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Modern Geopolitics of Eastern Mediterranean Hydrocarbons in an Age of Energy Transformation

Modern Geopolitics of Eastern Mediterranean Hydrocarbons in an Age of Energy Transformation provides a very broad picture of the Eastern Mediterranean, evaluating the region from many different and valuable perspectives. Although there are some gaps in the narration and some issues are glossed over quickly, the book, in general, can be read fluently. Regardless of their level of knowledge, it is recommended for those studying the Eastern Mediterranean from all disciplines.

 

 

The Eastern Mediterranean has been one of the most debated and contentious regions on the global agenda for the past two decades and has drawn attention by virtue of its unique location for much longer. In ancient times, it formed a major leg along the route of the Silk Road; after the Industrial Revolution, it enabled imperial powers to reach their colonies and markets; before WWI, states treated the Eastern Mediterranean like a constantly changing chessboard, as they scrambled to avoid adversaries while racing to meet a rapidly increasing oil demand. These days, the off-shore hydrocarbon reserves discovered there, and the prospects for discovering more, have made the region even more engrossing for circles and stakeholders from energy to economics, politics to the military. With a semi-enclosed sea as its central feature, one can count the number of maritime delimitation controversies between the coastal states of the region. To shed light on this complex environment, Modern Geopolitics of Eastern Mediterranean Hydrocarbons in an Age of Energy Transformation, by Ozay Mehmet and Vedat Yorucu, “is written as an exercise in rational behavior in support of regional cooperation in order to monetize hydrocarbon wealth in the Eastern Mediterranean” (p. v).

Throughout the book, the authors use the term “Eastern Mediterranean” to refer to the Levant from Egypt in the South through the coastline states of Israel, Lebanon, and Syria, to Turkey in the North, including the island of Cyprus as well. Although it does not have direct access to the Levant, Iraq is also considered among these states, since the country is one of the oldest oil producers in the world, and plays a significant role in the region.

The book consists of 12 chapters; following the introduction, Chapter 2 covers energy transformation from fossil fuels to renewable energy resources. Chapter 3 provides the theoretical background of the book; the authors predicate their thesis on ‘location theory’ and a ‘regional energy model.’ Location theory, in short, asserts that “locational determinants ultimately shape the behavior of the actors” situated in a given locale. These determinants gradually allow the actors to elude their historical passions and pride, and strengthen rational thinking. The model indicates that economic rationalism plays a crucial role even in the most complicated scenarios. Actors prioritize economic interests, and thus begin to make rational decisions that conform to market logic: “the marketplace will deliver energy to final users in markets closest to the source at minimum cost, well before consumers in distant markets” (p. 21).

The next five chapters examine the current energy situation of the coastal states: Turkey, Israel, Egypt, Northern Iraq, Syria, Lebanon, Northern Cyprus, and Greek Cyprus. Among these, Turkey, Israel, Egypt, and Northern Iraq are depicted as the principal actors of the region by virtue of their relatively larger oil and natural gas reserves and/or higher energy consumption. Turkey’s growing economy and increasing energy demand are particularly emphasized, and the energy cooperation between Egypt and Israel is noted. Indeed, the relation between these two deserves particular attention, since their energy trade has just reversed; erstwhile energy exporter Egypt has become an importer, and Israel now exports natural gas to Egypt. In the cases of Lebanon, Northern Iraq, and Syria, ongoing terrorist activities and ceaseless ethnic and/or tribal wars are considered the biggest obstacles to the hydrocarbon future of these countries.

Chapters 9, 10, and 11 discuss the projects that have been proposed to develop the discovered hydrocarbon reserves, whether they are financially feasible or not, and explore the conditions that must be met in order for the projects to be implemented. The East-Med Natural Gas Pipeline, the Arab Gas Pipeline, and the route through Turkey are debated, and the authors conclude that East-Med is economically irrational, while the Arab Gas Pipeline would require the Syrian civil war and the conflict in Lebanon to end. In such an environment, they argue, nation-states in the Eastern Mediterranean, for their own good, should act in a rational rather than an emotional manner if they want to commercialize their gas. The hydrocarbon reserves discovered in the region are not big enough to challenge the existed gas giants, i.e., Russia or Qatar, or even Azerbaijan or Kazakhstan. The authors assert that Israeli gas is the most tradeable option in the region since i) it has sufficient reserves for both domestic supply and exportation, ii) hydrocarbon companies provide options to meet the country’s needs, and iii) thanks to these, Israel has already begun to use and export its own gas. Although there have been political differences between Turkey and Israel for a couple of years, the two are best suited to enable regional cooperation for commercializing the Eastern Mediterranean gas. With its geographical proximity, economic growth rates, relatively higher demand for natural gas, and existing infrastructure, Turkey is the best option to market excess Israeli gas; it provides the most financially viable option to export both Israeli and other Eastern Mediterranean gas.

The book contains some falsifiable statements. First, when pointing out the geopolitical rivalry between energy supplier countries, Qatar and Saudi Arabia are given as major Liquefied Natural Gas (LNG) suppliers competing for a greater share in the global energy market. While Qatar is a major LNG supplier –in fact, it was the world’s largest exporter of LNG in 2020– Saudi Arabia neither exports nor imports LNG –indeed, the country lacks any LNG infrastructure altogether. Second, the argument that since the world is going through an energy transformation, fossil fuels such as coal and natural gas are losing their significance is also debatable. The International Energy Agency (IEA) forecasts that the demand for coal will rebound until 2025; before COVID-19, an even higher increase was expected. Given that developing countries’ demands for energy will continue to increase, “coal use in absolute terms is not set for a rapid decline in the immediate future.”1 Third and last, Mehmet and Yorucu assert that the energy transformation has begun to decrease the influence of OPEC producers over global energy markets. On the contrary, however, one could say that they grew more powerful, as they became OPEC+ with the addition of non-OPEC producers such as Russia, Azerbaijan, Norway, etc.2

Despite these shortcomings, Modern Geopolitics of Eastern Mediterranean Hydrocarbons in an Age of Energy Transformation provides a very broad picture of the Eastern Mediterranean, evaluating the region from many different and valuable perspectives. Although there are some gaps in the narration and some issues are glossed over quickly, the book, in general, can be read fluently. Regardless of their level of knowledge, it is recommended for those studying the Eastern Mediterranean from all disciplines.

 

Endnotes

 

1. “A Rebound in Global Coal Demand in 2021 Is Set to Be Short-Lived, But No Immediate Decline in Sight,” IEA, (December 18, 2020), retrieved April 1, 2021, from https://www.iea.org/news/a-rebound-in-global-coal-demand-in-2021-is-set-to-be-short-lived-but-no-immediate-decline-in-sight.

2. Just after the book was published, the COVID-19 pandemic pushed governments around the world to implement isolation procedures. Economies almost shut down and oil demand decreased to historic levels, which prompted OPEC+ members to compete with each other to get their share in the market. The rivalry between Saudi Arabia and Russia collapsed oil prices, which dipped to below-zero levels on April 20, 2020. Having succeeded in lowering prices to deter one another, the two then made an agreement to raise prices again. Thus, OPEC+ still continues to affect oil prices by controlling oil production levels. Still, it should be noted that the last two instances of control stem from the dynamic nature of energy markets; it is quite open to being influenced by geopolitical developments from all around the world.

 


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