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Rudaw

Analysis

Kurdistan Region: The new source of energy

By Paul Iddon 15/12/2015
Rudaw photo
Rudaw photo

Over a quarter of a century ago Turkey's former President Turgut Ozal dismissed the potential of a possible Iraqi Kurdish state saying that while, “It might have a little oil. It would be totally dependent on Turkey.”

Today oil from Iraq and Iraq's Kurdistan Region has been piped to international markets via Turkey. And it now seems Turkey itself is going to start purchasing the Kurdistan Region's natural gas in the near future.

Turkey gets most of its gas reserves (approximately 60%) from Russia. Consequently Moscow's threat's to place economic sanctions on Ankara over its downing of the Russian warplane last November 24 – and for its more general policies in Syria, which are diametrically opposed to Russia's – has reminded Turkey that it cannot afford to become heavily dependent economically on a major power which can in turn exert major pressure on it. Therefore it is seeking to diversify the sources from which it imports its much-needed energy.

One source will indeed be the neighbouring Kurdistan Region. Already, according to Bloomberg, Turkey is planning to build 180-kilometer gas pipeline from there. The Kurdistan Region is estimated to have up to 200 trillion cubic feet of natural gas in its territory and could therefore, with some development, become a major exporter of gas in addition to oil. Something which would give it an additional source of revenue at a time when making ends meet has become more difficult thanks to the eternal threat posed by Islamic State (ISIS) and the massive number of Internally Displaced Persons (IDPs) that autonomous region is presently providing with protection and shelter.

Especially since natural gas may well eclipse oil (whose price per barrel has decreased substantially since this time last year) in the coming years as the most profitable non-renewable natural resource. Remember the richest country in the world today is Qatar, a tiny sheikhdom whose wealth comes primarily from natural resources it exports. And the primary natural resource which Qatar is currently exploiting is its gas reserves, not oil.

In the long-term Turkey's reminder that it cannot be overly dependent on a single source for its energy needs should also serve as a reminder to the Kurdistan Region that becoming a rentier state may, in the long-term, render it more heavily dependent on those who purchase it resources and provide them with the capital necessary to purchase whatever goods and commodities it needs (the Kurdistan Region imports many of its commodities with one recent report indicating up to 90% of food in the region is imported rather than produced locally). Over-reliance on a natural resource for income has a long track record of undermining economic diversification in oil-rich countries. The oil-rich Arab states of the Persian Gulf, for example, routinely rank very low on economic diversification reviews carried out by the OECD.

While Turkey and the Kurdistan Region maintain quite cordial relations it’s important that the latter, like the former, doesn't become too dependent on Turkey to purchase its resources. To be truly independent, which is something the Kurdistan Region and most Kurds have long striven for, necessitates that sources of income be broadened. This will lessen the chance that either an independent or more autonomous Kurdistan Region will become too heavily dependent on anyone. After all dependency is the antithesis of independence, something which the Kurds abhor. No one wants to be completely dependent on anyone else and potentially pressured to conduct affairs a certain way as a result.

In appreciation of this the Kurdistan Region shouldn't forget that in the short-term its natural resources are a blessing which may well help it overcome the many burdens it faces today. But in the long-term over-dependence on those very same resources could, conversely, prove to be a curse for the Kurdistan Region and its people.

Paul Iddon is an Erbil-based journalist and political writer who writes on Middle East affairs. The views expressed in this article are those of the author and do not necessarily reflect the position of Rudaw.

Comments

 
kurt basar | 15/12/2015
It will be nice if they give the Ezidies their legitimate share of the money, which they will earn from the natural gas sale, and if they not fall into Sunnistan trap by digging more ditches between them & their Rojava brethren because of the Salafi Turkish cult.
M Gonzales
M Gonzales | 15/12/2015
With the wealth that your new natural gas reserve's will bring expect the power hungry and greed of those around said natural gas too come out. It never ceases too amaze me the ability of the Kurd too be their own worst enemy with divisions and your ability too hate rival Kurd factions or lust for power.
Brzoo Kurdi
Brzoo Kurdi | 15/12/2015
when i read this article, i say to myself Imagine how much Kurdish natural resources have been stolen through out history? what a unjust world we live in.
Nyaz | 16/12/2015
Dear Paul Iddon " Author", Thanks for your article, really it is interesting news, But Please: 1- can you let us know the source of the data's which talking about 200 trillion CUM natural gas as a reserve resource available in Kurdistan region territory ? 2- As per Wikipedia info's, the whole natural gas available in the world is around is 187 trillion CUM ? Wiki Link: https://en.wikipedia.org/wiki/List_of_countries_by_natural_gas_proven_reserves Please give us your comment for the info's. Thanks again for your efforts.
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