Tag: Energy

  • EC recommends EU to open negotiations with Turkey on energy

    EC recommends EU to open negotiations with Turkey on energy

    EC recommends EU to open negotiations with Turkey on energy

    EC said Turkey would be connected to European Union’s (EU) energy network soon, and could become the main center in natural gas.

    The European Commission (EC) recommended on Tuesday member states to open negotiations with Turkey on energy.

    The commission sent a statement to member states and European Parliament, asking member states to make progress with Turkey in energy chapter, which was blocked by the Greek Cypriot administration.

    EC said Turkey would be connected to European Union’s (EU) energy network soon, and could become the main center in natural gas.

    Turkey could become an important transit country in natural gas supply to the union, the commission said.

    The commission said progressing in Turkey’s full membership to Energy Community Treaty and opening accession talks on energy would help boost cooperation and create a firm framework in natural gas transportation via Turkey.

    The EC also said Turkey’s full membership to Energy Community Treaty was set as a short term priority.

    Turkey, which has been an observer member to the Energy Community Treatment–established by EU and Balkan countries in 2006, expects the EU to open negotiations on energy before taking a step for full membership.

    27-member EU, Albania, Bosnia and Herzegovina, Croatia, Macedonia, Serbia, Montenegro, Kosovo, Moldovo and Ukraine are party to the treaty.

    Energy Community Treaty provides for the creation of an integrated energy market (electricity and gas) between the European Community and the contracting parties.

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  • Unlike European countries, LPG is a popular type of fuel in Turkey

    Unlike European countries, LPG is a popular type of fuel in Turkey

    Unlike many European countries, LPG is a very popular type of fuel in Turkey. The Turkish LPG market ranks 14th in the world (1.5% of worldwide consumption in 2009) and 2nd in Europe, trailing only Russia. In 2010, LPG consumption stood at an estimated 3.68mn tons, representing 17.8% of total fuels consumed in Turkey. 85% of the LPG that reaches the Turkish consumer is imported, coming mostly from Algeria, Kazakhstan, Russia, Norway and Nigeria. The segmental split of LPG consumption in 2010 was 68% auto-LPG, 29% cylinder LPG and 3% bulk. Aygaz maintained its market leadership position in 2010, with 1.04mn tons of LPG sold and an overall market share of 29%. Aygaz services the Turkish market with the Aygaz and Mogaz (100% subsidiary) brands.

    Auto-LPG had a 13.6% share of the total 18.4mn tons in automotive fuels sold in 2010, marking a record level. Below we illustrate the development of the composition of automotive fuels in Turkey.

    In the period from 2000 to 2010, the popularity of auto-LPG has grown substantially, recording a CAGR of 6.9%. This was mainly driven by the cost advantage of LPG over the other fuel types, especially gasoline. While gasoline demand was more than 118% higher than that of auto-LPG in the 2000, consumption of both fuel types was nearly equal in 2009. In 2010, auto-LPG demand clearly surpassed that of gasoline. The cost advantage of auto-LPG over gasoline stems from the difference in the tax treatment of the two products, while LPG as a commodity is in fact more expensive. While the annual average taxes (special consumption tax plus VAT) applied to gasoline was TRY 2.47/ liter in 2010, it was TRY 1.8/liter for low-sulfur diesel, TRY 1.71/liter for rural diesel and TRY 1.06/liter for auto-LPG.

    The Turkish auto-LPG market is dominated by the large fuel retailers. With 578,000 tons sold and a market share of 23% in 2010 (4.7% is attributable to Mogaz), Aygaz is the market leader, followed by Petrol Ofisi, Shell and BP. At the end of 2010, Aygaz had a total of 1,226 auto-LPG dealers across Turkey.

    The growth in auto-LPG over the past 10 years, however, was not enough to compensate for the deterioration in the demand for other LPG segments, namely cylinder and bulk LPG. As can be seen in the graph below, auto-LPG sales have grown strongly since 2001, while both cylinder and bulk LPG have seen a sharp decline in consumption. This has led to a slight drop in overall Turkish LPG consumption, from 3.8mn tons in 2000 to 3.7mn tons in 2010. Going forward, we expect the trend from the past to continue, with the demand for bulk LPG reaching a floor and cylinder LPG consumption contracting further, albeit at a slower rate. We are optimistic on the future development of auto-LPG and project its demand to gradually increase. Overall, we reckon with a CAGR of 1.6% in the Turkish LPG consumption for 2010-15.

