IEEJ：November 2015

ｃ○ IEEJ 2015

Special Bulletin
A Japanese Perspective on the International Energy Landscape (247)November 24, 2015

Atlantic Council Energy & Economic Summit
Ken Koyama, PhD
Chief Economist, Managing Director
The Institute of Energy Economics, JapanOn November 18-20, the seventh annual Atlantic Council Energy & Economic Summit
took place in Turkey’s Istanbul. The conference, sponsored by the U.S. think tank Atlantic Council,
was a large international meeting in which more than 500 people from more than 40 countries andregions participated. High-level participants in the opening session included not only President
Recep Tayyip Erdogan of Turkey as the host country for the conference but also the president ofCroatia, the prime minister of Albania, senior U.S. State Department officials and European energy
ministers. In the following, I would like to summarize particularly impressive points at theconference.
First, participants in the conference were conscious of the importance of Turkey. Locatedin the nexus between Europe, the Middle East, Russia and Central Asia, Turkey is in a very
geographically important position. Turkey’s presence in the international energy market as well asoverall international relations has increased as the country serves as a gate for energy flow to Europe
and has expanded its own energy demand through robust economic growth. The reason the Atlantic
Council has sponsored the summit in Tukey in consideration of the country’s strategic importance isthat the United States gives priority to Turkey in its national strategy. At a time when the Middle
Eastern energy situation has been fluid with Russia-Ukraine-EU relations thrown into confusion,
Tukey’s presence and stability have become very important for international energy security andenergy geopolitics.
In this respect, particularly, natural gas supply through Turkey holds one of the keys to
the European Union’s diversification of energy supply sources and its reduction of dependence onRussia to enhance its energy security. It was impressive that many views about this point werepresented at the summit. Participants in the conference vigorously discussed the economic efficiency
and economic security contributions of the Southern Gas Corridor project to provide gas fromAzerbaijan to Southern Europe via Turkey. Discussions in various sessions of the summit alsotouched on problems and significance of the Turkish Stream project that Russia, conscious ofTurkey’s importance, has devised to export gas via Turkey, as well as the Nord Stream 2 project
linking Russia to the northwestern European gas market including Germany via the Baltic Sea.
While these competing gas export projects exist, Turkey is likely to grow more important as a future
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gateway to the European market. Turkey’s presence is increasing for Russia, Central Asian andCaspian Sea countries, and the United States.
Second, it was impressive that participants in the latest conference were very conscious ofenergy security. In a sense, I was surprised to see many policymaking officials participating in theconference, indicating energy security as a key component of national security. A factor behind such
indication may be the terrorist attacks in Paris that highlighted the importance of security problems
for Europe and the entire world just before the conference.
Representative energy problems for Europe might have seemingly been related to climatechange measures for the single European market. But the recent international energy situation,
including developments regarding the Russia-Ukraine problem, has indicated the importance ofenergy security problems for Europe. In the conference, policymaking participants clearly describedenergy security as national security, emphasizing that each European country or the entire EU should
give policy priority to infrastructure investment and the diversification of energy supply sources. I
thus saw energy security emerging as the top priority in Europe.
At the same time, however, energy problems are market or business problems. Whether
plans for enhancing energy security have sufficient economic viability acceptable for the market
would be very important when their feasibility is considered. Industrial or business people might
have to consider how to survive the new business environment represented by crude oil priceplunges and how to enhance global warming and energy security policies based on the results of the
21st Conference of Parties to the U.N. Framework Convention on Climate Change, or COP21. The
cost for enhancing energy security may eventually raise energy costs for consumers. In this sense,
the pursuit of pure economic efficiency may occasionally trade off with energy security and global
warming measures. Basically important is the balanced pursuit of the 3Es -- economic growth,energy security and environmental protection. But the pursuit of the 3Es is very challenging forEuropean countries, Japan and many other countries.
At the conference, International Energy Agency Executive Director Fatih Birolemphasized that any country must steadily address the essentially important issue of energy security
irrespective of whether crude oil and other energy prices are high or low. He also pointed out thatcurrent low crude oil prices, while benefitting oil consuming countries or consumers at present,could have negative effects on them by weakening incentives for energy conservation and cuttingenergy investment to affect long-term energy security. In the international energy situation that isgrowing more complex, government and industry people in each country will have to implement
policy and business strategies based on a cooler situational analysis and judgement than ever.
Contact: report@tky.ieej.or.jp
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