The new energy game with new actors

The new energy game with new actors

It is true that the activation of shale gas resources by the United States (and Canada) has already started to change the rules of the global energy game. Liquefied natural gas (LNG) terminals have already become too expensive to build and operate, so the natural gas trade has to rely more on pipelines to be feasible.

The less the open seas are used for gas trade, the more it depends on land and thus politics, since the land is all about sovereignty rights.

Now, in the middle of the Syrian crisis, which could be considered a Second Cold War stage between the Americans and Russians, the energy game, which has been dictating the politics for more than a century has been rapidly changing.

When you say that Americans have started to play with the rules of the game, you also say that the current players of the game are somehow disturbed; the old players being Russia, Saudi Arabia and Iran. It is clear that as long as you have political crisis in the region, the oil and gas prices are kept high and old players win more.

Plus, there are emerging players in the game. Azeris have been the first to export their oil and gas via pipelines through Turkey as the first example from the region out of Russian, Iranian or Saudi control. And there will be more directed to the European market with more pipeline projects over Turkey.

Kurds in Iraq are eager to sell their oil and gas via Turkey, too. That makes the central government in Baghdad uncomfortable; Iraq, if it manages to keep its unity, is expected to be the number one oil producer on earth by 2030, thanks to the untapped fields in the Kurdish region. The issue has been one of the main topics during Turkish Prime Minister Recep Tayyip Erdoğan’s visit to the U.S. in mid-May, since it has direct links with the Turkish initiative to bring an end to its own Kurdish problem and both the U.S. and Turkey do not want disintegration of Iraq into Kurdish and Shiite states next to Iran.

News gas sources have been found in the eastern Mediterranean off of Israel and around the island of Cyprus. With the new gas trade regime, the geography dictates that the most economically feasible way to export it to European markets is by pipelines via Turkey. But Cyprus is divided between Greeks and Turks. Turkey does not recognize the Greek government there as to represent the Turks in the north and blacklists the companies which cooperate with Greek Cypriots, as long as they do not officially pay the share of Turks on the island. Italian oil company Eni is an example of that.

Turkey and Israel have problems, too. They are in a reconciliatory mood following the Israeli apology for the killing of nine Turks by Israeli soldiers in 2010, but there is still a long way to go.

When asked, Turkish Energy Minister Taner Yıldız said that transporting Israeli gas to Europe via Turkey was possible, if it is clear to Israelis that such a project would not be “a justification of their apology, but could be an outcome of the apology”.

Yıldız also said that the same formula applies for Cyprus; Ankara doesn’t see the need to have a comprehensive solution to Cyprus first in order to start trade. But the “Greek Cypriot government should recognize the rights of the Turkish Cypriot government, pay Turks’ share from the gas they extract,” as the Turks have already stated that they were ready to give the Greeks’ share from their production.

Is that similar to the agreement between the central Iraqi government in Baghdad and the Kurdistan Regional Government (KRG) in the North, by Turkish and Iranian borders? Yes, very similar.

In this new energy game under the new Cold War conditions, “Economic feasibility is not enough to start a project” the Turkish Energy Minister underlined, “You have to have political feasibility first.”