Georgia Institute of TechnologyINTA 4803-International Energy Security

Ukrainian Energy Security

From the Perspective of the Foreign Ministry

Shannon Kehoe

The Energy DilemmaUkraine today faces strategic dilemmas on several fronts in the international arena.

Foremost among these is its energy dilemma. Though Ukraine is a key transit country for

natural gas and has one of the most energy intensive economies in the world, it suffered gas

shortages in 2006, 2009, and again in 2014 (Yergin, 2012) (Mock, EU Pushes to Resolve

Ukraine, Russia Gas Dispute: Deal Hinges on Whether Kiev Is Able to Pay Upfront for Russian

Gas, 2014). This is due to the fact that Ukraine is a net importer of energy, rather than a net

exporter, or even a self-sufficient energy producer. This despite the fact that Ukraine has some

of the largest uranium and shale gas deposits in the world (Tania Marocchi, 2014) (Nuclear

Power in Ukraine, 2014). Ukraine’s energy intensity is three times the European average, and

32% of Ukraine’s energy is imported (The World Bank, 2014) (European Bank for

Reconstruction and Development, 2013). This is an enormous imbalance in trade and

production, and an unacceptable risk to Ukrainian national and economic security.

Ukraine’s position as an energy importer has caused problems in the past. Its

geographical position between the European Union, Russia, and former soviet states, and the

Black Sea, frequently puts Ukraine in the political crossfires of these countries as they debate

energy concerns (Douglas, 2004). The past decade has seen pipeline politics play out between

the European Union, the United States, and Russia numerous times; the 2014 crisis is only the

latest evolution. Unless action is taken to increase Ukrainian political and economic capital in

the energy sector this trend will not only continue, but will likely worsen.

Although Ukraine has significant interests in energy politics and economics, it lacks

leverage in this sphere. To develop this leverage, Ukraine must:

Secure existing energy supply

Diversify and increase energy supply

Increase cooperation with NATO

Each of these tenets is in line with Ukraine’s existing, and long held foreign policy strategies of

obtaining European Union membership, lessening Russian influence on Ukraine’s energy sector,

and extensively cooperating with, but not necessarily joining, NATO (Andrii Olefirov, 2012).

Among EU membership criteria are requirements for a functioning market economy and stable

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institutions. The first two bullet points each would work towards both of these membership

tenets. The last tenet, cooperation with NATO, is an extension of existing policy, but one that

requires adjustment following events in Crimea and Eastern Ukraine. Focusing on securing

supply in the short term is critical as, in the words of Ned Stark, winter is coming. Without

adequate energy supply in the short term, much of Ukraine’s populace will freeze. On the other

hand, diversifying and increasing energy supply must also be a long term aim in order to ensure

such shortages do not occur in the future. Achieving this tenet will decrease energy imports

from Russia, thereby decreasing Russian political leverage over Ukraine. Finally, increasing

cooperation with NATO will enable Ukraine to better defend territory still under its control, and

more easily reclaim control of territory under rebel control. Accomplishing all three of these

tenets will involve intense deliberation with four key regions: Russia, the United States, the

European Union, and Eurasia. However, if these aims can be accomplished with respect to these

four regions, Ukraine will emerge as an energy secure country with an increased capacity to act

in its own interests.

Securing Existing Energy SupplyOn October 30th of 2014, Russia, Ukraine, and the European Union concluded talks on

delivering gas supplies through the winter of 2014 to 2015 (Talks Concluded between Russia,

Ukraine, and EU on Gas Supplies from Russsia to Ukraine for the Winter 2014/2015, 2014). The

deal consisted of five pieces. 1) Ukraine’s paying of past debt for natural gas in two tranches. 2)

Ukraine receives gas only if the gas is paid for in advance. 3) Russia exempts gas to Ukraine

from its export customs duty. 4) The price of the exported gas is calculated via a specific

formula. 5) Each of these tenets is in accordance with the 2009 sales contract between Russia

and Ukraine. At last, an agreement on gas for this winter has been reached.

