on IPI project but supports Pakistan and India for trans-portation of Turkmen natural gas. Only problem in the project is the confusion in Afghanistan and lacking transporta-tion security. Afghanistan’s economi-cal benefit from this project named as Turkmenistan-Afghanistan-Pakistan-India pipeline is obvious. Pakistan as-signed $10 billion to finish this project which is seriously supported by US and told to be given to a US company for construction. Just like in similar cases, Russia Federation’s detention and sab-otaging actions against this project is also recognized.

Another project which can pass through Pakistan is Gulf Countries-South Asia (GUSA) pipeline. This proj-ect is in the agenda since the beginning of 1990s. Goal of the project is to carry Qatar natural gas beyond the Gulf,

Pakistan assigned $10 billion to finish this project which is seriously supported by US and told to be

given to a US company for construction. Just like in similar cases, Russia Federation’s

detention and sabotaging actions

against this project is also recognized

S.Eastern Asia

Gwadar Harbor through United Arab Emirates territory and territorial wa-ters. China and India requested to join this project while the process. If this project successes, Pakistan is expected to use 25% of the gas which reached to its territory and sends the rest to Asian countries. This project’s progress is problematic because of finance, lacking of mutual trust and terror threat.

Political Struggles with India delay the Pakistan to become an Energy Corridor

Its clear that Cold War between US and Russia in transformed to a eco-nomical survey more than a political survey. Russia Federation which aims to maintain its energy monopoly over Europe, also wants to maintain its transportation country and control mo-nopoly over the fossil fuels of Turkistan countries. Besides Russia’s concern on NABUCCO project, US’s reservations towards Iranian natural gas transpor-tation to Europe and India shows the

political dimensions of the game which is played on the energy chess board in Asia Minor.

Pakistan which has kind relations with US just like its neighbors, is tak-ing the cuts derived from these games as much as possible.

Problems about Iran-Pakistan-India(IPI) pipeline project are getting more dimensional because of the politi-cal reasons, especially reasons derived from the problem with India caused by Keşmir problem. According to the agreement signed for this project in 1993 between Iran and India, 700 km of the pipeline will pass through Paki-stan and will reach India. Project costs $4 billion and it was expected to be so much beneficial for Pakistan. If this project succeeded then Pakistan paid $500 million per year as a transporta-tion payment and also Pakistan will be able to pull an amount of natural gas for itself to diversify its energy provi-sion.

Keşmir problem between these

states leading India to withdraw from the project and India is more closer to an idea to construct an undersea pipe-line to exclude Pakistan from the issue. In spite of Pakistani guarantee which states pipeline will work in war time, India’s concerns are still important but another important issue is Russia and US support and shackles onto this kind of projects. In this sense, it was stated that Pakistan will get help for having energy from the new dams of the Ta-jikistan through Wakhan energy corri-dor, only if US abandons Iran natural. Pakistan’s position is not certain at this point.

While the games on energy pro-ceeds like this, countries which have en-ergy resources or countries which will make use of this energy, harmed from this situation.

Colonial countries’ plans for col-lapsing and sharing Ottoman Empire are applied upon the countries which have energy resources or countries on energy bridges, in different dimensions.

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Executive Summary

The Turkish energy sector is wide-ly seen as the most promising and attractive investment area

in the Turkish economy. The market is experiencing a transition towards a competitive market structure in order to attract private sector investment. The energy market is witnessing rapid growth and a liberalization process with the recent privatizations, licence tenders and strategic partnerships. The sector has been remarkably active re-cently and offers major opportunities to investors. Turkish energy consumption is low compared to Western European countries. However, the large, young and increasingly urban population in Turkey represents a growth potential. Currently, Turkey is a major energy importer, as its energy consumption

growth has outpaced domestic produc-tion. Substantial investment in the en-ergy sector will be required in the near future in order to meet the increasing demand in Turkey. The energy consumption in Turkey reached a level of 102 tonnes of oil equiva-lent, or 1,415 kg of oil equivalent per head in 2008 (which is still below Western lev-els) with an increasing trend between 2004 and

2008. Given the slowdown in the econ-omy since mid-2008, energy consump-tion growth slowed from 5.3% y-o-y in 2007 to 1.4% in 2008. The decline is ex-pected to continue in 2009 with a 5.5%

decrease; however a recovery of 2.5% annually is expected between 2010 and 2013 . The Turkish electricity market

was one of the fastest growing in the world. Installed capacity has continued to rise reg-ularly in the last de-cade from 23,354 MW to 41,817 MW with a CAGR of 7.8%. As a result of the increase in the share of natural gas fired power plants, natural gas constitutes the highest share of primary energy re-sources with 39% of

the total followed by lignite (30%), hard coal (7%) and fuel oil (6%) in 2008. Turkey’s domestic oil and gas pro-duction meets less than 3% of its energy

Turkish EnergyIndustry Report

The Turkish electricity market was one of

the fastest growing in the world. Installed

capacity has continued to rise regularly in

the last decade from 23,354 MW to 41,817 MW with a CAGR of

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requirement leaving Turkey amajor importer of oil and gas. 90%

of Turkey’s crude oil is imported, main-ly from Saudi Arabia, Iran, Iraq and Russia. 70% of domestically produced oil is obtained from the state-run Turk-ish Petroleum Corporation (TPAO) with the remainder produced mainly by Royal Dutch/Shell. As for natural gas, Turkey is dependent on imports from Russia which corresponded to 63% of the total in 2007. Other suppliers in-clude Iran which accounted for 17% and Azerbaijan for 4% of the total. A competitive gas market in Turkey is shaped by the Natural Gas Market Law which was issued in 2001. Accordingly a gas release program was initiated and the transfer of the rights under 4.75 bcm of BOTAŞ’s contracts (14% of ac-tual gas imports) was completed. These rights were acquired by four private sector companies which won the pub-lic tender and which have now started gas imports. The State-owned pipeline operator and gas supplier BOTAŞ pre-viously handled all oil and gas import and owns the distribution infrastruc-ture, though its dominant share of the market is planned to be further reduced in coming years in line with the Natu-ral Gas Market law. The share of the private sector in gas import and whole-sale activities should thus rise as the share of the State (BOTAŞ) falls. Coal is mainly used for power generation in Turkey. 30% of total primary energy consumption in Turkey is derived from coal. Only one-half of the coal used is produced domestically in Turkey which makes Turkey’s coal market dependent on imports. The coal market is consid-ered as largely a monopoly operated by the Turkish Hard Coal Enterprises (TTK) although minor parts of produc-tion, processing and distribution

activities are contracted to the pri-vate sector. On-going transformation and liberalization of the energy markets has led to increased private investment, from both domestic and foreign inves-tors. There are a great deal of invest-ment opportunities in the Turkish ener-gy sector. State-owned generation and distribution assets are to be privatised,

new power plants are tobe built by the private sector, ten-

ders for licences in natural gas distri-bution are held and certain natural gas import agreements of the state are (as described above) transferred to the private sector. In the past five years, Turkey has accommodated a lively in-vestment environment as many foreign investors have made greenfield invest-ments, entered into partnerships with local players and acquired state-owned and private companies. Turkey has also a significant potential for renewable energy. Due to substantial renewable energy resources and recent develop-ments in renewables legislation and liberalization in the electricity market, there is a suitable environment for re-newable investments. The renewable energy sector is further analyzed in IS-PAT’s “Environmental Technologies & Renewable Energy Industry Report”.

Sector Overview

Global SectorGlobal energy consumption reached

a level of 10,465 million tonnes oil equivalent in 2008 with a CAGR of 2.4% between 2004 and 2008. Coal con-sumption has shown the highest growth in 2008 with a growth rate of 3.7%.

Energy exporting regions such as the Middle East and Africa have also ex-perienced growth in energy consump-tion . However, energy consumption is expected to experience a decrease in 2009 due to the global economic crisis. The fall in the consumption is expected to affect oil, natural gas and coal con-sumption. Oil has the highest share within the global energy consumption corresponding to 35% of the

total followed by coal, natural gas and hydroelectricity .

OilStrong growth in demand together

with the reduction in spare capacity be-tween 2003 and 2007 has led to rapid growth in oil prices, which culminated in a peak of over US$140/barrel in July 2008 . The peak was followed by even more rapid decline as the impending global recession took shape. From early 2009 onwards, however, oil prices have resumed their upward trend.

Natural GasIn 2008, the demand for natural gas

has started to decline with countries hit by recession reducing their energy us-age. This trend continued in 2009. Al-though the consumption of natural gas was declining, at the same time new gas

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resources such as liquefied natural gas (LNG) from Middle East and Indo-nesia have emerged. Despite the global eco-nomic downturn, total natural gas production increased by 4.1% in 2008, Russia and the US being the main producers.

