Gas is not the solution

At the European Gas Conference in Vienna this week Deputy Director-General of the European Commission (EC) Klaus-Dieter Borchardt spelled out the energy road-map of the new Commission in the light of the forthcoming Green Deal. EU energy policies will no longer be market-driven but will have to work towards the over-riding objective of achieving net-zero emissions by 2050.

Borchardt said that by 2050 there will be no coal, and gas will have to be decarbonised in Europe. Over the medium-term it will be important to migrate to green gases. Gas will have to become more flexible. Long-term fixed gas contracts have a lock-in effect that eventually will jeopardise the 2050 targets and as such they should be avoided.

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He was forthright and clear. Europe has all the capacities it needs for natural gas. There is no need for new, large gas pipelines. Europe will need to make smarter and better use of the infrastructure already in place.

On top of that is the additional problem that gas prices are very low, around $4/mmbtu (per 1,000 cubic feet) both in Europe, even though it is winter, and in Asia. Even though prices are expected to eventually increase the relentless penetration of renewables is keeping them in check. This makes selling our gas to global markets challenging.

Listening to the EC and gas industry experts in Vienna on the future of natural gas and returning to Cyprus feels like returning to a surreal world. Like being in a time-warp. The EC says that the ‘writing is on the wall’ for gas, but in Cyprus – far from reality – the view still is that Europe needs our gas, needs diversification of supplies, and so on.

We seem to be fixated with gas we may not be able to sell, getting ourselves into a cul-de-sac situation where we can neither benefit from our gas resources nor solve our problems having made the two inter-dependent.

A historical review of Turkey’s intervention in Cyprus’ EEZ

The challenges become clearer when one considers the escalation of Turkey’s illegal intervention in Cyprus’ EEZ, which is always announced in advance and carried out to a plan, with careful timing

    - February 2013: Turkey buys exploration vessel Barbaros
    - October 2014: Barbaros commences seismic exploration in Cyprus EEZ
    - June/July 2017: Cyprus talks at Crans Montana fail to reach agreement
    - July 2017: Turkey’s Foreign Minister Melvut Cavusoglu announces that “it is not possible to continue from where we left-off at Crans Montana.” From now on everything changes (and it did, as the following demonstrates)
    - September 2017: Turkey announces intent to buy a rig to drill in the Mediterranean
    - February 2018: Cavusoglu announces intent to start drilling in Cyprus’ EEZ
    - February 2018: Eni’s drilling rig blocked by the Turkish navy on its way to drill in Cyprus’ block 3
    - October 2018: Turkish drilling rig Fatih starts first well-drilling in the Mediterranean
    - May 2019: Fatih starts drilling for the first time in Cyprus’ undeclared EEZ west of Paphos
    - July 2019: Turkey’s second drilling rig Yavuz starts drilling south of Karpasia
    - July 2019: EU foreign ministers approve sanctions on Turkey – still to be applied
    - October 2019: Turkey announces plans to lease or buy a third drilling rig
   -  November 2019: Turkey announces plans to drill five wells and to conduct more seismic surveys in Cyprus’ EEZ in 2020
    - November 2019: Turkey signs maritime ‘boundaries’ deal with Libya. It claims this makes construction of the EastMed gas pipeline that needs to pass through this area difficult, if not impossible
   -  November 2019: Turkish drilling rig Yavuz starts drilling for the first time in a licensed block, in Cyprus’ block 7. Turkish Energy Minister Fatih Donmez announces that “we will keep drilling until we find gas”
   -  December 2019: The Turkish foreign affairs ministry said “this agreement [with Libya] also amounts to a political message that Turkey cannot be sidelined in the Eastern Mediterranean and nothing can be really achieved in the region without Turkey’s participation”
    - December 2019: Turkish navy orders Israeli research ship to leave Cyprus’ EEZ
    - December 2019: With Cyprus’ new drilling round about to start, Cavusoglu states that Turkey “has the right to prevent” gas exploration in areas it or Turkish Cypriots claim
    - January 2020: Yavuz starts drilling in Cyprus’ block 8, about 100 miles south of Limassol, on behalf of the Turkish Cypriots, where for the first time there are prospects of a gas discovery.

These activities are supported by the Turkish navy. By 2021 Turkey will have its own aircraft carrier and it is also continuing the development of new short-range missiles, the reinforcement of its naval forces, including submarines, and the production of drones. Unless there is a change, its position may then harden even further.

Turkey is determined to continue its aggressive policies which, it says, “stem from its worries about being boxed-in by rivals in the East Med,” by challenging the weakest country, Cyprus. But it is now escalating this by extending its challenges to Greece.

In doing so, President Erdogan is not concerned about regional isolation or condemnation by the US and the EU, which, in any case, so far is confined to words with little action. Turkey is pursuing its own wider strategic interests of exerting influence and hegemony over the complete region, not just gas.

Whatever the reasons, this is a massive provocation that can destabilise the region. Turkey has become increasingly inclined to assert its political and military power than in earlier years, while at the same time developing a very assertive legal position to justify its claims in the East Med.

Cyprus is rightly using all means available to it to respond to this, but it is unable to stop it.

Gas in not the solution

Turkey is attempting to create a new ‘reality’ by completely redefining maritime boundaries, presumably in anticipation of future negotiations under its own terms. The longer this goes unchecked the more assertive Turkey’s demands are becoming.

Turkey is exploiting our fixation with gas to promote these demands. More gas is likely to be discovered in Cyprus’ EEZ. But with Europe pursuing a green future and Asian energy markets becoming highly competitive, exporting this gas to global markets looks increasingly challenging. May be the best way forward is to concentrate on solution of our problems, delinked from gas.

There is no other avenue than dialogue and negotiations. The longer this takes to happen the more assertive Turkey becomes and the more challenging our position becomes – even if right is on our side.

Charles Ellinas

Dr Charles Ellinas, is Senior Fellow at the Global Energy Center, Atlantic Council. First published in the Cyprus Mail

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