Azerbaijan-Turkey-Israel Relations: The Energy Factor

September 19, 2008, 1:25 pm
  


 



By Alexander Murinson*

With the conclusion of the Cold War, the trilateral axis (Israel-Turkey-Azerbaijan) in the expanded Middle East emerged. The issue of energy security as a component of this relationship has remained largely unexplored. First, this article elucidates the transformation of the concept of security in the post-Cold War period. It then places the hydrocarbon-rich Caspian region in the context of the energy security needs of energy-poor Turkey and Israel. The importance of transportation routes from the Caspian for the Jewish state are highlighted, and the potential of Caspian petrochemicals for cooperation in energy field between Israel, Turkey Israel are explored.

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INTRODUCTION: A NEW TRILATERAL AXIS

The emergence of the Israel, Turkey, and Azerbaijan entente of the 1990s not only reflected the new geopolitical realities of the post-Cold War era, but also heightened awareness of the depletion of primary resources and fresh water, and new environmental challenges confronted each of these countries. Even though a number of scholars have drawn attention to the emergence of the trilateral axis (Azerbaijan-Turkey-Israel) in the post-Cold War era, the issue of energy security as a component of this relationship remains largely unexplored.[1] In light of increased competition for access to secure energy sources in recent decades and in the foreseeable future, the impact of energy security on foreign policy requires special attention. This article explores how the growing importance of energy security contributed to the formation of the strategic axis between Azerbaijan, Turkey, and Israel.[2] In order to reflect adequately this complexity in the post Cold War period, the conceptualization of security needs to be extended beyond only military security. This newly expanded concept includes energy security, environmental, and water security.

TRANSFORMATION OF SECURITY

With the end of the Cold War, there was a paradigmatic shift in concepts of security due not only to geopolitical changes(in light of the fall of the Communist system) but also to exhaustion of–or increased competition for–secure energy resources, environmental and biospheric changes, new ideological threats, as well as the threat of WMD proliferation and their use against population centers. This has had a direct effect on the relationship among Turkey, Israel, and the newly-independent Azerbaijani republic. One of the developments resulting from this global shift was the emergence of the Turkish-Israeli axis in the Middle East, which after the collapse of the Soviet Union in 1991 involved a newly established Muslim state, the Republic of Azerbaijan.

In the traditional sense, security had a dual goal of preserving the integrity of a state’s territory and its sovereignty.[3] Lenore Martin proposes an integrated approach that defines national security as "the capability of a state to deter or counter threats to its three components: territory, society, and regime."[4] Among the critical variables that she includes in this paradigm of security are military capabilities, political legitimacy, ethnic and religious tolerance, economic capabilities, and the availability of essential natural resources.[5] Energy security is based on a country’s ability to have continued access to sufficient supplies of energy, oil, and gas–either from sources on its own territory or from sources abroad. Since globalization has become the dominant force animating the economic reality of the international community, the competition for reliable sources of energy and energy security is at the top of the international agenda. Energy security has become integrally interlinked with issues of global security.[6]

The Caspian Possibilities

When the independent Azerbaijan laid its claim to its petrochemical resources in the Caspian shelf in the early 1990s, energy security emerged as a major area of cooperation with Turkey and, in a more limited but still vital way, with Israel. Energy security is an important part of this trilateral relationship due to Azerbaijan’s geographic position: It is the east-west passageway to the land-locked Caspian and its petrochemical resources, as well as an important link to Central Asia’s natural resources.[7] Since Israel’s independence in 1948, access to secure oil and natural gas were the sources of persistent anxiety, as the main oil-producing countries were Arab and exhibited animosity toward the Jewish state.

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The fossil-fuel rich Caspian basin is an important source of energy security for Europe and Israel, and even more so with depletion of the North Sea oil reserves.[8] Western energy needs and strategic considerations have necessitated the establishment of a stable, Western-oriented Azerbaijani polity. Multiple transport and communications routes were developed throughout the Caucasus in order to implement this policy and to anchor Azerbaijan in the Western-dominated globalized economy. This also led to improved political stability in the region and the commodification of Caspian oil. The U.S-sponsored East-West energy corridors and a transportation corridor known as the TRACECA (Europe-Caucasus-Asia project proposed by the European Union) were viewed as guaranteeing the independence and economic viability of Azerbaijan and the Central Asian republics.[9] The Baku-Tbilisi-Ceyhan pipeline (or BTC) through Turkey is of importance here. An American critic of the BTC project conceded, "The relationship among Israel, Turkey, and the United States is the major factor for the selection of the Baku-Ceyhan route, which could be extended to bring oil directly to the energy-deficient Israel."[10]

Turkey, a country poor in hydrocarbon resources, has also been affected by the "politics of oil" and its fluctuations in relations with its Middle East neighbors.[11] During the Cold War (1947-1988), Turkey’s industry and infrastructure were dramatically affected by the 1973 Oil Embargo in the aftermath of the Yom Kippur War between Israel and its Arab rivals, Egypt and Syria. Economic considerations led to a cooling-off of the Turkish-Israeli alliance of the 1950-1960s, as Turkey pursued the friendship of the Arab oil-producing countries. These bilateral relations only further deteriorated as the result of the Cyprus crisis beginning in July 1974. Following a Turkish military intervention intended to counter the attempt to annex the island by another NATO ally, Greece, Turkey was ostracized by the United Nations. Turkey sought the diplomatic support of the Arab world in its standoff over the political fate of Cyprus with the West. In 1975, Turkey recognized the PLO. In exchange, Turkey hoped that Arab countries would recognize the self-proclaimed Turkish Republic of Northern Cyprus, but this hope never materialized. The United States, always eager to secure oil supplies from the Persian Gulf, recognized the importance of its Middle Eastern allies–Turkey and Israel–as stabilizing elements in its regional strategy during the Cold War. From 1987, Turkey began importing natural gas from Russia and became increasingly dependent on Russian gas. As a result of the construction of the Blue Stream project, which transports 16 billion cubic meters of natural gas each year, by 2010, Turkey will be importing 50 percent of its gas from Russia.[12] Following the collapse of the Soviet Union, Caspian oil and gas resources once again became an apple of contention between the great powers as in the first decades of the twentieth century. However, now even more actors, including the new independent states (i.e. Azerbaijan, Kazakhstan and Turkmenistan, and Iran) laid claims to the petrochemicals in their prospective sea shelves.

Since the collapse of the Soviet Union in 1991, Russia has pursued a dual goal in the Caspian: to control the largest production share of hydrocarbons and total control over transport routes.[13] If by the mid-1990s Russia reached that goal by controlling the pipeline infrastructure that delivered oil and gas from the Caspian region, Azerbaijan intended to disentangle itself from its dependence on Russia for delivery of its petrochemicals to the world market. This would require an outlet that did not pass through Russian territory. Naturally, the construction of the proposed BTC oil pipeline served this purpose. Financially, it was in Azerbaijan’s best interest to delay its commitment to the Turkish route in order to obtain optimal conditions from the United States and Turkey for the strategic pipeline. In addition, international investors were wary of the construction of an expensive overland route.[14] Until the discovery of gas in the Shah Deniz field, the largest natural gas discovery worldwide since 1978, Azerbaijan was not a major player in the Caspian gas market.[15] This discovery, however, renewed international interest in Azerbaijani natural gas.[16]

In the early 1990s, Turkey sought to become recognized as the leader among the Turkic republics. Prime Minister Turgut Ozal’s government embarked on a foreign policy course aimed at reestablishing ethnic, cultural, and political ties dating back to the Ottoman period. Turkey sought U.S. support for a pipeline project that would provide an outlet for Azerbaijani oil, later known as the Baku-Tbilisi-Ceyhan project (BTC). Fiona Hill observes, "Since the early 1990s, the twin goals of Turkey’s foreign policy in the [Caspian] region have been to secure new energy supplies, and to establish itself as the transit country for energy flows from the Caspian to consumer markets in Europe."[17] One of the strategic goals of this relationship was to support secular and pro-Western regimes in the newly independent Muslim states.[18] Commercial development of these states’ abundant natural resources soon became one of the tangible directions of strategic cooperation obetween Turkey and Israel, and Azerbaijan has become the focal point of this cooperation.[19]

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For Israel, such cooperation with Turkey in guiding these new countries in the economic sphere–especially in agriculture and telecommunications–offered another channel for the pursuit of their shared geopolitical goals.[20] Israeli officials also received American approval for this strategy. [21] An Israeli diplomat identified this new trend as "a multi-vector foreign policy."[22] In cooperation with the United States, the Israeli government intended to transfer its technical expertise in such highly developed fields as medicine, agriculture, and irrigation to Azerbaijan and the Central Asian republics. Turkey also gained importance for the United States as a potential conduit for American global policy in the Transcaucasus and Central Asia.