CoalCoal production is

expected to increase by nearly 60% between 2009 and 2030 with most of the growth ex-pected in China and India . The World’s largest coal consumer is China which is ex-pected to dominate 38% of world capac-ity by 2011. Another country in which coal is the primary source of energy is India, where 62% of the country’s elec-tricity generation is obtained from coal-fired stations. The demand from these two big coal consumers has shaped the growth in the coal market with an an-nual increase in global demand of 5% from the beginning of the century .

NuclearThe nuclear energy industry has be-

come attractive due to the demand of many countries to diversify their energy

sources and the high level of alternative en-ergy costs. Russia and France are major play-ers in nuclear power in Europe, where nucle-ar energy comprises more than 44% of to-tal electricity genera-tion. Concerns over the global warming effect of carbon-based electricity generation, together with con-cerns over the security of oil and gas supply, have reawakened in-terest in other coun-tries such as the UK and Sweden. China is planning to construct

capacity of more than 20,000 MW by 2015 .

The Domestic Sector

Sector OverviewFigure 6 - Energy Consumption by

CountryTurkey is one of the fastest growing

energy markets in the world, with signif-icant further growth potential. Turkish energy demand was affected by an eco-

nomic downturn experienced in Turkey in 2001 but picked up in 2002 and con-tinued to grow thereafter, reaching the pre-crisis consumption level in 2003. The energy consumption increase con-tinued between 2004 and 2008 equalling 102 tonnes of oil equivalent, or 1,415 kg of oil equivalent per head, which is still below Western standards. Together with the global economic crisis, the en-ergy consumption slowed down since mid-2008 with an annual growth rate of 1.4% in 2008, compared to a rate of 5.3% in 2007. The decline is expected to continue in 2009 with a fall of 5.5% however a recovery of 2.5% annually is expected thereafter between 2010 and 2013.

ElectricityThe Turkish electricity market is

currently going through a liberalization process and rapid growth. The market is experiencing a transition towards a competitive electricity market in order to attract private sector investment and maximise efficiency. Electricity demand in 2008 equalled 198 TWh, represent-ing 4.3% annual growth from 2007. The CAGR of electricity demand between 2004 and 2008 was 7.2% . Electricity de-mand has been growing in parallel with the urbanization and industrialization level and economic development. Also supported by the population increase, the Turkish electricity demand shows great potential for further growth. Electricity demand is expected to be affected by the global economic down-turn where there is a 4.7% decrease in the first ten months of 2009. However, there is a sign of recovery in demand in the following months and the demand turns to increase in October by 6.5% .

Installed capacity has continued to rise gradually in the last decade between 1998 and 2008 from 23,354 MW to 41,817 MW respectively with a CAGR of 7.8%. In line with the increase in share of natural gas fired power plants, natural gas constitutes the highest share in primary energy resources with 39% followed by lignite (30%), hard coal (7%) and fuel oil (6%) in 2008 . The current energy supply including the ex-

In the past five years, Turkey has accommodated a lively investment

environment as many foreign investors

have made greenfield investments, entered

into partnerships with local players

and acquired state-owned and private companies. Turkey

has also a significant potential for

renewable energy.

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isting power plants, the licensed plants and those under construction was ex-pected to be insufficient to cover the Base Energy Demand starting from 2009 . On the other hand, the decline in economic activity which has affected electricity demand has also delayed the electricity imbalance. After a recovery in electricity demand, there will be the requirement for further capacity to bal-ance supply and demand. The estimat-ed investment required for the period of 2009-2017 is approximately US$ 35-50 bn .

The top 15 generators by installed capacity ranking as of December 2008 are shown in the following table.

The state owned generation compa-ny EÜAŞ currently owns c.58% of total installed capacity. Due to the ongoing liberalization process in the Turkish electricity market the state owned gen-eration assets are expected to be priva-tized Apart from state owned EÜAŞ, the other top players are: ENKA, a leading construction company in Tur-key owning the Adapazari, Gebze and Izmir combined cycle gas turbine (CCGT) plants. Isken owns an import-ed coal power plant and Baymina is the fourth largest player with 798 MW CCGT. Birecik owns one of the largest HEPPs (Hydro Electric Power Plants). There are basically two types of prices in the Turkish electricity market defined as: market prices and regulated tariffs approved by EMRA. A comparison of the system imbalance prices (SIPs) and TETAS whole sale prices is presented in the below chart.

System imbalances prices are set in the Balancing Market where upward and downward regulation offers to cov-er the long or short position of the mar-ket are accepted by the system opera-tor, TEIAS. TEIAS accepts the offers in accordance with the daily demand forecast and daily generation schedule defined on an hourly basis. Prior to July 2008, the gap between regulated tariffs and market prices was high. The Auto-matic Pricing Mechanism, based on re-flecting cost fluctuations onto the ener-gy prices of state owned enterprises was introduced as of July 1, 2008 and had an

immediate impact on the TETAS price. The Automatic Pricing

Mechanism affected the TETAS price and the gap started to close. The Turkish electricity markets regulatory structure is as follows: General prin-ciples are set by the Law. The

Council of Ministers and/or the High Planning Council make decisions in line with the spirit of the law. Detailed rules are set by secondary regulations and finally detailed operational matters such as tarif approvals and the issu-ance of licences are defined by EMRA Board Decisions. The Electricity Mar-ket Regulatory Authority established as per Law no. 4628 was later renamed the Energy Market Regulatory Authority. EMRA acts as a supervisory and regula-tory body for the energy market. These laws aim to establish a stable and trans-parent energy market functioning in a competitive environment. The market

chain can be divided into four sections; generation, wholesale, distribution and retail market (or consumers). There is a monopoly for transmission in between wholesale and generation. The general market value chain and structure is il-lustrated in the following figure.

Oil & GasTurkey’s known oil and gas re-

serves correspond to 300mn bbl and 8.0bcm, respectively. Oil production is far lower than the estimated consump-tion of c.673,000 b/d in 2008. Oil com-prised c.31.5% of total primary energy consumption in Turkey in 2008, show-ing a slight increase compared to 2007 (30.2%) whereas natural gas comprised 31.6% of the total in 2008, almost stable compared to 2007 (31.2%). Natural gas prices have risen in line with global pric-es . Demand for natural gas is increas-ing rapidly as it is preferred as the fuel

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for industrial use as well as for power generation. 55.5% of natural gas was used for power generation, 22.5% for residential use and the remaining 22% for industrial use in 2008. Although rel-atively low compared to others, indus-trial usage has nearly doubled since the beginning of the decade . The network of the State-owned pipeline operator and gas supplier Botaş covered 63 cit-ies by the end of 2008, increased from 54 at the end of 2007. The improvement in the distribution network is expected to increase natural gas availability. Tur-key’s domestic extraction of oil and gas meets less than 3% of its energy re-quirement leaving Turkey a

major importer of oil and gas. 90% of Turkey’s crude oil is imported, mainly from Saudi Arabia, Iran, Iraq and Rus-sia. 70% of domestically produced oil is obtained from the state-run Turkish Pe-troleum Corporation (TPAO) whereas the remainder is produced mainly by Royal Dutch/Shell. As for natural gas, Turkey is dependent on imports from Russia corresponding to 63% of the total in 2007. Other suppliers included Iran accounting for 17% and Azerbai-jan for 4% of the total . Turkey has a strategic location between European markets and major oil and gas-produc-ing countries in the Middle East and

around the Caspian Sea. Although the Bosphorus is a major oil shipping route between the Black Sea and the Mediter-ranean, heavy oil tanker traffic through the Bosphorus is restricted due to en-vironmental concerns. The legal frame-work for the EU-backed Nabucco pipe-line project was signed by Turkey and four EU transit countries in mid-July 2009. Accordingly, the 3,300-km pipe-line will carry gas from the Caspian re-gion and the Middle East through Tur-key, Bulgaria, Romania and Hungary to Austria, with the gas further distributed to other EU countries through existing pipelines. The project is expected to re-duce the dependence of EU countries on Russian gas .

Coal30% of total primary energy con-

sumption in Turkey is derived from coal. Coal consumption of 92.8m tonnes in 2008 declined by c.2.3% com-pared to the prior year , whereas total coal production in 2008 amounted to 1586.2m tonnes, up from 76.6m tonnes in 2007 . Hard coal is mainly mined by TTK in Zonguldak in the western Black Sea region. Lignite is mined mostly by the state-owned Turkish Coal Works (TKI) in various parts of the country. TKI controls mining in Afsin-Elbistan located in South-East Anatolia, where most lignite coal is produced.

Only one-half of the coal used is produced domestically in Turkey. This makes Turkey’s coal market dependent on imports. The domestic coal market is largely considered as a monopoly oper-ated by Turkish Hard Coal Enterprises (TTK) with minor parts of production, processing and distribution activities contracted to the private sector.

