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PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSL RUEHSR
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). 
 
¶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 
 
           "Visit Ankara's Classified Web Site at http://www.intelink.s 
gov.gov/wiki/Portal:Turkey"