2013 Issue №2(16)

This article explores Russian energy policy in the Baltic Sea region in the context of the world energy market globalization. The study focuses on the three Baltic States — Latvia, Lithuania, and Estonia — which have a similar geographical location and history. The dynamic development of the region as a whole is strongly influenced by the stability of energy supply in each state. The article analyses the role Russia plays in the energy policy of the region from both geopolitical and geostrategic viewpoints. The author identifies the main characteristics of the Russian energy policy in these countries, and provides with a forecast for energy policy development in the region. A geostrategic approach dictates any successful energy policy in the Baltic Sea region to bring in line Russian interests with those of the European states.

This article analyses certain issues of implementation of Russian energy policy in the Baltic region fr om the geoeconomic perspective. The purpose of the study is to explain Russian energy policy in the region as dependent solely on the import capacity of its partners. Russian energy policy is viewed as one of the most important activities of the state and its business structures. As such it aims to achieve both general economic goals (generation of profit, market domination) and more specific geoeconomic tasks. At the same time, the policy follows the traditional rules of consumer/producer market game. Russian energy resources are delivered to an energy deficient region, wh ere the demand and need for them is stable. The study is based on the author’s geoeconomic methodology, which extensively uses geographical and general scientific methods. This work aims to develop a geoeconomic paradigm in the framework of social geography. It will be of interest to anyone who aims to analyse the true motives behind
Russian current energy policy.

The current development of economic diplomacy in the world is determined by a combination of globalization and regionalization. In addition, it has an economic dimension. At the same time, the Baltic Sea region demonstrates large-scale politicisation of economic cooperation. The development of nuclear power in the eastern part of the Baltic Sea is indicative of the effectiveness of political and economic cooperation in the region. The author believes that Russia and the three Baltic States of Estonia, Latvia and Lithuania have the economic and technological opportunities for building up cooperation in the field of energy. This points to a question whether the traditional patterns of relations that developed among these countries in the past can be changed. A more pronounced international division of labour accompanied by the historically developed specialization of Russia makes nuclear power an important factor in Russia’s economic diplomacy. The promotion of Russian energy projects in the region contributes  to the development of a system of mutually beneficial ties. The increasing energy deficiency in the region can serve an economic prerequisite to this process.

This article focuses on the development of peaceful nuclear power. The author draws attention to the fact that nuclear power is a rather young branch of national economy. However, over recent decades, it has already seen rises and falls, and a number of states have had tragic experiences of nuclear emergencies. Nevertheless, many countries — including the three Baltic States of Estonia, Latvia and Lithuania — express a strong interest in development, generation, and application of nuclear power. In the Baltic States, nuclear power dates back to the Soviet times, but its development was suspended pursuant to the EU regulations (the Ignalina NPP). Lithuania, Latvia, and Estonia have been striving for energy independence from Russia — the principal supplier of energy carriers to these countries. For a long time, the three Baltic States have been proclaiming their unanimity on the general European path of development. However, the reality proved to be different. The touchstone for achieving common goals was the idea of constructing a new NPP at the site of the closed Ignalina NPP. The author concludes that the joint construction of a new NPP is quite questionable. When it comes to politics, each of the three Baltic States is ready to build its own NPP. Thus, the development of nuclear power in the Baltic Sea region requires joint coordinated actions independent of any bloc-inspired interests of the states involved. Moreover, this success may prove sustainable if the actions are based on innovative decisions and modern technologies.

In the context of regional gas infrastructure development this paper considers the issue of energy security of the countries of East Baltic, which depend heavily on a single energy supplier — Russia. In recent years, the countries of the region have announced several LNG terminal construction projects. The European Union will provide political and financial support to only one of these projects. The paper explores the role of gas and energy in the economy of the Eastern Baltic countries. The author concludes that the countries mostly dependent on Russian gas are Lithuania and Latvia. The announced LNG terminal projects are being reviewed in detail. Their necessity is estimated from the perspective of the current and future demand for natural gas, including the terms and conditions of contracts concluded with OAO Gazprom. Different scenarios and prospects for individual LNG terminal projects and associated pipeline infrastructure are evaluated. It is shown that the inability of countries to find a political compromise on this issue and the terms of existing contracts for Russian gas, as well as low domestic demand for gas hamper the implementation of a regional LNG terminal project even in the long term.