Azerbaijan also wished to cultivate its Western orientation through an alliance with Turkey and Israel. Azerbaijani foreign policymakers realized the importance of ties among the three countries,[23] and an Israeli diplomat stressed the political importance of access to Caspian hydrocarbon resources for Israel’s relations with Turkey and Azerbaijan. "When we talk about Azerbaijan," he said, "we talk about oil. Energy is a major component of this relationship."[24]

The Armenian American lobby to U.S. Congress opposed the BTC project as well as American governmental aid to Azerbaijan.[25] Turkey and Azerbaijan thus solicited the support of the American Jewish lobby, which coincided with improvement of Turkish-Israeli relations.[26] By allying itself with Israel, Azerbaijan gained significant muscle among the Jewish Caucus members and the organized Jewish community in lobbying on Capitol Hill for the promotion of the BTC, and the Silk Road Bill legislation was passed in 1999. Turkish diplomats were also appreciative of the Jewish community’s efforts in the United States to promote the BTC. Such leading American Jewish organizations as the American Jewish Committee and the B’nai Brith undertook a prominent role in this lobbying effort.[27] Since September 11, the United States has reinvigorated its policy for diversification of world hydrocarbon fuel supplies in order to reduce future dependence on Persian Gulf oil. This policy has only enhanced a strategic interest in promoting the axis between the three countries.

ENERGY AS AN IMPORTANT FIELD FOR TRILATERAL COOPERATION

Turkey is heavily dependent on imported oil. Up to 90 percent of Turkish oil comes from the Middle East and Russia, covering nearly half of the country’s energy requirements. Due to the Turkish economy’s increased energy needs from the 1990s, the energy demand is expected to grow grow 200 percent to 300 percent by2010. Turkey’s dependence on imports of energy resources is projected to reach 75 percent by the same year.

Israel does not possess significant oil resources and is completely reliant on oil imports.[28] The growing demand for oil resources and political threats to the safe supply of the Arab and Iranian oil became sources of chronic international tension, as well as wars such as the First and the Second Persian Gulf Wars. If traditionally, Egypt, the North Sea, West Africa, and Mexico were major exporters of oil to Israel, since the break-up of the Soviet Union, the Jewish state has shifted its energy priorities. Israel has obtained most of its oil from the former Soviet Union since the 1990s. The largest oil importers are Russia and the Caspian countries: Kazakhstan, Turkmenistan, and Azerbaijan.[29]

The concerns about energy security directly affected political calculations in Turkey, Israel, and Azerbaijan and played a notable role in the strategic basis of the relationship among the three countries. One important component of energy security and its economic benefits lies in control over hydrocarbon delivery networks, such as pipelines and seaport terminals. The availability of multiple routes of transportation for oil and gas also contributes to energy security, since it decreases dependence on any particular pipeline in case of terrorist attacks or inter-state conflict. The BTC pipeline issue for delivery of oil from the Caspian basin to the West came to the foreground of Israeli attention, thanks to the pro-Israeli lobby in the United States.[30] From August 1997, when American Jewish leaders met with Azerbaijani President Heydar Aliyev, they participated in an active campaign to promote the BTC project on Capitol Hill. This lobbying campaign reflected the confluence of interests of Turkey, Israel, and Azerbaijan.

Azerbaijani independence from foreign, primarily Arab and Iranian, oil permitted a greater degree of flexibility in its foreign policy.[31] Not only did the new Azerbaijani authorities form close relations with the Turkish republic, it also opened a new era in relations with the State of Israel. Throughout the 1990s, Azerbaijan has largely followed U.S. and Israeli policies on Iran.[32] In line with American and Israeli security interests, Azerbaijan chose a pipeline to deliver its oil to the West, and it has closely coordinated its pipeline policy with the United States to avoid Iranian territory. Azerbaijani policy makers envisioned that the BTC project, transporting Azerbaijani (and potentially Kazakh) oil to the Mediterranean, would facilitate more reliable delivery of oil to Israel. The BTC route for Azerbaijani oil would also create tangible commercial benefits to Israel, since the Persian Gulf oil market is dominated by hostile oil producers, in particular Iran. Not only does this pipeline provide a shorter route for Azerbaijani oil exports to its Western clients, including Israel, but the Ceyhan port facilities would also allow the use of large tankers thus making Turkey the primary oil terminal of the Mediterranean.[33] Azerbaijani Deputy Foreign Minister Araz Azimov commented about the benefits of the BTC-transported oil for Israel:

[The] BTC is going to Ceyhan, and that is [the] Mediterranean… and to buy the Azerbaijani oil is much preferable than the Persian Gulf (oil)…. In the Persian Gulf you have 700 billion tons per year of oil being thrown into the market, while in the Mediterranean Azerbaijani oil [will contribute] 15 million tons a year. In the Mediterranean, you have lesser amounts of oil and more dynamics. Israel has its own demand there. Huge demands. [sic] In strategic way, Israel has certain reason to be interested in Azerbaijan.[34][sic]

By the same token Azerbaijan expected reassurance from the United States and Turkey that its interests would be protected from Iranian meddling in oil exploration on its continental shelf.[35] Iran has opposed the construction of the BTC, because it would not only deprive it of potential oil transportation revenues but would also open Caspian oil and gas for shipment to its archenemy, Israel. The Iranian government disputes not only the maritime and seabed boundaries demarcating its sector of the Caspian Sea, but also the sea’s legal status since the collapse of the Soviet Union.[36] Azimov explained that, as a result of Iranian support for Armenia during the Nagorno-Karabagh conflict, "We don’t trust them. Iran is not in favor of our policy on the Caspian Sea, on the Baku-Ceyhan transportation of oil, Euro-Atlantic integration…"[37]

According to an Israeli diplomat, Israel has been importing oil from Azerbaijan since 1991.[38] In general, oil imports dominate trade relations between the countries. According to Arthur Lenk, Israeli Ambassador to Azerbaijan, over the years oil imports from Azerbaijan have constituted more than $1 billion in bilateral trade.[39] Even before the BTC project started, Prime Minister Benjamin Netanyahu expressed interest in importing Azerbaijani oil through this pipeline during his meeting with President Heydar Aliyev in Baku in 1997.[40] Since July 2006 when the BTC began to deliver "early oil," it was anticipated that it would become a significant outlet for oil destined for Israel. Kazakhstan, the largest regional oil producer in the region, after convoluted negotiations, made a commitment to supply additional oil to make the BTC commercially viable.[41] In order to join the BTC pipeline Kazakhstan will need to construct an extension pipeline under the Caspian Sea from Aktau to Baku to export its oil to the West.[42]

Turkey’s location at the crossroads of Europe and Asia has made it an ideal location for construction of an energy corridor linking Caspian oil and gas producers with consumers in Europe and the Mediterranean such as Israel. After the end of the Cold War, the Turkish foreign policy elite saw energy security as one of their key foreign policy concerns.[43] Turkey, a long-standing Western ally, possesses a competitive advantage in pipeline construction and infrastructure building and maintenance.[44] Following Azerbaijan’s independence in 1991, Turkey proposed to construct a pipeline that would deliver Caspian oil from Baku to its Mediterranean oil terminal of Ceyhan. Originally this pipeline was viewed as a purely geopolitical project to make countries like Azerbaijan economically and politically independent from Russia and not beholden to Iranian interests in the region. Israeli policymakers shared the same perceptions and realized the value of the construction of this pipeline. The goal was to link the ethnically and linguistically related Azerbaijan to its natural ally and NATO member, Turkey. Turkish leadership has advanced the idea of an East-West pipeline from the Caspian since the early 1990s. As the leading energy security analyst of the Turkish Petroleum Corporation (TPAO), Turkey’s national oil company, Necdet Pamir promoted the BTC within Turkish political and business circles. Through his efforts, Pamir successfully gained the recognition of the project’s strategic value not only for Turkey but for the entire Euro-Atlantic alliance. Pamir also underlined that the pipeline’s strategic impact was more important than its financial profitability. He stressed, “The line will by-pass Russia. Central Asian republics will no longer depend on Russia to export oil and gas.”[45] His strategic vision assigned to Turkey the role of a global energy hub for delivery of Caspian hydrocarbon resources to the West.[46] If a growing number of pipeline projects transporting oil from such destinations as Kazakhstan, Russia, Azerbaijan, and Iraq through Turkish territory were realized, the Ceyhan port facility would become one of the top global oil terminals.[47]

