CESRAN INTERVIEW CORNER

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1 CESRAN CESRAN International Centre for Strategic Research and Analysis United Kingdom 30 June 2015 No: 1 INTERVIEW WITH ASSOC. PROF. DR. EMRE İŞERİ ON ENERGY SECURITY By Alper Almaz Review & Interview Editor, CESRAN International Alper.almaz@cesran.org Considering Turkey's 2023 vision and energy policy objectives, what are the potential challenges that Turkey faces? Do you think that Turkey is pursuing a sustainable energy policy? As a country with growing imported energy demand, which is around 70-75% at the moment, Turkey aims to reach sustainable energy future by increasing the share of local resources such as renewables (wind, solar, etc..), hydro, coal and nuclear in its energy consumption mix. However, there are several challenges/controversies on the way of Turkey to reach its energy objectives. First of all, beyond utilizing its renewable energy potential, Turkey should come up with a master plan to become one of the leaders in sustainable energy technologies. Otherwise, Turkey will continue to rely on imported energy technologies (i.e. solar panels, wind turbines, etc.) to utilize its local resources with minor positive effects on its economy. Second, in terms of energy source diversification and decreasing the share of imported natural gas to generate electricity (around 45-50%), Turkey s decision to go nuclear looks rational. As interrelated with my first point, nevertheless, it would be CESRAN International Centre for Strategic Research and Analysis info@cesran.org

2 Russian third generation nuclear technology (not the safer and more efficient than forthcoming fourth generation) and enriched uranium to fuel the Akkuyu nuclear plants. However, application of the third generation nuclear technology in Turkey has raised concerns over its safety standards, nuclear waste disposal and its potential environmental impacts in the event of explosion. Third, there are lots of question marks on environmental sustainability of Turkey s energy objectives. As stated in variety of EU s Progress reports, there are controversies on Environmental Impact Assessment Reports (EIA) pertaining microhydro power plants (particularly the ones in INSTEAD OF SOLELY CONCENTRATING ON CONSTRUCTION OF HUGE ENERGY PROJECTS, TURKEY SHOULD ADOPT MEASURES, SUCH AS INCREASING AWARENESS OF ENERGY USAGE AND ENHANCING ENERGY EFFICIENCY, TO DECREASE ENERGY DEMAND. eastern Black Sea region) and Akkuyu nuclear power plant constructions. In a nutshell, I can say that instead of solely concentrating on construction of huge energy projects, Turkey should adopt measures, such as increasing awareness of energy usage and enhancing energy efficiency, to decrease energy demand. Plus, policy makers should support clean technologies improving energy efficiency. By doing so, we can have more environment friendly and sustainable energy policy. Despite the controversies over nuclear energy production in Turkey, the construction of the first nuclear power plant in Akkuyu, Mersin was started last April. Could you please explain more about nuclear power plants? Is nuclear energy really a dangerous resource? From Turkey s perspective what would be the possible impacts of nuclear power plants that will be fully operationalised in the early 2020s, on Turkey s energy security? 2 Several nuclear power projects have been proposed since the 1970s so as to meet growing energy needs. However, no projects could start due to financial and political reasons until 2010 when Turkey and Russia signed an Intergovernmental Agreement (IGA) for the construction of nuclear power plants in Mersin/Akkuyu. Following this IGA, in 2013, Turkey signed another agreement with Japan for the establishment of Sinop nuclear power plant which will be carried out by Japanese Mitsubishi Heavy Industry and French Areva. Considering Turkey's growing economy and energy needs, Turkey, the decision to go for nuclear energy seems rational as it will decrease energy dependency on particular suppliers and strengthen state power (national security,

