VZCZCXRO0797
RR RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHAK #1560/01 2411500
ZNR UUUUU ZZH
R 281500Z AUG 08
FM AMEMBASSY ANKARA
TO RUEHC/SECSTATE WASHDC 7293
INFO RUCNCIS/CIS COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHGB/AMEMBASSY BAGHDAD 1306
RUEHIT/AMCONSUL ISTANBUL 4667
RUEUITH/ODC ANKARA TU
RUEAIIA/CIA WASHDC
RHEHAAA/NSC WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEBAAA/DEPT OF ENERGY WASHINGTON DC

UNCLAS SECTION 01 OF 03 ANKARA 001560 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ENRG EPET IZ PREL TU
SUBJECT: TURKEY: SENATOR LUGAR DISCUSSES GEORGIA AND ENERGY 
 
¶1.  (SBU) Summary.  On August 26, Senator Lugar and 
delegation discussed the situation in Georgia, Caspian 
energy issues including Nabucco, Turkey's EU accession and 
other issues with President Gul, Foreign Minister Babacan 
and Energy Minister Guler.  The Senator also hosted a 
dinner for representatives from BP, Shell, Statoil and 
other energy experts to discuss similar matters.  All 
interlocutors warmly welcomed Lugar's visit.  Gul and 
Babacan emphasized the shared agenda and common approach 
the U.S. and Turkey share on key regional issues.  Gul and 
Babacan stated their support for Georgia's unity and 
territorial integrity.  They told Lugar that Nabucco 
continues to be a top foreign policy priority and that the 
GOT is working with Azerbaijan, Turkmenistan and Iraq to 
help secure gas supplies for the project.  Gul said 
skeptics calling Nabucco a "pipe dream" will be proven 
wrong.  Babacan emphasized Turkey's commitment to the EU 
accession process, which benefits Turkey even if it does 
not ultimately lead to membership.  End summary. 
 
Georgia 
------- 
 
¶2.  (SBU) President Gul expressed surprise by the August 26 
vote of the Russian Duma supporting Abkazia and South 
Ossetia independence although added the potential for such 
an action had long existed.  He told Senator Lugar he had 
spoken twice to Georgian President Saakashvili about this 
issue and expressed his strong support for maintaining 
Georgia's territorial integrity.  Lugar expressed gratitude 
to the President and FM for Turkey's humanitarian 
assistance to Georgia.  Energy Minister Guler speculated that 
the situation in Georgia may force the EU to make critical 
decisions about its future energy 
supply.  Guler added that U.S. decisions will be 
equally important for the development of the Caspian energy 
corridor. 
 
¶3.  (U) In his press availability at the Foreign Ministry 
and in a television interview, Senator Lugar said he 
appreciated Turkey's leadership in Iraq and Afghanistan and 
in providing humanitarian aid to Georgia.  He described as 
unhelpful Russia's recognition of Abkhaz and South Ossetian 
independence and underscored the U.S. commitment to 
Georgia's territorial integrity.  Asked about Turkey's 
"Caucasus Stability and Cooperation Platform" concept, he 
said he reserved judgment and noted that the U.S. had not 
been consulted before its announcement.  He suggested 
further discussion of the idea be postponed until Russia 
has withdrawn its troops to the status quo ante 
 
Nabucco a Top Priority 
---------------------- 
 
¶4.  (SBU) Gul and Babacan said enhancing the energy security 
of 
Turkey and its European allies is a key policy goal.  Turkey 
has consequently given priority to the Nabucco project to 
diversify and increase gas supply to both Turkey and Europe. 
Gul 
bemoaned rumors in some EU circles that Turkey has "lost 
interest" in Nabucco and asked Lugar to convey to European 
interlocutors Turkey's commitment to the project.  (Note: 
Lugar will travel to Bucharest, 
Budapest, Berlin and Brussels.)  Guler echoed Gul's 
sentiments on Turkish support for Nabucco and suggested 
slow progress could be attributed to European attention to 
"other projects" (comment: a likely allusion to South 
Stream). 
 
Caspian and Iraq Gas Needed for Nabucco 
--------------------------------------- 
 
¶5.  (SBU) Gul said developing new gas resources is key to 
Nabucco's success.  Turkey has spent considerable effort 
discussing this with Azerbaijan, Turkmenistan, and other 
Central Asian countries.  Turkey has worked hard to help 
build confidence between Turkmenistan and Azerbaijan and 
Gul claimed credit for the May 19 visit of Turkmen 
President Berdimuhamedov to Baku.  Guler said he would 
visit Baku, Ashgabat and Astana in the next few weeks to 
continue the dialogue.  Lugar praised in each of his 
meetings Turkey's leadership and cooperation with 
 
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Azerbaijan on BTC.  He said that he used a recent meeting 
with Azerbaijan President Aliyev to urge patience in 
finding a solution to meet the needs of both Turkey and 
Europe. 
 