The BTC Connection

During the 1990s, Israel and Turkey sought to gain reliable sources of petrochemicals and access to the new Central Asian markets, through Azerbaijan as the main transit country. For both historical and pragmatic reasons, Azerbaijan became the focus of intensive diplomacy and security cooperation with Turkey and Israel . One must note an obvious inequality in relations among the three states. An active military-strategic entente can be observed between the regional powers of Turkey and Israel, supported by the United States. The multi-vector and close cooperation between Turkey and Israel in promoting Azerbaijani independence and economic viability has become a factor in the power balance in the Caucasus and the Caspian regions. While Israel still attempts to establish more robust relations with Azerbaijan, Turkey took has taken the lead in security cooperation. Despite the absence of diplomatic representation of Azerbaijan in Israel, all regional powers are aware of the strategic partnership between Israel and Azerbaijan. Pursuing these objectives, Turkey sought Israeli support in convincing the United States of the strategic value of this geopolitical linkage. Israel’s supporters in the United States campaigned to lobby in Congress. . After 1995, the U.S. government indicated its official support for the project. The Clinton administration worked to remove the many obstacles standing in the way of this project. While originally this pipeline was viewed as a purely geopolitical project to make countries like Azerbaijan economically and politically independent from Russia and not beholden to Iranian interests in the region, the construction of the Baku-Tbilisi-Ceyhan linking the Azerbaijani oilfields with Ceyhan, the Turkish oil terminal on the Mediterranean, and the nearly completed South Caucasus Gas pipeline, have elevated both Azerbaijan’s and Turkey’s status as players in the world energy market. Moreover, their improved geopolitical statures have been reaffirmed and have increased their economic and military value for the United States, with Azerbaijan and Turkey establishing themselves as the frontline allies of the United States in the global war against radical Islamist movements.[48] Israeli policymakers shared the same original perceptions and realized the value of the construction of this pipeline. Since June 2006, Israel has been discussing plans with Turkey to extend the BTC to Israel.

Gas Synergy?

To the extent possible, the Jewish state wanted to contribute its political muscle to the BTC project, which had geopolitical significance to its political allies in the region. As an additional benefit, Israel wished to gain access to a source of oil that would not be affected by the attitude of the Persian Gulf states toward Israel. Still even more important for Israel and Turkey was access to reliable and secure sources of natural gas. Both countries experienced a growing demand for natural gas with the expansion of their industries and electricity generation. In Israel demand for natural gas has grown exponentially since the 1980s and has been projected to reach 282.5 billion cubic feet (Bcf) annually by 2010.[49] The Israel Electric Company, the national electricity provider, is currently investing $1.5 billion in the construction of eight additional natural gas power plants. Turkey intends to play a role in the supply of natural gas to Israel through its territory and participates in the critical projects for the Israeli power network. In fact, in October 2005, the Turkish conglomerate Zorlu Energy signed a major contract to participate in construction of the Ashdod gas-based power plant in southern Israel.[50] The Turkish company will own a 20 percent share in the power plant. This plant will produce a significant amount of energy–100 MW per year.[51]

Israel had considered the option of large-scale delivery of gas from Egypt, but due to the chronic political volatility in the Middle East, it preferred to cultivate multiple sources. Gas imports from the Caspian thus represent an attractive alternative. Turkmenistan possesses the second largest natural gas reserve in the world. As a Caspian riparian state, the most direct route for Turkmenistan’s gas shipment was to build an underwater pipeline for delivery through Azerbaijani territory to the West. Yosef Maiman, the head of Merhav, an Israeli energy and infrastructure conglomerate, established close personal and business relations with former leader of Turkmenistan, now deceased autocratic leader Mr. Saparmurad Niyazov, also known as Turkmenbashi. Merhav became the largest foreign contractor of the Turkmeni oil and gas industry.[52] Since 1996, Merhav has been involved in the reconstruction and upgrading of Turkmenistan’s oil and gas refineries.[53] Prior to 1997, Caspian region natural gas was delivered through the re-export route from Turkmenistan via the Russian natural gas pipeline system. Russia had originally intended to deliver gas to the Turkish market by extending its Central Asian pipeline and connecting it to the existing Russian natural gas pipeline to Georgia and then via a new pipeline to Turkey. In October 1998, Merhav negotiated with the Turkmenbashi government for a $3 billion deal to build a trans-Caspian gas pipeline (TCGP) that would bypass Russian territory. Earlier that same month, Turkish President Suleiman Demirel and Saparmurat Niyazov signed a long-term agreement for the supply of Turkmeni gas to Turkey via the Israeli Merhav-backed pipeline. This pipeline was expected to be a substantial component of the U.S.- sponsored "East-West corridor” and would run along the Baku-Tbilisi-Ceyhan oil pipeline.[54] Despite the high cost estimate of its construction, the United States lent support for the project for " more long-term diplomatic and strategic purposes."[55] The American government hoped these projects would guarantee Turkey’s energy needs, and possibly be a future power source for Israel.[56] The Merhav deal included the prospective development of upstream gas resources, negotiating rights of way with Azerbaijan and Georgia, and constructing a 2,000 kilometer pipeline capable of transporting 30 billion cubic meters of gas annually. Azerbaijan and Georgia would have benefited financially from transit fees, but the international consortium was suspended. The TCGP project was met with intense opposition from the Russian government, which applied considerable pressure on the Western oil concerns involved in the project.[57] Russia is not only the largest producer of natural gas in the world, but it has vigorously competed for natural gas delivery to Turkey since the mid-1990s. Ultimately, the Russian gas monopoly Gazprom was able to harness its influence among Turkish and Israeli business lobbies and thus to realize the controversial Blue Stream project to be discussed as follows. Talks are now underway to extend the Russian pipeline through Turkish territory and the Mediterranean to Israel.

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As in the case of Israel, Turkey has critical dependence on natural gas imports,[58] and it is a strategic resource for both countries. Turkey, like Israel, has also began shifting from oil to natural gas for its energy production and industrial needs. The consumption of natural gas has increased five-fold in Turkey, from 150 billion cubic feet (Bcf) in 1991 to 748 (Bcf) in 2003. Turkey had signed import contracts for a total of around 1.8 Tcf per year of natural gas imports in 2010, over 25 percent higher than the Botas forecast for Turkish gas consumption (1.4 Tcf) in that year, prior to the 2001 financial crisis.[59] Turkey overestimated its future demand for imports of natural gas. Following the crisis, BOTAS, the state natural gas and pipeline company, had to revise its natural gas demand growth projections down sharply–from about 1.6 trillion cubic feet (Tcf) in 2005 to under 0.9 Tcf in that year. This was a 45 percent downward revision. Despite political opposition from the military and the Kemalist elite, in August of 1996, Necmettin Erbakan’s government signed a highly controversial contract to import natural gas from Iran. This deal represented part of a broader campaign by Erbakan to improve its relations with the Muslim world.[60] This 25-year contract worth $30 billion obligated Iran to supply Turkey with more than 8 Tcf of natural gas beginning in late 1999.[61] Anti-Islamist forces in Turkey were concerned that by signing this contract, the Erbakan government had exposed Turkey to "energy blackmail" from Iran.[62] This agreement was harshly criticized by the United States, but was later accepted.[63] The Iranian gas deliveries were suspended by both sides on numerous occasions due to disagreements over prices, "gas quality," and delivery quotas.[64] Nevertheless, Turkey is expected to import about 19 percent of its gas from Iran by the year 2010. As mentioned above, construction of the planned Trans-Caspian Pipeline to deliver gas directly from Turkmenistan was suspended in 2002. The Shah Deniz gas discovery reduced Turkmenistan’s leverage in negotiations with Azerbaijan over pipeline volumes. However, due to over-commitments in the previously signed gas importation agreements with Iran and Russia, Turkey delayed signing an agreement for delivery of Azerbaijani gas. Both Russia and Iran have thus imposed “take-or-pay” provisions on Turkey in the event that the Turkish government fails to purchase contracted gas.[65] According to these agreements, Turkey was not allowed to re-export Russian gas to third parties. Instead of an international arbitration process, originally considered by Gazprom, in late 2003, the parties managed to reach a settlement that reduced both the price and the take or pay percentage in the late 2003.[66] Expected heavy financial penalties have compelled Turkey to renegotiate the clauses of the contract that ban it from re-exporting natural gas to third countries, including Israel; but this remains at the discretion of the Russian signatories to the agreement.

