VZCZCXRO5435
RR RUEHAG RUEHAST RUEHBC RUEHDA RUEHDBU RUEHDE RUEHDF RUEHDIR RUEHFL
RUEHIK RUEHKUK RUEHKW RUEHLA RUEHLN RUEHLZ RUEHPOD RUEHROV RUEHSR
RUEHVK RUEHYG
DE RUEHIT #1014/01 3301418
ZNR UUUUU ZZH
R 261418Z NOV 07
FM AMCONSUL ISTANBUL
TO RUEHC/SECSTATE WASHDC 7696
INFO RUCNCIS/CIS COLLECTIVE
RUEHAK/AMEMBASSY ANKARA 7289
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNIRA/IRAN COLLECTIVE
RUEAIIA/CIA WASHDC
RHEHNSC/NSC WASHDC
RUETITH/ODC ANKARA TU
RHMFIUU/DEPT OF ENERGY WASH DC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 03 ISTANBUL 001014 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
EEB FOR A/S SULLIVAN 
EUR FOR DAS BRYZA 
SCA FOR MANN 
DO FOR HEGBURG 
USTDA FOR DAN STEIN 
 
REF: ANKARA 2720 
 BAKU 1049 
 
E.O. 12958: N/A 
TAGS: ENRG EPET AJ IR IZ KZ RS TU
SUBJECT:  Energy Secretary Bodman Meets with Turkish Energy Minister 
Guler 
 
Sensitive but Unclassified.  Please protect Accordingly. 
 
¶1.  (SBU) Summary:  On November 15, U.S. Energy Secretary Samuel 
Bodman met Turkish Energy Minister Hilmi Guler in Istanbul.  They 
reaffirmed the U.S.-Turkey strategic energy vision for the 
development of Caspian resources and delivery systems to bring them 
to market, including the Trans-Caspian pipeline.  Bodman informed 
Guler of progress within the U.S. government to approve the 
bilateral agreement with Turkey on the Peaceful Uses of Nuclear 
Energy.  Bodman urged Guler to move forward in negotiations with the 
Azeri government to purchase additional gas volumes.  Guler defended 
the pricing mechanism in the gas agreement with Greece and Italy, 
which is opposed by Azerbaijan, but said striking a deal with the 
Azeris was his "number one priority".  Guler reaffirmed his support 
for the U.S. Department of Energy-sponsored Clean Energy Conference 
to be held in January 2008 in Istanbul.  Guler sought and received 
U.S. support for Turkey's bid to host the World Energy Congress in 
¶2011.  Bodman reaffirmed U.S. support to bring the PKK to justice. 
Bodman reiterated USG policy on Iran and cautioned against energy 
deals with Iran.  End summary. 
 
------------------------ 
NEGOTIATING WITH AZERIS 
------------------------ 
 
¶2.  (U) Bodman noted the importance of Turkey as a transit state for 
natural gas to Europe.  He commended Turkey's helpful, pragmatic 
approach to the Baku-Tbilisi-Ceyhan oil pipeline opened in June 2006 
and recommended Turkey take a similar approach in negotiations with 
Azerbaijan for gas volumes for the Turkey-Greece-Italy pipeline. 
 
¶3.  (SBU) Guler said reaching an agreement on gas issues with 
Azerbaijan was his "number one priority".  Guler repeated arguments 
that we have heard before defending the transit terms of the 
Turkey-Greece-Italy intergovernmental agreement (reftel A) to which 
Azerbaijan, the key supplier, is not a party.  (Note: According to 
the agreement, Turkey will receive 15 percent of total gas transited 
from Azerbaijan to Greece at a "net back price".  Simply put, the 
price of gas would be calculated by the end delivery price minus the 
cost of transportation across Turkey.)  Guler went further than we 
have heard previously to defend his position.  He said that Turkey 
had consulted and received agreement from both Ilham and Natiq Aliev 
(Azerbaijan's President and Energy Minister, respectively) before 
completing the intergovernmental agreement.  This assertion is 
refuted by Embassy Baku reporting in reftel B.  Guler claimed that 
EU Energy Commissioner Piebalgs also approved of Turkey's net-back 
pricing scheme.  Guler said he was hopeful a gas-supply agreement 
with the Azeris could be reached soon.  Bodman said he would not 
weigh in on the details of the commercial arrangements but said he 
hoped negotiations could be concluded swiftly. 
 
--------------------------- 
TURKEY'S NUCLEAR AMBITIONS 
--------------------------- 
 
¶4.  (SBU) Bodman told Guler that on November 15, he and Secretary 
Rice had recommended to the President to forward to Congress the 
bilateral agreement with Turkey on the Peaceful Uses of Nuclear 
Technology (also know as the "123 Agreement").  Bodman explained 
that once the agreement reaches Congress a 90-day clock begins, and 
if Congress does not act, the agreement takes force. 
 
