Russian fossil fuel production in the Arctic: implications for EU energy security

Abstract

The EU-Russia energy relationship is a core aspect of their relationship, and one which has faced difficulties and tensions in recent years, characterized by mutual dependence of security of supply and security of demand. However, Russia has shown itself willing to use energy as a tool of foreign policy, creating vulnerabilities for the EU and individual Member States’ energy security. In recent years, the Arctic has emerged as an increasingly important area of energy politics. The littoral states seek to expand their sovereignty over an extended continental shelf and the suspected 22% of remaining undiscovered oil and gas reserves to be found there. These dynamics encapsulate the nexus between the Arctic, energy security and climate change but have remained insufficiently analysed. This thesis has contributed to the body of knowledge by establishing whether Russian Arctic energy projects would be beneficial or detrimental to EU energy security, given the current relationship. Using Andrew Moravscik’s liberal preference formation theory, and Richard Sakwa’s characterization of the Russian government as a ‘dual state’, the thesis has adopted an approach to energy security analyses not seen in the literature. It conceives of the EU, its Member States, and Russia as actors whose interests change in accordance with the dominant preferences within their policy-making structures. Simultaneously, it highlights the vastly different decision-making structures in place within the EU and the Kremlin and the resultant discrepancies in policy-making and coherence on internal and external aspects of energy policy. The thesis demonstrates that whilst Russia pursues greater expansion of Arctic fossil fuel production, the EU is experiencing a dramatic change in its Internal Energy Market (IEM), with greater levels of competition, integration and a diversifying, less fossil-fuel dependent energy mix. It also points to an important trend in the Arctic of abiding by the terms of the United Nations Convention on the Law of the Sea and bilateral delimitations as evidence of a thus far peaceful evolution of Arctic politics, refuting some claims of a risky, potentially zero-sum approach. The thesis therefore argues that there exists some evidence to support the view of a more cooperative Russian pattern of behaviour emerging in the Arctic. In turn, this reduces the qualitative risk to EU energy security that Russia’s politicking represents and the quantitative concerns over future Russian production levels. Internal mechanisms led by the European Commission in areas of sustainability and competitiveness act to filter the negative impacts of Russian energy coercion, but it is where EU cohesiveness is yet to emerge, such as in external energy policy where the risks remain greatest. Contingent on intra-EU gains, and a more coherent EU-level approach to external energy policy, fostering sustained Russian involvement via Russian Arctic resources could be of benefit to the EU’s energy security. Therefore, the Russian Arctic will be important, just as Russia itself will remain a key supplier to the EU, especially for the eastern Member States. However, the defining feature by which EU energy security will be realised in coming years is the relative cohesiveness of the EU and its Member States combined.