Despite these setbacks, Turkey continues to pursue its cooperation with Azerbaijan in the areas of gas transportation and energy security. In March 2001, Azerbaijan signed its own natural gas export deal with Turkey to deliver the Shah Deniz gas.[67] By 2010 Azerbaijan is expected to supply about 13 percent of total Turkish gas imports. Azerbaijan and Turkey are proceeding with plans to construct the Baku-Tbilisi-Erzrum gas (the South Caucasus Gas pipeline) pipeline which will run parallel to the BTC pipeline. Both of these projects, as a part of the East-West "energy corridor," will have increasing importance in the years to come. Turkey will continue to support Azerbaijani economic self-sufficiency and provide a geopolitical bridge for Azerbaijan to the Euro-Atlantic community. As Turkey moves closer to membership in the European Union (though it is subject to debate among members of the European Union), the Azerbaijani energy contribution will provide a basis for future economic and political integration within Greater Europe.

From Blue Dream to Blue Stream

With reference to the energy security of the three countries, the most controversial issue was the agreement to build the pipeline and deliver Russian gas to Turkey under the Blue Stream project (or Mavi Akim, in Turkish). The Blue Stream officially opened in November of 2005.[68] As mentioned above, dependence on any particular foreign supplier for strategic fuel weakens a country’s energy security. Following the period of turmoil that followed the collapse of the Soviet Union, Russia set the strategic goal to re-establish itself as the "great energetic [sic] power."[69] The new Russian political elite perceives energy not only as a lucrative international commodity, but also as an instrument of domination over its immediate neighbors and as a tool for projection of power in the international arena.[70] The Turkish government’s decision to go ahead with the Blue Stream project was the result of intense lobbying by Turkish business interests heavily invested in Russia.[71] Both the Dogru Yol (the True Path) government under Tansu Ciller (1993-1997) and the Anavatan (Motherland) government lead by Mesut Yilmaz (1997-2000) were implicated in influence-peddling to secure the Blue Stream project.[72] Massive corruption scandals were associated with all stages of negotiations and construction of the project.[73] This contract had such geopolitical significance that it was hailed as the "turnabout" in Turkish-Russian relations. The contract was signed during a visit by then Russian Prime Minister Viktor Chernomyrdin, himself a representative of the Russian energy lobby, to Turkey on December 16-17, 1997.[74] By 2003, however, the Turkish leadership came to realize its impending dependence on Russia for natural gas. Justice and Development (AK) government Energy Minister Hilmi Guler harshly criticized the gas deal concluded by the previous governments. He urged sharp reductions in Turkey’s reliance on Russian natural gas. Hilmi Guler declared to the Turkish Parliament in April of 2003 that the AK government had a “strategic goal” to reduce Russian supplied natural gas from 70 to 30 percent within five years.[75]

The Blue Stream project undermines long-term Turkish energy independence and security, because it locks Russia and Turkey into a symbiotic, but unequal relationship. Russia achieved this through the legal mechanism of the “take-or-pay” provisions of the contract obliging Turkey to pay exorbitant penalty fees for suspension of pumping Russian gas into its distribution system. As a result, the Turkish intention of supporting its Turkic cousins of Azerbaijan and Turkmenistan through direct imports of the natural gas has become less tangible and much more financially taxing.[76] Specifically, Ed Smith, the president of the Pipeline Solutions Group, which led the negotiations on the TCGP construction, explained in testimony to the U.S. Senate in 1999:

Both the Blue Stream and TCP will bring gas to Turkey, but only one will be developed at a time because of the size of the market in Turkey. Turkey’s demand for natural gas is very great and would seem to be big enough to support the development of both projects. But it is not. The enormous cost risks involved in developing projects this size require a high level of confidence that the market will be there when the gas arrives…[77]

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Since the Sharon government came into office in March 2001, Israel pursued an improvement in relations with Russia in hopes of reaching an understanding about the situation in the Middle East. Israeli officials attempted to curry favor with the Russian political elite, which predominantly represented Russian energy interests.[78] One of the outcomes of this new foreign policy for Israeli energy security was growing support for the idea of importing gas and oil from Russia through Turkish territory. The completion of the Blue Stream project made this a tangible reality. At the official opening ceremony of the Blue Stream, President Vladimir Putin reiterated the Russian interest in transporting Russian gas to Israel through an extension of the Blue Stream pipeline or by liquefied natural gas (LNG) tankers.[79]

New Milestones in Trilateral Energy Cooperation

The completion of the Baku-Tbilisi-Ceyhan project was the turning point in the energy cooperation between Baku, Ankara, and Jerusalem. The inauguration ceremony for the Baku-Tbilisi-Ceyhan (BTC) oil pipeline, supported by the United States, took place in the Turkish Mediterranean port on July 6, 2006. The importance, which Israel attaches to this pipeline, was demonstrated by the attendance of this historic event by the Israeli Minister of National Infrastructures Binyamin Ben-Eliezer. The Israeli high official was one of the representatives from 36 countries who attended the ceremony. Furthermore, Israel is considering building an extension of the BTC pipeline to its Red Sea port in Eilat in order to deliver Azerbaijani and Kazakh oil to Asian markets. During his visit to Baku in June 2006, Binyamin Ben-Eliezer explained, "The territory of Israel is only 600 kilometers away from the Turkish port of Ceyhan. This makes possible the use of the Israeli pipeline network to deliver the Caspian oil to markets in the Middle East."[80]

In July 2006, the first delivery of Azerbaijani oil via the BTC reached Israel. It was only the sixth delivery of crude oil via the pipeline to the Turkish terminal of Ceyhan to the international markets. As a matter of general policy, Israel keeps the sources of its energy imports confidential. If previously Israel had been secretly purchasing Azerbaijani oil, the Israeli authorities now announced this sale publicly in order to undescore the strategic nature of Azerbaijani-Israeli cooperation. The Azerbaijani side took significant political risks by selling oil to Israel in defiance of the regime of Iranian mullahs. Currently, the sixth part of Israeli oil imports comes from Azerbaijan.[81] When the Azeri-Chirag-Gunashli (ACG) oil field in the Azerbaijani Caspian shelf reaches its maximum extraction capacity, Azerbaijan is expected to generate $29 billion in oil revenue over the next 20 years.

