Promoting International Energy Security. Volume 2: Turkey and the Caspian

Abstract : The dramatic rise in oil prices in 2008 has increased attention on the sources of imported oil, the workings of the world oil market, and the potential problems of meeting future demand for liquid fuels. Energy security concerns often focus on the Middle East. But most of the world s oil and natural gas production occurs in countries outside that area. Political instability, governance shortfalls, armed conflict, and the potential for further conflict both within and outside the Middle East continue to threaten the continuity of supplies of oil and natural gas. Oil and natural gas exports already provide the financial foundation for the economic development of Azerbaijan, Kazakhstan, and Turkmenistan, and there is considerable promise of significant expansion of exports in coming years and decades. Presently, energy exports from the Caspian region are constrained by a combination of inadequate upstream investment and the available pipeline network. Meanwhile, Russia, the European Union, China, Turkey, and the United States have major stakes in how and when additional oil and gas production will come on line and, more importantly, how it will be routed. Turkey is emerging as an energy crossroads because of its unique position astride potential transit routes from the Caspian, as well as from Iraq and Iran, to Europe. In this technical report, we examine the current energy security situation in the Caspian region and the potential impediments to further development of Caspian oil and natural gas resources. Considering Turkey s important relationship with the United States and the US. Air Force (USAF), we give special attention to issues associated with the transit of oil and natural gas within Turkey, including oil tanker transit through the Bosporus and the security of Turkey s overland oil and gas pipeline network. The report also suggests areas in which USAF might be able to assist Turkey in attaining its objective of becoming an energy transit hub.