However, Ukraine must ensure that this agreement holds. Preferably in the long term,

but at the very least through the winter of 2014 and 2015. This requires that Ukraine pay off its

undisputed gas debt of 3.1 Billion USD. The Arbitration Court of the Stockholm Chamber of

Commerce is currently examining the additional, disputed, 2.2 Billion USD the Russian

Federation claims Ukraine still owes to them. If the Arbitration Court finds for Russia, Ukraine

must be prepared immediately to pay the additional 2.2 Billion USD. If Ukraine is not prepared,

Russia may call to renegotiate the recent agreement, or declare that Ukraine is in violation of the

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agreement, and as such turn off the gas again. In sum, Ukraine must find the money to pre-pay

future gas imports, and pay off the cost of past imports potentially totaling 5.3 Billion USD.

This is on top of the debt Ukraine has already accrued in other areas of its portfolio. Ukraine

does not have this money itself, and so must seek help elsewhere (Daryna Krasnolutska, 2013).

The most likely avenues of assistance include the United States, the European Union, and

Australia. The United States has already provided Ukraine with $291 Million of assistance, as

well as a $1 Billion loan guarantee, and the European Union and International Monetary Fund

have also pledged to “use all financial means” to ensure payment for gas is available, and has

already provided $3 Billion in relief to Ukraine (MacDonald & Blenkinsop, 2014) (Office of the

Press Secratary, 2014) (Factbox: Ukraine wins IMF deal; faces $9 billion in debt payments this

year, 2014). As a result of the downing of flight MH17 and the deaths of 28 Australian citizens,

Australia opened an embassy in Kiev (Young & O'Neill, 2014) (AAP, 2014). In addition, they

ceased their sales of uranium to Russia. As Australia is the world’s third largest producer of

Uranium in the world, and has the largest concentration known reserves, this shows a serious

commitment to stand against Russia, and blow to the Russian nuclear sector (Evans, 2014).

Australia has considered offering aid to Ukraine, and indeed has already done so in the

military and civil sectors (Wroe, 2014). Australia has shown sympathy for Ukraine, and clear

signs of hostility towards Russia. Due to the predicament in eastern Ukraine, Russia’s takeover

of Crimea, and the downing of flight MH17 by Russia backed separatists, Australia has clear

incentives to offer Ukraine further assistance. Ukraine must convince it to do so in the form of a

financial package to cover, at least in part, the past and future costs of Ukraine’s natural gas.

Seeking financial assistance from Australia, in addition to the United States, the European

Union, and the International Monetary Fund, will ensure that Ukraine obtains the funds required

for adequate supply of natural gas both this winter, and the near future. As Ukraine has already

secured approximately $1.3 Billion of the necessary $5.3 Billion, Ukraine ought to request a $1

Billion loan guarantee, or $500 Million loan, from Australia in order to diversify its debt

portfolio. This will ensure that Ukraine is able to meet whatever sum of money Russia will

demand following the outcome of the Swedish arbitration court’s decision, that Ukraine will not

be overly indebted to any one banker, and therefore maintain its ability to act without undue

pressure from the United States, the European Union, or Australia.

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Diversifying and Increasing SupplyUkraine ranks twenty second in the world for electricity production, and twenty first in

the world for electricity consumption (U.S. Central Intelligence Agency, 2014). Ukraine

produces 3.1 Quadrillion btus of energy, but consumes 5.0 Quadrillion btus (U.S. Energy

Information Administration, 2013). Ukraine is a net energy consumer, not a net energy

produced. Additionally, Ukraine relies on natural gas for much of its energy, and Russia is its

primary supplier of natural gas (OSW, 2013). This is the principal flaw of Ukraine’s current

energy policy: a dearth of diversity. As such, Ukraine must look to an increased variety of

country suppliers, fuel types, and options for domestic supply in order to secure its energy future.

