Turkey’s KRG Energy Partnership

This piece was first published by ForeignPolicy.com on January 29, 2013.

Assertions and opinions in this publication are solely those of the above-mentioned author(s) and do not necessarily reflect the views of the Middle East Institute, which expressly does not take positions on Middle East policy

Only a few years back, the idea of an independent Kurdistan bordering Turkey would have had Ankara up in arms. Not anymore. Past tensions have been supplanted by a new energy partnership and Turkey seems far less worried about the prospect of an independent Kurdistan. In May 2012, Turkey and the Kurdistan Regional Government (KRG) cut a deal to build one gas and two oil pipelines directly from Kurdish-controlled northern Iraq to Turkey without the approval of Baghdad, taking the rapprochement started between the two in 2009 one step further. If realized, the Kurdish pipelines will for the first time provide the Kurds direct access to world markets, bypassing the Baghdad controlled Kirkuk-Ceyhan (Turkey) pipeline bringing the KRG one step closer to the long-held dream of Kurdish independence.

Some pundits have argued that for this very reason Turkish approval of a Kurdish pipeline is a long shot. But the construction seems to be underway. According to Turkish press, the KRG has already begun construction on the oil and gas pipelines which are due to be operational by early 2014.

A couple of factors account for the sea change in Turkey's KRG policy. The first being Turkey's energy strategy. Turkey is an energy hungry country with a six to eight percent annual increase in demand. In order to sustain its economic growth, Ankara wants to strengthen its energy security, ensure diversification of suppliers, and establish itself as an energy hub between the energy-producing countries to its east and the energy-consuming countries to its west. Currently, Turkey relies heavily on imported energy from Russia and Iran. Recently, however, Iranian sanctions have driven up Turkey's energy costs. Moreover, the Syrian crisis has revealed that energy dependence on Iran and Russia might restrict Turkey's room for diplomatic maneuver. This is where the Iraqi Kurdish energy supply comes in handy. The Kurdish region sits on significant, nearly untapped oil and gas reserves. The KRG would offer Turkey a high quality low cost energy alternative to Iran and Russia while Turkey might serve as a conduit for KRG energy exports to Europe.

There are also geostrategic considerations behind Turkey's volte-face. The Syrian uprising has strained Turkey's once strong ties with Iran and Syria. In retaliation for Turkey's support of the Syrian opposition, Bashar al-Assad has given the Democratic Union Party (PYD), the PKK's Syrian offshoot, a free hand to establish itself in the country's north. Turkish intelligence reports indicate that Iran has been providing shelter and logistical support for the PKK to launch attacks against Turkey as well. The KRG, on the other hand, has banned pro-PKK political parties, arrested PKK politicians, closed down PKK offices, and closely monitors pro-PKK activities. Against the backdrop of shifting dynamics in Turkey's immediate neighborhood and mounting PKK attacks, cultivating closer ties with the KRG has become one of the most important components of Turkey's anti-terror strategy and the government's most recent "Imrali process," the peace talks with the PKK's jailed leader Abdullah Öcalan.

Yet another intricacy for Turkey's regional policy has been the face off with Baghdad. An already strained relationship between Ankara and Baghdad due to diverging stances over Syria came to a head after the U.S. withdrawal. In an effort to consolidate his power, Iraqi Prime Minister Nouri al-Maliki issued an arrest warrant for Sunni Vice President Tareq al-Hashemi on terrorism charges. Turkey granted refuge to Hashemi and refused to extradite him dealing yet another blow to bilateral relations. The energy deals Turkey signed with the KRG are the latest in the Baghdad-Ankara confrontation. Baghdad is accusing Ankara of meddling in Iraqi affairs by "backing radical Sunni elements" in the country and signing "illegal" energy deals with the Iraqi Kurds, while Ankara is charging Maliki of provoking sectarian tensions and leading Iraq into civil war. Maliki's growing tilt toward Iran has only exacerbated the tension.

Facing a host of new challenges including an increasingly antagonistic Maliki government, growing Iranian influence in Iraq, mounting PKK attacks, and increasing energy demand, Turkey seems to have found an unlikely ally in its ordeal.

Strange as it may sound, the United States is not happy about Turkey's courtship with Iraqi Kurds. Since the first Gulf War, Turkish-U.S. relations suffered multiple crises over the latter's support for Iraqi Kurds. This time, however, it is the other way around. Last week, Feridun Sinirlioglu, Undersecretary of the Turkish Ministry of Foreign Affairs, had a meeting with the State Department in which the United States reiterated its opposition to the energy deals directly between Ankara and the KRG fearing that closer energy ties might push Baghdad's Shiite government closer toward Tehran and threaten Iraqi unity.

Despite opposition from Baghdad and the United States, there seems to be little that can stop the ball from rolling on energy cooperation between Ankara and the KRG. In an interview with Turkish daily Hurriyet on January 8, Namik Tan, Turkey's ambassador to the United States, made it loud and clear: we will not turn our back on the KRG's energy resources.

The energy deals foreshadow a major shift in Turkey's Iraq policy. Gone are the days when the KRG was seen as part of the problem; it is now viewed as part of the solution. Turkey cannot only tolerate an independent Kurdistan but also benefit from it, as long as it remains dependent economically on Turkey. An independent Kurdistan could offer a source of energy, a buffer against a hostile Baghdad and Iran, and an important ally in Turkey's fight against the PKK.

Yet it is not all roses; risks abound for both parties. The oil pipeline deal will allow the Kurds to export up to one million barrels per day, but it might also make reconciliation between Erbil and Baghdad harder to achieve. If the KRG does not find a constitutional solution to its dispute with Baghdad over its contentious hydrocarbon law, the conflict will become regionalized inviting further meddling in Iraqi politics by neighboring powers. Ensuing instability carries the risk of scaring away badly needed foreign investment. Additionally, by bypassing Baghdad in its bilateral agreements with the KRG, Turkey risks losing investment in southern Iraq which holds the country's largest explored oil and gas reserves.

Regardless, Turkey seems ready to take the risk. In light of Turkey's long tortured history with the Kurds, such a radical shift seems nothing short of astonishing.