¶6.  (SBU) Gul and Guler noted Iraq as a potentially 
important source of gas for Nabucco.  PM Erdogan's recent 
visit to Iraq focused on energy issues and Gul hoped there 
would soon be another US-Turkey-Iraq trilateral working group 
on natural gas.  Gul hoped the improvement in security in 
Iraq would lead to progress on energy issues.  Gul 
underscored the need for passage of 
an Iraqi hydrocarbon law and Guler called for USG 
assistance in expediting its passage. 
 
¶7.  (SBU) Lugar expressed appreciation for Turkey's 
continued leadership on energy issues.  Lugar praised BTC 
but also noted that its security remains a concern. 
Lugar asked Gul to speak more openly and frankly with 
Azerbaijan President 
Aliyev.  He added that Aliyev, in a recent conversation, 
Saiad that Turkey wanted to buy such large 
volumes of Shah Deniz Phase II gas that Azerbaijan's 
ambitions to sell gas to Europe could be dashed.  Lugar 
said Aliyev told him that without a route to Europe, Aliyev 
would consider selling gas to Russia. 
 
Private Sector Views on Energy 
------------------------------ 
 
¶8.  (SBU) Representatives from BP, Shell, Statoil and other 
energy experts discussed the policy and commercial dilemmas 
created by competition between Turkey,s growing energy needs 
and its desire to be a gas transit hub to Europe.  These 
experts said the key to improved Turkish and European energy 
security is developing new gas sources.  All agreed that 
Nabucco partners, the EU and the US should intensify 
efforts to make deals with Turkmenistan and Iraq. 
Participants unanimously see Iraq as a short to medium term 
solution due to its huge reserves and lack of Russian 
political influence.  While acknowledging current U.S. 
policy toward Iran, one expert argued that Turkey and Europe 
can not afford 
to overlook Iranian resources, the second largest gas 
reserves in the world.  Another expert quipped that 
negotiations with Iran are impossible, even without U.S. 
opposition and international sanctions.  On Georgia, some 
noted that, since the Russian invastion, the risk premium and 
therefore cost of building a new pipeline transiting Georgia 
will be greater, but no one saw this as the key determining 
factor as to whether the pipeline goes forward. 
 
Renewable Energy and Conservation 
---------------------------------- 
 
¶9.  (SBU) Guler said Turkey has set a goal of reducing by 
half its natural gas consumption by substituting solar, wind, 
and 
nuclear power and implementing energy efficiency and energy 
conservation programs.  Guler accused "some countries" of 
using natural gas as a political weapon and likened this to 
a military threat.  For Turkey, which currently generates 
half its electricity with natural gas and imports almost 
100% of its gas, this is a dangerous situation.  Guler said 
he welcomes U.S. investment in further developing Turkey's 
renewable sector and specifically called for cooperation 
and technology sharing on solar energy which he believes 
holds huge potential in Turkey.  Additionally, Guler said 
Turkey could benefit from U.S. experience in nuclear power 
and expressed his hope that an American firm would bid for 
the September 24 tender to build Turkey's first nuclear 
power plant.  Lugar welcomed the opportunity to share 
experience and deepen cooperation on these issues, and 
re-emphasized the point with FM Babacan. 
 
EU Accession 
------------ 
 
¶10.  (SBU) FM Babacan told the Senator the Turkish economy 
has been aided by the EU accession process and the 
predictability it affords.  Turkey is institutionalizing 
its democracy through this process, improving itself in 
areas such as food safety and environment.  Turkey is not 
 
ANKARA 00001560  003 OF 003 
 
 
desperate for EU accession.  When the process is complete, 
it believes EU members will see Turkey as an asset, but 
Turkey will have achieved Western standards either way. 
Babacan mused that five years ago, European concerns were 
that Turkey was too poor.  Then he heard that Turkey was 
culturally too different.  The fear in Europe 
now is that Turkey will be "too influential."  If Europeans 
want Europe to be a relevant, global power, they will 
admit Turkey.  Lugar expressed U.S. support for 
Turkey's EU accession process and said he would convey 
Babacan's vision and commitment to the EU process during 
his upcoming meetings in Brussels. 
 
The Global Food Crisis 
---------------------- 
 
¶11. (SBU) Senator Lugar discussed with FM Babacan the 
global food crisis and the need for innovation to address 
these issues.  He cited "GMO" seeds and noted how his own 
farm's productivity has grown three-fold, due to advanced 
farming techniques, since his father,s generation.  The 
Senator bemoaned trade barriers being erected around the 
world to secure national 
food supplies and suggested that the U.S. and Turkey could 
cooperate on promoting sound food policies.  Babacan said 
Turkey needs to improve its agricultural 
productivity and welcomed the opportunity to partner with 
the U.S. on agricultural issues. 
 
 
Visit Ankara's Classified Web Site at 
http://www.intelink.sgov.gov/wiki/Portal:Turk ey 
 
Visit Ankara's Classified Web Site at 
http://www.intelink.sgov.gov/wiki/Portal:Turk ey 
 
WILSON