To this end, I propose reforming existing nuclear infrastructure via foreign capital, securing

alternative natural gas imports, developing shale gas reserves and diversifying oil imports.

NuclearUkraine’s 15 nuclear reactors generate nearly 50% of its total produced energy (Nuclear

Power in Ukraine, 2014). However, Ukraine’s nuclear industry, like its gas industry, is heavily

dependent on Russia. The nuclear industry in Ukraine was established by the USSR in the

1970s, and all of Ukraine’s nuclear facilities today are of Russian origin. These types of reactors

are notoriously less efficient, and less safe, than many contemporary reactor designs (World

Nuclear Association, 2013). Slovakia, Lithuania, and Bulgaria closed eight soviet reactors as a

condition of joining the European Union in 2004 and 2008 (European Union, 2014). As Ukraine

is already strapped for energy supply, it does not have the option of closing its reactors. It does,

however, have the option of upgrading them to higher standards of efficiency. This would

reduce Ukraine’s production/consumption imbalance and can be done using funds from the

European Union, and human capital from France.

France relies on nuclear energy for 75% of its electricity, gains 17% of its electricity from

recycled fuel, and is the world’s largest net exporter of electricity (World Nuclear Association,

2014). France is also a member of the European Union, which has been of enormous assistance

in dealing with Russia about gas disputes and the situation in Crimea and Eastern Ukraine. In

addition, the European Union recently approved the construction of a new nuclear power facility

in the United Kingdom (Mock, U.K. Nuclear Plant Gets Freen Light From EU, 2014). The

European Union is nuclear-friendly, despite the failure of the Fukushima facility and Germany’s

decision to shut down 12 of its nuclear power plants (Morris, 2013). Finally, the European Bank

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for Reconstruction and Development designed a loan to Ukraine totaling €600 Million

specifically intended for reforming Ukraine’s existing nuclear facilities (European Bank for

Reconstruction and Development, 2013). French nuclear experts would be able to best advise

Ukrainian plant owners as to which control rods to replace, and what material they should be

replaced with, or whether a different type of coolant or moderator could increase efficiency.

Ukraine has already obtained a moderate amount of monetary capital from the European Union

towards upgrading its nuclear sector, now Ukraine must secure the human capital from France as

well in order to ensure Ukraine is able to upgrade its nuclear facilities, and that those upgrades

are completed to proper safety standards.

Natural GasBoth the European Union and Ukraine have natural gas supply options other than Russia.

It is estimated that Algeria, Libya, and Egypt, together, could replace 44% of the natural gas

supply Russia currently provides (Clark, 2014) (Shiryaevskaya & Almeida, 2014). Algeria

already has a pipeline to Spain in place. If European partnerships with Libya and Egypt could

also be obtained, this would represent a dramatic diversification of supply. Russia’s share of the

natural gas market would be cut in half, and three additional players would enter geopolitical

natural gas considerations. Engaging Algeria, Libya, and Egypt in the European natural gas

market would alleviate some of the political pressure Ukraine currently suffers from. Russia

would have 3 competitors to contend with, and there would be other pipelines of significance in

place. While this would decrease the geographical importance of Ukraine’s Btratstvo and Soyuz

pipelines, the increased stability in our region provided by the increase in competition and

decrease in Russian control of the natural gas market would more than make up for the loss of

power in pipeline politics. Indeed, it would prove beneficial to Ukraine as it would allow

Ukraine to focus on other aspects of its energy industry, such as developing its own shale gas

reserves. In addition, increasing North African exports to Spain would still leave the eastern

European, and much of the central European, gas markets open for Ukraine to export to once

shale gas comes online.

