The past week has seen a lot of activity focused on energy exploration in the eastern Mediterranean. Turkish newspaper Sabah claimed Wednesday that Israel proposed to Turkey that an underwater natural gas pipeline be built, connecting the two countries along the Levantine coast. That same day, Lebanon's minister of energy announced that Russian energy firms Rosneft, LUKoil and Novatek have filed bids to explore for hydrocarbons off the Lebanese coast. Earlier in the week, Turkish Energy Minister Taner Yildiz told Italian energy firm ENI that the firm won't be able to participate in energy projects in Turkey as long as it proceeds with its bid to develop natural gas off the coast of Cyprus. Finally, Israel began production March 30 at its offshore Tamar natural gas field.
What is a Geopolitical Diary? George Friedman explains.
We will hear more ambitious proposals on underwater pipelines, floating liquefied natural gas terminals and new bidding rounds for exploration, but with any prospective energy project, there are questions that cannot be ignored. Namely, how much of the estimates on the reserves have actually been proven? What are the technical and logistical requirements to exploit those reserves and transport the resources to export markets? And, of course, who is going to take financial responsibility for these projects? Although Israel is making progress in developing natural gas offshore for domestic use, the prospect of transforming the eastern Mediterranean into a hub for natural gas exports raises more complications than we can count.
But these complications are not going to tame the frenzy over eastern Mediterranean energy prospects any time soon. Geopolitical rather than commercial interests are primarily driving each of the main players in this region to act.
Turkey is trying to prevent an energy-bound alliance of adversarial forces from developing on its eastern maritime flank. The Turks watched uncomfortably as Israel put aside its historical tensions with Greece and Cyprus to coordinate more closely on energy and security. Moreover, Turkey has an outstanding dispute with the Cypriot government (that Ankara does not recognize) over the status of Turkish-controlled northern Cyprus and does not want foreign energy interests to undermine its attempts to force a resolution to the conflict.
In addition, Turkey has to worry about its reputation. Ankara can send warships to drilling platforms and try to blacklist foreign firms from dealing with Cyprus, but if those warnings continue to be ignored, Ankara will have a bigger credibility problem as it tries to influence its near abroad. Even assuming that Israel and Cyprus can overcome the many obstacles to exporting their natural gas, Turkey has already positioned itself as the main east-west energy corridor. It doesn't want to face competition from nearby natural gas suppliers unless they service the Turkish domestic market or transit Turkish territory.
Israel has an immediate need to develop enough natural gas to cover its rising domestic needs but is interested in using any surplus natural gas to help bind its most strategic relationships in the region. In an ideal world, Israel would use energy exports to shore up the governments of financially stricken and politically embattled Egypt and Jordan and create added incentive for those regimes to maintain good relations with Israel. Israel would also like to integrate its energy plans with Turkey in hopes that a stronger economic link will translate into better coordination between the estranged neighbors on regional threats. So Israel is proposing a natural gas pipeline to Turkey even though such a pipeline would have to traverse legally ambiguous Lebanese and Syrian waters. With the northern Levant fragmenting under the pressures of civil war in Syria and no credible government to enforce any agreement, these maritime boundaries will remain undefined for the foreseeable future. Israel is also quietly talking to Jordan about supplying natural gas to the kingdom's potash plant, even though commercial relations with Israel are more of a liability than an asset for these countries, especially in the current geopolitical climate.
Russia, which already has complex relationships with all of these countries, is trying to enlarge its stake in the eastern Mediterranean while still treading carefully with Turkey. Specifically, Russia wants to ensure that any prospective energy exports to Europe that circumvent the Russian mainland still require a Russian signature. Russian companies Gazprom, LUKoil, Rosneft and Novatek all are involved in various project proposals in the eastern Mediterranean (none of which are anywhere close to being finalized).
Cyprus has the most direct interests in this mix. The tiny island nation is broke and, though it is a member of the eurozone, bureaucrats in Brussels are putting strict limits on how far they are going to go in bailing out Nicosia. Cyprus' need for funding to avoid total political, economic and social catastrophe simply doesn't allow much room for the government to pursue more ambitious geopolitical goals. Natural gas exports are an obvious remedy to Cyprus' financial woes, but relief is still several years away at best, assuming Cyprus gets the funding to both exploit and export its natural gas.
In each of these cases, there is a rather substantial gap between the strategic intent of the player and the actual likelihood of their plans coming to fruition. This is a common trait of energy politics, since loose estimates of reserves can quickly evolve into grand strategies before the first feasibility test is even conducted. The eastern Mediterranean will continue to attract a lot of attention in the coming years, but actions driven by geopolitical desire don't always yield tangible commercial results.