Imports no solution to energy gap, experts say

This file photo shows the world’s second largest oil-exploring platform Leiv Eiriksson leaving Turkey in March after one year exploration in the Black Sea. Hürriyet photo

ISTANBUL- Hürriyet Daily News, Friday, August 12, 2011, Erisa Dautaj Şenerdem, 

Energy imports to Turkey have grown by more than 41 percent in the first half of the year. Domestic supply is the only way to ease pressure, experts say

Turkey’s cost of energy imports increased 41 percent during the first six months of the year compared to the same period in 2010, and experts say domestic energy production is the only way to relieve the pressure.

The country’s energy imports totaled $24.8 billion between January and June, compared to $17.6 billion in the same period last year, according to figures published by TurkStat, the official state statistics institute. The figure includes imports of oil and oil products, natural and seamless gas, electricity, as well as bituminous coal, hard, coking and briquette coal.

The data shows imports of crude oil grew 16.13 percent reaching a volume of 8.8 million tons, in the same period. Turkey imported most of its crude oil from Iran, Iraq and Russia.

Energy is the item that bears the largest weight on the country’s current account deficit, according to Altan Kolbay, the secretary-general of the Oil Platform Association, or PETFORM,  a sectoral organization of 48 energy companies. “Turkey imports 93 percent of the oil and 98 percent of the natural gas it consumes,” Kolbay told the Hürriyet Daily News in a phone interview on Friday. He said this figure had remained almost the same for the past 10 years.

Natural gas imports have increasingly become a concern for the current account, due to a radical increase in demand, thus increasing dependency on imports, he said.

Oil prices have also increased considerably, and Turkey is among countries that cannot affect such prices, which are determined in international markets, Kolbay added.

Recalling that this was a problem for all non-oil producing countries, Kolbay said the only way out of the situation was through domestic production. According to him, this can be realized through encouraging exploration and investments in off-shore regions, trying unconventional production methods, particularly in exploring for shale gas, as well as encouraging enhanced oil recovery methods, which increase production in existing oil wells through certain chemical techniques.

The existing regulation on oil production dates back to 1954 and it must be revised in accordance with the present conditions, Kolbay said. “It must encourage both public and private investments.”

Coal, thermal power plants an alternative

The behavior of energy resource suppliers will always tend toward higher prices, however, the Turkish consumer must have a choice (to say NO), said Haluk Direskeneli, an Ankara-based energy analyst.

“We must use domestic coal and thermal power plants in harmony with environmental norms,” Direskeneli told the Daily News in a phone interview. Nuclear energy takes much more time and there are concerns related to the environment. On the other hand, the country should try to diversify its energy resources (such as Wind/ Solar/ Hydro/Clean Coal), he said.

Private investors have mostly invested in plants that use imported coal, whose international spot price has increased radically (almost double) in recent years, Direskeneli said. “These investors cannot sell energy now, due to very high electricity generating/ operation costs. The state must repair existing coal mines and encourage private sector to invest in these or new plants nearby already existing mines.”