Abstract
ABSTRACT As the importance of natural gas for the energy future of the European Union rises, many new pipeline projects are proposed to transfer rich resources of Eurasia towards Europe. Why do some of these projects succeed, and others fail? To explain this phenomenon, the energy security literature has focused mostly on the security of energy supply and demand, while the specific challenges faced by transit states attracted relatively less attention. This paper focuses on the reasons that make pipeline politics and economics controversial and challenging by introducing and operationalizing the concept of transit security. It defines transit security broadly where transit countries are sensible to changes in supply and demand in addition to pipeline-specific issues, which are determined by a combination of economic and geopolitical factors. It argues that in the case of Turkey, transit security is influenced by asymmetries in trade dependence and political power in addition to prospect of future rents from transit. The last section applies this framework to Eurasian gas transit in order to explain the success and failure of past, present, and future pipelines.
Highlights
As the importance of natural gas for the energy future of the European Union rises, many new pipeline projects are proposed to transfer rich resources of Eurasia towards Europe
This paper focuses on the reasons that make pipeline politics and economics controversial and challenging by focusing on the concept of transit security
This paper makes a significant contribution to the theory of energy security by defining and operationalizing transit security
Summary
Energy security is often a vital matter for all governments due to the crucial role of hydrocarbons in the functioning of modern economies and, more broadly, of societies. Economic approaches to understanding transit relations have focused on issues such as externalities caused by transit states (Yegorov & Wirl, 2009), dual pricing (Tarr & Thomson, 2004), relative bargaining power of suppliers and transit countries (Omonbude, 2007), and analysis of gas contracts (Pirani, 2009). While these studies have substantial value in demonstrating technical aspects of energy commerce, transit is often a political issue for Author Accepted Manuscript.
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