3 economic power and energy security). Besides, when the reactors in Akkuyu and Sinop are fully operationalized, they will help Turkey to overcome dependency on natural gas and coal plants. In other words, I can say that opting for nuclear energy is very much in line with Turkey's energy objectives. On the other hand, there have been growing concerns over nuclear power plants as it is claimed that they are posing threats to environmental and human security. In the event of accidents and earthquakes, such as the Chernobyl and Fukushima accidents or any radioactive leakage from the reactors will threaten humans, the environment and agriculture. Also, there is an unresolved and significant issue of nuclear waste. It is not clear that how nuclear waste will be managed. If necessary safety measures are carefully taken and the issue of nuclear waste disposal is solved, then the risk of accidents and leakage can be minimized. THE AMOUNT OF GAS PLANNED TO BE CARRIED BY TANAP WILL MORE LIKELY TO SUPPORT TURKEY'S DESIRE TO PLAY A KEY ROLE AS A HUB IN ENERGY POLITICS. In addition to Turkey's nuclear power plant projects, there are gas and oil pipeline projects planned to pass through Turkey. Once they are fully implemented, how will these pipelines affect both Turkey's and Europe's energy security? The completion of the pipeline projects (TANAP, TAP and Turkish Stream) bears some future prospects and challenges for both Turkey and Europe. The amount of gas (31 bcm/y when the project fully operational) planned to be carried by TANAP will more likely to support Turkey's desire to play a key role as a hub in energy politics. Within the scope of the project, in addition to existing ones, new storage and refining facilities and logistics systems will be operational. Besides, Turkey has got the right to re-export/store 6bcm of gas from the pipeline. In addition, these pipelines, except Turkish Stream, will diversify energy suppliers of Turkey and the EU which will bring less dependency on Russian pipelines and more energy security. With regard to the Turkish Stream, it is believed that the project will enhance Turkey's position in global energy market since it is regarded as a secure route for energy transportation. On the other hand, it is argued that the Turkish stream project raises concerns about Turkey's increasing dependence on Russian energy resources. I can say that the Turkish Stream serves interests of Russia more than Turkey. Also, the project might undermine Turkey's diversification policy. 3

4 4 Coming to the effects of energy on Turkish foreign policy, how did the ongoing active policies of Turkey for the last 10 years affect the foreign-dependent energy costs? Due its middle-power status and arguably contradictory foreign energy ambitions (i.e. approaching favourably to rival projects such as Turkish Stream and TANAP-TAP, energy deals with KRG (Kurdistan Regional Government) at expense of central Baghdad government, etc.), Turkey is not the sole actor shaping its prospects to upgrade from being a corridor to regional energy hub or centre. One should take into account not only super power (the US) and regional powers (Russia and the EU), but also regional geopolitical developments (i.e. Ukraine crisis, the future of Iraq, Caspian legal dispute, Nagorno-Karabakh, Iranian nuclear deal) in order to have a comprehensive perspective on Turkey s regional energy prospects. ONE SHOULD TAKE INTO ACCOUNT NOT ONLY SUPER POWER (THE US) AND REGIONAL POWERS (RUSSIA AND THE EU), BUT ALSO REGIONAL GEOPOLITICAL DEVELOPMENTS IN ORDER TO HAVE A COMPREHENSIVE PERSPECTIVE ON TURKEY S REGIONAL ENERGY PROSPECTS. It is asserted that there has been a normalization of relationship between the US and Iran since the negotiations on Iran's nuclear program started. Besides, economic sanctions on Iran are gradually lifted. How would the US-Iran 'rapprochement' and removal of economic sanctions affect regional and global energy market? P5+1 are working with Iran so as to have a comprehensive nuclear deal. As they are approaching to the end of negotiations, international oil companies, such as BP, Total and ENI have already started to analyse reinvestment opportunities in Iran's energy sector. Iran, as a country highly dependent upon energy revenues, could not invest in energy sectors for years due to heavy sanctions imposed from European countries and the US. If sanctions are lifted or eased, Iran will immensely benefit from it. It is expected that international energy companies will support Iran with necessary technology and know-how to develop Iran's oil and gas sectors. Also, they have a great appetite to resume their energy investments. If sanctions are lifted, there will be regional and global implications as well. However, it will take five to ten years to observe the impacts. Among the impacts, there will be increase in supply in global energy market which might decrease the prices. Second, Iran could be an alternative supplier to energy dependent countries. For instance,