Israeli officials also expressed interest in purchase of Azerbaijani gas. After the discovery of natural gas in the Shah Deniz field, Azerbaijan reached the extraction volume of 9 billion cubic meters annually with a prospect of reaching 24 billion cubic meters. Israel needs to import 1.7 billion cubic meters of gas, some of which could come from Azerbaijan. In June 2006, Binyamin Ben-Eliezer proposed to extend the completed Baku-Tbilisi-Erzrum natural gas pipeline to the Ceyhun energy hub in Turkey. The Israeli minister stated that Israel would purchase as much Azerbaijani gas as became available. The Israeli authorities have already discussed this possibility with their Turkish counterparts. Israel is willing to sign a long-term agreement for the purchase of Azerbaijani gas. Ben-Elizer said, “We signed the long-term contract with Egypt that obligates it deliver natural gas to Israel over the period of 15 years with possible extension every five years. We are ready to conclude a similar contract with Azerbaijan.”[82]

From 2005, Turkey made important inroads into Israeli energy-generation market. In 2005, Turkish energy giant Zorlu signed a contract with Israeli private utilities conglomerate Dorad to build a gas-operated power plant with the capacity of 800-megawatts in Ashkelon. Even in the midst of Israel’s military campaign against Hizballah in Lebanon in the summer of 2006, Zorlu signed another contract to build a smaller 50-megawatt plant with another Israeli company, Edeltek Holdings in the southern city of Ashdod. The most significant undertaking in the energy security field between Turkey and Israel in the years to come, however, is the planned construction of a multi-purpose pipeline. This project currently at feasibility study stage would make both countries global players in the energy market. The project to construct the strategic multi-purpose pipeline to carry oil, natural gas, water, and electricity from Turkey’s Mediterranean port of Ceyhan to southern Israel was launched in July 2008. If the project materializes, Israel and Turkey will serve as transit countries for oil destined for the Far East, China, and India.[83] Even though most of the oil is projected to be delivered from Russia and Kazakhstan through the Samsun terminal on the Turkish Black Sea coast, Azerbaijan also has an interest in this project.

CONCLUSION

The end of the Cold War brought an end to such threats as the frontal confrontation with Russia and Soviet-sponsored Marxist domestic militancy in Turkey. In the post-Cold War period, the two democratic and Westernized countries with secular political elites in the Middle East, Turkey and Israel, were faced with new challenges to their security. From the Euro-Atlantic perspective, both Israel and Turkey wanted to change their status from "consumers of security" to "security producers."[84] Moreover , due to the end of the Cold War and globalization, a new security paradigm has taken shape. The domain of security expanded to include non-military issues such as energy security. Meanwhile, regional oil and gas producers like Azerbaijan, Kazakhstan, and Russia were looking to take advantage of the ongoing conflict in the Persian Gulf and the rising demand for this energy source in the Far East and Asian markets.

Stock Photos from 123RF

The 1991 breakup of the Soviet Union provided both Turkey and Israel with the opportunity to gain access to reliable sources of petrochemicals and access to new markets in the Caucasus and Central Asia. Azerbaijan, due to its geographical location on the western shore of the Caspian Sea, looked like an ideal transit country for Central Asian resources. Turkey and Israel were also concerned about the spread of Islamism in the post-Soviet space. As a result Israel and Turkey came to focus on Azerbaijan for intensive diplomacy and security cooperation, for both historical and pragmatic reasons. One must note an obvious inequality in relations between the three states. An active military-strategic entente between regional powers Turkey and Israel supported by the United States is evident. When the independent Azerbaijan laid claim to its petrochemical resources in the Caspian shelf in the early 1990s, energy security emerged as a major area of cooperation with Turkey and in a more limited, but still vital, way with Israel. The multi-vector and close cooperation between Turkey and Israel in promoting the independence and economic viability of Azerbaijan has become a major factor in the power balance in the Caucasus and Caspian regions. After 1995, the United States government indicated its official support for the project. An inauguration ceremony for the Baku-Tbilisi-Ceyhan (BTC) oil pipeline, supported by the United States, took place in the Turkish Mediterranean port on July 6, 2006. The BTC pipeline that skirted the territories of Russia and Armenia, both of which have close relations with Iran, began to transport Caspian oil to the Turkish port of Ceyhan. Originally, this pipeline was viewed purely as a geopolitical project to make countries like Azerbaijan economically and politically independent from Russia and not beholden to Iranian interests in the region. Israeli policy makers shared the same original perceptions and realized the strategic value of the construction of this pipeline. As of 2006, Israel began to discuss plans with Turkey to extend the BTC to Israel. However, in the final analysis, Turkey’s overall strategy was not achieved, because it was successfully challenged by the Russian policy of locking dominant country-producers of hydrocarbons–Kazakhstan (oil) and Turkmenistan (natural gas)–into the Russian energy network.

The Baku-Tbilisi-Ceyhan pipeline and the South Caucasus Gas pipeline will make a significant contribution to the overall economic viability and environmental security of all transit countries. The economic and environmental impact of commercial exploitation will be especially substantial for Georgia and Azerbaijan, which are dependent on these pipelines as significant sources of national revenue.[85] The transit fees in particular will be important for these transitional economies. Since Turkey can only collect highly regulated low fees for passage of oil and gas tankers, it will gain higher transit fees as a result of the BTC project. However, for an economy of Turkey’s size, these revenues will not be significant. During the first six years of the BTC operation, Turkey is expected to receive $40 million a year from transit fees, rising to $300 million when the pipeline reaches its full capacity.[86] Turkey is expected to earn $1.5 billion from pipeline and terminal operations, transit fees, and upstream investments. By 2020, the Caspian could be pumping over 6 million barrels a day, roughly six percent of the daily world oil demand in the near future.

Thus, in the foreseeable future, energy, water, and environment security issues will continue to be the important components of the relationship among Turkey, Israel, and Azerbaijan. On the upside, the safety against environmental disasters of the Turkish Straits has been enhanced, since a significant portion of (primarily Russian) oil tanker traffic through this international water passage would be eliminated. At full capacity, the pipeline will avoid around 400 additional tanker movements a year, which approximates 35 percent of current tanker movements through the Straits. In the sphere of natural gas, the increasingly important alternative to oil, the results of the cooperation are less propitious. The Blue Stream contract stipulates that Russia has exclusive rights to all infrastructure projects (their construction and operation) associated with the Blue Stream pipeline.[87] In the final analysis, Turkey’s overall strategy was not achieved, as it was challenged by the successful Russian policy of locking dominant country-producers of hydrocarbons–Kazakhstan (oil) and Turkmenistan (natural gas)–into the Russian energy network. Ultimately, the Blue Stream project may open the way for Turkey to become an energy bridge not only in the east-west direction, but also north-south, by transferring Russian natural gas to Israel.[88] Under this scenario, Turkey would increase its geopolitical stature in the Middle East (vis-à-vis Israel) and fill the critical niche of energy security provider for GreaterEurope.[89] In the medium-term, however, not only is Russia expected to reap most of the financial benefits as the exclusive gas importer, but it will also be able to exert significant political influence and economic leverage over Turkey. Still, the recently inaugurated project to deliver oil, gas, electricity, and water from Turkey to Israel and further to the Asian markets holds the promise of a propitious breakthrough in this energy quagmire. The recent bloody conflict unleashed by Russia against Georgia on August 9, 2008, had important implications for both Turkey and Israel’s energy security since it was near the BTC and South Caucasus pipelines, critical for delivering energy resources to the two countries. Russia was sending a clear message to the international community about who can control delivery and distribution of the natural resources in the area extending from the Caucasus to Central Asia.

* Alexander Murinson received his Ph.D. from the School of Oriental and African Studies, University of London. He is the author of "The Strategic Depth Doctrine: A New Paradigm of the Turkish Foreign Policy," Middle Eastern Studies, Vol. 42, No. 6 (November 2006); "Good Relations Between Azerbaijan and Israel: A Model for Other Muslim States in Eurasia?," Policy Watch #982, The Washington Institute for Near East Policy, (co-author Soner Cagaptay), March 30, 2005; "The Impact of American Foreign Policy After 9.11 on the October 2003 Presidential Elections in Azerbaijan," Insight Turkey, (April/June 2004).


NOTES

[1] See Alexander Murinson, “Israeli Foreign Relations with the Islamic Newly Independent States: General Overview,” The Cyber-Caravan, The Central Asia-Caucasus Institute, SAIS, August 1999; Qadir Nasri Meshkini, “Challenges of Iranian Policy in Central Asia and the Caucasus,” Amu Darya: The Iranian Journal of Central Asian Studies (Spring/ Summer 2000), Vol. 4, No. 5, pp. 85-99; Mohammad Noruzi, “Contention of Iran and Turkey in Central Asia and the Caucasus,” Amu Darya, Vol. 4, No. 5 (2000), pp.113-33; M. Chumilov, Kaspiyskaya neft y Mezhnazyonlalnye Otnoshenya [“The Caspian Sea and International Relations”] (Moscow: The Center for Study of International Relations, 2000), pp. 53-69; Svante Cornell, “The Conflict in Nagorny Karabagh,” in Dmitry Furman (ed.), Azerbaijan and Russia (Moscow: Letny Sad, 2001); See Bulent Aras, The New Geopolitics of Eurasia and Turkey’s Position (London, Portland, OR: Frank Cass, 2002), p. 34.

