Energy Economy of Turkey

Chris Lyons
October 24, 2010

Submitted as coursework for Physics 240, Stanford University, Fall 2010

Fig. 1: Map of Turkey showing existing and proposed pipelines. (From [7])

As scientists we obviously tend to think primarily about the technical challenges associated with future word energy demands. These challenges are undoubtedly enormous; however, in a world where so much economic scope is dedicated to the production and delivery of energy, it seems to me that the political and economic challenges associated with future world energy demands are equally enormous and worth mentioning.

As a chemist I'm not qualified to suggest solutions to the political issues surrounding the ever-changing global energy industry. Therefore, I thought it might be interesting to summarize some aspects of the energy economy of the Republic of Turkey as a way to highlight how politically complicated a dramatic shift in the energy industry through exhaustion of hydrocarbon resources could be. Why Turkey you might ask? Mainly because I think it's an interesting place.

The Republic of Turkey is unique in that it acts as both a literal and figurative bridge between Europe and the Caucuses. Geographically it straddles two continents while politically and culturally it's a country of 77.8 million Muslims vying for membership in the European Union. [1] In the last decade, Turkey's GDP and energy demands grew steadily until the economic downturn experienced in 2007, and in 2009 the GDP growth rate was estimated to be -5.6%. [1] Turkey itself does not possess many domestic hydrocarbon sources and their reliance on imported supplies (approximately 70% of their oil and 97% of their natural gas) makes international relations and energy policy particularly important for the country. [2] A 2010 study estimated that by 2020, approximately 33-46% of the country's electric energy demands may be met by hydroelectric power supplies, though this is a relatively small percentage of total energy consumption (11.1% as of 2005). [3]

Turkey imports approximately 734,600 barrels of oil per day, and though there is relatively little energy produced domestically, there exists some oil drilling and export, amounting to approximately 133,100 barrels per day. [1,2] Domestic oil production is primarily performed by Turkish Petroleum Corporation, a state owned entity while the previously state-owned Petrol Ofisi AS (POAS), privatized in July 2000, is one of Turkey's leading refined petroleum product manufacturers. Because of Turkey's heavy reliance on imported oil relative to gained revenue from exported oil, its economy can be affected substantially by the fluctuation of global oil prices. Depletion of world crude oil supplies could have devastating consequences.

Similar to oil, natural gas is not produced in very large supply in Turkey, but the import and transit of natural gas are extremely important aspect of Turkey's energy policy and international relations (Table 1). Furthermore, Turkey's consumption of natural gas has increased dramatically in the last several years, to approximately 3.6 × 1010 m3 in 2009 (~1018 joules). [2] Prior to 2001, most of Turkey's natural gas infrastructure was controlled by BOTAS, a state-owned entity. Most typically, domestic natural gas is harvested from areas where oil is obtained, and proven reserves are documented at 6.1 × 109 m3 (~2 × 1017 joules). [1,4] As is the case with oil, state-owned TPAO is responsible for the majority of Turkey's natural gas production, but various privately owned companies have a stake in the domestic natural gas production of Turkey. In addition to international pipelines supplying natural gas for Turkey's consumption, recent proposals have been made to create further transnational pipelines through Turkey that would supply parts of Europe with natural gas. [5]

Project Length (km)
Turkey-Greece-Italy Pipeline 808
Arab Gas Pipeline 1,200
Iraq-Turkey Pipeline 430
Nabucco (Caspian - Eur.) 3,300
Table 1: Example International Natural Gas Pipelines [6]

Let's assume for the sake of argument that energy demands will be satisfied by some alternative source in the future. In other words, let's assume that the technical problem is solvable. Accomplishing this would obviously be a huge success, but in reality only half the battle will have been won. The political and economic implications for having a major shift in the types of energy resources available pose huge challenges. If a relatively small country like Turkey stands to be affected so much by depletion of hydrocarbon energy sources, what affects will be felt by the United Sates? Approximately 75% of Saudi Arabian government revenues come from oil exports. What will happen to them when the reserves run out?

© Chris Lyons. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.


[1] "Turkey," CIA World Fact Book, U.S. Central Intelligence Agency, 2008.

[2] "Country Analysis Briefs: Turkey," Energy Information Administration, 2006.

[3] I. Yüksel, "Energy Production and Sustainable Energy Policies in Turkey," Renewable Energy 35, 1469 (2010).

[4] B. Shaffer, "Turkey's Energy Policies in a Tight Global Energy Market," Insight Turkey 8, 97 (2006).

[5] S. Stern, "Turkey's Energy and Foreign Policy," Globalization, 2003.

[6] S. ÇİMEN, Energy and Energy Security: Turkey's Role," The 28th Annual Conference on US-Turkish Relations, 1 Jun 09.

[7] "Turkey's Energy Strategy," Republic of Turkey Ministry of Foreign Affairs, Deputy Directorate General for Energy, Water and Environment, January 2009.