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Natural Gas Conflict in the EU, Ukraine, and Russia Nexus
Kenny Laskowski
Basics of InterdependenceEU imports from Russia (as % of total resource imported)
Russia exports to EU (as % of total resource exported)
Gas 36% 70%
Oil 31% 80%
Coal 30% 50%
Importance of the Ukraine
History of Ukrainian-Russian Gas ProblemsRussian Gazprom placed
vital assets in Ukraine under USSR
Grazprom lost direct control over assets to Ukraine after the collapse of the USSR
Ukraine control of pipelines and Russian control of gas creates massive ties between the two in the gas industry
At collapse of USSR, 90% of gas to Europe went through Ukraine
History of Ukrainian-Russian Gas Problems (con’t)
1990
2009
1992: Russia halts gas allocations to Ukraine
1992: Russia reduces gas flow to Ukraine
1994 Gas Agreement balancing interests of two countries
1998: Dispute over Ukrainian siphoning gas intended for Europe
1999: Ukraine agrees to relieve debt by selling equipment
2001: Russia and Ukraine reach 2001 Transit Agreement
2004: Orange Revolution
2006: Russia cuts off gas to Ukraine; reach 2006 Gas Agreement
2009 Gas Crisis shuts off gas to Europe for 22 days until agreement was reached
Better Understanding Ukraine-Russian Gas Problems
http://www.youtube.com/watch?v=ka7S0R9dhGg
Future Pipeline PossibilitiesNord Stream Pipeline
•Connects Russian gas w/EU more directly•“European interest”•Line 1 is already operational•Financing for Line 2 secured in March 2011•Set to be complete later this year (2012)
South Stream
Future Pipeline Possibilities
•Construction to begin 2013•Important for Russian influence and European energy security•Cost: 12-15 billion euros•First gas supplies to flow late 2015
Nabucco Pipeline
Future Pipeline Possibilities
•Construction set to begin 2013•Costs roughly 8 billion euros•Gas will be supplied from Caspain region and Middle East•Significant because it is free from Russian interest and supply•Set to be completed in 2017
Possibilities for the future of the Ukraine
Possible transportation of Iranian gas
Turning inward to own natural resources
Must first deal with internal problems before such a scenario is possible
Addressing Ukraine’s Internal Problems
Corruption in politics and gas supply to Ukraine
Legislation difficulties relating to the bureaucratic nature of the Ukrainian political system
Energy management or lack thereof; inefficient use by populace and inability of government to make change
Lack of resource use; the potential and lack of progress towards this potential