¶5.  (SBU) Guler said the development of nuclear power wll help meet 
Turkey's growing demand for energy. He thanked Bodman for the good 
news on the 123 greement and said he was looking forward to U.S.company investment in Turkey's civilian nuclear poer sector.  In 
response to Secretary Bodman's invtation to join the Global Nuclear 
Energy Partnerhip (GNEP), Guler said Turkey would consider theoffer and was looking favorably toward joining. 
 
--------------------------------------- 
TURKMAN GAS AND TRANS-CASPIAN PIPELINE 
--------------------------------------- 
 
ISTANBUL 00001014  002 OF 003 
 
 
 
¶6.  (SBU) Bodman relayed some of the details of his meeting with 
Turkmen President Berdimuhamedov on November 14 (septel) to Guler. 
Bodman said a Trans-Caspian pipeline (TCP) would benefit 
Turkmenistan, Turkey and the broader region.  He said the Turkmen 
president listened to the merits of the project but appeared 
"reticent" to make a commitment to its development.  Bodman urged 
Guler personally to become more engaged with Turkmenistan and help 
to develop the TCP. 
 
¶5.  (SBU) Guler agreed and noted that Europe needs Turkmen gas at 
least as much as Turkey.  He said a delay in developing this source 
encourages "other sources" (we believe he meant Russia) to continue 
to increase market share.  Guler said that in addition to 
Turkmenistan, Turkey sees Iraq and Azerbaijan as important gas 
suppliers.  He said that all three countries need investment to 
realize the additional volumes demanded by consumers.  He added the 
U.S. could play a major role in getting any one of these three 
countries to move up their timeline for gas field development. 
Guler urged more U.S. involvement in regional gas development and 
recommended countries in the region send presidential delegations to 
Turkmenistan to impress upon them the importance of increasing gas 
output.  He said Turkey would do this.  He hinted that Russia and 
Iran are competitors in the same market and are waiting to see what 
projects materialize before making their decisions on increasing gas 
supply to Europe.  Guler said Russia is still considering building a 
"Blue Stream II" (a pipeline that would bring natural gas from 
Russia to either the Balkans or Israel through Turkey).  Guler said 
Turkey is continuing to develop its plans with Israel to build a 
so-called "peace pipeline" that would bring oil, gas, water, 
electricity, and fiber optic cables to Israel.  (Note: According to 
preliminary feasibility studies conducted by Calik Energy, oil and 
gas pipelines are more profitable than water and electricity. 
Telecommunications has not yet been studied.) 
 
------------------------ 
CLEAN ENERGY CONFERENCE 
------------------------ 
 
¶6.  (U) Guler reaffirmed his support for the Department of Energy's 
Clean Energy Conference, which is scheduled to take place in 
Istanbul at the end of January.  He said he would like to establish 
some joint working groups on energy efficiency and energy savings. 
Bodman said we would be happy to share information with the Ministry 
of Energy.  He also invited Guler or others from the Energy Ministry 
to Colorado to visit the U.S. Department of Energy's Renewable 
Energy Laboratory that is doing research on solar, wind and 
biofuels.  Bodman also proposed inviting experts from this lab to 
participate in the conference in January. 
 
---------------------- 
WORLD ENERGY CONGRESS 
---------------------- 
 
¶7.  (U)  Guler requested U.S. support for Turkey's candidacy to host 
the World Energy Congress in 2011 in Istanbul.  The vote will take 
place in Uruguay at the end of November.  Bodman said we would be 
supportive. 
 
---------------------- 
PKK AND WAR ON TERROR 
---------------------- 
 
¶8.  (SBU) Bodman thanked Guler for Turkey's steadfast support in the 
War on Terror.  He noted U.S. designation of the PKK as a terrorist 
organization and pledged U.S. government support to "bring the PKK 
to justice".  Guler responded that terrorism knows no national 
boundaries and that Turkey and the U.S. are acting together to fight 
it. 
 
----------------- 
CAUTIONS ON IRAN 
----------------- 
 
ISTANBUL 00001014  003 OF 003 
 
 
 
¶9.  (SBU) Secretary Bodman reiterated to Minister Guler the U.S. 
policy on Iran and expressed concerns about Turkey's energy 
agreement with Iran.  The Secretary noted that Iran was not a 
reliable partner and cooperating with them could create problems for 
Turkey in the long term.  Guler acknowledged that the GOT was aware 
of and respected U.S. concerns, but noted that Turkey must have 
alternatives to meet increasing demand in the future. 
 
¶10. (U)  This message was cleared by Secretary Bodman.