US’ first comment on Turkish Stream

Russian President Vladimir Putin caused a shockwave around the world, specifically in Europe, when he declared the suspension of the long-planned South Stream project during his visit to Istanbul in early December 2014. He pulled another rabbit out of his hat with his next statement: “We will build a new pipeline via Turkey instead.”

This new pipeline, called the “Turkish Stream,” is going to change the energy map in Europe and therefore also in the world. The South Stream would transport the Russian gas via the Black Sea to Bulgaria and from there, to South and Eastern Europe. This new pipeline, however, will transmit the very same amount of gas via Turkey instead of Ukraine.

This development has been widely interpreted as a message that Russia is giving to Europe through Turkey due to Moscow’s ongoing political impasse with the West. New York Times made it its headline, commenting “if there is one winner, it is Turkey.”

The following questions remained in our minds: Will Turkey become more dependent on Russia? What is the U.S.’s position? Is Turkey’s dream of becoming an energy hub coming true?

I had the chance to ask these questions to the person who could give just the right answers: Retired American Ambassador Richard Morningstar. He was President Bill Clinton’s Special Advisor for Caspian Basin Energy Diplomacy and later Special Envoy for Eurasian Energy during President Barack Obama’s term. Morningstar served as Ambassador to Azerbaijan between 2012-2014. And by the end of last year, he returned to Washington to found the “Global Energy Center” under the Atlantic Council, which is one of the U.S. and the world’s foremost think tanks.

Morningstar has been visiting Turkey frequently in the last 17 years. Just before our meeting, he was in Ankara to meet Energy Minister Taner Yıldız to discuss these latest developments.

We started our conversation with the following question: What is the U.S. position on the Turkish Stream? “In the immediate term, it will not have a major effect. Even if a final agreement is reached between Turkey and Russia, the first pipeline will only replace the gas that is presently coming through Ukraine, the so-called ‘West pipeline.’ So it will not be any additional gas,” he says.

Then who are the winners and losers of this new equation? The international media has widely interpreted this as a success for Turkey and Russia. After underlining the uncertainties around the Turkish Stream, Morningstar says, “For now, the European Union [EU] is a winner from the cancelation of the South Stream because it stuck by its own regulations and laws. At the end, the project was canceled because Russia didn’t comply with the EU’s regulations. So it is good for the EU that it sticks by its law. Better to rely on legal norms, rather than politics.”

Will this new pipeline increase Turkey’s dependence on Russia? “Ultimately that could happen. But it depends on how far the Turkish Stream will go; if it is limited with the first pipeline which is pure substitution, then no. If Turkey buys new gas in the future, then it could. But at this point, there are no final agreements.”

Morningstar adds: “We don’t know yet what other sources will be available for Turkey. If Turkey can get cheaper gas from other places, it will buy less gas from Russia. The key is for Turkey to be diversified. Then it will have the ability to buy gas from other sources if Russia acts in a non-competitive way.”

How would it affect relations with the U.S. if Turkey buys more gas from Russia? “That’s Turkey’s decision. I could make the strong argument that it is not that meaningful for Turkey to become more dependent on Russia. But that’s up to Turkey.” 

Yet, he adds, “But this also depends on how Russia acts. If they sell gas to Turkey through ordinary market mechanisms, being fair, transparent and competitive, then they should be entitled to sell gas as anybody else.”

Last but not least: Will the Turkish Stream increase the chances of Turkey’s dream of becoming an energy hub? “The more sources of gas Turkey has, the more it may increase the possibility of that happening,” he says.
How does the U.S. evaluate Turkey becoming en energy hub? “Only if Turkey, the energy hub and all suppliers operate according to market rules would it be an efficient way to transport gas.”