[2] See Kemal Kirisci, "Turkey and the Muslim Middle East," in Alan Makovsky and Sabri Sayari (eds.), Turkey’s New World: Changing Dynamics in Turkish Foreign Policy (Washington, DC: WINEP, 2000), p. 47. See also Malik Mufti, "Daring and Caution in Turkey’s Foreign Policy," Middle East Journal, Vol. 52, No. 2 (Spring 1998), pp. 40-41; Alain Gresh, "Turkish-Israeli-Syrian Relations and Their Impact on the Middle East," Middle East Journal, Vol. 52, No. 2 (Spring 1998), p. 203.

[3] Michel Frederic, "A Realist’s Conception of Environmental Security," in Daniel Deudney and Richard Matthew (eds.), Contested Grounds: Security and Conflict in New Environmental Politics (Albany: State University of New York, 1999), p. 93. See also the discussion in Simon Dalby, "The Case for Comprehensive Security," in ibid, p.160.

[4] Ibid, p. 7.

[5] Ibid, pp. 8-16.

[6] The US Energy Plan of May 2001 emphasizes the vital need for the "reliable, affordable, and environmentally sound" sources of energy. The European Parliament talks about this in the context of "security of supply, competitiveness and protection of the Environment." See Report of EP Committee A5-0363.2001, October 2001. The UK government talked of "… securing cheap, reliable and sustainable sources of energy supply." Cabinet Office Performance and Innovation Unit (PIU) Energy Review (February 2002). In Japan this issue was framed under the heading "3Es: Energy Security, Environmental Protection and Economic Efficiency," A Report of the Japanese Advisory Committee for Natural Resources and Energy, July 2001.

[7] See Necdet Pamir, "Turkey: The Key to Caspian Oil and Gas," Lecture at the Israeli Institute for Advanced Security and Policy Studies, Jerusalem, August 2001, p. 4; see also on Azerbaijan as a transportation hub, "Azerbaijan Road Transport at the Crossroads of Europe and Asia EU’s Transeca Project Modernizes Ancient Silk Road," Azerbaijan International Special Reports, http://www.internationalspecialreports.com/ciscentralasia/01/azerbaijan/azerbaijanroad.html.

[8] By the turn of the twentieth century, it was predicted that the total exports of Caspian oil would have reached 2 million barrels per day. See Thomas Land, "Pipelines and Politics," The Middle East, No. 252 (January 1996), p. 5.

[9] Projects like the Baku-Tbilisi-Ceyhan oil pipeline, the Turkmenistan-Turkey natural gas pipeline, and the Azerbaijan-Turkey South Caucasus gas pipeline are all part of the so-called East-West Energy Corridor. The construction of this corridor would allow the West, the Caspian basin countries, as well as Turkey and Israel to benefit from Caspian energy resources while avoiding likely difficulties with countries such as Russia, Iran, and Iraq. See also Bulent Ariza, "The Ultimate Resolution of the Great Pipeline Game Will Require Russia and Turkey to Cooperate as Their Interests Dictate," TUSIAD Report, Private View, 1996.

[10] Christopher Bollyn, “Same Old Names, Faces Primed to Make Big Bucks Off Tragedy,” American Free Press, http://www.rense.com/general15/game.htm.

[11] See Alon Liel, Turkey in the Middle East: Oil, Islam and Politics (in Hebrew) (Tel Aviv: University of Tel Aviv and the Moshe Dayan Center for Middle Eastern and African Studies, 1994).

[12] Necdet Pamir claims that Turkey currently depends on 64 percent of its gas imports from Russia. "The Reality and Myth of Turkey as a new Global Energy Hub," CSIS Turkey Project and the Caspian Energy Project, Center for Strategic and International Studies, Washington, DC, March 29, 2006.

[13] Vicken Cheterian, "Sea or Lake: A Major Issue for Russia," CEMOTI, No. 23, p. 6.

[14] In particular, BP, the largest shareholder in the Azerbaijani International Oil Corporation, the international consortium that handles Azerbaijani oil exploration, was originally non-committal. Only in 1999, the AIOC decided to use BTC as well as a Russian pipeline for Azerbaijani "early oil."

[15] According to provisional geological estimates, its reserves exceed 700 billion cubic meters. See Nezavisimaya Gazeta via NewsBase, July 14, 1999, http://www.gasandoil.com/goc/company/cnc93719.htm.

[16] Gas of the Shah Deniz field will be delivered mostly to Turkey via the South Caucasus gas pipeline (parallel to the BTC) expected to stretch some 630 miles, including 290 miles in Azerbaijan and approximately 170 miles in both Georgia and Turkey. The estimated cost of this project is $900 million. "The Caspian Sea Region," U.S. Energy Information Administration website, http://www.eia.doe.gov.

[17] Fiona Hill, "Caspian Conundrum: Pipelines and Energy Networks," in Lenore Martin and Demitris Keridis (eds.), The Future of Turkish Foreign Policy (Cambridge, MA: MIT Press, 2002), p. 211.

[18] See Ali Koknar, "In the Land of the Lost Tribe: Israel Joins Turkey in Central Asia," AOL Journal, April 7, 2006; See also Jacob Abadi, "Israel’s Quest for Normalization with Azerbaijan and the Muslim States of Central Asia," Journal of Third World Studies (Fall 2002).

[19] Armenian political analyst Sergey Minosian emphasizes that "Azerbaijan serves as the most reliable partner for the Turkish-Israeli alliance in post-Soviet space." See S. Minosian, The Turkish-Israeli Military and Political Cooperation and Regional Security Issues Iran and Caucasus, Vol. 7 (Leiden-Boston: Brill, 2004), p. 14.

[20] Meliha Benli Altunisik, “Turkish Policy Toward Israel,” in Makovsky and Sayari (eds.), Turkey’s New World, p. 68.

[21] Israeli Trade and Industry Minister Micha Harish believed that Turkey could have played an important role as Israel’s bridge to the Muslim republics. See Jerusalem Post, November 27, 1993; See also Jacob Abadi, Israel’s Quest for Normalization with Azerbaijan and the Muslim States of Central Asia," pp.70-71.

[22] Personal Interview with Emmanuel Nachshon, DCM of Israeli Embassy in Ankara, May 25, 2004.

[23] Personal Interview with Araz Azimov, Deputy Foreign Minister of Azerbaijan, August 2004. Araz Azimov explained: "Turkey for Israel, is not only a bilateral partner between Israel and Turkey, but a partner which may support Azerbaijan in the region and therefore will be considered as a moderate Islamic society vis-à-vis Iran and the security platzdarm [sic] in the South Caucasus."

[24] Personal Interview with Emmanuel Nachshon, May 25, 2004.

[25] American aid to Azerbaijan and other forms of assistance to the East-West Energy Corridor that included the BTC as its centerpiece was included in the Silk Road Strategy Bill. The Armenian lobby conducted a campaign to block this legislation. In June 1999 the U.S. Congress passed the Silk Road Strategy Bill, and Section 907 that bars U.S. aid to Azerbaijan was not blocked. See Erik Hotmire, "Silk Road Legislation Passes U.S. Senate Tonight," http://brownback.senate.gov/pressapp/record.cfm?id=175947& ; see also Harun Kazaz, "Will a Rising Tide Lift up All the Ships?," Turkish Daily News, May 1,1999.

[26] Avi Machlis, "Azerbaijan Courts Jews, Israel to Win Favor with U.S," Jewish Telegraphic Agency, February 18, 2000, http://www.jewishaz.com/jewishnews/000218/charsid2.html.

[27] "American Jewish Committee Endorses Silk Road Strategy Act," Press Release of the American Jewish Committee, June 24, 1998. See a detailed account "Strategically Minded Jewish-American Groups May Help Effect Needed U.S. Regional Policy Shift," Caspian Watch #13, the Center for Security Policy, No. 99-D 22, February 10, 1999.

[28] See the detailed account in Andrea Mihailescu, "Israel’s Ongoing Foreign Energy Dependence," Washington Times, November 8, 2004.

