Pipeline Politics

Key Takeaways:

• Recent shifts in geopolitical orientations and energy strategies present an opportunity for Turkey and the EU to strengthen their energy cooperation. 

  • Turkey's role as a crucial energy hub and transit country, demonstrated by projects like the Trans-Adriatic Pipeline, coupled with the EU's ambition to diversify its energy sources and increase renewable energy usage, underline the mutual benefits of an enhanced partnership.

• A closer energy cooperation between Turkey and the EU could lead to significant investments in new energy infrastructure, fostering a more integrated and resilient energy market. 

  • This potential partnership offers opportunities for business diversification, innovation in renewable energy and technology, and positions NGOs and environmental consultants to influence sustainable energy policies. 

• However, the unpredictable political landscape in Turkey poses risks that could affect the stability and predictability of such collaborations.

Cooperation and skepticism simultaneously characterize the relationship between Turkey and the European Union. Several factors have soured their relations in the last few decades, such as Ankara's assertive foreign policy tone and the stagnation of its EU accession process.

Other clashes at the diplomatic level, also within NATO, further intensified the feelings of reciprocal mistrust between Turkey and European states. However, underneath the surface is a set of common interests, especially in the economic and energy domains.

We are witnessing several shifts in Turkey's geopolitical orientation, which looks increasingly inclined towards alternative regional and global actors. While the future of the relationship with Europe seems uncertain, Ankara's geopolitical turn raises questions about its bond with Brussels while emphasizing the untapped potential for cooperation, especially in the energy sector.

EU- Turkey Energy Relations

Common strategic interests and challenges characterize Turkey-EU energy relations. Although both sides recognize the potential benefits of a more dynamic energy partnership, political, regulatory, and geopolitical factors often interfere with the prospect of stronger cooperation. Efforts to improve energy trade and promote sustainability have been made in the past, albeit without consistent follow-through. One example is the EU-Turkey High-Level Energy Dialogue Meetings, an initiative launched in 2016 to improve their energy collaboration, which was suspended as early as 2019 due to political frictions. However, recent developments in Turkey's and the EU's energy strategies could bring the two sides closer together.

Turkey's energy strategy has two main pillars: (1) diversifying sources and routes and (2) becoming a crucial hub for energy trade. In addition to several projects involving the Caucasus and the Balkans, the completion of the Trans-Adriatic Pipeline (TAP) in 2020, as the western arm of the  Southern Gas Corridor extending through Greece, Albania, and Italy, has decisively reinforced Turkey's role in enhancing Europe's energy supply security.

Similarly, the European Union recently set the parameters of its ambitious new long-term energy strategy. These include increasing renewable energy, reducing greenhouse gas emissions, improving energy security and efficiency, and strengthening international cooperation.

The Russian invasion of Ukraine in February 2022 indubitably escalated the urgency for the European Union to diversify its energy sources, precipitating an accelerated search for alternatives. Yet, this strategic pivot was not entirely a reaction to the immediate crisis. For several years, the European Union has been methodically enhancing its energy diplomacy across North Africa, the Caspian region, and the Eastern Mediterranean in an effort to secure and diversify its energy supplies. The completion of the Trans-Adriatic Pipeline in 2020 represents a significant milestone within this broader strategy of diversification—a process that, despite substantial progress, remains an ongoing imperative for the EU.

Analysis:

Turkey already plays a vital role in transporting energy supplies to Europe. The numerous pipelines running through the Anatolian peninsula contribute to the EU's energy diversification and reduce its dependence on Russia. In addition, Turkey and the EU have already presented a significant portfolio of energy cooperation projects over the years.

The foundation for enhancing Turkey-EU energy cooperation is robust and firmly established. Yet, Despite this potential, political tensions and disagreements on various issues have affected energy relations between Turkey and the EU. Concerns in Brussels over Ankara's domestic politics, particularly regarding the state of democracy, rule of law, and human rights, have occasionally led to frictions in energy cooperation.

One of the most significant reasons for tension is the dispute over energy resources in the Eastern Mediterranean. Turkish-led hydrocarbon exploration and drilling activities near Cyprus, which began in the early 2010s but have increased significantly since 2017, raised concerns among several EU member states. The situation worsened in 2019 when Turkey deployed additional drilling vessels to the area, thus exacerbating tensions with Cyprus, Greece, and neighboring states. Ankara has always justified its behavior in the Eastern Mediterranean by citing its own and the Turkish Republic of Northern Cyprus' claims, rights, and maritime interests. However, the European Union has heavily criticized Turkey for this conduct.

A delicate combination of political, geopolitical, and economic factors characterizes Turkey's energy relations with the EU. While opportunities for cooperation abound, challenges and tensions persist. Efforts to overcome political differences, promote dialogue, and pursue mutually beneficial energy projects could strengthen Turkey-EU energy relations in the long run.

Implications:

Considering the confluence of mutual needs, burgeoning opportunities, and aligned interests, it stands to reason that an enhanced partnership in the energy domain represents a shared aspiration for both Turkey and the European Union. Such a strategic collaboration is poised to precipitate a multitude of consequential shifts within the regional energy landscape. Not only would it recalibrate the dynamics of the energy market, but it would also forge new pathways for energy-centric enterprises and nongovernmental organizations dedicated to sustainable development.

Opportunities:

• Someone needs to build the roads: Closer energy cooperation between Turkey and the EU could catalyze significant investments in new energy infrastructure, such as pipelines, LNG terminals, and interconnectors. This presents opportunities for companies specializing in construction, engineering, and energy infrastructure development.
  

• Energy Diversification: By incorporating energy supplies from Turkey into their portfolios, businesses can reduce their reliance on a single source or region. This diversification acts as a hedge against geopolitical risks, supply disruptions, and price volatility, which are common in the energy sector.

  
  

• Renewable Energy Projects: The EU's emphasis on increasing renewable energy sources aligns with global trends toward sustainability. Turkey's strategic location and efforts to diversify its energy sources present opportunities for renewable energy projects, including wind, solar, and hydroelectric power.
  

• Technology and Innovation: The focus on energy efficiency and sustainability could spur demand for innovative energy technologies, including smart grid solutions, energy storage, and efficiency improvements. Companies at the forefront of these technologies could find new markets and collaboration opportunities in both Turkey and the EU.
  

• First Mover Advantage: The drive towards sustainable energy policies opens avenues for NGOs and consulting firms specializing in environmental sustainability, renewable energy, and corporate social responsibility to play advisory and implementation roles.
  

Risks:

• Turkish politics are unpredictable: The fluid political landscape in Turkey, characterized by swift and reactive changes to new developments, adds a layer of unpredictability for businesses operating in or with Turkey. This volatility can lead to sudden shifts in policy, regulatory environments, and business conditions, impacting long-term planning and operations for companies involved in the energy sector and beyond.