A pipeline to fuel Mid-East energy security

Editor’s Choice

25 August 2010
A pipeline to fuel Mid-East energy security
By Mary E. Stonaker
NOT many people outside the energy industry know much of it, but the Arab Gas Pipeline (AGP) is quietly shaping up to be an important player in regional and even global energy security.
This is a submarine and overland pipeline that carries natural gas throughout the Middle East. There are plans to connect the pipeline to Europe, a move that will make Middle East gas resources more accessible to European countries.
The AGP began as a Memorandum of Understanding between Egypt, Jordan, Syria and Lebanon in 2001. This outlined the route of the AGP network through Al-Arish and Taba in Egypt; Aqaba, Amman and Damascus in Jordan; and Hims in Syria.
The pipeline exports mainly Egyptian natural gas. Egypt possesses the third highest estimated natural gas reserves in Africa at 58.5 Tcf (trillion cubic feet), after Nigeria (185 Tcf) and Algeria (159 Tcf).
It is a net exporter of natural gas, producing approximately 1.9 trillion cubic feet (Tcf) while consuming 1.1 Tcf in 2008. In 2009, Egypt exported 646 billion cubic feet (bcf), 30 per cent of this through pipelines, 70 per cent as Liquefied Natural Gas).
The AGP thus helps Egypt secure markets for its natural gas exports in the Middle East and possibly Europe. At the same time, Egypt like other Middle Eastern countries, face increasing domestic demand for gas resources and continually monitors export volume to ensure the domestic markets are sufficiently supplied.
There is still excess capacity in the AGP, with the current volume of gas flowing through the AGP standing at 4 billion cubic metres per year (bcm/y) while its capacity is 10 bcm/y.
This provides tremendous opportunities for the expanding AGP to spur exports to other Middle Eastern countries. This is important in a region known for its conflicts and helps secure regional energy security by offering Egypt’s natural gas resources to its neighbours in a stable and relatively low-cost and manner. Experts have said that it is shared energy insecurity that “provides an incentive for regional collaboration on renewable energy”.
Despite having 40% of the world’s remaining natural gas reserves, Middle Eastern countries are struggling to become exporters. This is due to growing domestic demand, as well as obstacles in developing the export market due to low prices, poor bill collection systems, and uneven distribution. Only with improved and increased infrastructure will the Middle East be able to reverse this trend, meet domestic demand and become net exporters of natural gas.
As the AGP expands its footprint, countries currently tied to it for natural gas resources will need to develop domestic infrastructure in order to reap the greatest benefits from participation in the AGP project. This has the salutary effect of spurring the development of regional energy infrastructure, which allows the whole region to be well-positioned for eventual integration into European markets.
Global gas demands are predicted to grow by about 2% per year for the next several decades. Natural gas demand is set to rise from the present 3.1 trillion cubic metres (tcm) to 4.5 tcm by 2030, a rise of nearly 50 per cent. Most of that demand will come from electricity, as it is a clean (low CO2 emissions), affordable way to power the region and the world. The Arab Gas Pipeline (AGP) will play a pivotal role in securing access to natural gas in the region and beyond.
Already, the signs are good that the AGP will see additional extensions of its pipeline into Turkey, Iran, Iraq and possibly the European Union. It will do so by linking into existing or planned natural gas pipelines in these areas. If fully successful, the AGP would carry a total volume of gas of 14,000 million cubic metres per years (MCM/y).
Examples of extension: In 2006, the original signees (Egypt, Jordan and Syria and Lebanon) agreed with Turkey to build an extension from Hims, Syria across the Turkish border. They also agreed to allow Iraq’s natural gas access to the Arab Gas Pipeline and, in turn, access to the EU market if plans to tap into the Nabucco pipeline succeed. This pipeline is currently under construction and will run from Austria, Hungary, Romania, Bulgaria to Turkey.
The AGP is by no means the only regional gas pipeline of significance. Middle Eastern nations have been accessing collective and individual energy security policies to create regional cooperation and, ensure greater regional stability. There have been other natural gas pipeline projects in the region, most notably the pipelines connecting Algeria with European markets.
Algeria is the fourth-largest supplier to the EU after Russia, Norway and the Netherlands. There are now two main natural gas pipelines  from Algeria, with a third expected to be From Algeria, there are two main natural gas pipelines: the Trans-Mediterranean (Transmed) and the Maghreb-Europe Gas (MEG). A third major line, Medgaz, will connect Beni Saf, Algeria to Almería, Spain and is expected to be with a third expected to be fully operational mid-2010. Connectors to French and other European natural gas transmission networks are expected to be completed no earlier than 2013-2015.
Other pipelines are also being planned for the Middle East region.
The AGP is a commendable effort of four nations (Egypt, Jordan, Lebanon and Syria) to streamline exports and allow greater ease of access for Arabs to natural gas. It acts as a spur to regional development of gas infrastructure. It is also far-sighted in foreseeing the export potential of extending the AGP into Israel and Turkey, as well connecting to other regional pipelines, such as lines originating in Iraq and Iran.
Plugging itself into this network of pipelines, the AGP will play an important role to stabilize the region’s energy security, at least in regards to natural gas.
The writer is with the Middle East Institute, National University of Singapore. She may be contacted at marystonaker@nus.edu.sg