NuclearTurkey does not produce electric-

ity from nuclear sources. A tender for building a 1,000-MW nuclear-power plant by 2005 was cancelled in 2000. In subsequent years, a tender was devel-oped for the first nuclear plant with a combined capacity of 5 GW and was an-nounced on September 24, 2008. How-ever, with only one consortium submit-ting a bid, namely Russia’s state-owned nuclear export company Atomstroyex-port and Turkey’s Park Teknik Group, the tender was cancelled by TETAŞ in

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November 2009. As the energy demandgrows in Turkey, nuclear energy

could provide an important supply source and will remain on the agenda in the coming years.

Main Players

ElectricityBefore the 1990s, a state owned

company, the Turkish Electricity Au-thority (TEK), dominated the Turkish electricity industry. TEK was estab-lished in 1970 and in order to move towards market liberalisation and pri-vatisation it was separated in 1993 into TEAS for generation, transmission and wholesale power supply and TEDAS for distribution. In 2001, TEAS was further separated into EUAS for generation, TETAS for wholesale and TEIAS for trans-mission; each being established as a sepa-rate legal entity with the introduction of the Electricity Market Law. EUAS operated 91% of Turkey’s power supply before the elec-tricity reform in 2001 . Most of EUAŞ’s power plants are to be priva-tized according to the privatization plan.

Oil & gasBOTAS, the state-

owned gas supplier and pipeline operator, handled all gas and oil import and distribu-tion infrastructure until recently. How-ever, its monopoly position is changing from 2009. A competitive gas market in Turkey is shaped by the Natural Gas Market Law which was issued in 2001. According to the Law, a gas release program was started and a tender was completed for the transfer of the gas im-port rights under 4.75 bcm of BOTAŞ’s contracts (14% of actual natural gas im-ports). Following the program, the four private sector companies which won the

tenders started to import gas and sell it wholesale to major customers in Tur-key. In the coming years, further ten-ders are expected which should reduce BOTAS’s market share in imports to

the limit of 20% set by the Natural Gas Mar-ket Law as the maxi-mum for any one mar-ket player. The private sector’s market share should thus increase correspondingly. The companies which suc-cessfully tendered to take over the agree-ments and their cor-responding volumes were Enerco 2.5 bcm, Bosphorus Gas 750 million Sm , Avrasya Gas 500 million Sm and Shell 250 million 3Sm . Bosphorus and Shell have completed the take-over process earlier and have start-ed importing in 2008, whereas Enerco and

Avrasya Gas started their operations in April 2009. There are 60 licensed natural gas distribution companies in the Turkish gas market of which 4 are owned by municipalities and the re-maining 56 are private companies. The privatization tender for İzgaz was com-pleted; Başkentgaz and Igdaş are to be privatized. Tenders for the remaining cities are planned to be completed by the end of 2011 . 78% of the Turkish fu-els and lubricants supply market is con-

trolled by Tüpraş and the biggest fuels retailer in Turkey is POAS, a former state company. BP, Shell and Cono-coPhillips are the other active compa-nies . In the petroleum refining market, Tüpraş has a strong monopoly position with 4 sites located in Izmit, Izmir,

Kırıkkale and Batman. Total com-bined capacity of Tüpraş is over 600,000 b/d. In September 2005, a 51% stake in Tüpraş was acquired by a consortium led by domestic group Koç Holding and Shell Co for US$4.4 billion.Turkey has one non-Tüpraş refinery which is the Ataş plant in Mersin. The plant is owned by BP (68%), Shell (27%) and domestic fuels supplier Turkpetrol (5%) .

Sector OutlookDriven by high industrialization

and urbanization, electricity demand has exceeded electricity production and largely resisted even the global fi-nancial crisis. The increase in demand is expected to continue with the popu-lation growth and economic develop-ment in future and Turkey is expected to outpace its European peers. TEIAŞ projections for 2009-2018 include 4 dif-ferent scenarios. The high demand sce-nario accompanied by high capacity has been considered and presented below. There are also three other scenarios with lower demand and capacity esti-mates. Electricity demand is expected to exceed electricity generation with a CAGR of 7% between 2009 and 2018. The reliable electricity generation is expected to increase by 3.2% CAGR while installed capacity is expected to

Turkey has a strategic location between

European markets and major oil and gas-producing countries in the Middle East

and around the Caspian Sea. Although

the Bosphorus is a major oil shipping route between the Black Sea and the

Mediterranean, heavy oil tanker

traffic through the Bosphorus is restricted due to environmental

concerns.

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increase with 3% CAGR in the coming decade. While thermal capacity formed 64% and HEPP 34% of the total installed capacity in 2009, the share of thermal ca-pacity is expected to slightly decrease to 60% whereas HEPP capacity increases to 38% by 2018. The oil import level is expect-ed to rise in line with demand and increasing prices assuming an av-erage of US$ 80 /bar-rel in Turkey by 2013 . On the other hand, growth in natural gas is expected to exceed pe-troleum and coal con-sumption. The natural gas consumption is ex-pected to increase with a CAGR of 7%

between 2010 and 2013. In 2008, coal consumption in Turkey was 92.8 million tons which was mainly used for power generation. Coal consumption in Turkey is expected to decrease by c.

5.5% in 2009 and recover with an in-crease of 2.5% between 2010 and 2013.

SWOT Analysis

Strengths-Well-organized

and structured legal framework in the en-ergy sector

-EMRA operat-ing as an independent market regulator

-High growth po-tential of the Turkish Energy sector com-pared to other Euro-pean countries.

-Advantage of Tur-key operating as an energy hub between Europe and the Mid-dle East.

Electricity -Increase in the weight of the pri-

vate sector through the privatization of state owned generation assets

-Probable horizontal and vertical

mergers of electricity, natural gas and water distribution, to allow synergy and regional utility companies

Natural Gas-High gas demand growth potential-Favorable gas supply geography

and infrastructure-Potential role as a transit corridor

and potential for development of trad-ing hubs

Weaknesses-Electricity-Coal is the only energy source with

significant domestic availability, leav-ingth ecountry increasingly import-de-pendent

Natural Gas-Requirement for gas storage for

system security reasons-Import dependence on natural gas

supplies

Opportunities

Electricity-Privatization of regional distri-

CAGR f 7%

A competitive gas market in Turkey is

shaped by the Natural Gas Market Law

which was issued in 2001. According to

the Law, a gas release program was started

and a tender was completed for the transfer of the gas

import rights under 4.75 bcm of BOTAŞ’s

contracts (14% of actual natural gas

imports).

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bution companies (to be finalized by 2010) will allow for an independent merchants’ market

-Synergy expected to be created be-tween electricity, natural gas and water distribution businesses

Natural Gas-Tenders for the remaining cities, gas

requirements to be met by end of 2011-Privatization of municipality owned

natural gas distribution companies.-Restructuring of Botaş and com-

petitive market structure transition to a Interest of foreign investors in the natu-ral gas distribution market.

Threats -No new contract releases are an-

nounced/expected in the short term-Shortage of electricity supply

against electricity demand.

Investment OpportunitiesTurkey is a major energy importer

with energy consumption exceeding its production. For Turkey to meet its en-ergy demand, significant investments are necessary in the energy sector. The transition of the Turkish electricity market to a liberalized market has al-ready attracted private investment from both domestic and foreign investors and further opportunities will occur. Among the investment opportunities, the state owned generation and distri-bution assets together with new power plant establishments can be indicated. Turkey has experienced a lively invest-ment environment in the last five years in which many foreign investors have made greenfield investments, entered into partnerships with local players and acquired state-owned and private com-panies. Below is a list of M&A transac-tions by foreign investors in the Turkish energy industry between 2004 and 2009:

The Turkish government is in the course of privatization of the distribu-tion companies as a step towards full liberalization of the energy market. There are 101 assets with total capac-ity of 15,594 MW which are to be priva-tized:

-18 thermal power plants (11,769 MW)

-27 hydro-electric power plants of EUAS (3,677 MW)

-56 run-of-the-river power plants (148 MW)

There are 21 distribution regions under the Turkish privatization portfo-lio. Kayseri region was the only private region and currently, the privatization tenders for 4 DisCo’s have been final-ized, although one has been cancelled by the Council of State. The com-petitive environment as a result of the privatizations is expected to accelerate electricity generation investments.

