Ankara's Gamble

Further political interference may well delay one of Europe’s most hopeful energy projects, as a seemingly unrelated bill pending in the French Senate related to Turkey’s role in the alleged Armenian genocide in World War  I. It has set off a chain reaction in the energy world.

Turkey has now pulled out of talks with French energy company, Gaz de France (GDF), side-tracking the company’s attempts to join the Nabucco natural gas pipeline consortium.

The Nabucco project, which involves the building of a natural gas pipeline via Turkey, Bulgaria, Romania and Hungary up to Austria, is considered to be the European Union’s first attempt at a common energy policy, as well as the first concerted response to Russian domination of its gas supplies. The project, already facing delays of up to two years, is expected to cost €4.6 billion, and a recent ‘feasibility report’ carried out by the five countries involved, confirmed the need for additional members to help carry the cost.

"Financing possibilities are currently being evaluated," said Andrea Mol, spokeswoman for OMV, the Austrian company heading the consortium, in a press release. This is where interested parties, such as Gaz de France, come in.

However, negotiations between Gaz de France and Nabucco are believed to have broken down in early April due to Turkey’s pulling out, which would threaten to further delay the project. The move has been perceived as politically motivated, centered on the unrelated issue of a bill waiting to be voted on in the French senate.

This bill, proposed by French socialists and opposed by the current government, would make it illegal to deny that Armenians suffered ‘genocide’ at the hands of the Ottoman Empire during the First World War. This has enraged Ankara, who vehemently denied that any genocide took place at all, claiming that the figures cited are a gross exaggeration. Turkey’s apparent withdrawal from the negotiations is considered by pundits to be a retaliatory move, designed to put pressure on both Paris and Brussels. According to the British news service Reuters, an unnamed Turkish energy official predicted that the future of negotiations will depend on the outcome of the French presidential elections, now awaiting a run off in early May between center right candidate Nicolas Sarkozy and socialist Segolene Royal.

The recent row between France and Turkey is an unfortunate turn of events for the Nabucco project. However, even with all the problems plaguing the project, it is hard to imagine this issue being its death-knell, given projected EU energy needs.

Both Turkey and the EU realise the importance of a sustainable alternative to Russian natural gas.

According to a study by CGEMP Université Paris Dauphine, over the next 25 years, the EU is expected to need an additional 100 to 200 billion cubic meters of natural gas yearly.

Unless there is a viable energy alternative, Russia, who already controls a large percentage of Europe’s natural gas supply, could find itself enjoying a position of increasing influence – at Europe’s expense.

Much of Turkey’s rabble rousing has been seen by some as political maneuvering in an attempt to strengthen its position in the pipeline project, as Turkey wants to be a major energy hub for Western Europe. So while the Armenian genocide question is a hot button issue for the Turkish people, a possible breakdown of the Nabucco project would be far more devastating for the country.