Ukrainian energy safety

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There is now no doubt that energy independence is an issue of high priority for each country. For Ukraine this aspect is extremely important, because of its geopolitical situation. The question is how to benefit from a cooperation with Russia and Europe without loosing its independence.

Necessity of Ukrainian energy independence

Author

Yuriy Shokot’ko

03/10/2013 - 08:53

It is clear that Ukraine ought to overcome its dependence from our Eastern partner's, Russia's energy sources, if our country wishes to become a truly sovereign state. This has been stressed in all the official government discourses since Ukraine became independent and should be carried out in due time,

Firstly, it should be mentioned that the lion’s share of the Ukrainian GDP – more than $12 billion from $165 billion – is spent on Russian gas each year. This obviously strengthens the Russian Federation and weakens Ukrainian economic potential.

Non-material reasons

The difficulty of overcoming this situation is rooted in national mentalities. Plenty of Ukrainian people adhere to the stereotype that our economy is weak and that it needs the goodwill of its eastern neighbour in order to prosper. This point of view is quite widespread and vastly affects vox populi (public opinion). That affects political preferences inside the country as well as in the foreign policy choice of the citizens. So, the more we overcome our economic dependence, the more mentally self-sufficient we become.

Chain reaction

Moreover, to reach energy freedom, a country needs to upgrade its industrial and domestic energy base, which can give a powerful impetus to the improvement of the technical conditions in different spheres of the economy. As a result, it can palpably enhance scientific and technological progress of the whole state. Some worthy attention should be paid to the opportunity of developing of renewable energies technologies, as well as to Ukrainian shale gas reserves.

An obvious risk

Last but not least, it should be mentioned that while Ukraine, year in year out, obediently pays enormous sums for the Russian natural gas and oil, the Russian Federation does her best to relocate their pipelines in order to evade Ukrainian transit partnership in the nearest future: the Nord Stream pipeline will link Russia’s Baltic Sea coast near Vyborg with Germany’s Baltic Sea coast in the vicinity of Greifswald. The South Stream is a proposed gas pipeline to transport Russian natural gas through the Black Sea to Bulgaria and further to Greece, Italy and Austria.

Surely, development of the independent energy system demands colossal financial and resource investments. However, this problem is solvable, provided that the Ukrainian establishment and leading financial groups pay due attention to it. In addition, Ukrainian official political leadership ought to do their best in order to outline their clear position on the issue and to express their undoubted willingness to support potential investors in all the possible ways.

This article deliberately presents only one of the many existing points of views of this contorversial subject. Its content is not necessarily representative of its author's personal opinion. Please have a look at Duel Amical's philosophy.

This article convinced me.

Ukraine needs partnerships

Author

Anastasiia Che…

03/10/2013 - 10:53

On the main figures of cooperation in key industries Ukraine has two-sided strategic partnerships only with four countries - Russia, USA, Germany and Poland. Coordinating the energy policies with these states should always be one of our main priorities.

Cooperation with partner countries is vital to the Ukrainian economy, firstly, because energy is probably the base industry of all economic production and development and, secondly, Ukraine is a power scarce state: internal energy resources cover only 47-49% of domestic requirements.

Power conflict: both sides could suffer

In 2012, Kiev bought a record of 40,01 billion cubic meters of fuel from Gazprom - the largest extractor of natural gas and one of the largest companies in the world -, and this surely helped to increase the profits of the Russian monopoly enterprise. Russia is the largest producer, and owner of the biggest gas reserves, while Ukraine is the largest transit country of Russian gas. As gas supply of Europe depends, first of all, on "East-West" pipelines, nowadays it is almost impossible to transit gas without Ukrainian participation.

Experts in power claim that people don't realize that the power conflict with Russia will take place in the nearest future if we don't take measures now. More and more supporters of a power-independent Ukraine appear, although they understand that 5, even 10 years are not enough to execute their ideal.

So, what would happen if the partnership was destroyed today? Russia would raise the prices on hydrocarbons and that would lead to economic collapse. Taking into account the power dependence of Ukraine, coupled with the poor quality of energy saving and high levels of power consumption, the national economy would suffer notable losses. The probability of a default would become real as well as the raise in prices of natural gas and oil.

Nearest means cheapest

Tighter cooperation with Russia will be more profitable not only for the population, but for the heavy industry as well. Main consumers of Russian gas are at the same time key economic players. The well-being of thousands of workers and the economic growth of Ukraine depends on their success.

Nearest should means cheapest, because of the particular location of Ukraine and tight economic and historical connections between the two countries. So we should give some independence in decision-making to the gas consumers for the sake of economic well-being.

Triple Alliance

The European Union, Russia and Ukraine could objectively form a common power space, some kind of "a power triangle", providing the participants with synergetic effects due to the summation of their common strengths. If the depoliticization of the gas question will happen one day, and we shall return to economic rationality, Ukraine will play an important role as the transit country from energy rich Russia to energy-hungry Europe. And there will be no need to become power independent because such cooperation would be equally beneficial for all countries.