For foreign and security policy analysts, pipelines tend to be the entry point into the world of energy. Pipelines create dependencies between countries, pipelines stay for decades, and pipelines have a highly symbolic political value.
In the European energy security debate, gas pipelines also have an identity function: you either support freeing Europe from its dangerous addiction to Russian gas by backing the Southern Gas Corridor—formerly known as “Nabucco” and designed to bring new gas supplies from the Caspian Basin, Central Asia, and Middle East regions into Europe—or you blindly follow the Kremlin’s breadcrumbs into the Nord Stream/South Stream-energy trap. Critical differentiation is rare.
Today, controversies over pipeline politics have a rather anachronistic flavor. This is mainly due to the growing flexibility of European—and partially global—natural gas markets in light of the massive increase in LNG supply, interconnectors, and spot market trade. This new market environment has not only changed the relationship between producers and consumers but has also altered the political and economic leverage of transit countries. This is especially important when looking at new transit countries, Turkey being a prominent example.
Nowadays, transit countries are not just dependent service providers; they can also have a profound influence on the market share of a supplier. This leverage can be used as a vehicle to negotiate higher transit fees depending on the available flexibility of switching between markets and suppliers on both sides.
The example of Ukraine as a transit country illustrates this quite well: without alternative supply routes, Ukraine can determine the market share of Russian gas in Europe (approximately 60% of Russian export capacity to the EU is via Ukrainian territory.) Once a pipeline is constructed, the temptation for rent-seeking in transit countries—and transit control power—is huge. Therefore, a suppliers’ interest in the physical diversification of transit routes is understandable. This applies as much to the future gas supply architecture of Southeastern Europe as it does to the Nord Stream/Ukraine debate.
With the realization of the Trans-Anatolian Pipeline (TANAP)—a smaller version of the originally planned Nabucco Pipeline and now a Southern Gas Corridor project—two new variables will enter the equation of European energy security. First, natural gas from Azerbaijan could reach European markets for the first time around 2019. Second, Turkey will obtain the position of a transit country for European gas imports; admittedly with limited influence, since only 10 billion cubic meters per year are foreseen for the European market (between 2-3% of total EU gas consumption in 2014.)
In addition to the TANAP project, the recent easing of tensions between Turkey and Russia has revitalized debates about the construction of Turkish Stream, a project that was initiated after a direct pipeline connection between Russia and Bulgaria through the Black Sea (“South Stream”) was cancelled in 2014 due to regulatory conflicts between Gazprom and the European Commission. Turkish Stream would mainly supply the Turkish market, but could also bring gas destined for the EU market to the Turkish-Greek border.
Moreover, should gas exploration in the Eastern Mediterranean Sea south of Cyprus be commercially and technologically feasible, project developers will be tempted to think about a possible pipeline project serving the Turkish market and potentially re-exporting gas to Southeastern Europe. The Turkish corridor would also be mandatory for all hypothetical deliveries from Iraq, Iran, or Central Asia.
While some analysts positively describe these developments as the creation of the “Gas Hub Turkey,” one could also reframe it as the potential rise of Turkey as a major transit country for (Southeastern) European gas supply. There has been very little debate so far on the subsequent security implications.
With the potentially growing role of Turkey as a transit corridor for European gas supplies, the implications could be twofold. On the one hand, future relations between Azerbaijan and the EU will be strongly influenced by Ankara’s role as the middle man in transporting gas. On the other hand, Turkey could also gain a significant position in EU-Russia gas relations—smaller, but still comparable to the situation of Ukraine today.
The threat of Turkish influence over how much Azeri or (some of the) Russian gas would enter European markets and the potential for rent-seeking in transit fees looks troubling in the current political environment. The willingness of Turkey’s government to link issues such as refugee treatment, visa liberalization, and financial transfers, as has happened recently, should serve as a warning.
This leads to the conclusion that both Russia’s and Europe’s interests would be best served if Turkey were kept out of bilateral energy relations in the future; a possibility that can only materialize if Turkey does not assume a gate-keeper role for several suppliers simultaneously.
Currently, however, the opposite is a very realistic scenario. Since the cancellation of the South Stream project, Russia has declared an unwillingness to deal with the “politically motivated” regulation of the EU Commission on the matter of Southeastern European gas supplies, and only a few EU politicians have shown interest to engage in the issue again. This has not solved any problem though, since competition between different gas suppliers as well as control over access to the EU market would be transferred into the hands of Turkish authorities in the future.
Therefore, resuming the debate about a smaller version of a direct Russia-EU-link through the Black Sea, which would exclude Turkey, should be seriously revisited by European and Russian stakeholders alike. Provided, of course, that the regulatory control of the third energy package fully applies on EU territory.
Severin Fischer is a senior researcher at the Center for Security Studies (CSS) at ETH Zurich.
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