5 considering Europe's energy dependence on Russia and recent severe supply disruptions, Iran could be an alternative and secure energy supplier for Europe. It is also believed that Iran could be a convenient transit country to carry Turkmen gas to Europe. However, new energy exports and exploration of energy fields require expensive projects that will cost billions of dollars and take years to operationalise. As you know, recently there has been fluctuations in oil prices. Can you enlighten us about the reasons behind this? Based on the world markets, is that sustainable in terms of pricing? DUE TO INDIVIDUAL COUNTRIES AMBITION TO PURSUE THEIR NARROW NATIONAL INTERESTS OVER THE SO-CALLED NEW SUEZ CHANNELS AND ENERGY DISCOVERIES, THROUGH A PESSIMISTIC PERSPECTIVE, THE NORTHERN POLE AND THE ARCTIC WILL LIKELY TO BECOME THE SCENE FOR THE TRAGEDY OF COMMONS. Whenever a sudden rise or fall occurs in oil prices, there begins a (re)heated debate about reasons of this fluctuation. The debate revolves around two different perspectives on the nature of oil markets: Cyclical or Structural. Regardless of this debate, what we know is various factors affect volatility of oil prices. Supply-demand is only one of them though. Given that oil is a financial asset just like stocks, how market players perceive conjunctural developments (i.e. geopolitical risks, oil supply/demand projections, i.e.) cause fluctuations in oil prices in the short term. In the case that the so-called unconventional energy revolution is real and Iran s abundant energy reserves (in along with recent discoveries in Brazil, the Arctic, etc.) could be efficiently integrated to world energy markers, I believe, we will see moderate prices in the long-term. Today, the North Pole and the Arctic are mentioned in energy centred political struggles. So what are your opinions about the region? Will the region be a place of conflict or cooperation? Due to individual countries ambition to pursue their narrow national interests over the so-called new Suez channels and energy discoveries, through a pessimistic perspective, the Northern pole and the Arctic will likely to become the scene for the tragedy of commons. In order to avert this tragedy, going beyond their narrow self-interests, states should restructure their preferences in manner to meet at the lowestcommon denominator. 5

6 It is frequently discussed that in the near future the world will run out of oil and gas resources. What are your comments about this speculations? The question to ask is not whether there is enough oil/gas or not, what we need to focus on is at what political-economic cost, which is not only about feasibility, but also, arguably more importantly, sustainability. With a doubt, those new discoveries (i.e. Arctic) or technological advancements (i.e. hydraulic fracturing) is neither economically feasible at oil prices below $80 per barrel nor environmentally friendly. 6

7 Emre Iseri currently works as an Associate Professor of International Relations in the Department of International Relations at Yasar University. He received his undergraduate degree in 2002 from the department of political science at Bilkent University. With his thesis titled The US Policy towards European Integration: The Case of Turkey's Accession to the EU, he was awarded a master's degree from the department of EU politics and international relations at the EU Institute -- Marmara University. He wrote another thesis, Turkey's Security Relations with the US and the EU in the post-september 11 period at the department of international conflict analysis at the University of Kent in the UK, and he earned his Ph.D. in 2008 from Keele University in England with his dissertation titled The US Grand Strategy and the Eurasian Heartland in the 21st Century: With Special Reference to the Main Caspian Oil Export Pipeline BTC. Dr. İşeri also conducted research at the Central Asia-Caucasus Institute & Silk Road Studies Program at Uppsala University. His areas of research include Eurasian politics, energy security and Turkish foreign policy. He has published academic articles in numerous books and journals both in Turkey and abroad including Geopolitics, JBNES, Turkish Studies and Energy Policy Copyright by CESRAN International This material is available for republication as long as reprints include verbatim copy of the article in its entirety, respecting its integrity. Reprints must cite the author and CESRAN as the original source. Assessments expressed in this report reflect only the opinions of its authors and do not represent the institutional opinion of CESRAN. 5

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