    Consumption of cylinder LPG has fallen from 2.13mn tons in 2000 to 1.1mn tons in 2010, recording a negative CAGR of -6.7%. The reason for the contraction is that LPG cylinders as an energy source have increasingly been substituted for by natural gas, as it is cheaper, the taxes are lower, the natural gas infrastructure has been expanded in Turkey and the average income has risen, making initial conversion costs more easily affordable. In 2010, Aygaz (incl. Mogaz) had a market share of 39% with 409,000tons of cylinder LPG sold.

    In March 2011, Aygaz announced that it purchased the usage rights of cylinder gas dealership agreements and associated licenses from Totalgaz for TRY 36mn. The deal is dependent on the approval of the Competition Board. Adding Totalgaz’s market share of 4.5% to that of Aygaz results in a dominating 42%-43% share (adjusted for overlaps) of the cylinder LPG market for the latter.

    The enormous increase in natural gas sales by BOTAS, the Turkish state owned natural gas pipeline operator, since the late 1980s shows the commodity’s growing popularity in Turkey. As described above, cylinder LPG and bulk LPG sales have contracted by a negative CAGR of -6.7% and -20.0%, respectively, from 2000 to 2010, while BOTAS’ natural gas sales recorded CAGR of 8.0% over the same period. As natural gas is a substitute for LPG, its growth was the main reason for the deterioration of cylinder and bulk LPG sales figures. The graph below shows the growing popularity of natural gas in Turkey (BOTAS only).

    For the future, we believe that the trends of the recent past will remain in place. Our estimates are based on a steady escalation of natural gas sales, despite the crisis-related drop in 2009 and 2010, at the cost of cylinder and bulk LPG consumption. Thus, both of these LPG segments will be of little attractiveness for Aygaz and other distributors looking for sales growth. However, the opposite is true for auto-LPG, which we forecast to retain its popularity, due to its cost advantage compared to other fuel types, and therefore expect to remain on its growth path.

    Source : bne

    via Balkans.com Business News : Unlike European countries, LPG is a popular type of fuel in Turkey.

  • Turkey’s green movement struggles to be heard

    Turkey’s green movement struggles to be heard

    On May 31st, Metin Lokumcu, a 54-year-old retired teacher, collapsed and died after being tear-gassed and allegedly kicked by police during a protest in northeast Turkey. He was demonstrating against the government-backed construction of dams and hydroelectric plants in the pristine mountain valleys of the Black Sea coast.

    ”]The crowd had gathered in the town of Hopa to oppose a visit by Prime Minister Recep Tayyip Erdogan ahead of Turkey’s June 12th general election. Though they represented a disparate array of causes, the issue of the dams was a key grievance. “Water is a right — it cannot be sold”, one banner read.

    Environmental activists claim that Lokumcu’s death and the protests in Hopa show that Turkey’s green movement — often ignored, derided, and vilified by the government — is becoming louder and angrier.

    “What happened in Hopa is certainly going to change the scale of activism against hydroelectric plants and dams in Turkey,” said Guven Eken, chairman of the Turkish NGO, the Nature Association.

    Turkish ecologists have had a lot to worry about in recent months. Top of the list is the government’s plan to pass a new nature law that could threaten up to 80% of protected land to clear the way for 2,000 new hydro plants.

    Though experts say the technology exists to build eco-friendly plants, the government has put few restraints on the private developers carrying out the projects.

    Some worry that Erdogan’s planned third bridge over the Bosphorus, as well as his recently unveiled project for a canal joining the Black Sea and Marmara Sea could decimate forest outside Istanbul, jeopardizing the city’s main fresh water source.

    Energy Minister Taner Yildiz appeared to sum up the government’s attitude towards environmental fears when he said that staying single posed a greater health risk than nuclear energy.

    The problem, activists say, is that while countless Turks are seduced by the government’s vision of bold, relentless development, few worry about the environmental consequences.

    “It’s much too early for that,” said Cengiz Aktar, a political scientist at Istanbul’s Bahcesehir University, told SETimes. “Turks are still discovering the consumer society, they are eager to buy more of everything. It’s very difficult to raise consciousness about environmental damage.”

    In few places is the devastation of Turkey’s environment clearer than in the town of Dilovasi, an hour outside Istanbul.

    More than 150 factories are haphazardly jumbled among a population of 45,000, including dirty, heavy industries such as scrap metal resmelting and paint and petrochemical manufacturing. Because of air pollution, the town’s cancer death rate is nearly triple the national average.