However, this potential arrangement with North Africa is complicated by the lack of

stability in Northern Africa, and Ukraine’s distance from Libya, Egypt, and Algeria. The Arab

Spring in Libya in 2011caused its natural gas production to drop a staggering 90%, though

production has recovered markedly since then (Clark, 2014). Egypt may be difficult to

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incentivize as demand in the Middle East is rising, and it is easier for Egypt to sell natural gas

within the Middle East, than across it and into Europe (U.S. Energy Information Administration,

2014). Finally, while Algeria already has a natural gas pipeline to Spain in place, Spain’s natural

gas infrastructure is not well connected with the rest of Europe’s (Clark, 2014). However, if

Spain’s pipelines could be integrated with western and central Europe, and greater stability in

North Africa achieved, the regional strain on natural gas would be eased. As such, Ukraine must

encourage the European Union to invest in North African natural gas in order to lessen Russian

interests in Ukraine. Ukraine could make these encouragements through NATO discussions, as

NATO has expressed clear interest in stabilizing European energy supply (NATO Review

Magazine, 2014).

Another option to ease pressure on the European and Eurasian natural markets is for

Ukraine to import natural gas from Azerbaijan or Turkmenistan. The Trans Anatolia Natural Gas

Pipeline (TANAP) is a proposed pipeline that would traverse Italy, Greece, Albania, the Adriatic

Sea, and Turkey before finally delivering gas to Ukraine as an LNG import to Yuzhnyi’s, an

LNG facility in the Odessa region of Ukraine (Sobczak, 2014). However, this pipeline is still

being debated by the producing, consuming, and transiting countries. This means that not only

must the route be decided upon, construction of the line itself has yet to begin. As such, the

relief this pipeline could provide does not offer an immediate solution, but is an attractive

alternative to Russian piped gas in the near future. Ukraine and Azerbaijan already have a

working group on TANAP in place, and if the work is expedited construction could begin sooner

(Jafarova, 2013). Azeri natural gas, while not an immediate solution, could well provide an

alternative to Russian gas in the next five to ten years.

Finally, liquefied natural gas from the United States is also an option, but its viability is

questionable. An LNG receiving terminal is already under construction in Yuzhnyi (Investment

Portal of Kyiv Region, 2013). The United States has repeatedly expressed its desire to export

LNG to Ukraine, and Ukraine has been open to the idea of LNG imports (Mufson, 2014).

However, the LNG facility being built in Ukraine is located in the Odessa region on the Black

Sea. Any LNG imports must pass through the Bosporus strait, which is controlled by Turkey.

Turkey is also looking to become a regional hub for LNG (Ukraine's Plans for LNG imports fae

Turkish resistance, 2013). Despite American enthusiasm for exporting LNG to Ukraine, without

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approval from Turkey, it will be very difficult for Ukraine to import LNG from the United

States. As such, Azeri natural gas imports, transmitted through pipeline to Turkey, and as LNG

to Odessa, Ukraine are more feasible alternative.

While many natural gas options here expressed deal with European Union supply issues,

these issues are directly linked to those of Ukraine as Ukrainian and European natural gas

infrastructure are closely linked. If natural gas connectivity between Spain and central and

Eastern Europe could be increased, this would alleviate some of the pressure for Russian gas to

transit Ukraine into Europe. This would enable Ukraine to negotiate a lower price for gas from

Russia (even if that price is still mathematically linked to oil). Additionally, Ukraine and the

European Union already have infrastructure built to transit natural gas between them. The flow

of gas could be reversed (as was recently done in Slovakia) to supply Ukraine with gas from

North Africa and Western Europe (Slovakia Reaches Reverse Gas Flow Deal with Ukraine,

2014). Finally, while LNG remains an attractive option with which to reduce dependence on

natural gas imports, Turkey’s control of the Bosporus straight and desire to become a regional

LNG hub make LNG imports to Ukraine infeasible. As such, it is in Ukraine’s best interests to

encourage the European Union to increase its natural gas ties to northern Africa while Ukraine

focuses on developing its domestic shale gas reserves.

