Energy and Foreign Policy
EU-Russia Energy Dynamics
March 20, 2014
Overview
Role of energy in foreign policy
The security of supply crisis
Impact on European and Russian foreign
policy
Implications for current situation in Ukraine
Why this case?
Shows the growing importance of energy
in foreign policy
Highlights the challenges of
interdependence in foreign policy
Energy as a factor in foreign policy
Natural resources long history of influence
on foreign policy
Level of significance depends on
economic and political vulnerabilities of
dependent states - energy dependence
See energy as strategic resource
Energy policy impacted by state, non-state
and private actors
Two key aspects of energy for FP
The sovereign aspects of energy
Energy as inherently territorialized
Consolidating domestic and foreign status
of the state
Energy’s ability to significantly impact
fortunes of a state
Has major impact on revenue of energy
producing states
Role of energy in foreign policy
Energy as indicator of national prosperity
and underwrites national security
Energy security as variable
Security of demand
Security of supply
Energy as economic concern
Maintaining supply and demand, minimize
energy disruptions
Role of energy in FP (Cont.)
Energy as political concern
Concern over potential leverage of
exporter states over importer and transit
states
Energy as foreign policy tool
Exporters - use to shape diplomacy,
embargos and coercion
Importer - soft power objectives, sanctions
and motivation for conflict
Russia: Energy exporter
Three key aspects of power in Russian
energy:
 Size and ownership of resource
 World’s largest gas exporter and second
largest oil exporter
 Gazprom - state-owned
 Pipelines are also state-owned
 Long-term contracts
Europe: Energy importer
Most European states have little or no
energy reserves
On average EU is 30-50% dependent on
Russian gas and 26-30% dependent on
Russian oil
Also dependent on transit countries to get
that energy to it
The transit states
Countries between Russia and EU through
which the pipeline pass
Caught between pull of EU and Russia
Transit countries dependent on revenue
from energy moving through the pipelines
but also dependent on the energy itself
So dependent on both EU and Russia
Ukraine key transit country with two major
pipeline passing through it
The crisis: The preamble
Late 2004, tension arises between Ukraine
and Russia over Ukraine’s inability to pay
for Russian gas
 Previous Russia solution was to reduce
supply to Ukraine
Problem: Russia still needs to send gas to
EU, so Ukraine just took from that portion
Also have tensions over transit tariffs
The crisis
Two key causes:
Remote cause- the Orange Revolution
Ukraine government shifts towards Europe
Russia sees itself losing influence of key region
and further encroachment of West
Proximate cause- inability of Ukraine to
pay for Russian oil
The crisis
January 1, 2006 Russia cuts gas supplies
to Ukraine
Ukraine argues entitled to 15% of transit
gas
Result: several key European countries
see gas deliveries drop by 14 to 40%
Russia responds by increasing flow of gas
on January 2
The crisis: aftermath
Russia
Argues crisis solely about Ukraine not
paying for gas
Reject any notion that stoppage was
political
Ukraine
See stoppage as effort to show Russian
disproval at Ukrainian shift towards West
Impact on European & Russian FP
 Hardens European perceptions of Russian
willingness to use energy as foreign policy tool
 Dramatically exposes European dependence
Russian energy
 Puts need for common European energy policy
on the agenda of the EU
Energy now clearly seen as strategic issue
 Highlights interconnected nature of EU-Russian
energy security
Lessons for foreign policy
Energy creates vulnerability in foreign
policy for both exporter and importers
Energy as important mediating factor in
national and regional power relations
Growing interconnections between states
means conflict between two states can
impact many others
Further complicating foreign policy decision
Implications for current crisis in
Ukraine
What are the implications from this for the
current crisis?
What does it tells about how we might
expect the various actors will behave in
the current situation?