[29] Israel Country Report, U.S. Energy Information Administration, http://www.eia.doe.gov.

[30] Personal Interview with Daniel Mariaschin, March 10, 2004.

[31] This was a factor of crucial importance in Israel’s relations with Turkey whose dependence on Arab oil forced it to lower the level of its diplomatic relations with the Jewish state in 1980. See Jacob Abadi, "Israel’s Quest for Normalization with Azerbaijan and the Muslim States of Central Asia"; see also Liel, Turkey in the Middle East.

[32] Michael Lelyveld, "Iran: Contact with Israel May Affect Caspian Oil Countries," RFE/RL, June 23, 1999.

[33] Valeh Alesgarov, "Current Trends and Developments in Azerbaijan’s Oil," Azerbaijan International, Vol. 9, No. 1 (Spring 2001), http://www.azer.com; See also Necdet Pamir, "Getting Azerbaijan’s Oil to the International Market," Azerbaijan International, (Autumn 1995), p. 6.

[34] Personal Interview with Araz Azimov.

[35] Iranian gunboats have made several incursions into Azerbaijani territorial waters. The last major violation occurred on July 23, 2001, when an Iranian warship ordered an Azerbaijani exploration ship, hired by British Petroleum, to withdraw from exploration operations in a disputed zone. In a show of force and to express support for Azerbaijan, Turkey sent its Chief of the General Staff General Hussein Kivrikoglu to Baku and a squadron of the Turkish Air Force to participate in the air show in the Azerbaijani capital. Israel has shadowed this operation. See Soner Cagaptay and Alexander Murinson, "Good Relations Between Azerbaijan and Israel: A Model for Other Muslim NIS?," Policy Watch #982, The Washington Institute for the Near East Policy, March 30, 2005. See also RFE/RL Iran Report, July 30, 2001, August 6, 2001 and August 13, 2001. For analysis see also Jon Gorvett, "Turkey Plays Big Brother to Azerbaijan in Opening Skirmishes over Control of Caspian Resources," Eurasianet; Hüseyin Bagci and Saban Kardas, "Post-September 11 Impact: The Strategic Importance of Turkey Revisited," in the CEPS/IISS European Security Forum, Brussels, May 12, 2003; William Samii, "A Tehran-Moscow-Beijing Axis Against the West," RFE/RL Iran Report, September 2001; Gulnara Ismailova, "Azerbaijan President’s Visit to Iran Postponed," The Central Asia/ Caucasus Analyst, September 26, 2001.

[36] The dispute focuses on the question of whether the Caspian is a sea or a lake and has implications for both the applicability of the U.N. Convention on the Law of the Sea and negotiation of the boundary demarcation regime. See Cheterian, "Sea or Lake"; "La Caspienne. Une nouvelle frontière," Sommaire, No. 23 (January-June 1997).

[37] Personal Interview with Deputy Foreign Minister of Azerbaijan, Araz Azimov, August 3, 2004.

[38] Personal Interview with Yakov Finkelstein, second secretary of the Israeli Embassy in Azerbaijan, August 3, 2004. According to other sources, overall trade between Israel and Azerbaijan (1996-1998) constituted a meager $23 million compared with the Azerbaijani-Turkish trade volume of $832 million for the same period. See A. Veliyev, "Treugolnik Israil-Turtsiya-Azerbaijan: realnost i perespektivy" ["The Israel-Turkey-Azerbaijan Triangle: Reality and Prospects"], Centralnaya Azia i Kavkaz, Vol. 2, No. 8 (2000), pp.105-11.

[39] “Israel and Azerbaijan: An Interview with Arthur Lenk, Ambassador Extraordinary and Plenipotentiary of the State of Israel to Azerbaijan,” ADA Biweekly Newsletter, Vol. 1, No. 7 (May 1, 2008).

[40] "Turco-Israeli Oil Agreement," Sabah, August 30, 1997. See also Hrair Dekmejian and Hovann Simonian, Troubled Waters: The Geopolitics of the Caspian Region (London: I.B. Tauris, 2003), p. 125.

[41] The BTC pipeline capacity is projected to be 1 million-barrels/day. However, Azerbaijan’s oil production capacity is not sufficient to fill this quota. The expectation is that Kazakhstan will pump its oil through an underwater cross-Caspian pipeline to make the BTC pipeline profitable. See "Kazakstan Seeks Multiple Pipelines by 2015," Caspian Business Report, Vol. 2, No. 7 (April 15, 1998); Shahin Abbasov and Khadija Ismailova, "BTC: Kazakhstan Finally Commits to the Pipeline,” Eurasianet, June 19, 2006, http://www.eurasianet.org.

[42] "Kazakhstan to join BTC project," AssA-Irada, April 19, 2005.

[43] One expert notes, "Energy has emerged as an important factor influencing Turkish internal and foreign policy." See Selma Stern, "Turkey’s Energy and Foreign Policy," Globalization (2003), http://globalization.icaap.org/content/v3.1/03_stern.html.

[44] Turkey’s Ceyhan port is an important outlet both for current Iraqi oil exports as well as for potential future Caspian oil exports.

[45] Ercan Ersoy, "No Throughput yet in Sight for Caspian Line," Reuters English News Service, November 19,1999. See also Necdet Pamir, "Getting Azerbaijan’s Oil to the International Market."

[46] Even before realization of the Baku-Tbilisi-Ceyhan project, Turkey exported Iraqi oil through its oil terminal in Ceyhan. Prior to the outbreak of the Second Gulf War in 2003, Turkey had exported about 1.5 to 1.6 million barrels of Iraqi oil a day. For details, see U.S. Energy Information Administration, Turkey Country Analysis Brief, http://www.eia.doe.gov/emeu/cabs/turkey.html.

[47] There are more than ten such projects, including the Samsun-Ceyhan Pipeline. See "Samsun-Ceyhan Pipeline," Zaman, December 7, 2005; see also Ismail Altunsoy, "Turkey Now Has Voice in Energy Policies," Zaman, July 14, 2006.

[48] This strategic value only increased after the September 11 attack unleashed the war against terror, (serving their struggle against regional challenges such as the PKK, al-Qa’ida, the Turkish Hizballah, ASALA for Turkey; the Lebanese Hizballah, the Islamic Jihad, and Hamas for Israel); WMD proliferation, and other transnational threats.

[49] Israel Country Analysis Brief, U.S. Energy Information Administration, http://www.eia.doe.gov.

[50] "Turkish Zorlu Energy Inks 360 mln USD Israel Power Plant," Journal Turkish Weekly, October 13, 2005. See also Oscar Heck, "Israel’s Dorad Energies and Turkey’s Zorlu Energy Join Forces to Build $500 Million Power Plant," The Journal of Turkish Weekly, November 11, 2005.

[51] "Zorlu to Build Power Plant in Israel," Zaman, October 12, 2005.

[52] In an interview to The Wall Street Journal about his role in furthering the “geopolitical goals of both the U.S. and Israel,”- allegedly the former Mossad agent Maiman said, “This is the Great Game all over,” in Central Asia." Quoted in Christopher Bollyn, "Same Old Names"; see also details on Merhav’s CEO Yosef Maiman in Dekmejian and Simonian, Troubled Waters, p. 158.

[53] At the time, Merhav controlled $1 billion worth of contracts in Turkmenistan. Under the contract, Merhav is responsible for the refining of up to two million tons of crude oil and ultimately would produce 900,000 tones of gasoline a year. See "Turkmenistan and Merhav Discuss Upgrade of Large Oil-refinery," Caspian Business Report, Vol. 2, No. 7 (April 15, 1998). See also details about Merhav’s CEO Yosef Maiman in Dekmejian and Simonian, Troubled Waters, p. 158.

[54] The BTC project was eventually approved by the governments of Turkey, the United States, and four nations bordering the Caspian, namely Azerbaijan, Georgia, Kazakhstan, and Turkmenistan in October 1998. David Zev Harris, "Merhav Helps Broker $3b. Gas Pipeline Deal," Haaretz, November 3, 1998.

[55] Ibid. See also “Energy Policy for the 21st Century,” Remarks by U.S. Secretary of Energy Bill Richardson as Delivered at Tel Aviv University, Israel, February 21, 2000.

