6 BYZANTINE ENERGY POLITICS: THE COMPLEX TALE …
169
the post-2008 crisis raised questions about the benefits and relevance
of EU membership for Turkey and reduced the external pressures for
sustaining the reforms. The loss of this external pressure allowed the AKP
governments to reverse course on the neoliberal structural reforms of the
previous period and embark on a more centralized economic management model where political interests would reign supreme and steer
energy policy more in favor of fossil fuel, nuclear and large-hydropower
development.
By the end of the 2000s, AKP governments were ready to reestablish
authority over the market to appropriate a larger share of the energy rent,
which could be used to finance their widespread clientelistic networks that
proved vital to their political survival. 55 Resources created and controlled
by regulatory agencies, such as the price of electricity, energy production permits, imposition of fines in cases of noncompliance, were seen as
too valuable as political tools to be handed over to independent agencies
beyond the control of politicians. 56 One of these independent agencies, the EMRA, became subject to increasing political intervention. As
government’s influence on EMRA grew, so did the spontaneous and
arbitrary revisions to licensing procedures and price mechanisms that
advantaged certain energy projects over others.
The delay and continuing failure to reduce the state monopoly on
natural gas imports and pricing can be seen as another example of politicians’ reluctance to give up regulatory power and economic rents. The
2001 Natural Gas Market Law was designed to liberalize the natural gas
sector and break the monopoly of the state-owned company, BOTAS,
which was responsible for all crude oil transportation, as well as transportation, distribution, import, storage, marketing, trade, and pricing
of natural gas. While the privatization of downstream activities—distribution and transmission—proceeded as planned, progress on reducing
BOTAS’ share in natural gas imports to 20% of the country’s total
consumption and unbundling the company’s upstream activities into
separate trading, transmission, and storage companies has been painstakingly slow. 57 Several legislative drafts have been prepared in the past
several years; however, a firm timeline for the enactment of the amendment to further liberalize gas imports and restructure BOTAS has yet to
be established. BOTAS continues to dominate wholesale gas imports with
a market share of about 82% of annual consumption while eight private
companies account for the balance. 58 With such a dominant market position, BOTAS also controls natural gas prices and keeps them artificially
169
the post-2008 crisis raised questions about the benefits and relevance
of EU membership for Turkey and reduced the external pressures for
sustaining the reforms. The loss of this external pressure allowed the AKP
governments to reverse course on the neoliberal structural reforms of the
previous period and embark on a more centralized economic management model where political interests would reign supreme and steer
energy policy more in favor of fossil fuel, nuclear and large-hydropower
development.
By the end of the 2000s, AKP governments were ready to reestablish
authority over the market to appropriate a larger share of the energy rent,
which could be used to finance their widespread clientelistic networks that
proved vital to their political survival. 55 Resources created and controlled
by regulatory agencies, such as the price of electricity, energy production permits, imposition of fines in cases of noncompliance, were seen as
too valuable as political tools to be handed over to independent agencies
beyond the control of politicians. 56 One of these independent agencies, the EMRA, became subject to increasing political intervention. As
government’s influence on EMRA grew, so did the spontaneous and
arbitrary revisions to licensing procedures and price mechanisms that
advantaged certain energy projects over others.
The delay and continuing failure to reduce the state monopoly on
natural gas imports and pricing can be seen as another example of politicians’ reluctance to give up regulatory power and economic rents. The
2001 Natural Gas Market Law was designed to liberalize the natural gas
sector and break the monopoly of the state-owned company, BOTAS,
which was responsible for all crude oil transportation, as well as transportation, distribution, import, storage, marketing, trade, and pricing
of natural gas. While the privatization of downstream activities—distribution and transmission—proceeded as planned, progress on reducing
BOTAS’ share in natural gas imports to 20% of the country’s total
consumption and unbundling the company’s upstream activities into
separate trading, transmission, and storage companies has been painstakingly slow. 57 Several legislative drafts have been prepared in the past
several years; however, a firm timeline for the enactment of the amendment to further liberalize gas imports and restructure BOTAS has yet to
be established. BOTAS continues to dominate wholesale gas imports with
a market share of about 82% of annual consumption while eight private
companies account for the balance. 58 With such a dominant market position, BOTAS also controls natural gas prices and keeps them artificially