The Straits Times, August 25, 2010

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“The EU Has Treated Turkey Unfairly”: Interview with Zülfü Livaneli

Editor’s Choice
28 June 10
“The EU Has Treated Turkey Unfairly”
Interview with Zülfü Livaneli

Zülfü Livaneli is one of the Turkey’s most influential intellectuals. Hülya Sancak talked to him about his new film about Mustafa Atatürk, democracy and xenophobia in Turkey and the relationship between Turkey and the EU.
Did you find it difficult to transpose an historic figure such as Atatürk, the founder of modern Turkey, to the cinema screen?

Zülfü Livaneli: It wasn’t that easy of course. After all, Atatürk is like a Holy Grail in Turkey; everyone has his own perception of Atatürk. For some he’s like a statue, and they get angry with you for showing any human traits. For some however, he’s an unpopular figure, and if you show Atatürk’s good characteristics, then you’re criticised for having divinised him.

In my film I applied a method to avoid the potential pitfalls of a biographical film: I choose a subjective narrative perspective, telling the story through the eyes of Salih Bozok, an old friend of Atatürk.

So, it’s not “your” Atatürk…

Livaneli: I have portrayed Salih Bozok’s Atatürk. Salih Bozok has been a friend of Atatürk since he was six years old, and kills himself following Atatürk’s death, because he cannot imagine life without him. I have introduced Atatürk from his perspective, and that is a subjective viewpoint.

We could talk about your film for a long time. But as a well-known representative of Turkey’s left-wing tradition I would like to ask you whether a social-democratic ideology in the European sense exists in Turkey?

Livaneli: No it doesn’t, because all European social-democratic parties emerged from the labour movement. In Turkey, on the other hand, it arose as the first party of the new republic founded by soldiers. It was the 1960s before it announced that it was “left of centre”. So the evolutionary process of social democracy in Turkey is totally different.

When I was a member of parliament for the CHP, I tried very hard to keep the party on a social democratic course. But I discovered that this wasn’t possible, and I left. But now, with the new head of the party Kemal Kılıcdaroğlu, I am hopeful again.

Will the CHP become a social democratic party with Kemal Kılıçdaroğlu at the helm?

Livaneli: He’s a good friend of mine. I think if he doesn’t lose himself in the party organisation, he can do it; I’d like to believe that. He is a person of integrity, but the party organisation has broken down and is under huge strain. As long as he’s not hindered by party bureaucracy and hysterical individuals who want to pursue their own career ambitions, then he can achieve this.

Turkey has been battling for years with the unresolved Armenian issue. How do you view the situation, do you think Turkey is taking the right steps?

Livaneli: No, Turkey is not taking the necessary steps. For decades, it pursued a policy of denial, burying its head in the sand. But you can’t say that the Turks turned around one day and arbitrarily killed the Armenians. It wasn’t like that. We can talk about these things without any shame. But what we’ve been pursuing up to now, this policy of detraction, has made everything difficult for us on an international level.