Shale GasAnother option for Ukraine is to develop its own shale gas reserves. At 42 trillion cubic

feet, Ukraine has the fourth highest estimated recoverable gas reserves in Europe (Ukraine Crisis

Sharpens Focus on European Shale Gas, 2014). In 2013, Ukraine and Chevron signed a

“potentially $10 Billion production-sharing agreement” with Chevron, allowing Chevron to

explore and produce shale gas in the Oleska field (Buckley, 2013). A production- sharing

agreement is an agreement between a corporation and a state in which the corporation assumes

the risks of exploration and production, and is allowed to first recoup those costs before splitting

profits with the state (World Bank Institute Governance for Extractive Industries Program,

2013). In January of 2014, Ukraine postponed, for a second time, the signing of a production

sharing agreement with ExxonMobil, which would bring several billion more cubic feet of

natural gas (Ukraine Postpones Signing Gas Production Sharing Deal with Exxon, 2014). This

was a mistake. Ukraine has significant shale gas reserves, and multinational corporations are

interested in developing them. Ukraine must allow them to do so; it is in our own best interest.

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Developing Ukraine’s shale gas reserves is likely the best way to increase Ukraine’s

leverage in the Energy sphere, increase Ukraine’s energy portfolio and security, and establish

Ukraine as an energy exporter, or at least a self-sufficient producer1. Allowing firms—be they

western or eastern-- to develop Ukraine’s shale gas reserves via production sharing agreements

will save Ukraine the costs of resource exploration and production while still allowing it to reap

the benefits, albeit on a delayed timeline as Ukraine will only begin receiving revenue from this

resource once the company’s costs have been recouped. Producing Ukrainian Shale gas has the

advantage of not needing to build any additional transit infrastructure. The pipelines to Russia

and to Western Europe are already in place and will transit natural gas regardless of the gas’

origins. Producing these reserves will provide jobs in Ukraine’s domestic economy, a significant

source of revenue for the government, and an alternative to Russian gas. Ukraine’s shale gas

could be used both to power its domestic economy, but also to power that of the European

Union.

Americans and their companies are known for being entrepreneurs. In comparison to the

European Union, Americans are more willing to compete and prefer to be self-employed

(European Commission, 2010). Both of these attitudes are connected with a greater willingness

to take risks. Currently, investment in Ukraine is a risk. Russia has annexed Crimea, and eastern

Ukraine is besieged by rebels. However, firms have invested in riskier locations—the Niger

Delta for example—and seen enormous rewards. Because of their attitude towards risk, and their

government’s proven willingness to support Ukraine in its current situation, American firms such

as Chevron, ExxonMobil, and ConocoPhillips will be the easiest to convince to develop

Ukrainian shale gas in northeast Ukraine. As such, Ukraine must seek out American energy

companies and offer production sharing agreements to develop its gas reserves in the Northeast.

OilIn 2010, Ukrainian domestic oil production began to decrease (International Energy

Agency and the OECD, 2012). In 2012, oil comprised 20% of Ukraine’s energy mix. In 2009,

70% of Ukraine’s gasoline products were produced domestically, but by 2011, 62% of its

gasoline products came from imports. This is a drastic reversal of supply and demand. As a

1 Energy Independence, the complete reliance on domestic resources for energy supply, may be a politically popular sentiment, but it is also a myth (Weissmann, 2012). However, striving for self-sufficiency is an attainable aim. Self-sufficiency is defined here as ability to withstand supply shocks without experiencing dramatic economic reverberations.

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result, Ukraine began to diversify its oil imports away from Russia, which accounted for 14% of

oil imports in 2011, and towards Azerbaijan. Azerbaijan, with an estimated seven billion barrels

of reserves, is a significant oil producer in Eurasia and provides a supplement to Russian oil

imports (U.S. Energy Administration, 2014). As oil still comprises a significant share of the

Ukrainian energy portfolio, it is still important to ensure a steady supply. However, oil supply

has been rather steady. To continue this trend of stability, Ukraine must continue importing oil

from both Azerbaijan and Russia.

