1. Diversification projects in Ukraine’s energy sector: state, problems and ways of achievement
- Author:
- Yevhen Shulha
- Publication Date:
- 01-2009
- Content Type:
- Journal Article
- Journal:
- National Security and Defence
- Institution:
- Razumkov Centre
- Abstract:
- Ukraine, seeking to back future sustainable development of the national economy with energy resources, is interested in their reliable deliveries. Since large volumes of energy resources are imported from one country (or through the territory of one country) – Russia, Ukraine logically and reasonably tries to diversify their sources and in that way minimise risks for its energy security, including political ones. The plans to diversify sources of energy supply, first of all, to reduce energy dependence on the Russian Federation, for years have been declared in official documents of different levels (e.g., the Energy Strategy of Ukraine through 2030). Meanwhile, those questions caused most acute discussions in the Ukrainian political community and in society, which hindered implementation of diversification projects. The current stage of such projects’ development bears traits endangering their implementation. First, the global economic crisis that substantially complicated normal functioning of the Ukrainian economy also strongly affected operation of the national energy sector: in the conditions of foreign credits shortage and reduction of budget allocations on specific energy projects and the energy sector as a whole, investments in the energy sector go down, hindering its development. So, the global economic crisis adjusts plans that even before were not zealously implemented. Second, another “gas war” (January 2009) again complicated the uneasy relations of Ukraine with its strategic partner in the energy sector – Russia. And any economically unsound decisions may not only destabilise supply of energy resources but lead to their cut. Third, aggravation of home political confrontation on the eve of the presidential elections, unfortunately, extends to diversification projects in the energy sector. This greatly undermines the effectiveness of Ukraine’s international cooperation with foreign governments and transnational companies, since diversification projects are international, their implementation requires huge investments and import of advanced technologies. An economic choice of diversification projects should make that area of the energy sector reform the core of Ukraine’s energy strategy, concentrate funds on priority directions of development, cease excessive politicisation of that issue in society, making those projects nation-wide. At the same time, it is clear that irrespective of the diversification projects implementation time, Russia will remain the main partner for Ukraine in the energy sector in the long run. The pause in the “race” of international diversification projects caused by the global economic crisis enables Ukraine and its partners in implementation of said projects to defer for some time, without particular losses, passage of final decisions for all-round analysis of the goals they face and search of the most effective and acceptable for all actors ways of their attainment.
- Topic:
- Oil, Natural Resources, Gas, Diversification, and Energy
- Political Geography:
- Europe and Ukraine