Keith Smith
Marcin Zaborowski
06 October 2015

Russian Energy is a Political Weapon

The Kremlin uses energy for political reasons and Poland is one of the victims of this approach. This was one of the conclusions presented by participants of the seminar “Energy Independence in Central Eastern Europe,” headed by CEPA Fellow Keith Smith.  

The panelists concluded that energy policy is essentially a part of power politics, which is why Russia’s actions are so aggressive. A relevant example is Russia’s policy between 1997 and 2000, when the Kremlin cut off the Druzhba Pipeline no fewer than nine times.  Right now, Poland is going through a difficult period in its energy history, and Ukraine has a similar situation, as the gas delivered by Gazprom to these two countries is sold at the highest rates possible.

Transparency was another issue raised at the debate, particularly the lack of openness during energy provider contracting and decision-making. Unfortunately, Gazprom has a lot of sway over negotiations in Central Eastern Europe—some of it shadier and less accountable. The Nordstream–1 pipeline negotiations engaged people formerly employed during the Communist period by the Stasi. Certainly, Gazprom’s employment of former German Chancellor Schroeder is also an ethically questionable. Substantial evidence reveals that foreign actors, probably supported by Russia or the French left, financed the protests of ecologists in Poland while the Chevron was drilling for shale gas, which essentially torpedoed the project, to Poland’s and Chevron’s dismay.

Such unabashed interference in Poland’s domestic market makes it fear for the safety of privatization in the energy sector, which, from a purely economic point of view, could be helpful for the Polish energy market. However, not all the participants of CEPA’s discussion agreed that foreign investment in the energy market represents the best solution in post-Communist countries. Some participants raised issue with the lack of added value from privatization: if you privatize, Russians can always buy.  Furthermore, the private sector encounters frequent resistance from formal obstacles on the Polish energy market, especially during the exploratory and drilling stages of shale gas extraction, which is why only small players survive and are able to prosper.

The Warsaw Office of the Center for European Policy Analysis held the seminar on October 6, 2015. The debate was moderated by CEPA Vice President Marcin Zaborowski.