Increased Cooperation with NATOUkraine is NATO’s oldest, and most active partner (North Atlantic Treaty Organization,

2014). Since 1997, the North Atlantic Treaty Organization and Ukraine have worked closely on

“military operations, defense and security reform, civil emergency planning”, and energy

security. Though Ukraine participates in all NATO led programs, it is not a member of the

organization, nor does Ukraine necessarily wish to be (Andrii Olefirov, 2012). However,

Ukraine and NATO both have vested interests in energy security in Eastern Europe and Eurasia.

In March of 2014, NATO Secretary General Anders Fogh Rasmussen stated that energy security

had “become a truly strategic issue, with numerous implications for Allied security” (NATO

Review Magazine, 2014). Europe relies on natural gas from Russia, which is transited from

Russia, through Ukraine, to the rest of Europe. If energy security is a strategic concern for

NATO, then Ukrainian security is as well as Europe is dependent on the gas Russia transits

through Ukraine. However, the Russian annexation of Crimea and continued turmoil in eastern

Ukraine prove that current joint NATO-Ukraine defense measures are inadequate. To this end,

Ukraine and NATO must work together to carry out an increased number of joint military

exercises, improve troop training regimens, and establish NATO bases in Ukraine.

The White House has already made bilateral commitments as well as commitments

through NATO to improve training and increase joint exercises with Ukraine (Office of the Press

Secratary, 2014). However, Ukraine must ensure that the United States goes a step further and

encourages the establishment of NATO bases in Ukraine. Ukraine is not a member of NATO,

and must once again express its desire to remain a partner in order to assuage Russian fears of

NATO enlargment. That said, Ukraine, NATO, and the United States each have interests in

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ensuring the integrity of energy infrastructure in Ukraine. The surest way to do that is to

establish a long term military presence.

NATO has already established a presence in non-member countries, and there is no

provision with Russia preventing NATO from establishing a base, or significant permanent

presence, in Ukraine (NATO, 2014) (Straus, 2014). As Ukraine has been an active partner of

NATO’s for nearly two decades, and given that its territorial integrity is currently quite

questionable, it is logical for Ukraine to cooperate with NATO further. Especially given that

Ukraine and NATO, and even Russia, are after the same end: secure transmission of natural gas.

This includes timely payments for the gas transmitted, as well as security of transmission

infrastructure. The latter is currently at risk due to rebel activity in the east. Ideally, the NATO

base of Operations would be located to the West of Kiev, in the town Pryluky. This would put

the base within easy reach of Ukraine’s gas fields in the east and Ukraine’s capital city Kiev in

the west (Tulett, 2014). However, it would avoid putting NATO troops directly on the Russian

border. From this Pryluky, Russia would remain approximately 3 hours away by car. To be able

to secure the region, a NATO base in Pryluky would require a garrison of between three and five

thousand troops. A limited number of aircraft would be stationed at this base as well; enough to

provide air support if needed, but not enough to cause Russia significant worry2 (Croft, 2014).

The stationing of these troops at a base in Pryluky would ensure the continued security of

pipeline infrastructure to the West, and would help to secure Ukraine’s gas fields in the

northeast.

Moving ForwardThe strategy here proposed looks at the short, medium, and long term energy security of

Ukraine. In the short term, Ukraine must continue to work with Russia in order to ensure it has

an adequate supply of natural gas in winter. This will require working with the United States,

the European Union, the International Monetary Fund, and Australia to ensure that Ukraine has

access to the minimum $3.1 Billion owed to Russia, as well as the disputed $2.2 Billion currently

being analyzed in Swedish Arbitration court. Ukraine will also need to acquire from these

entities funds with which to purchase new gas for this winter as, under the new agreement with

Russia, gas will only be transmitted on condition of pre-payment. This will increase Ukraine’s 2 An exact number of aircraft, however, is outside the purview of this ministry and must be determined by the Ministry of Defense.

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current debts to these countries, and will increase the influence these countries have over

Ukrainian policy. However, by dividing its debt between these four entities, Ukraine will

diversify enough to prevent any one entity from gaining undue influence on Ukrainian policy

considerations. In addition, if Ukraine is able to increase its domestic production capacity in the

medium term, especially shale gas, this outside influence on Ukraine will be short term.