Abbreviationsb/d - Barrels per dayBcm - billion cubic metersBMI - Business Monitor InternationalCAGR - Compound Annual Growth RateCCGT - combined cycle gas turbineDisCo - Distribution CompanyEIU - Economist Intelligence Unit

EMEA - Europe, Middle-East and AfricaEUAS - Electricity Generation Co.Inc.EUR - EuroGDP - Gross Domestic ProductHEPP - Hydro Electricity Power PlantIEA - International Energy AgencyISE - Istanbul Stock ExchangeISPAT - Republic of Turkey Prime Ministry

Investment Support and Promotion Agency (IS-PAT)

KCETA - Kayseri Region Electricity Com-pany (Kayseri ve Civarı Elektrik T.A. )

LNG - liquefied natural gasOPEC - Organization of the Petroleum Ex-

porting Countries PED - primary energy demandRmb - Chinese yuanUS - United StatesUS$ - US DollarsTEAS - Turkish Electricity Generation and

Transition Co.TEIAS - Turkish Electricity Transmission

CompanyTEK - Turkish Electricity AuthorityTETAS - Turkish Electricity Trading Com-

panyTPAO - Turkish Petroleum Corporation

Choice of UkraineBy Shemsey Vodinov

Eastern Europe

Party of Regions which known with its close relations with Rus-sia, had won the elections and

finished up the era that shake Soviets and called as Orange Revolutions Era. Question in the agenda is on Ukraine’s choice on new strategic issues especially on energy. New energy chart seems to change the parameters of the region while an alliance with Russia is predict-able. Victor Yanukovich who is the lead-er of Donetsk centered Part of Regions, is a former welder worker. Yanukovich went into politics in 90s and he was sup-ported by Russia President Vladimir Putin in the beginning of 2000s. After the Yanukovich’s confession of their graft in the elections he lost his power in Ukraine and country surrendered to Western supported Orange Revolu-tion. Country’s progress in five years which was expected to lead country to NATO membership was written to history as a period of increas-ing discontent. Presi-dent Yushchenko and Prime Minister Yu-lia Timoshenko who turned their back to Russia, caused natural gas crisis every winter period which harmed Ukraine because 1/5 of the natural gas passes through Ukraine which is sold to Europe by Russia. Russians punished the Kiev Government with accessions to natural gas and deduction of natural gas because of Kiev’s policy of getting closer to the West. Military issues were another source of crisis. Center point of Russian Navy Forces, Sevastopol in Crimea was the centre of this crisis. In spite of the Yuşçenko administration’s approach which defends removal of Russia forces from Sevastopol in 2017 according to the agreement, Yanu-kovich defended Russian existence in Crimea. Yanukovich told that Russia could stay in Crimea and Ukraine will not be a member of NATO by himself to Russian President Dimitry Medve-dev while his visit to Moscow after the elections. Yanukovich tried to convince Medvedey for not bypassing Ukraine

with alternative north and south energy lines.

Energy Balance in the Eastern and Western Dnieper

Yanukovich not only tried to solve the energy problem with those guar-antees he also offered assigning 1/3 of Ukraine’s administration of natu-ral gas transmission system to Russia (Kommersant Newspaper). Man of the

day Yanukovich, did not forget to visit Brussels and gave natural gas guaran-tees while he was visiting Moscow. In this way, he gave concrete guarantees both to Russia and EU. Question on the agenda is nowadays is if Russia will make a discount on natural gas prices which Ukraine demands from Russia. Also Russia may abandon the south-ern stream program but Russia cannot abandon the northern stream which is

Russians punished the Kiev Government with accessions to natural gas and deduction of

natural gas because of Kiev’s policy of getting

closer to the West.

Eastern Europe

guaranteed to Germany and France. At this point, Medvedev cannot make the discount which Ukraine demands but Russia can aid Ukraine by giving cheap credits and economic support to not to disappoint Yanukovich.

Dnieper River which was witnessed 2 million peoples’ death while the So-viet Red Army and German Nazi Army battle, is now separat-ing Ukraine’s politi-cal geography. Today, Russian friendly poli-tics in the east of this river has the power. This situation affects the conditions in the west of Dnieper which NATO come to its borders after Hitler’s march to those borders after 60 years. Political consolidation of Ukraine in the future is not certain but it is abso-lute that Yanukovich will have a strong

effort on this issue. Ukraine is divided by two on the axis of Dnieper is defined as Russia’s territory by Moscow, gains a meaning only by being united.

Europe admits that Ukraine is a part of Russia strategically but Germany and France did not welcomed Ukraine’s membership to NATO and EU in their

recent statements. EU’s priority is its nat-ural gas demand. 1/4 of this demand is met by Russia. Energy issue is stabile in the region so Brussels does not care about how this region builds its stability. Af-ter this political pic-ture in Ukraine, Eu-rope speeded up the investments which cost

billion dollars. A secret or open agree-ment between Continental Europe and Russia can be predicted. Main problem is US’s future movements. Soros sup-

ported Orange Revolution Wave fin-ished by 2009. Main aim of US is to de-termine and control the energy lines in Central Asia and Caucasia. Apparently, energy alliance between EU and Russia weakens the US role in Eastern Europe and in Western Eurasia. Serbia was wel-comed by EU with staying close to Rus-sia, this can be a signal for Ukraine to follow the same strategy. As like Yanu-kovich’s priority, Ukraine may get eco-nomical aid from EU although Ukraine does not become an EU member.

Ukraine-Turkey-Russia Relations

Turkey recognized Ukraine as a country in 1991, 16th of December. These two countries are working to-gether within the Black Sea Economic Cooperation Organization since 1992. In June 1997, an agreement signed for building the a pipeline between Baku and Ceyhan for transportation of crude oil in Ankara. Turkey is the second big-

ft 60 billi d ll

Dnieper River which was witnessed 2

million peoples’ death while the Soviet Red Army and German Nazi Army battle, is now separating Ukraine’s political

geography.

Eastern Europe

gest trade partner of Ukraine after Rus-sia. Turkey is importing iron and steel products, lard, herbal oil and mineral fuels from Ukraine and exports plastic, electronic machines, cleaning products and sub-industry products to Ukraine.

Turkish Embassy of Ukraine was opened in 1993. Ukraine also has a Consulate General in Istanbul, Honor-ary Consulates in İzmir and Çanakkale. Turkey Embassy of Ukraine is in Kiev and there is a Turkish Consulate Gen-eral in Odessa.

Turkey does not have an interest on the government in Ukraine. Both international public and Ankara agree that election results of Ukraine will not effect Turkey’s role of being a transit country in recent years. Natural gas experts warn that an eventual Kiev-Moscow partnership would weaken the Ankara on an energy bargain. An-kara expected to play the stability card against this issue.

The positive course on Kiev and Moscow relations which was started with Yanukovich’s election victory is not expected to dismiss Turkey from the energy transportation game.

An energy expert from Turkey, Nec-det Pamir interprets the situation as:

Election victory of Yanukovich will enables the transportation option of Ukraine for Russia. This result also strengthens the Russia’s hand at nego-tiations with Turkey. However Turkey is an important option for Russia and it is impossible for Russia to by pass Tur-key. Negotiations which are made by Turkish Energy Minister Taner Yıldızlı is a package negotiation. Russia’s in-creasing advantage on the negotiations would affect other parts of this package. Negotiations continue on giving nuclear energy to Russia without a bid by a in-tergovernmental agreement. Strength-ening of Russia’s hand on natural gas will make Russia advantageous in nu-clear energy negotiations because ne-gotiations are held as a whole. (Akşam Newspaper, Interview with Ezgi Akın)

Eurasia is RisingEurope and Turkey will have to as-

sess new positions against the pressure

caused by regional dynamics. North At-lantic relations will constrain Ankara and Brussels at this point. One of the most determining element of strategy is energy issue so economics will face processes which will determine next 10 years’ world. Increasing advantage of Russia is not the only issue but reel politics’ increasing importance. EU and Russia are associating on a more real-ist survey. Turkey is joining this process naturally. NABUCCO and similar proj-ects which will planned for the benefit of US and extracting Russia, will be re-

constructed on a realist survey too. In spite of general view or view of western analysts statement that Russia’s impact on Ukraine will not harm the stability, it is a natural result of geopolitics. This is a turning point of new cooperation period in Eurasia. Future is not expect-ed to bring Dnieper wars and conflicts which are remnants of Second World War, future will be a partnership period around the axis of energy in the Eur-asia. This era will start to show itself by economic and political means, rising of Asia will occur as rising of Eurasia.

Liberalization Problems of Turkish Energy Market

By Sureyya Yucel Ozden

Privatization of Energy

In this century we are living in, it is impossible to un-

derstand or interpret any issue or case with-out the energy perspec-tive. Energy use is ac-tually a life sustaining action. When looking at issues like lightning, education, heating, water, communication, transportation, health and industry every sin-gle part of human life bases on energy. Briefly, energy is the basic element of civilization. Until near past, basic elements for life were wa-ter, air and earth. It will be appropriate to say that electrical energy should be added to this list. In this sense, without

denying the electrical energy developments in Turkey, it should be admitted that there are lots of minor and major problems in Turkey about ener-gy. Two perspectives needed to understand when handling the national and interna-tional problems.