    In 2006, a parliamentary commission recommended that Dilovasi be declared a “sanitary disaster zone”. But authorities have done little since then to clean up the town’s polluting industries.

    But even here, where residents blame the government for not cutting the deadly pollution, many are still won over by the record of breakneck economic development credited to the AKP.

    “In spite of what’s going on here, I can make no insult against them,” said 66-year-old retired metalworker Tahsin Karadag. “They have brought Turkey to where it is today.”

    Eken fears that when Turks wake up to the environmental cost of economic progress, it could be too late.

    “Right now, it’s only the people directly affected by the loss of environmental assets who care, and most people are not directly affected yet,” he said. “Eventually people will understand. The government’s policy is to convert natural assets into cash — this is not a sustainable way of growing our economy.”

    This content was commissioned for SETimes.com.

     

  • Turkey’s Great Leap Forward risks cultural and environmental bankruptcy

    Turkey’s Great Leap Forward risks cultural and environmental bankruptcy

    Turkish government’s rush to build dams, hydro and nuclear power plants angers villagers and environmental campaigners

      • Fiachra Gibbons and Lucas Moore in Ankara
      • guardian.co.uk, Sunday 29 May 2011 18.56 BST
      • Article history
      • Tigris River and ancient city of Hasankeyf, Batman Turkey. Image shot 2007. Exact date unknown.

        Work was halted on a massive dam project in Hasankeyf three years ago after the ancient city was flooded. Campaigners fear the government will go ahead with the dam regardless. Photograph: Alamy

        Every springtime Pervin Çoban Savran takes her camels and sheep up into the Taurus mountains of southern Turkey, following the same routes along the Goksu river that Yoruk people like her have taken for more than 1,000 years. To many Turks these last nomadic tribes are symbols of the soul of their nation.

        Their way of life – and that of millions of small farmers – is being threatened by Turkey’s Great Leap Forward, one of the most dramatic and potentially devastating rushes for economic development and prosperity Europe has seen in decades.

        Thousands of dam and hydropower schemes are being built on almost all of the main rivers in a pharaonic push to make Turkey a world economic power by the centenary of the republic in 2023.

        The ruling AK party, expected to win a record third term in next month’s elections, is forcing through a series of gigantic public works projects that include three nuclear power plants – despite Turkey being one of the most seismically active nations on earth.

        The first plant, a prototype Russian reactor on the Mediterranean coast near the port of Mersin, is close to a highly active faultline. A second, Japanese-built, plant will soon follow on the Black Sea near the city of Sinop.

        Prime minister Recep Tayyip Erdogan raised eyebrows across the world last month by promising to cut a 40-mile canal between the Black Sea and Marmara to relieve the dangerously overcrowded Bosphorus strait, an idea even he calls his “crazy plan”.

        He has since topped that by revealing a blueprint for two new cities to relieve earthquake-prone Istanbul. Critics say they will only further extend Europe’s largest megalopolis, home already to nearly 17 million people.

        It is Erdogan’s declaration that Turkey’s rivers must no longer “run in vain” and 100% of its hydroelectric potential be harnessed over the next 12 years that has environmentalists most worried. They claim that the rush for hydropower is likely to be even more damaging to Turkey’s delicate ecological balance, where desertification and depopulation are already problems.

        Hundreds of private companies have been given extraordinary latitude to evict villagers, expropriate private land, clear state forests and steamroller normal planning restrictions to meet the target of 4,000 hydroelectric schemes by 2023. Protestors claim licences have been granted on highly favourable terms, guaranteeing investors four decades of clear profit.

        The Turkish Water Assembly, an umbrella group researching the impact of the push for more power, argued that 2 million people could be displaced by the hydropower schemes alone. They accuse the government of riding roughshod over human rights, and Turkey’s commitments to preserving its extraordinary biodiversity and cultural heritage, in the name of energy security.

        Campaigners fear Ankara is also determined to press ahead with the massive Ilisu dam project on the Tigris river, which was halted three years ago after an international outcry over the flooding of the ancient city of Hasankeyf.

        The Ilisu dam is dwarfed by the $4bn Beyhan project on the Euphrates, also in the Kurdish south-east, where fears of the forced evacuation of the local population evokes bitter memories of the mass clearances of Kurdish villagers by the Turkish army during the war with the Kurdish separatist PKK in the 1980s.

        Demonstrators intent on converging on Ankara from five corners of the country are still being prevented from reaching the capital after a week-long standoff with riot police outside Ankara. Many, like the Yoruks, had been walking for two months as a part of the Great March of Anatolia, a movement sparked by anger at the hydro plans but which has come to embody growing anxiety that the country is being despoiled in the rush for growth.