Can the Kurdish issue also be regarded in this context?

Livaneli: For a long time, the Kurdish people and its culture were denied. Then the military putsch came in 1980. At the time, inmates in the prison at Diyarbakir were treated inhumanely and cruelly tortured. All this made the problem worse.

Now, today, I don’t believe that the Kurdish citizens of the republic, the majority of the Kurdish people, want to break away from Turkey. They just want their language and their culture to be accepted. That is not a political demand but a basic human right. One must respect the mother tongue of a people. But whenever I raise my voice on this issue, I am criticised.

Still, we are all citizens of this country, who listen to the same music, who have the same taste, who support the same football teams; we must accentuate 98 percent of what we have in common, not the 2 percent that divides us.

What is your view of the latest developments between Israel and Turkey?

Livaneli: On the one hand, Israel has committed a crime against humanity. It should be deplored by the entire world and the necessary action taken. Secondly, the Israeli government had said that the Red Cross or Red Crescent could bring supplies to Gaza. This means that a civilian initiative moving around with boats in the conflict area is going to be unsafe from the outset. It’s tantamount to saying: “If you kill me, I can use it as propaganda.” I think the Turkish government made a mistake here.

Following these recent events, is it fair to say that Turkey has changed its course, and that there are increasingly Islamic currents in the country?

Livaneli: Yes, one can observe a process of Islamisation and a rapprochement with the Middle East in Turkey. The government has destroyed Turkey’s political tradition, and this is a mistake. Turkey’s political tradition was to distance itself from the Middle East. This is grounded in the experience of the Ottoman Empire.

But the government has drawn Turkey to the Middle East: whilst telling the Europeans “we’ll come to you”, the nation has pushed itself eastwards. Eight years ago we tried to make all this clear to our European and German friends, but they didn’t understand us. All the government talked about was Europe, but in actual fact, they want to Islamise Turkey. By siding with Hamas and Ahmedinejad, Turkey has lost its old position.

Previously, Yasser Arafat thanked Turkey because it enjoyed good relations with Israel, which meant it could adopt a mediation role as a neutral country. He said it was helpful to the Palestinian cause. But now Turkey has lost its neutrality, it has gone over to the Arab side and people call out anti-Semitic slogans on the streets.

And it is the government that has caused this. They have made mistakes, and I don’t know how they’re going to put everything right again.

Is anti-Semitism becoming more widespread in Turkey?

Livaneli: Yes, it is. Not just anti-Semitism, but also other kids of xenophobia: anti-American, anti-European voices are growing ever louder. Our people were not like this before, but they have been made to be like this.

How do you assess of the EU’s policy towards Turkey and its prospective EU accession?

Livaneli: The EU has treated Turkey unfairly. For some time, it gave the nation too much hope. That was followed by huge disappointment. It is all rather like a one-sided love affair.

Our government has exploited this process. When a date for negotiation talks was set, they sold it to the nation as though it were a declaration of accession, and celebrated it with fireworks. But then came the disappointment. And behind the xenophobia and anti-European statements lies this sense of having been deceived. That’s why membership of the EU isn’t as popular as it was in Turkey.

Interview by Hülya Sancak

© Qantara.de 2010   –   25 June 2010

Translation: Nina Coon

Zülfü Livaneli (b. 1946) is a popular Turkish folk musician, a novelist, newspaper columnist and a film director who has been highly popular for decades. He is also a prominent left-wing and social-democrat politician and was a member of the Turkish parliament for one term.

Editor: Lewis Gropp/Qantara.de
About Qantara.de
The Arabic word “qantara” means “bridge”. The Internet portal Qantara.de represents the concerted effort of the Bundeszentrale für politische Bildung (Federal Center for Political Education), Deutsche Welle, the Goethe Institut and the Institut für Auslandsbeziehungen (Institute for Foreign Cultural Relations) to promote dialogue with the Islamic world. The project is funded by the German Foreign Office.

