Energy Geopolitics 'Great Game' Intensifies

Published May 11, 2012

| AOL Energy

As nations continue to wrangle over the control, development and transportation of Caspian basin oil and gas resources, recent new discoveries in the Eastern Mediterranean Sea have raised the potential conflict level between governments, corporations and other relevant parties. But the discovery of what appear to be substantial natural gas deposits, also presents great opportunity.

"There was some concern a number of months ago about these gas finds off the southern coast of Cyprus... now the US would have to have more of a naval presence in the Eastern Mediterranean in order to de-conflict these forces..," Steven A. Cook, Council on Foreign Relations' Hasib J. Sabbagh Senior Fellow for Middle Eastern Studies told journalists at a recent roundtable for select media.

The briefing was held to announce the release of a new CFR-sponsored Independent Task Force report entitled "US-Turkish Relations: A New Partnership." The bipartisan Task Force is chaired by former Secretary of State Madeline Albright and former National Security Advisor Stephen Hadley, and is directed by Steven Cook.

Several natural gas discoveries have been made in the Eastern Mediterranean Sea in the past 10 to 15 years, with some of the larger structures identified by Noble Energy falling within the Exclusive Economic Zones of Israel and Cyprus. Noble has discovered approximately 35 trillion cubic feet of gross natural gas resources in the region, which is roughly equivalent to Ukraine's total proved end-2010 gas reserves or about 13% of total proved end-2010 US gas reserves.

A "Spaghetti Bowl of Pipelines"

"The principal should be diversification of supply, diversification of routes, no choke points and no monopolies - so there is a free and adequate flow of energy..," said Hadley. Pipeline politics in the region are notoriously complex and at times divisive. There is a constant tug of war for development rights and market access, with governments and companies jockeying for position.

Albright, who was closely involved with developing the Baku-Tbilisi-Ceyhan pipeline under the Clinton Administration, referred to the "spaghetti bowl of pipelines," in the region. The BTC pipeline delivers crude oil from Azerbaijan through Georgia to the Turkish Mediterranean port of Ceyhan, and on to western markets.

A new phase of pipeline politics is unfolding as a result of the Eastern Mediterranean discoveries and prospects. Longstanding territorial disputes between Cyprus and Turkey could be further strained under new resource development pressure. However, there could also be an opportunity for mutual benefit.

"Everybody needs energy - the Israelis need energy, the Cypriots need energy, the Turks need energy, Kurds need energy, the Europeans need energy," said Cook.

"Rather than conflict... there might be an impetus here to share these resources, certainly on the island of Cyprus that could - perhaps over a medium or longer term - lead a pathway towards, if not reconciliation, a change in the status of the relationship," he said.

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