[56] Ibid.

[57] These Western companies included Amoco, Unocal with Conoco, Halliburton, Enron, and Bechtel together with Mobil and GE Capital.

[58] See the important discussion in William Hale, "Economic Issues in Turkish Foreign Policy," in Makovsky and Sayari (eds.), Turkey’s New World, pp. 26-27.

[59] U.S. Energy Information Administration, Turkey Country Analysis Brief.

[60] Kemal Kirisci, "Post Cold-War Turkish Security and the Middle East," Middle East Review of International Affairs (MERIA), Vol. 1, No. 2 (July 1997), http://meria.idc.ac.il/journal/1997/issue2/jv1n2a6.html.

[61] U.S. Energy Information Administration, Turkey Country Analysis Brief.

[62] Personal Interview with Necdet Pamir, May 23, 2004. Earlier, Necdet Pamir expressed a concern that "Iranian regimes have always competed with Turkey in the regional power game and tried to destabilize Turkey by giving support to Islamic radical elements and/or separatist terrorist groups like PKK." Necdet Pamir, "Turkey: Key to the Caspian Oil and Gas," Institute for Advanced Strategic and Political Studies, Jerusalem, http://www.iasps.org/strategic/strat13.pdf.

[63] See "U.S. Trade Sanctions: Effective Tool or Superpower Cudgel," Federation of American Scientists, August 26, 1996, http://www.fas.org/irp/news/1995/960826mr.htm; also Hale, "Economic Issues in Turkish Foreign Policy," p. 35.

[64] See "Iranian Gas Sale to be Postponed to Mid-August," Turkish Daily News, July 20, 2001; See also U.S. Energy Information Administration, Turkey Country Analysis Brief.

[65] These provisions include cash penalties of up to $1 billion per year if Turkey does not live up to the letter of the contract. See U.S. Energy Information Administration, Turkey Country Analysis Brief.

[66] "Gazprom’s Trouble In Turkey," http://english.neftegaz.ru/analit/comments.php?one=1&id=1073. See also "Blue Stream Flows Again As Dispute Ends," Gas Matters, July 2003, pp. 1, 26–28.

[67] Azerbaijan is to deliver 70 Bcf of natural gas to Turkey in 2006, then 177 Bcf in 2007, and around 223 Bcf per year from 2009 through 2020. U.S. Energy Information Administration, Turkey Country Analysis Brief.

[68] The submerged gas pipeline was completed under the Black Sea in October 2002. The pipeline runs from Russian port Dzhugba to Samsun in Turkey. The projected capacity of the pipeline is 275,700 billion barrels a day. "Interfax Oil and Gas Report," Interfax, November 24, 2005.

[69] Oleg Lobov, the former head of the Security Council of the Russian Federation, quoted in Valeri Kosiuk (ed.), Le Pétrole et le Gaz Russes (Geneva: Centre de Recherche Enterprises et Sociétés et Association de Coopération Internationale, 1995), p. 19.

[70] Energy in a broad sense is seen as the key to the new Russian foreign policy doctrine, namely routes of oil and gas distribution networks, control of energy resources and electricity grids of the neighboring countries, as well the domination in oil and gas supply to Europe. See Cheterian, "Sea or Lake."

[71] In particular, several Turkish companies were involved in lobbying for the Blue Stream project, including GAMA, ENKA, and Tekfen. See Gareth Winrow, "Turkish Policy Towards Central Asia and the Transcaucasus," in Makovsky and Sayari, (eds.), Turkey’s New World: Changing Dynamics in Turkish Foreign Policy, p. 127.

[72] Personal Interview with Necdet Pamir, May 23, 2005.

[73] The former Turkish Prime Minister Mesut Yilmaz and two former Turkish energy ministers, Cumhur Ersumer and Zeki Cakan, have been under Turkish State Court investigation on corruption charges stemming from multiple allegations of bribery of the Turkish state officials who signed the agreement to construct the Blue Stream project. The "White Energy" secret police investigation of 2001 specifically named Cumhur Ersumer as the prime suspect. See Muammer Kyalan, The Kemalists (Amherst, NY: Prometheus Books, 2005), pp. 291-92. See also Amberin Zaman, "Corruption Scandal Threatens to Sink Blue Stream Pipeline Project," Eurasianet, May 31, 2001.

[74] Gencer Ozcan, “Turkey’s Changing Neighbourhood Policy,” Security in a Globalized World Series, September 2004, Friedrich-Ebert-Stiftung, http://www.fes.de/globalization, p. 5.

[75] U.S. Energy Information Administration, Turkey Country Analysis Brief.

[76] 75 Necdet Pamir, "The Reality and Myth of Turkey as a new Global Energy Hub," CSIS Turkey Project and the Caspian Energy Project. See also Pamir, "Turkey: The Key to Caspian Oil and Gas," p. 21.

[77] Congressional Daily Digest, 106th Congress, March 3, 1999, pp. D203-D212.

[78] Gazprom and the Israeli government discussed a pipeline to transport Russian gas to Israel as early as 1998, when Israel only wanted 2.6-3.9 billion cubic yards of gas annually, making the venture unprofitable for Gazprom. See Mihailescu, "Israel’s Ongoing Foreign Energy Dependence."

[79] "Hopes Run High as ‘Blue Dream’ Becomes Reality," Turkish Daily News, November 18, 2005.

[80] Fuad Mamedov-Pashabeyli, “V Izraile obsuzhdayutsaya perespektivy energeticheskogo sotrudnichestva s Azerbaijanom” ["The Prospects of Israeli-Azerbaijani Cooperation in Energy Field Are Discussed in Israel"], Zerkalo, June 12, 2006.

[81]V Azerbaijane opasayutsya reaktzii Irana na energeticheskoye sotrudnichestvo s Izrailem” ["Azerbaijan is Fearful of Iranian Reaction to its Energy Cooperation with Israel"], Zerkalo, July 7, 2006.

[82]Izrael predlagayet prodlenye gazoprovoda ‘Baku-Tbilisi-Erzrum’ do Djeyhana” ["Israel Proposes to Extend Baku-Tbilisi-Erzrum Gas Pipeline to Ceyhan"], CDU TEK, June 7, 2006. Ben-Eliezer reiterated this intention in his interview to the Israeli APA agency in July 2008, http://news.bakililar.az/news_ministr_nacionalnoy_infr_9154.html.

[83] “Turkey, Israel Committed to Giant Energy Project,” Turkish Daily News, July 14, 2008.

[84] Personal Interview with General Cevik Bir, former Turkish Deputy Chief of Staff, May 26, 2004.

[85] For details see David Blatchford, Frederick Starr, and Svante Cornell (eds.), The Baku-Tbilisi-Ceyhan Pipeline: Oil Window to the West (Washington: the Central Asia-Caucasus Institute and Silk Road Studies Program, 2005); Jonathan Elkind, “Economic Implications of the Baku-Tbilisi-Ceyhan Pipeline,” in ibid.

[86] Necdet Pamir, "The Reality and Myth of Turkey as a New Global Energy Hub."

[87] Personal Interview with Necdet Pamir, May 23, 2004.

[88] According to Necdet Pamir, the Blue Stream gas pipeline was originally conceived to deliver Russian gas to Israel and was known as the Lazar Projesi. Personal Interview with Necdet Pamir. Also see the detailed account in Firat Gazal, Mavi Akım: Avrasya’da Çözümsüzlüğün Öyküsü [The Blue Stream: The Unresolved Game in Eurasia] (Semih Sökmen, 2004).

[89] See about the Russian plans for the Blue Stream gas to be transported from Ceyhan to Israel through an undersea pipeline or by liquefied natural gas (LNG) tankers: "Hopes Run High as ‘Blue Dream’ Becomes Reality," Turkish Daily News, November 18, 2005; "Samsun-Ceyhan Pipeline," Zaman, December 12, 2005. On the E.U. strategy for the energy security, see Selcuk Gultasli, "Turkey Included in EU’s Strategic Energy Projects," Zaman, March 11, 2006.


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MERIA is indexed in Index Islamicus and CSA Worldwide Political Science Abstracts. ISSN: 1565-8996.
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Related: Central Asia, Economy, Israel, Russia, Turkey


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