        While the neo-liberal reforms of the moderately Islamist AK party have been credited with firing the country’s runaway growth, the gulf between the rich and poor has widened dramatically, and corruption has increased.

        The Turkish government insists it must act radically to safeguard the decade-long boom, with growth this year predicted to top 7% despite the worldwide downturn.

        Energy, however, is the achilles heel of the so-called Anatolian tiger, with industry heavily dependent on imported gas from Russia and Iran. Despite making itself the hub of a network of pipelines serving Europe from Russia, Central Asia and Iran, Turkey is even more at the mercy of Moscow and Tehran – a fact dramaticallydemonstrated four years ago when Iran turned off the tap and sent fuel prices in Istanbul soaring overnight.

        Erdogan has so far been withering of critics of his Great Leap Forward, accusing them of holding Turkey back. He argued that the hydro projects will bring thousands of jobs to the underdeveloped east, irrigate barren land and reverse the wave of migration to the more prosperous west.

        “All investments can have negative outcomes,” he said. “But you can’t give up just because there can be some negative outcomes. We cannot say that there will be no earthquake, but we will take all the precautions.”

        After the Fukushima disaster in Japan, his energy minister Taner Yildiz caused consternation by claiming that nuclear power was no more dangerous than staying single, citing studies showing married people tend to live four years longer. Alcohol and smoking posed more danger than nuclear power, he claimed, prompting comparisons with former president Kenan Evren’s claim after Chernobyl that “radiation is good for the bones”.

        Tourism minister Ertugrul Gunay appeared to break ranks, warning that “if the hydroelectric energy projects are carried out in a reckless manner, cutting out each brook, levelling each mountain and destroying forests just to be able to produce a few watts of energy, tourism would be an impossible dream”, particularly in the Black Sea region.

        His comments came as laws were being drafted to allow nature reserves to be handed over for hydroelectric projects. Still more worrying to campaigners has been the official reaction to the legal morass the plans have created, with almost 100 lawsuits filed in the last two years. Of the 41 cases so far heard, judges have halted 39. Work has often continued in defiance of the courts with the protection of police and gendarmerie.

        Each hydro scheme is allowed to take 90% of the water out of a section of river, leaving the remaining 10 % as “lifeline support”. After the water travels through the turbines, it is returned to the river, but farmers say much of the water is either lost, polluted or has had the “life taken out of it”.

        For Yoruks such as Pervin Çoban Savran it is their very survival that is in question. “Nobody in parliament has shown any interest in our cause,” she said. “They don’t love life, only money. These dams are bringing about our end. Our culture is being destroyed.”

        Hydroelectric projects on the tributaries of the Goksu river have already severelydamaged traditional pastures, she said. “It has affected us very quickly. But in the end, everyone else will suffer too.”

        ‘They want to turn us into slaves’

        “They killed me when they took my land,” said Sinan Akçal, a tea grower from the spectacular Senoz valley on the Black Sea. He has watched his local court order the cancellation of the hydropower project his land was expropriated for no less than three times. But each time the Turkish environment ministry, which originally rubber-stamped the project without an environmental impact assessment, overrides the court ruling – and work on the dam continues.

        In the meantime, large swaths of forest above the valley have been felled, triggering landslides and soil erosion.

        “They’ve taken my land and they’ve offered me 15,000 lira [£5,800]. I didn’t take it, and I won’t take it,” said Akçal, 54. “They just want us to go to the cities and turn us into slaves. But what does 15,000 lira get you in a city? In a year the money will run out.

        “Where I come from, people don’t have a lot of arable land, but we grow corn, potatoes, tea and vegetables and we have everything we need. I don’t need huge amounts more of electricity, it is not going to benefit us. My mother is 84, and she can’t live anywhere else.”

        He added: “The talking is going nowhere. Again and again we went to court – again and again the courts sided with us. But they didn’t stop, they just kept on working, cutting trees, dirtying the water. In total we have counted 25,000 dead fish in our stream.”

  • İstanbul to become world center for hydrogen energy

    İstanbul to become world center for hydrogen energy

    In late April, PM Erdoğan publicly announced the details of his long-anticipated crazy project, Kanal İstanbul, saying the government would create a new Bosporus in İstanbul.
    In late April, PM Erdoğan publicly announced the details of his long-anticipated crazy project, Kanal İstanbul, saying the government would create a new Bosporus in İstanbul.

