• Natural Gas News

    Russia as the biggest risk for energy security in East Europe

    old

Summary

The open Russian invasion of Crimea will lead to serious reduction of energy cooperation in the region and will highly rise political and security...

by: Roman Rukomeda | Hazar

Posted in:

Pipelines, Security of Supply, News By Country, Russia, Expert Views

Russia as the biggest risk for energy security in East Europe

The open Russian invasion of Crimea will lead to serious reduction of energy cooperation in the region and will highly rise political and security risks for any energy projects in the Black Sea and Caspian Sea regions.

Russia’s aggressive actions toward Ukrainian Crimea gives grounds to propose that Moscow starts the long process of Ukraine’s destabilization in key spheres with the purpose to gain control over the any possible part of Ukraine. It is direct violation of all international principles, norms and agreements but Russian president Putin is afraid of the possibility of massive protests in his country so he will try to strike on Ukraine as much as he can.

The key risk for EU, US, all Ukrainian neighbors and all the other countries in the world is that global powers do not guarantee any security now, moreover can become the aggressor as Russia does. It means that soon the world will see new massive arms race that will seriously slow down economic growth, energy development and will drastically complicate the situation with security.

The second thing is that Russia starts the process of maintaining new borders on the post-Soviet space that is a direct threat to all former republics of USSR, including Azerbaijan, Turkmenistan, Kazakhstan, Uzbekistan and others. For example, now Russia can use with the high probability its army to neutralize the realization of EU Southern gas corridor which is highly competitive to its gas export and will make a blow on Gazprom.

Russia now is becoming a threat to everyone as it can provoke the new phase of all frozen conflicts, including in Transdnistria and Karabakh. Having large ethnic Russian minorities in Kazakhstan and some other Central Asian countries Russia can perform military operation of defending these minorities which will ruin the security and state sovereignty of those states.  It gives understanding that in the interest of all the countries in Europe and Eurasia it is to find solution of Crimean crisis and to withdrawn Russian troops back and to keep Ukraine’s sovereignty over the Crimea and status quo in international law and agreements. World’s weak economy and development rates will not survive a massive war in the geographical center of Europe. There will be now winners in that. For Ukraine now there is only one way left – to defend its territories till the end.

On that scene one more trend is developing – it is the comeback of total Russian economic and energy war against Ukraine. Russian president already announced that the gas price discount will stop from the 1st of April 2014 and Ukraine will again receive the gas by the price of more than 400 dollars per thousand cubic meters. EU countries announced that they will help Ukraine with reverse gas. Technical possibilities with the opening of reverse gas route to Ukraine from Slovakia will allow importing from EU more than 15 Bcm per year. It will help to remove the total dependency from Russian gas. That means complete loosing Ukrainian gas market in the perspective of 2-3 years for Russia. Especially, taking into account that just a couple years ago Ukraine was the biggest buyer of Russian gas in Europe. No wonder that Gazprom threatened to block the gas transit through Ukraine for saving at least some influence on Ukrainian gas market. EU and US announced about their help in case of new gas war from Russian side.

All these moments that are now appearing in the security sphere as the results of Russian geopolitical game are very negative signals for business, especially in energy sphere. For example, ExxonMobil postponed its agreement with Ukrainian government about Black Sea deep shelf gas exploration and production. Key reason of such step is political instability and high security risks. Shale gas production projects so far successfully developing in Ukraine but they can appear under threat, too, if the Crimean crisis will continue.

Now is the time for all the global powers, regional players and Ukrainian neighbors to stop Russian escalation of conflict in Crimea as it can promptly lead to a massive chaos with no winners in any perspective and serious global destabilization.

This article originally appeared on Hazar Strateji Enstitusu