From the State Hydraulic Works to the "Energy Works"

I remember writing in this column some time ago that you must not simply say "State Hydraulic Works" and move on. The administration of waters has always been the most important matter that makes a state a state. Indeed, the formation of the Asiatic-type centralized state rested largely on the large-scale organizations required by regulating water resources for agricultural lands. To carry out an organization on this scale, one needed, above all, a highly disciplined and coercive organization of human labor, and it was by this route that the centralized and despotic regimes in Asia came into being. At the very least, the Westerners' typology of the "Asiatic-type state" about the East rests on this kind of reading.

Süleyman Demirel, our 9th President, who came from the State Hydraulic Works, was someone who had also discovered very well the role of water resource management in contemporary politics. His forecasts each year about how politics would first of all be affected by the rainfall were famous. Rainfall would affect agricultural production, and this in turn the state of the economy. His political career, which began with his contributions to the development of dams in Türkiye, greatly nourished this outlook as well.

Today the management of the state rests more on the administration of energy than on the administration of waters. Energy has become the most important subject both of world politics and of every state's governing of its own people. Energy determines every area of our lives more with each passing day, and it also requires production that can meet an ever-increasing demand for energy. Rising demand for energy drives prices up too, but because it is so heavily demanded, the rising prices become the most important source of people's discontent with their own governments. Today the most important job of states has become almost the regulation of the production or supply of the economy and its consumption.

During his visit to Yeni Şafak, the Minister of Energy and Natural Resources, Mr. Fatih Dönmez, took the writers and executives of our newspaper on a very illuminating tour d'horizon of the problems the world and Türkiye face in energy policy. He presented data that are extremely promising regarding Türkiye's capabilities.

Yesterday our colleagues Ali Saydam and Hasan Öztürk shared this promising data with you. The gas discovery in the Black Sea and its being made ready to be put into the system within a period that can be called a record by world standards, and the formidable technological capabilities displayed along the way, are pictures that give pride on Türkiye's behalf.

Türkiye is a country that is developing rapidly both in terms of its industry and technology and in terms of its lifestyle, but this also means increasing energy consumption. Our developing industry requires consuming more energy. The increasing use of cars, the improving quality of our housing, and so on bring with them greater consumption of electricity and gas, but our production to meet this consumption cannot develop at the same pace.

Unfortunately, Türkiye is a country dependent on foreign sources in energy. Our production of natural resources such as gas and oil is almost nonexistent. In electricity, part of the production again relies on gas, coal and oil, and to obtain these we must again buy from abroad and with foreign currency. As an alternative, utilizing hydroelectric plants and renewable energy sources, that is, sources such as water, wind and sun, also requires investment, and the investments made in this field over the last twenty years have raised Türkiye's installed electric capacity by three and a half times, to above a hundred GW. Moreover, a significant portion of this installed capacity has been built in renewable energy. However, in periods of low rainfall, and last year it was very low, the electricity coming from hydroelectric plants is correspondingly low and gas and oil are inevitably relied on, which is a factor that directly affects the current account deficit and from there the foreign exchange rates.

Türkiye's dependence in the field of energy, in Mr. Dönmez's striking expression, is in fact "consuming its energy," but at the same time it directs the country to use its existing resources far more effectively and to raise efficiency. Türkiye's current account deficit and the amount it pays for energy almost coincide, and this creates the greatest pressure on the exchange rate.

The price of crude oil, all of which we buy from abroad, which had fallen to as low as 25 dollars last year, has today risen above 120 dollars. This is in fact a change that is expected to multiply prices fivefold in every area of our daily lives, from agricultural production to transportation, and it is a source of inflation that affects not just Türkiye but essentially the whole world. Even in countries that can produce their own energy, gas and oil, this inflation may perhaps be subsidized by the resulting current account surplus. But Türkiye has no resource with which to subsidize it. Even so, the government applies a serious subsidy on fuel. In particular, by paying about 70 percent of the natural gas used in homes, the state ensures that it is not reflected in prices. This is a matter that those who complain about the rise in gas prices probably do not know enough about. That is, without the subsidy they would now be paying three times more than they currently pay.

High prices are of course a serious problem, and governments exist to overcome this too. But at the same time there are the realities of the world and of Türkiye.

Part of the energy supply-demand imbalance we are experiencing now stems from the fact that energy consumption, which had grown cheap because it had come to a standstill during the pandemic, has quickly risen after the pandemic far beyond even its earlier levels.

Türkiye must cover a great deal more distance to become a self-sufficient country in energy, and it is advancing with sure steps on this road.

And to the extent that it cannot be self-sufficient in energy, it must make the high industrial and technological production performance it is displaying to close its deficit in this area continuous and sustainable, and the signs in this regard are promising.