    The İstanbul Strait will become the world’s most important center of hydrogen energy if the construction of a second canal that has been publicized by Prime Minister Recep Tayyip Erdoğan as a “crazy project” actually happens.

    If the tankers use the canal for transportation, the traffic in the Bosporus will be minimized, and the sea flow in the strait will be used for the generation of hydrogen energy. Before the announcement of the Kanal İstanbul project, the International Center for Hydrogen Energy Technologies (ICHET) founded by the United Nations Industrial Development Organization (UNIDO) in Turkey in 2003 was planning to generate electrical energy out of the flow in the Bosporus.

    However, the project was never implemented because of the heavy traffic in the Bosporus and a lack of infrastructure. In case the project is actually implemented, UNIDO-ICHET will station a turbine on a submarine in Arnavutköy-İstanbul to start generation of electricity. The center authorities who concluded that the magnitude of the undersea flow is sufficient for generation of electricity will produce 20 kilowatts of electricity by a generator to be installed on a platform in the strait.

    The turbine that will generate electricity will produce energy out of the flow eight meters below the surface. Subsequent to the move of the traffic load to Kanal İstanbul, the project will be fully implemented for effective use of the flow. During the initial stages, electrical energy will be generated out of the undersea flow from the Black Sea to the Marmara Sea along the Bosporus Strait.

    By using this energy, the seawater purified of ions will be electrolyzed to produce hydrogen. The generated hydrogen will be stored under heavy pressure. The high-pressure hydrogen will be used as fuel in an internal combustion engine to produce mechanical energy that will be transformed into electrical energy for future use. On the other hand, the high-pressure hydrogen will also be filled in tanks for end-use. Use of this sort of energy will help combat environmental degradation because it does not produce exhaust gas.

    The biggest handicap with hydrogen energy despite it being renewable, sustainable and highly efficient as well as environment-friendly is lack of the necessary technological infrastructure, and its excessive cost. Current projections note that Europe will completely abandon oil and natural gas as energy sources and embrace hydrogen energy in 2030, whereas this will be the case in the entire world by 2070.

    Turkey believes that it seized a chance to become a world center of hydrogen energy after the making of a deal envisaging establishment of an international center for hydrogen energy technologies in Turkey in Vienna in 2003. The UN picked Turkey over China, Japan, Canada and Norway as the host country of the center in 2004; the center has done remarkable work to fulfill its mandate over the past years.

    The center, which was assigned the task to ensure information flow between developing and developed countries in respect to the development of hydrogen technologies, install pilot facilities operable by hydrogen energy, identify hydrogen energy policies and produce fuel batteries and deal with environmental affairs, storage techniques, transport systems and applications for vehicles, has successfully completed some pilot projects so far.

    The center, set to implement a hydrogen-run three-wheel vehicle project in India, a hydrogen island project, hydrogen-run marine vehicle project in Turkey and production of hydrogen out of solar energy project in Libya, seems to have made visible progress in respect to hydrogen technology and storage.

    One of the biggest projects of the center was launched on Feb 16. ICHET decided to launch the first hydrogen filling facility in Eyüp-Feshane.

    A hydrogen filling station that generates hydrogen by use of electrolysis, a first in Turkey, will be constructed by Hydrogenics, a leading company in the sector specialized in generation of hydrogen and fuel cells. Turkey’s first hydrogen filling station will meet the fuel needs of the land and sea vehicles.

    The station, the only station in the world that will offer hydrogen filling services for both land and sea vehicles, will also address the needs of special vehicles operated by hydrogen technology. The hydrogen filling operation will be performed under 350 bar pressure. After the launch of the station, Turkey will become one of the countries with a hydrogen station in Europe after Norway, Iceland and Germany.

    ICHET also placed orders for bus and automobiles for use in the hydrogen station that will be in service by the end of 2011. The first tender will be held in the days to come. On the other hand, the first hydrogen-run boat in Turkey is being constructed in the Tuzla shipyards. The project, ordered by Istanbul Seabus Enterprise (IDO), is being implemented jointly with Istanbul University.

    The project attracts attention of Japanese and Korean firms

    Turkey’s works on hydrogen energy has attracted a great deal of attention from countries in the Far East. Japanese automobile firm Mazda has decided to introduce its RX-8 Hydrogen RE cars, offered for sale in Europe last month, to the Turkish market. Hyundai also reportedly is getting ready to offer its Tucson cars for sale in Turkey. Reports also indicate that the authorities are holding meetings and negotiations with some firms in Hungary for purchase of hydrogen-operated buses that will be mainly used at the airports.