A- Internal af-fairs of Turkey

B- Conditions in Turkey’s International Relations

Internal Affairs of Turkey1- Turkey is having problems with

transforming public energy sector to private energy sector. To regulate ener-

gy use, production and transformation, many regulations and laws are enacted. Laws on energy and their dates of re-lease are listed below.

- Law No: 4628, Electricity Mar-ket Law, 3 March 2001.

- Law No: 4646, Natural Gas Market Law, 18 April 2001.

- Law No: 5015, Oil Market Law, 20 December 2003.

- Electricity Sector Strategy, 2004,

- Amendment No: 5177 on Law No: 3213 Mining Law, 5 June 2004.

- Law No: 5307 Liquid Petro-leum Gas Market Law, 2 March 2005.

- Law No: 5346 Law on use of Renewable Energy Sources to Produce Electrical Energy, 18 May 2005.

- Law No: 5627 Energy Produc-tivity Law, 2 May 2007.

When all investment demand in energy

sector is calculated, $130 billion of

financial need is expected in the

upcoming 10 years. It is hard the answer

the question that How could this financial

need problem solved?

- Law on Geo-thermal Sources and Natural Mineral Wa-ters, 13 June 2007.

- Law No: 5710 Law on Energy Ex-port, Constructing and Managing Nuclear Power Plants, 21 No-vember 2007.

Sector defined it-self in many means and ambiguities overcame mostly. This transfor-mation is important and Turkey has not full liberalized its en-ergy sector yet. There is a lack of communication and coop-eration between Ministry of Energy and Natural Sources which is the main responsible in the governmental level

and Energy Market Regulatory Authority which is an another regulation body of en-ergy. Communication and cooperation prob-lems also occur in the other bodies related with energy too. Oth-er private associations which are expected to invest on energy, have still many complaints about many issues.

2- Supply Se-curity is an another important problem which still exists in

energy sector. There is a 75% foreign dependency for answering the demand on primary energy. For instance there is a 50% dominance of natural gas use

at producing electrical energy. Pay-ments which nearly worth $ 50 billion is reported for the energy input of pe-troleum, LPG and natural gas. These payments are composing the ¼ of the imports and it is an important part of export which worth $132 billion.

Investment Demand3- Another important problem is

the increase of energy demand. If hesi-tation caused by economic crisis in 2009 does not taken into account, demand increase of primary energy is 5% per year and demand increase of electirical energy is 7% or 8% per year. The issue of answering this demand should be considered. It is predicted that electric consumption of 196 billion Kw/h in 2009 will be increased to 420 billion Kw/h in 2020. According to this prediction the established power of 43000 MW should

ation and coop energy sector

Another important problem is in the

use of energy. Illegal use of electricity,

Lose of power while transmitting and

distributing electricity and problematic

energy structure of the industry causes

the extra energy consumption when compared to energy

production.

be upgraded to 96000 MW by a 2 times increase. When all investment demand in energy sector is calculated, $130 bil-lion of financial need is expected in the upcoming 10 years. It is hard the answer the question that How could this finan-cial need problem solved?

4- Another important problem is in the use of energy. Illegal use of elec-tricity, Lose of power while transmitting and distributing electricity and prob-lematic energy structure of the industry causes the extra energy consumption when compared to energy production. In the light of this information expect-ing a productive use of energy from citi-zens becomes a senseless expectation.

5- There are other problems apart from building a continuous supply secu-rity, demand management, decreasing the foreign dependence, finding appro-priate financial support for investments and environmental problems:

- Taxes on fuel consumption.- In spite of consumers’ cheap

energy demand, investors’ high selling price demand.

- Delays or idleness on using lo-cal resources for en-ergy production.

- Cancellations of the bids which held for nuclear power plants.

- Lacking con-struction of natural gas storage facilities.

- Source diver-sification difficulties.

International Dimensions

Prominent issues in international rela-tions analysis:

- Geopolitical location of Turkey: 70% of the world’s oil and natural gas sources are within the countries around Turkey. In other words Turkey is located between the countries which have hydrocarbon re-sources and the countries which de-mand hydrocarbon. Turkey is in the center of Caspian Countries, Middle East Countries and European Coun-

tries. - Countries which have their

own energy resources do not hesitate to use the energy card in international relations.

- Internal en-ergy policies would affected from interna-tional relations or the world energy politics would have a huge im-pact on internal energy policies.

Problems and ques-tions about Turkey’s energy policies come forward when the is-sues are analyzed with the facts listed above. Briefly these problems are:

A) What is the aim of Turkey in re-

spect to its international position? Is Turkey want to become an energy bridge or energy terminal or both? Does Turkey make any preparations according to these aims? How does the future of Ceyhan City planned in re-spect to field use, transportation, indus-trial future, residential planning and all other perspectives?

B) What is the current situation at NABUCCO project? Which countries assured to transfer gas to Turkey?

C) How does the capacity increase of the Blue Stream project to 32 bcm affect the projects such as Iraq Natural Gas Pipeline, Egypt – Turkey Natural Gas Pipeline and Qatar Pipeline after the Baku-Tbilisi-Ceyhan Pipeline?

D) How does the issue of provid-ing Turkey’s energy security finalized by agreements with Iran, Iraq, Azerbaijan, Russia, US and EU?

E) What kind of an approach will Turkey have after the KYOTO Proto-col? CO2 and greenhouse gas emission is one of the contemporary problems of the world. How does Turkey behave to-wards this problem?

Each topic above have different di-mensions in themselves.

While analyzing energy politics, this result comes forward: energy is the main engine of the economic and social development; energy should be pro-duced in a competitive liberal market with qualified and safe conditions con-tinuously at minimum cost. For solving problems which are explained briefly, Turkey needs to be governed success-fully with the national and international consciousness.

While analyzing energy politics,

this result comes forward: energy is the

main engine of the economic and social development; energy

should be produced in a competitive liberal market with qualified and safe conditions

continuously at minimum cost.

EU Expectations

Introduction

The Lisbon Treaty is meant to usher in a new stage in Euro-pean integration. The smooth

functioning of the institutions, new bodies to coordinate policy and a better decision-making process are its main accomplishments. How these will trans-late into policy practice is uncertain. For the time being, enthusiasm is lim-ited due to intra-institutional squabbles and the failure of the Union to inspire its citizens.

This was not always the case. Over the 1980s and for a large part of the 1990s, the European Union became the focal point of innovative politics the world over. The main reason was the realistic and at the same time idealistic decision of its member states to pool their sovereignty in economic affairs and create the world’s largest single market.

Today, however, intra-state antago-

nism is on the increase and intergovern-mentalist considerations prevent closer cooperation. Energy politics is a case in point, precisely because dependence on oil and (especially) gas is so varied among EU member states.

In what follows I start with reviewing how the single mar-ket became possible before discussing Eu-rope’s energy politics agenda. I conclude by arguing that European synergies on energy politics are needed if the Union is to match its economic clout with geopolitical power. The ratification of the Lisbon Treaty could be a step in that direction.

Forming a Single MarketThe signing of the Single European

Act in 1986 was a historic step forward in the institutional development of the Union. Apart from modifying the Trea-

ties that had created the European Communities, it also ‘brought major cooperative arrangements more firmly within the framework of what may be

termed the Communi-ty process’ and granted new decision-making powers to the Council of Ministers and the European Parliament.

In addition, the SEA incorporated into the Rome Treaty

the concept of cooperation in economic and monetary policy and paved the way for EMU. More importantly, the SEA signalled the willingness of Europe to reform and expand its institutional machinery to face off the economic challenge of the United States and Ja-pan, whose competitive advantage had grown over the previous decade. In all these respects, the SEA proved the cru-cial turning point in the history of Euro-pean integration. It was the brainchild of an activist Commission, put in place under the leadership of the French So-cialist Jacques Delors. Delors wished to mark a new beginning for the Commu-nity, whilst at the same time empower-ing the marginalized Commission. The Single European Act is therefore the one piece of legislation that unlocked Europe from past inertia and intro-duced the legislative conditions en-abling the Community to move beyond a predominantly intergovernmentalist perspective.

Gas Supply and the Russia factor

There is a marked difference in the oil and gas markets. While the former functions pretty much on the basis of predictable prices and pretty secure

By Dr Dimitris Tsarouhas

The EU’s Energy Politics

b i th t th t f

Energy politics is a case in point, precisely because dependence

on oil and (especially) gas is so varied among

EU member states.

EU Expectations

supply, gas supply is very much depend-ed on pipelines due to the nature of the product. The logical consequence of that is that gas supply becomes en-meshed in geopolitics and the relative power leverage the Union can have vis a vis its main suppliers.

