Fuel Fix: Liberating an Energy Hostage

Over the past few years, media and public attention has focused more on domestic energy issues than some important energy challenges and opportunities overseas.  We have seen a major turn around in domestic oil and gas production resulting from advances in technology.  As a result our energy security has increased immensely.  But, that is not the case for much of Europe, which is heavily dependent on natural gas from Russia.

Over the past several years, Russia has interrupted the flow of gas to European countries to remind them that it remains a force to be reckoned with.  This year during a very harsh winter, Russian cut back supplies in February.  In the cut off in 2009, schools, hospitals, factories, and people froze after Russia cut off gas to Bulgaria

This demonstrates once again the dangers of an energy monopoly.  But, after years of political delays, the days of European nations being held hostage to the whims of Moscow appear to be numbered.  Azerbaijan and Turkey have signed an agreement to build a major gas pipeline, TANAP—Trans-Anotolia gas pipeline—to move Azerbaijani gas to Central and Southern European countries.  Today, those countries are hostage to Russia and pay a large premium for its gas.

The TANAP project has been whole-heartedly endorsed by both the US and UK governments, which have sent a strong signal about its geopolitical importance.

However, even with the agreement between Azerbaijan and Turkey, the project faces many hurdles over the next few months, and even after those are overcome, it will take years to build.  MORE