Identifier
Created
Classification
Origin
09ANKARA1589
2009-11-05 09:12:00
CONFIDENTIAL
Embassy Ankara
Cable title:  

DOE DEP SEC PONEMAN VISIT: TURKS POSITIVE ON

Tags:  ENRG EPET PREL TU AZ 
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DE RUEHAK #1589/01 3090912
ZNY CCCCC ZZH
P 050912Z NOV 09
FM AMEMBASSY ANKARA
TO RUEHC/SECSTATE WASHDC PRIORITY 1141
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RHEBAAA/DEPT OF ENERGY WASHINGTON DC PRIORITY
C O N F I D E N T I A L SECTION 01 OF 02 ANKARA 001589 

SIPDIS

DEPARTMENT FOR S/EEE RICHARD MORNINGSTAR
DOE FOR JOHN ELKIND, LANA EKIMOFF

E.O. 12958: DECL: 11/04/2019
TAGS: ENRG EPET PREL TU AZ
SUBJECT: DOE DEP SEC PONEMAN VISIT: TURKS POSITIVE ON
SOUTHERN CORRIDOR AND RENEWABLES

REF: ANKARA 1566

Classified By: DCM Doug Silliman for reasons 1.4 (b,d).

C O N F I D E N T I A L SECTION 01 OF 02 ANKARA 001589

SIPDIS

DEPARTMENT FOR S/EEE RICHARD MORNINGSTAR
DOE FOR JOHN ELKIND, LANA EKIMOFF

E.O. 12958: DECL: 11/04/2019
TAGS: ENRG EPET PREL TU AZ
SUBJECT: DOE DEP SEC PONEMAN VISIT: TURKS POSITIVE ON
SOUTHERN CORRIDOR AND RENEWABLES

REF: ANKARA 1566

Classified By: DCM Doug Silliman for reasons 1.4 (b,d).


1. (C) Summary: In separate meetings with Minister of Energy
Yildiz and BOTAS Acting Director General Konuk, DoE Deputy
Secretary Poneman stressed U.S. support for the Southern
Corridor and the urgent need to resolve negotiations with the
Azeris to make the Corridor a reality. Both Yildiz and Konuk
expressed support for the Corridor and said they believed the
remaining issues were close to being resolved. Industry
representatives showed confidence in Nabucco but stressed the
need for Iraqi gas to feed the pipeline along with Azeri gas.
The deputy secretary shared a non-paper on a new framework
for international nuclear fuel services to Turkish Atomic
Energy Authority Acting President Alper and also invited him
to deepen cooperation on Second Line of Defense. TAEK is
currently reviewing the effectiveness of its own portal
monitors and, depending on the outcome, might consider
additional collaboration with DoE in this field. Regarding
renewable energy, Minister Yildiz noted a wide range of
opportunities for private sector cooperation, while industry
representatives called for investment in the grid and
increased feed-in tariffs as incentives for more renewable
power generation. Deputy Secretary Poneman also indicated
that DOE hopes to hold an energy efficiency conference in
Istanbul in June 2010. End summary.

Turkey Positive on Turk-Azeri Negotiations and Nabucco
--------------


2. (C) In his meeting with Minister of Energy Yildiz, Deputy
Secretary Poneman stressed the great importance the U.S.
places on its relationship with Turkey on a range of energy
and strategic issues. He stressed the U.S. commitment to
making the Southern Corridor a reality and the concern that
the longer the process drags, the less confidence it signals
to investors. Minister Yildiz said that following the signing
of the Nabucco Intergovernmental Agreement (IGA) in July,
energy activity increased in the region: Turkey has signed
agreements or been in talks with Russia, Georgia, Iran, Iraq,

Syria and Qatar. Yildiz said Turkey wants to be proactive on
energy matters, not passive or reactive, and it will guard
its own interests but also be mindful of the impact on the
region and the world.


3. (C) Summarizing the status of negotiations with Azerbaijan
on Shah Deniz (SD) phase 1 and phase 2, Yildiz said in the
latest round Turkey made a positive offer that addressed both
countries' needs, although he commented that "Azerbaijan is a
country to be cautious of." Yildiz added that the strategic
value of the Southern Corridor is greater than the benefits
to the two countries. For these reasons, he said, Turkey is
being very positive toward Nabucco but also toward the
Interconnector for Turkey-Greece-Italy (ITGI). (Note: Yildiz
had just come from a meeting with Edison Energy, the Italian
lead promoter of ITGI. End note.)