Russia is here the world’s most im-portant player as it is the largest pro-ducer of natural gas and has the larg-est proven gas reserves. The Union, by contrast, produces only one quarter of what it consumes. For the foreseeable future, the EU will be dependent on Russia and the question that emerges is how this relationship can be managed to avoid conflict and se-cure supply in the long term.

What is the main goal of the EU at this moment in time? The Union has declared that it wishes to estab-lish a ‘balanced’ part-nership with Russia on the issue and has been asking for the re-newal of the PCA, the Partnership and Co-operation Agreement between the two sides. The original agreement dates back to 1997 and is the framework within which bilateral trade relations are managed. Energy relations are but one of the items on this agenda and the negotia-tions between the two sides are ongo-ing. The PCA therefore addresses the issue of energy though it is by no means limited to it.

The 2009 Russia-Georgia war cast a shadow over EU-Russia relations, and it revealed that the Union remains deeply split on the issue. While some countries (mostly CEE states) push for a tough stance towards Moscow, old and powerful member states wish to maintain good relations with Russia, even at the cost of disappointing some new entrants. Furthermore, it is impor-tant to stress that not all EU member states are exposed to the Kremlin’s abil-ity to control gas supplies in Europe to

the same extent. In fact, member states such as Spain have no dependence on Russia whatsoever, and can therefore make their policy calculations regard-ing Moscow in a markedly different way compared to the Baltic states or Poland, whose dependence on Russian gas is absolute.

What is certain is that Russia is well aware both of EU divisions on the

subject and its own ability to influence western policy. The prominent role of Gazprom, aided by the Kremlin, is no coincidence. What is Russia’s objective on this issue?

Russia’s dominant position in the vital gas market and the pipeline di-plomacy necessary to achieve stability in supply means that Russia has been able to use its position for political rea-

The Single European Act is therefore the

one piece of legislation that unlocked Europe

from past inertia and introduced the legislative

conditions enabling the Community to move beyond a predominantly

intergovernmentalist perspective.

EU Expectations

sons. This, in turn, is part of the larger Russian narrative of grievance and the insistent complaints levelled towards the west for the way it sought to exploit Russia’s weakness in the early post-Cold War era. The chaos of the time has left its mark on Russia’s attitude towards the west and suspicion has been ripe for quite some time. Following Putin’s

arrival to power, that grievance mani-fested itself in a new type of neoreal-ist policy towards the west. Disrupting gas supplies for a brief period in 2006 was a warning shot. In early 2009 Rus-sia stopped supplies to Ukraine over a payment dispute leading to a (literally) frozen landscape across much of East-ern Europe for two long weeks. Europe

is currently busy financing various gas and electricity projects to prevent a fu-ture supply crisis in an attempt to insure itself against unpredictability and pipe-line politics.

The EU claims that securing supply diversity is a key priority and has there-fore backed projects such as Nabucco, a project aiming at delivering Caspian gas to Austria from Turkey thus less-ening dependence on Russia. Despite the signing of the Intergovernmental Agreement on the project in July 2009 and its recent parliamentary ratification by the Turkish Parliament (the coun-

tries involved includ-ing transit are Turkey, Bulgaria, Romania, Hungary Austria) question marks re-main s to the efficacy of this private-sector project, the amount of gas secured and the alternative routes mapped out. More-over, Nabucco’s rival, the Kremlin-backed South Stream that will deliver gas from

Russia to Europe via Bulgaria, Greece, Serbia and Croatia to Italy. In August 2009, Russia and Turkey agreed that the proposed pipeline will be able to pass through Turkish territorial waters. Rus-sia and the EU both deny the alleged rivalry between the two projects. These are but two of the prominent examples highlighting the role of pipeline politics in the context of EU-Russia relations as the old continent is scattered with plans and ongoing pipeline projects all scrab-bling for security and good positioning in the gas match.

The American factor should not be left outside completely. Russia’s actions in Georgia and its behaviour in what it sees as its ‘near abroad’, es-pecially Ukraine, highlight its intense displeasure from US-backed initiatives to incorporate those countries into NATO (similar to what happened with CEE states earlier). The recent NATO Summit in Bucharest provided further evidence of many EU states’ unwilling-

Russia’s dominant position in the vital gas market and the pipeline diplomacy

necessary to achieve stability in supply

means that Russia has been able to use its

position for political reasons.

EU Expectations

ness to sacrifice a level-headed political relationship with Russia for the sake of NATO expansion in former Soviet territory. Whether this policy can be reconciled with the alleged willingness by Brussels to push the Kremlin on its human rights and civil liberties record is a different ques-tion. Meanwhile, the realization that all three (US, Europe, Russia) need each other in the face of chal-lenges such as the Iran question leads many to predict a soothing of rela-tions in the near future. Following the Russian-Georgian war and the tension this was accompanied by, EU-Russia

relations already seem to have been stabilized again. Meanwhile, the US and Russia are close to a very hopeful, new nuclear treaty to halve the number of their nuclear stockpiles. Obama’s ar-

rival to the White House is already producing vis-ible signs of improvement in US-Russian relations.

Conclusion: EU Energy Politics and the Lisbon Treaty

Last December, the Lisbon Treaty finally came into effect. After a decade-long process of soul-searching, failed referenda and endless arguments about integra-

tion, the Union now has a better tool to address global policy challenges and coordinates the work of its institutions

more effectively. Energy is explicitly mentioned in the

Treaty and that is a first for such a docu-ment. More importantly, energy policy has shifted away from unanimity voting towards qualified majority. This should in theory make it easier for the Union to reach quick and effective decision on energy. Solidarity on energy supply is pledged by Brussels to member states and that is a gesture to countries that have been affected by the recent crises mentioned above. If it is more than a token gesture remains to be seen.

A common energy policy is now an official EU objective. Pipeline politics reveal that this may still be a far-fetched goal. Lisbon, however, has brought it a tiny step closer to reality. For the sake of European integration, energy con-stitutes a vital policy area where new initiatives can pave the way for integra-tion.

Energy is explicitly mentioned in the Lisbon Treaty and

that is a first for such a document. More

importantly, energy policy has shifted

away from unanimity voting towards

qualified majority.

Russian Perspectives

It was not expected that increase of production, growth and prosperity would arise Russia again. This pe-

riod which was started with the collapse of USSR, had reached its peak with the increase of oil prices by the impact of

US invasion of Afghanistan and Iraq. Moscow government made a strategic decision in 2000. Control of Russian economy should be transferred to the state solidly. Economy had transformed to a new system which is based on raw material exportation. Invest-ments were slipping towards EU mem-ber Eastern Europe and Pacific. Energy demand in these re-gion was expected to increase slightly per year. Besides all these, Russia stands in the middle of EU and Pa-cific and Russia con-trols the energy valve. Plan was worked well in the last 10 years. Russia embrac-es Europe with its strong claws like a

grown-up bear and it challenges Atlan-tic Alliance. If Moscow is the body and Kremlin is the brain of this bear, GAZ-PROM and LUKOIL are the claws of

this bear.

Europe and Russia

Europe and Rus-sia are onto forming a strategic partnership since the US invasion of Iraq. This progress is leaded by Germany. The basic element of strategic partnership is economics actually and energy has the main role in the eco-nomic cooperation.

Europe is importing %40 of its natural gas from Russia. 2/3 of Russian gas ex-port is with Europe. EU also imports

Supply Perspectives of RussiaKremlin Winking at NABUCCO

NABUCCO- South Stream Comparison

6 NABUCCO countries have an import amount of 80 bcm per year. Russia established a

900 km long pipeline project called South Stream which is passes through 2000 m deep of the Black Sea and connects to Bulgaria gas network. South Stream pipeline will divide into two directions. One direction will reach Austria through Serbia-Hungary route and the other direction will reach to Italy through Greece. Italian ENI company is an important partner of Russia in this project. NABUCCO country Hungary is also participat-ing South Stream project. Kazakh-stan and Turkmenistan which does not have a tendency to provide gas to NABUCCO, signed a gas agree-ment with Russia for South Stream Project. South Stream’s capacity will be 30 bcm/year in the begin-ning then capacity will increased to 63 bcm/year. South Stream does not have problems such as provid-ing gas and it will be finished be-fore NABUCCO in 2015.

By Ozer Cetinkaya

Russia embraces Europe with its strong claws like a grown-up bear and it challenges Atlantic Alliance. If Moscow is the body and Kremlin is the brain of this bear, GAZPROM and

LUKOIL are the claws of this bear.

the 1/3 of its oil demand and ¼ of its coal demand from Russia. European companies are the main investors at Russian oil, gas and electricity sectors. Russian energy gi-ants’ role in Euro-pean Markets is also rising. Mutually and strongly developed European – Russia relations in recent years disturbs Wash-ington. Washing-ton brought up the threat of dependency to Russian energy for Europe. Arguments brought by Washing-ton are stated as the vital for EU:

- Moscow is using energy as a political weapon.

