chapter  9
Between consumers and producers: Turkey as an energy bridge?
Pages 14

The increased world demand for, and trade in, energy resources offers one of the most dramatic illustrations of globalization. Industrialization, urbanization, population growth, rising material living standards and expectations, and world trade, travel and communications have all contributed to the global rise in demand for energy. Indeed, the (uneven) global economic development of the twentieth century and the material comforts and ease of travel associated with it would not have been possible without the ready availability of relatively cheap supplies of traded energy products, primarily oil. The scale of this demand has meant that few economically developed states are now able to meet their energy requirements from domestic resources. To take the USA as an illustrative example, from the mid-nineteenth century until the Second World War it was the world’s leading oil producer, and throughout the period was largely self-sufficient in, and indeed an exporter of, oil. Since the late 1940s, US reliance on imported oil has steadily risen as needs have grown, and imports now account for well over half of domestic oil consumption. Furthermore, by 1972 domestic production had entered into an irreversible decline (Klare 2004: 7-18). European and Japanese dependence on imported oil is greater still. In recent years, newly industrializing and demographically expanding states

in the developing world, notably China and India, have accounted for most of the global increase in demand for oil. Furthermore, gas is increasingly joining oil as a globally sought-after energy resource, although its transportation over long distances is more problematic. This explosive growth in demand for energy has led to an intensifying search for new sources of supply, a trend that is amplified by the fact that the extraction of additional supplies from the world’s existing oil fields is increasingly costly and technologically challenging. Indeed, many analysts contend that the world economy has reached, or is approaching, so-called ‘peak oil’, the turning point at which oil extraction reaches its maximum level and enters a period of terminal decline (Deffeyes 2001, 2005; Hirsch 2005; Roberts 2005; Energy Watch Group 2008). Although the imminence and seriousness of ‘peak oil’ are bathed in some

controversy, the logic that the gap will widen as consumption increases and non-renewable resources deplete seems inexorable. The discovery and exploitation of new energy fields, and increased investment in extraction and transportation of energy from existing fields, can surely only delay the arrival of this critical point, or slow the widening of the gap between supply and demand. In the meantime, the search for new fields, and the exploitation and transportation of their output, is and will continue to be intensely competitive. Furthermore, the mismatch between the geographical distribution of the world’s reserves of non-renewable energy supplies, and the major centres of demand for it, is and will remain striking. The world’s oil and gas reserves are disproportionately located in the industrially undeveloped and sometimes politically unstable or problematic corners of the globe. They are also generally remote from the main centres of demand. This geopolitical and geostrategic fact intensifies the globalization of the energy industry, and adds to the tension and scope for conflict generated by the scramble for access to the world’s energy resources (Klare 2001, 2008; Pascual and Elkind 2010). It has also opened up an opportunity for Turkey to emerge as a player in

global energy politics. This involves the construction of a pipeline network that would criss-cross Turkish territory. Again, it is Turkey’s geographical location that is key to this development. However, pipeline politics are enormously complicated (Hill 2004; Bacik 2006; Fink 2006; Babali 2009, 2010; Saivetz 2009). The energy business is a quintessentially globalized and transnational one. There are multiple players – governments, extraction companies, energy transportation and pipeline construction companies, financial institutions. There are also mixed motives, and a wide range of complex legal, technical, financial, environmental, physical and political factors that come into play. Negotiations are complex, and plans and agreements made do not always come to fruition, or are put on hold until difficulties and differences can be resolved. This chapter aims only to offer an overview of the prospects, problems and progress thus far in Turkey’s bid to become a serious player in the energy business. It will note how Turkey’s distinctive approach seems at times to be an obstacle to, or a drag on, rather than a facilitator of, the further expansion and liberalization of the world’s energy markets.