Roosevelt Institute | Cornell University

Energy Diplomacy in Ukraine

By Sanat ValechaPublished March 17, 2014

European dependence on Russia's vast natural gas reserves allows Russian aggression, including the invasion of Ukraine, to go unchecked. However, the recent surge in domestic natural gas production has the potential to allow the United States to employ its energy policy to advance its geopolitical interests and combat those of its rivals.
By Sanat Valecha, 3/17/14

As the situation in Ukraine has deteriorated in the last few months — from violent protests, to an ousted government, to what is essentially an invasion by a foreign power — a clearer picture has emerged of the various international actors who have significant interest in and influence over the ongoing crisis.  Since the outset of the unrest, the narrative was framed as a battle between a government extremely cozy with Moscow, and protestors pushing for closer ties with the European Union and the United States.  After Ukrainian president Viktor Yanukovych fled the country in fear of his life, Russia launched an invasion of Crimea, a region of great strategic importance.  This is considered the latest aggressive Russian geopolitical maneuver substantiated and justified by the leverage it enjoys through Ukraine and the rest of Europe's reliance on its vast natural gas supply.  Russian president Vladimir Putin has been known to use Gazprom, Russia's state-run natural gas company, to advance his foreign policy goals, cutting supply or lowering discount rates to pressurize states dependent on Russian gas (Natural Gas as a Diplomatic Tool").  The recent Russian incursion is hardly surprising considering Ukraine is not only a large market for Gazprom, but also houses some of the largest pipelines that pump natural gas into the rest of Europe ("U.S. Hopes Boom in Natural Gas Can Curb Putin").  The United States is working to diminish the influence that permits Russia to invade its neighbor and bring Ukraine into the West's sphere of influence through energy diplomacy.

To combat the influence Russia wields in Europe, the United States is utilizing its energy policy to become more competitive in the global natural gas market.  The U.S. government wishes to deploy the recent domestic energy boom, with new and controversial technologies such as hydraulic fracturing and horizontal drilling allowing for a sharp rise in natural gas production, as a diplomatic tool to advance its interests abroad ("Natural Gas as a Diplomatic Tool").  Officials are calling for looser restrictions on natural gas exports to Ukraine and the rest of Europe so the U.S. can take advantage of the resource boom and decrease Russia's influence in the region ("America's Natural Gas Lever").  The thought process appears to be that reducing European dependence on Russian gas is equally or more effective in dissuading Russian military displays than a military response itself.

The American energy boom has serious implications for how the U.S. conducts its foreign policy.  By 2020, the U.S. will become a net fuel exporter ("Natural Gas as a Diplomatic Tool").  It will no longer be as reliant on its significant military might for foreign influence, but will be able to gain it much in the same way Russia or the O.P.E.C. countries do today.  Signs of this shift have already been noted in how the U.S. was able to persuade the international community to place sanctions on Iran for its nuclear program despite concerns that this would raise global oil prices ("U.S. Hopes Boom in Natural Gas Can Curb Putin").  A surge in American oil production kept prices stable, and allowed the U.S. to advance its interests without resorting to a military response.  Perhaps the energy boom will give rise to more peaceful modes of foreign diplomacy.

On the other hand, the American energy boom puts it at odds with Russia, which remains the U.S.' primary rival in post-Cold War Europe.  If the invasions of Crimea and, in 2008, Georgia are any indication, Russia is willing to take military action maintain the influence offered by its vast natural gas reserves.  The U.S. strained to check Russian aggression in the Caucasus ("America's Natural Gas Lever").  If the United States' new energy diplomacy poaches from Russia's sphere of influence and limits its ability to exercise its military power in its sphere, the scene for conflict would be set.  Certainly, wars have been fought for less than the tremendous geopolitical influence offered by access to lucrative energy markets.