Russian-Turkish Energy Relations: Compromise Unlikely
It's too early to tell what the fallout will be on Turkish-Russian energy diplomacy from the shooting down of the Russian fighter jet on 24 November, according to Aaron Stein, Nonresident Senior Fellow at the Atlantic Council's Rafik Hariri Center for the Middle East, but the incident could very well influence whether or not the the two countries further pursue the building of Turk Stream.
He notes: “The very initial statements you seen from Gazprom is that on the Russian side this will not affect their natural gas supplied to Turkey. Turkey is dependent on upwards of 60% of its natural gas, so it has very little flexibility in terms of how it can play the energy card itself.”
On Tuesday, Turkey reported that two if its F-16s had shot down a Russian fighter that had allegedly entered Turkish airspace near the border with Syria. Russian President Vladimir Putin called the incident a “stab in the back by the terrorists' accomplices.” He told the Associated Press that there would be “significant consequences.”
Despite the tensions, Mr. Stein maintains that both sides have an incentive to deescalate the present crisis. He says the tensions are likely to play out via sub state actors inside Syria. “Tangential things have been largely shielded from the Turkish-Russian tensions towards Syria, things like energy, economic cooperation, but they may now be affected by this,” he says.
More should be known about the Turkish stance, says Mr. Stein, following a security meeting being chaired by President Erdogan sometime this evening.
And what of plans for the natural gas pipeline project the two countries had planned together, Turk Stream? Analysts had earlier surmised that Turkish President Recep Tayip Erdogan and President Putin might discuss Turk Stream soon at a scheduled meeting, as little has been heard of the project since summer.
Aaron Stein believes today's military incident does have connotations for the natural gas pipeline project. “At the Atlantic Council Energy & Economics Summit last week in Istanbul I, too, was surprised not to hear President Erdogan talk about Turkish Stream in the energy component of his speech,” he remarks.
“The two sides have been at odds with each other since August over Turkish demands for a larger price cut from the Russian side, and I don't think there was any indication that Moscow was prepared to give that before this latest incident, and now, with tensions where they are, one repercussion is that you'll have a Kremlin that is far less willing to compromise with Turkey, particularly over something it wasn't willing to compromise on before – the price of natural gas.”
Regarding the country's energy security, he says Turkey's been looking to diversify for a very long time, arguing that it's too dependent on a single supplier, but this has resulted in incentivizing coal-fired power plants. “It's also begun to expand its nuclear field, and where this becomes more problematic is, because of Turkey's financing terms for its reactor. The only company that was willing to accept these financing terms was (Russia's) Rosatom, so you have this very awkward situation now, where that company is going to build, operate and own in perpetuity essentially a Russian reactor inside Turkish territory,” he explains.
While the building of Turkey's first reactor is scheduled for 2019, Mr. Stein says the Turks will be lucky if that happens by 2021. Still, Rosatom also needs the project, he points out, underlining that the two countries' energy relationship goes well beyond natural gas.
As for how the two sides can normalize their relations, Mr. Stein says that Turkey and Russia have a history of navigating these types of crises, especially when it comes to economic issues.
During the Crimea crisis, he recalls, Ankara had expressed close cultural ties with the Crimean Tatars for the Turkish/Ottoman heritage. “But the Turkish government just turned around and also began negotiations with Russia for Turkish Stream.
“Ankara is always looking to deepen it's bottom line,” he explains, “and on the energy side, it's very committed to turning itself into this energy hub, but doesn't let much else stand in its way.”
-Drew Leifheit