- Russian companies do not in-

vest on new areas.- Russian companies have a ten-

dency towards Asia.Russian energy pol-

icy and supply perspec-tives are more likely to aiming at gaining economic power than gaining political power. Russia will become a bigger power by eco-nomic income. It means the Russia’s becoming a global, independent power in the conditions of 21st century.

Is the Islamic Countries True Choice?

What is the mean-ing of spreading Russia

frighten among Europeans? EU had given a long list of duties. Decreas-

ing the state role in Russian oil and gas market is the first duty on the list. Concerns of Europe are not derived from Moscow, main source of these concerns is Europe itself. Enlargement towards eastern countries was the role for EU which was designed by Atlantic Alliance. Atlantic bounded European Countries lost their ability of strategic thinking while they are trying to under-stand their role. EU preferred to trust far Islamic countries energy instead of establishing an energy partnership with Russia. Ambiguities like invasion of Iraq and Iran’s future helped Europe to see their strategic mistake. EU steps seems to be the efforts for fixing the strategic mistake by tactical steps.

Will Kremlin Participate to NABUCCO?

What if Russia does not have a de-sire to produce more natural gas? This question is an argument brought for

EU preferred to trust far Islamic countries

energy instead of establishing an energy

partnership with Russia. Ambiguities like invasion of Iraq

and Iran’s future helped Europe to see

their strategic mistake. EU steps seems to be the efforts for fixing the strategic mistake

by tactical steps.

scaring Europe in fact. For support-ing this question, decrease of Russian oil produce which was had a growth capacity of 8% for years, since 2007 is stated as evidence. Situation may seem like this when looking at it for one, but it should not be forgotten that 2007 global economic crisis is still effective. Economies are shrinking and countries such Greece and Spain are in the edge of bankrupt. Even there is a positive

movement in global economy in 2010; its reflections can only be seen after 2011 on Russian energy production. Demand decreasing also decreases the energy prices. Russia’s response would be a decrease in production. Gazprom will continue to be the leader in the gas production with its financial power and with its ability of strategic plan-ning. Gazprom will reach till the North American market with its LPG raid.

Two main issues will determine Rus-sia’s energy strategy in the future:

1- Participation to NABUCCO2- Partnership with China in big

projects.Germany requested Kremlin to

participate NABUCCO project in se-nior level. This request shows the tac-tic change of EU which is problematic with finding gas sources. Kremlin has not decided yet. Attitude of Azerbaijan and Turkmenistan will be effective on this decision. If Azerbaijan and Turk-menistan decide to develop coopera-tion with Russia, Russia will accept to participate NABUCCO. Russia ad-vanced to be a real alternative for Azer-baijan. Azerbaijan assumes the rising in Europe as the most important potential strategy so Azerbaijan desires to cana-lize its consumers to put pressure on Turkey. Natural gas which will reached

Expected oil production in the Russia’s 30 year plan for energy

is 490-520 million tons. 200-215 mil-lion tons of this production will be expended by internal consumption. 100-105 tons are planned for Asia-

Pacific region. 30-35 million tons of the rest will be reserved for Com-monwealth of Independent States. The rest 150-160 million tons above the amount sold to Europe in 2001; 181 million tons.

Production Strategy of Russia

YEAR GAS DEMAND EU PRODUCTION DEFICIT RF SUPPLY PLAN

2015 614 bcm 282 bcm 332 bcm 250 bcm

2030 694 bcm 217 bcm 467 bcm

Supply-Demand Expectations for EU

to Russia by Azerbaijan is 500 mcm per year. This amount does not make Azer-baijan advantageous. Azerbaijan’s oth-er neighbor Iran demands gas in winter months especially Northern Iran. Turk-men gas meets the Iran gas demand al-ready. New pipeline which was started operating, is enters Iran through Dev-letabad. This pipeline and Körpece-Kurtköy pipeline can provide 14 bcm of natural gas per year. This capacity may increase to 20 bcm. Also Azerbaijan exports natural gas with advantageous conditions. With the agreement which will be active until 2013 1.5 mcm of natural gas per day will be transferred to Georgia. Subject of extending the agreement is another issue. All these is-sues bring up the GAZPROM as a real alternative for Azerbaijan.

New Plans of RussiaMoscow prefers to establish part-

nerships with local energy distributors to ensure Europe’s trust instead of increasing energy production. Situa-tion is same in the Asia-Pacific region too. Studies on huge projects continue by the association of GAZPROM and China. Fundamental issues in Russia’s new strategy proof this point:

a) Diversifying export market.b) Diversifying product applica-

tion areas.c) Focusing on Asia.Under those conditions Europeans

should look forward to sign long term supply agreements instead of concern-ing about energy dependency to Rus-sia. Russian entrance understood as a new threat for Europe. In fact, Russia’s partnership with Nigeria, Algeria and Libya provides new options to over-come increasing demand of Europe.

Alternative Energy

Energy has a strategic dimension in international policy, dilem-ma and conflicts. If we consider

together the 9/11 attacks, the invasions in Iraq and Afghanistan, the present crisis and developments in the world energy market, we can see that tendencies in energy issues are headed far from peace and prosperity, that delays are possible in investments and that these problems may be intensified.

An important rise in fossil fuel prices is also expected due to the difficulty of sat-isfying the world’s rising demand for petroleum. In global politics cheap oil and natural gas is going the way of history.

Accepting existing developments as they are and developing policies in increas-ing uncertainty will not prevent energy related problems and social disturbanc-es. As a result, we should not be fooled by recent factors such as the 5% de-crease in Turkey’s demand for electric-ity. In reality, over the last five years, Turkey’s primary energy consumption

increased 35%, and its electrical energy consumption increased 43%.

Meanwhile, our country’s depen-dency on foreign energy has reached 75%. Only 25% of our total energy consumption (the equivalent of 107

million tons of petro-leum) is being met by local production. We can say that Turkey’s 93% dependency on foreign oil and 97% dependency on foreign natural gas will con-tinue.

Our energy loss in industry is at least the equivalent of 6 mil-lion tons of petroleum. Our country’s conser-vation potential is over 25%. By exploiting the 25-30% energy conser-vation potential in de-cisive sectors it is pos-sible to save 5 billion dollars. It is possible

to reduce the share of the energy cost within product cost in manufacture, which varies from 8 to 50%.

The main reason that problems have reached such a scale is that the public service energy production is seen as a market activity, and this is

Turkey’s Policies for New and

Renewable EnergyBy Emin Koramaz

lllliiiii iiiiii iiii iiiii tttt dddddddd thththththhh

If we consider together the 9/11 attacks, the

invasions in Iraq and Afghanistan, the present crisis and developments

in the world energy market, we can see that tendencies in energy issues are

headed far from peace and prosperity, that

delays are possible in investments and that

these problems may be intensified.

Alternative Energy

If we consider together the 9/11 attacks, the

invasions in Iraq and Afghanistan, the present crisis and developments

in the world energy market, we can see that tendencies in energy issues are

headed far from peace and prosperity, that

delays are possible in investments and that

these problems may be intensified.

Alternative Energy

not a strategic planning approach. The cause is the division, downsizing and dysfunctionalization of public enter-prises in the energy sector by means of privatization and liberalization policies implemented over the last 30 years. It is due to the encouragement of electric plants that depend on imported natural gas and to the failure to improve, main-tain, repair and increase the capacity of our lignite fueled and hydroelectric plants because of commercial promises made to the natural gas plants. It is due to the failure to utilize adequately our rich lignite reserves, hydraulic resourc-es, new and renewable energy sources such as wind, geothermal and solar.

However, it is possible to change this situation. Our suggestions regarding this issue are below.

Suggestions for Necessary Steps in the Renewable Energy Sector

1. “The Draft Law on Supporting the Use of Renewable Energy Sourc-es for Electrical Energy Production” should be revised and submitted to the parliament for ratification.

The restructuring of the re-newable energy legislation can be en-abled by an integrated general frame-work law, a “renewable energy strat-egy and action plan” and a “Turkey

general energy document and action plan,” prepared with the participation of universities, professional organiza-tions, expert foundations and industrial institutions, taking market failures in consideration. Strategy documents and secondary legislation that covers incen-tives for each investment type such as hydraulic, thermal, wind, solar and geo-thermal should be separately prepared and 2020-2030-2050 targets should be identified for each resource.

Plans, strategies and targets for the electrical energy sector should be determined, and incentives should especially target R&D and lo-cal production. Development of local industries and employ-ment in renewable energy sec-tor should be supported in plan-ning.

The productivity stan-dards of each resource should be determined in order to pre-vent importing unproductive technologies, inefficient use of resources and the formation of

Alternative Energy

technological junkyards. The world’s beneficial and productive technologies should be encouraged considering the minimum productivity of the technol-ogy to be used (turbine productivity, panel productivity, system productivity, etc).