    The center’s ambitious projects include meeting the energy needs of an entire island using hydrogen technology, as 1,000 houses in Bozcaada will be heated and illuminated by hydrogen energy, while 60 vehicles on the island will also use hydrogen for fuel. A similar project will be implemented on Sedef Island as well. Another project will ensure that the entire energy needs of a hospital in Ankara are met by hydrogen energy. Within the project, hydrogen energy will be used for all battery-operated wheelchairs. Moreover, hydrogen technology will be used as source of fuel for information-based sectors because of its ability to provide uninterrupted energy.

    Boron for storage safety

    UNIDO-ICHET also launched joint projects with the Turkish Boron Institute to minimize the danger associated with the storage of hydrogen energy. To this end, boron will be used as a hydrogen carrier. When used in the vehicles, hydrogen remains under 350 bar pressure. This poses a great danger for vehicles; for this reason, this project was drafted for implementation jointly with the Boron Institute. The boron is able to store hydrogen in the form of sodium borohydride (NaBH4). This way, it becomes possible to use hydrogen by reliance on a simple chemical process.

  • Oil Spike May Take a While to Punish Energy-Hungry Turkey

    Oil Spike May Take a While to Punish Energy-Hungry Turkey

    By Joe Parkinson

        Adem Altan/AFP/Getty Images     An employee made a routine check at a natural gas control center of Turkey’s Petroleum and Pipeline Corporation, west of Ankara, Turkey.
    Adem Altan/AFP/Getty Images An employee made a routine check at a natural gas control center of Turkey’s Petroleum and Pipeline Corporation, west of Ankara, Turkey.

    ISTANBUL — Pundits in the U.S. regularly bemoan America’s “addiction to foreign oil” — but for a more unlikely energy addict, take a look at Turkey.

    Turkey imports 87% of its petrol, 85% of its coal and a whopping 97% of its natural gas, meaning that when energy prices rise, the economy is exposed. So this year’s 20% gain in oil prices propelled by the wave of unrest sweeping the Middle East should have set the alarm bells ringing in Ankara.

    But analysts at BGC capital partners say financial pain from spiralling oil is likely to take at least a year to fully feed through to Turkey’s real economy. That gives policymakers here valuable breathing room before national elections scheduled for June. But it also suggests that Turkey’s fast-growing economy could next year face a painful inflation spike and a further deterioration of its gaping current account deficit.

    In a research note published Wednesday, BCG calculates that Turkey’s energy addiction cost it $91 billion last year, or 12.4% of gross domestic product. As a consequence, the economy’s dependence on energy imports means that for every $10 rise in Brent crude, Turkey’s growth will be reduced by up to 0.5%.

    Turkey’s rapidly growing economy, which expanded 8.9% last year, could perhaps afford a little deceleration. Record low inflation in February and gradually falling unemployment underline the economy’s strong rebound from recession. But BCG research says surging oil prices could next year shock output, stocks and confidence. More troubling for Tukey’s policymakers: a sustained oil spike would further pressurize Turkey’s current account deficit — the achilles heel of the rapidly-growing economy.

    Turkey’s current account deficit widened 247% to a record high of $48.6 billion last year as domestic demand boomed and imports dramatically outpaced exports. The swelling deficit has fed market concern that the economy could be exposed to a hard landing if external financing for the deficit dries up; fears that have been magnified by the high ratio of speculative investment, or hot money, used to finance the current account gap, which could quickly flee Turkey if sentiment turns negative.

    BCG isn’t the only economic research house warning that spiking oil could aggravate Turkey’s imbalances. Neil Shearing, emerging markets economist at Capital Economics calculates that every $10 rise in the price of oil would add $6 billion — or 12% of the 2010 total deficit — to the funding gap.

    But Shearing also stresses that Turkey’s persistently strong economic data is suppressing market concern over the current account, sending stocks rising in recent weeks and pushing the Lira to a near-four month year high on Wednesday.

    “Turkey’s one of the big losers from higher oil prices, and everyone knows (the current account) is a risk. Its like we’re waiting for a trigger — I thought the middle east turmoil would be that trigger but it hasn’t been yet,” he said.

    Turkey’s policy makers may be hoping for a more benign outcome — where a steadily rising oil price eats into household incomes, gradually helping to rein in booming consumer spending and moderate the current account deficit.

    via Oil Spike May Take a While to Punish Energy-Hungry Turkey – New Europe – WSJ.