4. (C) Acting Director General Mehmet Konuk of the State
Pipeline Company (BOTAS) gave Deputy Secretary Poneman a
similarly positive outlook on the negotiations with
Azerbaijan. The deputy secretary said that it was impossible
to reconcile what he had heard in Ankara and in Baku, where
there was significant concern about the status of
negotiations. Konuk responded that it was natural that
parties' evaluations of a project would differ, but it was a
"known fact" that all parties in this case aim to deploy
resources to connect supply to demand. Both Turks and Azeris
know Azerbaijan needs its gas to flow west. Konuk noted that
demand for gas is growing in both Turkey and Europe, and "if
demand and supply are there, the negotiations will be
resolved."


5. (C) At a lunch hosted by the oil and gas companies'
association PETFORM, company representatives also expressed
confidence in Nabucco. Both OMV General Manager Oktay Sen and
E.On General Manager Cenk Pala, however, stressed the need
for Iraqi gas to feed the project along with Azeri gas.
Urging U.S. support, Pala said giant reserves in the south
and west of Iraq, not just in the north, should be tapped.


6. (C) COMMENT: While Poneman's interlocutors painted a rosy
picture that the technical issues in the Turk-Azeri
negotiations are close to resolution, assuaging Azeri angst
about Turkey's rapprochement with Armenia also may be
necessary to finalize the negotiations. In an October 15
meeting with embassy econ counselor (reftel),Undersecretary
of Energy Kilci said the Turkey-Azeri negotiation process was

ANKARA 00001589 002 OF 002


stalled due to "political issues," alluding to
Nagorno-Karabakh and the recent protocol signing with
Armenia. End comment.

TAEK May Reconsider Further SLD Cooperation
--------------


7. (SBU) In a meeting at the Turkish Atomic Energy Authority
(TAEK) Acting President Zafer Alper, Deputy Secretary Poneman
underscored the importance of nuclear energy and nuclear
security for the Obama administration. Poneman shared a
non-paper on a new framework for international nuclear fuel
services and emphasized the need to assure nuclear fuel
supplies to support the growth of nuclear power. While the
concept of "cradle-to-grave fuel services" is still new,
Poneman said, this approach will support the market for
nuclear energy. Deputy Secretary Poneman also invited the GoT
to send a representative to the upcoming meeting of Global
Nuclear Energy Partnership countries in Beijing. Alper noted
that Turkey remains an observer in GNEP and said the GoT was
still deliberating its level of participation for the Beijing
meeting.


8. (C) Noting Turkey's strategic location and existing close
bilateral cooperation on nonproliferation issues, the deputy
secretary offered to deepen bilateral cooperation further
through DoE's Second Line of Defense (SLD) initiative. Alper
acknowledged the long-standing partnership between TAEK and
SLD, including placement of nuclear detection portal monitors
since 2001. He said there continues to be good cooperation,
but that TAEK decided to develop its own portal monitors and
has provided these to Turkish Customs. Alper said TAEK is
currently reviewing the monitors' effectiveness and,
depending on the outcome of that review, might consider
additional collaboration with DoE in this field.

Increased Feed-In Tariffs and Grid Investment Needed for
Renewables Expansion
--------------


9. (SBU) At the Ministry of Energy and at a roundtable
meeting hosted by the Wind Power and Hydropower Plants
Businessmen's Association (RESSIAD),Deputy Secretary Poneman
stressed U.S. support for Turkey's efforts to expand power
generation from renewable sources. Minister Yildiz noted the
great demand for renewable energy projects in Turkey,
particularly for wind projects, and said the field presents a
wide range of opportunities for private sector cooperation.
At the roundtable, industry representatives described
projects they have underway. RESSIAD President Tolga Bilgen
said Turkey needs investment in its power grid in order to
allow any significant expansion of renewables use, but no
major investment is being made at this time. Several company
representatives said the government also will have to raise
feed-in tariffs in order to achieve much of an increase in
renewable energy projects. (Note: A bill to raise feed-in
tariffs was pulled from the legislative agenda in July due to
GoT concerns about its cost. A revised bill is being
drafted, but has not yet been submitted. End note.)


10. (U) Deputy Secretary Poneman reviewed this text prior to
transmission.

JEFFREY

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