Inventories of the locations of future plants should be prepared ahead of time, making sure that these locations do not overlap with land uses such as ag-riculture and urban development.

A produc-tion-consumption plan should be made that minimizes trans-port and distribution losses.

If transport/distribution of the produced energy is obligatory, relevant institutions should determine existing limitations of the infrastructure ahead

of time. Project feasibility reports

should be the basis of production li-cense grants.

The secondary legislation to be prepared should be clear and based on ob-jective criteria.

In order to prevent confusion, in-vestments should begin after the legislation is in effect.

2. In order to raise awareness concerning the use of renewable energy resources, pilot projects should be im-plemented in all prov-inces/towns, with public guidance and contribu-tions from professional

organizations, universities, government institutions and local governments.

3. It will be a more realistic structure if ETKB follows its actual functions in-cluding licensing, technically monitor-

ing and contracting new investments in the energy sector, and EPDK to return to its role of regulation, monitoring and determining flow up investments.

4. The downsizing, dysfunctional-ization and privatization of public en-terprises in the energy sector should cease and public enterprises should be strengthened. BOTAS and TPAO should be reunited under Turkish Pet-rol and Natural Gas Institution in order to continue natural gas and oil search, production, transport, refinery, distri-bution and sale activities in an interated manner while EUAS, TEIAS, TEDAS and TETAS should be reunited under Turkish Electric Institution (TEK) so that electric production, transport and distribution activities are integrated.

5. The main principle of energy pro-duction investments should be the min-imization of environmental damage. Environmental impact assessment re-ports and EPDK licence details should be transparent and ‘EIA Appropriate’ documents should be prerequisite for licences to be granted. Investment li-

By exploiting the 25-30% energy

conservation potential in decisive sectors it is possible to save 5 billion dollars. It is

possible to reduce the share of the energy cost within product cost in manufacture,

which varies from 8 to 50%.

Alternative Energy

cences should be cancelled if previously licensed investments fail to get EIA documents or if previously given EIA documents are cancelled. In applica-tions to renew EIA reports or EPDK licences, fuel changes, especially from coal to imported coal, and extensive ca-pacity increases should not be permit-ted.

6. Liquid bed technologies should not be used in coal fueled plants and it should be obligatory to have chimney treatment facilities and high efficiency filters in existing and new plants. Air cooling systems should be used in natu-ral gas fueled plants, rater than water cooling systems that diminish already limited water resources. Necessary re-visions and capacity improvements in thermal plants should be finalized rap-idly, idle capacities should be utilized, technical productivity and readiness of coal based thermal plants should be in-creased, and measures should be taken to reduce pollution. Privatization of plants that have been rehabilitated by public finance and contracting reha-bilitation works to unqualified foreign firms should be stopped.

7. Investments toward reducing loss and piracy in electricity that is around 15% should be made rapidly, legal reg-ulations on conservation and efficiency should be made.

8. Continuing public hydraulic plant projects should be finished by allocat-ing necessary resources. EPDK should monitor the meeting of the construc-tion deadlines it licensed. The impor-tance of this issue is illustrated by the fact that only one of every five hydraulic plant projects licensed by EPDK has in-vestment realization above 35%.

9. The grid connection and system balance of wind plants should be tech-nically investigated, problems should be resolved by R&D support if necessary.

10. The existing capacity for elec-tricity production (500 MW) from geothermal sources should be utilized, tens of thousands of homes should be heated with geothermal water, and the prioritization of the use of geothermal resources for centrally heating dense urban settlements should be obligatory.

11. A legal foundation for the uti-lization of the solar power potential should be established, secondary leg-islation should put in to effect accord-ing to this law, determination of solar power production technology level, the scope of R&D activities, methods, pilot facilities, production facilities, manu-facturing and assembly stages should be planned. Local production of Pho-tovoltaic cells and condensing systems should be aimed.

12. Decrees on norms, standards, minimum performance criteria and procedures for architectural design, heating/cooling needs and equipments, insulation needs and materias, electri-cal systems and lighting should be pre-pared by EIE, Ministry of Settlement

and public works and professional orga-nizations, put in effect and implementa-tion should be monitored.

13. The number of academic re-search institutions such as TUBITAK and Marmara MAM should be in-creased. Research centers should be es-tablished for: solar energy technologies in Mugla, Adana, Mersin and Harran universities; lignite/coal burning tech-nologies in Afsin Elbistan; wind plants in Izmir and Canakkale; geothermal energy in the Aegean region; hydraulic energy in southeastern Anatolia, and biofuel in Cukurova and the GAP re-gion.

Emin Koramaz is Turkey Union Chambers of Architects and Engineers (TMMOB)

Hidden Cost of Dirty EnergyBy Korol Diker

Greenpeace Mediterranean Climate & Energy Campaigner

Environmental Problems

Energy costs have always been a hot topic all around the world. Oil crises, gas pipelines, first

investment estimations, etc. are made from an economic perspective. But power generation from each and every energy source has ad-ditional costs to the environment and the local communities liv-ing close.

Energy sources like coal and nuclear en-ergy creates destruc-tion at every point of their cycle; from mining, processing, transporting to the fi-nal wastes. Mechani-cal processes during uranium mining haz-ardous elements like Thorium, Radium, and Radon-222 are re-leased. Couple months ago Greenpeace found high radiation contamination levels on the streets of Niger.

Nevertheless coal mining also has huge destructive effects on environ-ment. Coal mining causes widespread deforestation, soil erosion, water short-ages and pollution. All around the world locations where coal mining is being made the effects make it almost impossible for the local communities to continue to their daily lives.

150.000 additional deaths per year

The destruction continues during electricity generation; fossil fuels like coal, oil, and natural gas cause CO2 emissions, which are triggering the cata-strophic climate change. Global climate change caused by the relentless build-up of greenhouse gases in the earth’s atmosphere, is already disrupting eco-systems and is already casuing about 150.000 additional deaths per year. An average global warming of 2C threatens millions of people with increased risk of hunger, maleria, flooding and water shortages. Besides this, nuclear power,

coal power plants and all other fossil fu-els pose multiple threats and damages on people and the environment.

On the other hand nuclear energy bearing unacceptable risks to the en-vironment and human beings creates highly radioactive wastes during elec-tricity generation. These and more are the hidden costs of dirty energy sources. They don’t reflect to our electricity bills or aren’t taken in to consideration when

estimation are being made but usually the real cost is a lot more then what we see in our electricity bills.

Turkey has a solution!On the other hand sustainable

growth is a must for governments and the rising demand for energy is the main issue to be solved. In November 2009 Greenpeace proposed a very different way of planning our energy demand

Energy sources like coal and

nuclear energy creates destruction

at every point of their cycle; from

mining, processing, transporting to the final wastes.

Mechanical processes during uranium

mining hazardous elements like

Thorium, Radium, and Radon-222 are

released.

and consumption. Energy Revolution Scenario1 for Turkey was prepared to-gether with EREC (European Renew-able Energy Counsel). The scenario is providing sustainable growth and at the same time showing the pathway of a clean and fare energy future.

Actually the report showed that Tur-key might not have to generate that much en-ergy and the energy ef-ficiency is creating the base of the whole sce-nario. Another thing, report is pointing out is that this total new system is less expen-sive than the reference scenario. In 2050 En-ergy Revolution scenario will be 2 Euro cents less expensive for kWh, than the reference scenario.

When we also take in to consider-

ation that renewable energies and en-ergy efficiency solutions provide more and better jobs, it looks a lot more sus-tainable than the traditional dirty and inefficient energy generation ways.

But to be able to make an energy revolution; to end our dependency to dirty energy sources –which is also a

huge budget item in Turkish economy- new and supportive energy policies are also needed. Govern-ment should end the incentives given to coal and nuclear en-ergy and develop the current renewable en-ergy law. To stop the

catastrophic climate change, end our energy dependency and create a clean and fare energy future we must make this revolution; from top to each and

every person.Renewable energy combined with

the smart use of energy, can deliver half of the world’s energy near by 2050. Time is running out. Scientific opinion now agrees that the climate change is happening, is caused in large part by human activities such as burning fossil fuels. But Energy Revolution Report2 which is published by Greenpeace and EREC shows that it is economicaly fea-sible to cut global CO2 emissions by al-most 50% within the next 40 years. Also the report demonstrates that renewable energy (wind, biomass, photovoltaic, solar, thermal, geothermal, ocean and hydroelectirc power) is not a dream for the future, it is real, mature and can be deployed on a large scale.

References1-2 For Turkish version please visit: http://

www.greenpeace.org/turkey/press/reports/enerji-devrimi-raporu

Renewable energy combined with the

smart use of energy, can deliver half of the world’s energy near by 2050. Time is running

EURASIA CRITIC APRIL 2010

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