In the medium term, Ukraine must rely on its partners the United States and the European

Union, to assist it in increasing its domestic energy production capacity. By working with

France, a country dependent on nuclear energy for 70% of domestic production, Ukraine can

increase the efficiency of its 15 existing nuclear reactors avoid having to invest enormous sums

in building entirely new reactors. LNG, while an attractive substitute for pipeline gas, is

ultimately unfeasible due to Turkish interests and control of the Bosporus Straight. More

feasible options include developing domestic reserves of shale gas via production sharing

Agreements with American, and importing gas from Azerbaijan. This will drastically reduce the

price of energy in Ukraine, and make Ukraine a gas producer, in addition to being a gas

consumer, thereby increasing government revenues. In addition, by increasing domestic supply,

Ukraine will become less dependent on its import partners, and may even obtain export contracts

to central Europe.

In the short and medium terms, Ukraine will become more dependent on the United

States and the European Union, and less dependent on Russia. This may, at first, seem like a

substitution of one problem for another. However, the difference in these two dependency

schemes comes in the fact that dependence on the United States and the European Union offers a

path, eventually, to independence from both. Dependence on Russia, however, has been an

autocatalytic cycle; each year of dependence has only increased debt to Russia, thereby

increasing Ukrainian dependence.

In the long term, once Ukraine’s domestic energy production capacity has been increased,

Ukraine will be able to use the money gained from the production of shale gas to repay the debts

to the United States, European Union, International Monetary Fund, and Australia it accrues in

the short and medium terms. In addition, Ukraine must work with NATO to establish a NATO

base of operations in Pryluky, east of Kiev, southwest of shale gas fields, and significantly East

of the Russian border. Ukraine must firmly reiterate that it is a NATO partner, but not a

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member, in order to calm Russian apprehensions of NATO enlargment. Combined, these

strategies will enable Ukraine to operate independently on the international stage, and trade with

countries on an even playing field.

Reconciling PrioritiesThe Foreign Ministry of Ukraine advocated obtaining loans to ensure short to medium

term supply of natural gas from Russia, diversifying and increasing domestic supply via foreign

capital, and increasing cooperation with NATO. These tenets are in line with long-held foreign

policy objectives of Ukraine, namely eventual EU membership and close cooperation with, but

not membership in, NATO. However, these priorities may conflict with the priorities of other

Ukrainian government bureaus and national security aims. The Ukrainian Ministry of Economy

will likely find fault with the amount of loans the Foreign Ministry advises obtaining. However,

the Foreign Ministry believes that these are calculated loans, and has incorporated a method with

which to pay back these loans into its long term strategy (the development of domestic shale gas

reserves). The Ministry of Internal Affairs may be displeased about the Foreign Ministry’s plan

to move away from Russia and towards the European Union for fear that Russia will step up its

antics in the East. However, with clear communication to Russia that Ukraine will not join

NATO, but continue its decade long partnership, Russian fears can be assuaged; increased

NATO presence may even cause it to reconsider its operations in the east. Even if not, the

foreign ministry feels strongly that partnership with NATO is critical to Ukrainian national

security, and believes the Ukrainian Ministry of Defense would agree with it. The Ministries of

Agrarian Policy, of Health, and of Environment may will likely find issue with the Foreign

Ministries suggestion to develop Ukraine’s shale gas reserves as preliminary studies have shown

shale gas to have negative effects public health, causing skin and respiratory problems in some

populations (Peter M. Rabinowitz, 2014). However, the Foreign Ministry believes that, with

proper national environmental regulation, these health risks can be mitigated. Though the

Foreign Ministry’s Energy Security Strategy includes risks, this ministry has carefully noted

where this risks can be mitigated, and has done its utmost to consider the potential perspectives

of other ministries in its development of this brief.

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