The MEI does not necessarily endorse contents, or policies of the internet resources it extracts.

The demise of the dollar

Editor’s Choice

11 October 2009

By Robert Fisk

In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading

In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.

The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.

The Americans, who are aware the meetings have taken place – although they have not discovered the details – are sure to fight this international cabal which will include hitherto loyal allies Japan and the Gulf Arabs. Against the background to these currency meetings, Sun Bigan, China’s former special envoy to the Middle East, has warned there is a risk of deepening divisions between China and the US over influence and oil in the Middle East. “Bilateral quarrels and clashes are unavoidable,” he told the Asia and Africa Review. “We cannot lower vigilance against hostility in the Middle East over energy interests and security.”

This sounds like a dangerous prediction of a future economic war between the US and China over Middle East oil – yet again turning the region’s conflicts into a battle for great power supremacy. China uses more oil incrementally than the US because its growth is less energy efficient. The transitional currency in the move away from dollars, according to Chinese banking sources, may well be gold. An indication of the huge amounts involved can be gained from the wealth of Abu Dhabi, Saudi Arabia, Kuwait and Qatar who together hold an estimated $2.1 trillion in dollar reserves.

The decline of American economic power linked to the current global recession was implicitly acknowledged by the World Bank president Robert Zoellick. “One of the legacies of this crisis may be a recognition of changed economic power relations,” he said in Istanbul ahead of meetings this week of the IMF and World Bank. But it is China’s extraordinary new financial power – along with past anger among oil-producing and oil-consuming nations at America’s power to interfere in the international financial system – which has prompted the latest discussions involving the Gulf states.

Brazil has shown interest in collaborating in non-dollar oil payments, along with India. Indeed, China appears to be the most enthusiastic of all the financial powers involved, not least because of its enormous trade with the Middle East.

China imports 60 per cent of its oil, much of it from the Middle East and Russia. The Chinese have oil production concessions in Iraq – blocked by the US until this year – and since 2008 have held an $8bn agreement with Iran to develop refining capacity and gas resources. China has oil deals in Sudan (where it has substituted for US interests) and has been negotiating for oil concessions with Libya, where all such contracts are joint ventures.

Furthermore, Chinese exports to the region now account for no fewer than 10 per cent of the imports of every country in the Middle East, including a huge range of products from cars to weapon systems, food, clothes, even dolls. In a clear sign of China’s growing financial muscle, the president of the European Central Bank, Jean-Claude Trichet, yesterday pleaded with Beijing to let the yuan appreciate against a sliding dollar and, by extension, loosen China’s reliance on US monetary policy, to help rebalance the world economy and ease upward pressure on the euro.

Ever since the Bretton Woods agreements – the accords after the Second World War which bequeathed the architecture for the modern international financial system – America’s trading partners have been left to cope with the impact of Washington’s control and, in more recent years, the hegemony of the dollar as the dominant global reserve currency.

The Chinese believe, for example, that the Americans persuaded Britain to stay out of the euro in order to prevent an earlier move away from the dollar. But Chinese banking sources say their discussions have gone too far to be blocked now. “The Russians will eventually bring in the rouble to the basket of currencies,” a prominent Hong Kong broker told The Independent. “The Brits are stuck in the middle and will come into the euro. They have no choice because they won’t be able to use the US dollar.”

Chinese financial sources believe President Barack Obama is too busy fixing the US economy to concentrate on the extraordinary implications of the transition from the dollar in nine years’ time. The current deadline for the currency transition is 2018.

The US discussed the trend briefly at the G20 summit in Pittsburgh; the Chinese Central Bank governor and other officials have been worrying aloud about the dollar for years. Their problem is that much of their national wealth is tied up in dollar assets.

“These plans will change the face of international financial transactions,” one Chinese banker said. “America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate.”

Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars. Bankers remember, of course, what happened to the last Middle East oil producer to sell its oil in euros rather than dollars. A few months after Saddam Hussein trumpeted his decision, the Americans and British invaded Iraq.

The Independent, UK    –   6 Oct 10