Energy policy and (energy security) as a part of Russian foreign policy
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Nordia Geographical Publications 40: 4, 121–132 Jussi Huotari
Energy policy and (energy security) as a part of
Russian foreign policy
Jussi Huotari
Faculty of Social Sciences, University of Lapland
Abstract: In cartoons Russia is often portrayed as a grim soldier, sitting on a pipeline,
cutting off gas supplies to Europe. Images like this tell us something about a drastic
change which the EU-Russia relationship has undergone during the last twenty years.
While Russia was in the 1990s perceived as weak, it is currently framed as a powerful
state. Russia’s strengthened position was correlative of stable political system during
the two presidential terms of Vladimir Putin, and a high world market price of energy,
especially oil. The outcome of these two factors was that Russia managed to almost
double its real GDP in the past decade.
Oil and gas have been important factors in Russian foreign policy in the last fifteen
years. Energy policy itself is a complex question. It includes both oil and gas fields and
the energy infrastructure. The relationship between energy policy and foreign policy is
often interpreted via the concept of energy security, which is defined either from a sup-
plier’s or a customer’s point of view. After gas disputes between Russia and Ukraine
(during the years 2005–2006 and 2008–2009) the question of energy security arose in
political discourse both in Russia and in the European Union (EU). Finally, the presenta-
tion discusses Russian energy policy in three geostrategically important “Rimlands” of
the Eurasian landmass (East Asia, Central Asia and Eastern Europe and the Arctic).
Introduction political connections, economic relations,
military capacity and other available means
In public debate a common claim has to strengthen the nation’s position in the
been that Russia uses its oil and natural international arena (e.g. Morgenthau 1993
gas resources and their transports as a [1948]).
power tool for getting more political Energy emerged as one of the top
influence in the former Soviet region. priorities in the EU-Russia relations after
The Western media has often described the Russo-Ukrainian gas dispute in turn
Russia as an energy imperialist, unreliable of the year 2005 – 2006. This was the
energy supplier and unable to develop its first time when energ y transits from
own energy assets (e.g. Karaganov 2007). Russia to European Union were cut off.
These kind of claims generate an image A consequence of the dispute was that
of Russia as a country that uses energy as it politicized Russian energy in the EU
a principal instrument to maximize state member states. The Russo-Ukrainian “gas
influence and power. In this regard, Russia war” led to the situation where almost
is not an exception. Every nation uses its every contradiction in the EU-Russia
121Energy policy and (energy security) as a part of... NGP Yearbook 2011
relations was interpreted to deal with politics (Finger & Finger-Stich 2010). It also
energy issues (Raeste 2006; Baev 2008). promotes the preserving of the nation state
Russia’s actions, like an impressive flag as a principal actor in international relations,
planting underneath the North Pole on the despite globalization.
Lomonosov Ridge in August 2007 and the Energy geopolitics, which is about access,
military intervention in Georgia one year supply and transit of energy resources,
later, set off speculation in the international technology of production, state of logistical
community about the emergence of a new supply lines, processing facilities and
Cold War (e.g.Lukyanov 2010; Overland transit infrastructures, is one of the major
2010). But everything changed after the components of international relations
global downturn in the world economy and (Kropatcheva 2011, 555). Natural and
its effect on the world market price of oil. economic resources fuel state’s industrial
The changes in the world market price and military capacity, and consequently
of energy have diverse effects in the control over these strategic goods bestows
economies of the nation states. This shows influence and power. Uneven distribution
up as different geopolitical interpretations of oil and natural gas resources makes
and competing discourses. One of the some regions strategically more valuable
discourses describes the change in the world than others. What happens in, and to such
market price of energy as a threat to state regions, has an impact on the lives of other
sovereignty, a race for natural resources and states, which consequently will pay more
conflicts (e.g. Borgesson 2008; Smith 2008). attention, militarily or diplomatically to these
A contrasting interpretation to previous regions. (Grygiel 2006, 30.) This question of
discourse claims that there is neither a race strategic resources and geostrategic regions
for natural resources nor conflicts between brings the concept of energy security into
states in the case energy policy; on the discussion, because these resources are
contrary, states are ready and able to search vital for a state’s survival. As one of the
together alternative energy solutions that fathers of Realism, Hans Morgenthau (
ensure stable and peaceful development 1993 [1948]), put it, “A country that is self-
in the global context (e.g. Paillard 2010; sufficient, or nearly self-sufficient, has a
Trenin 2010). great advantage over a nation that is not,
The relationship between politics and because it does not depend on the will or
energy is not a new phenomenon. In fact, power of other states”.
oil and oil politics has reshaped relationships This article analyses Russia’s energy
between states for over two hundred geopolitics and its implications for energy
years. Control over energy resources has security in the three geostrategic regions in
influenced the emergence of conflicts. the Eurasian landmass and its “Rimlands”:
Even though alternative sources of energy Asia-Pacific region, Central-Asia and
are more common, societies will still stay Eastern Europe, and the Arctic region1.
highly dependent on fossil fuels in the In the 21 st century, interpretations of
future. This deepens and intensifies the actions of the states have considered the
interplay between energy, economy and “Rimlands” of the Eurasian landmass to be
122Nordia Geographical Publications 40: 4, 121–132 Jussi Huotari
potential stages for geopolitical competition economic modernization. (Legvold 2009,
between great powers. The actors have 30.) Because of this, Russia’s economy has
been looking for a common understanding developed slower than the economies of
and consensus from different international the great powers in the West.
institutional organizations (such as G8 Russia’s great power politics is often
and the UN Security Council) and ad hoc explained in the light of the three geopo-
meetings (the five littoral states get-together litical theories. The first one is based on
in Illulisat, Greenland 2008 and in Ottawa, Sir Halford Mackinder’s idea of the World
Canada 2010 and Russia’s, France’s and Island, in which the governing of the Eura-
Germany’s alliance against war in Iraq) sian landmass is the key element for being
for controlling Eurasian “Rimlands”. For world power. Mackinder’s “Heartland”
Russia’s prestige it is important to be part theory highlighted geostrategic factors
in these international alliances with other e.g. rich natural resources of the Eurasian
great powers. landmass (Mackinder 1904, 430 - 437). The
second one is based on Nicholas Spykman’s
thinking. This theory emphasizes the “Rim-
Russia’s energy geopolitics lands” and sea areas that surround the
in the light of “Heartland”. This description underlines
geo-political theories the meaning of the Central Asia as crucial
for Russia’s security (Heininen 1991, 21
Russia is considered to be one of the great - 22). The third explanation stresses the
powers, because of her large territorial meaning of the strategic sea areas and sea
extent. She has reached her current shape routes for Russia’s economic might and
following prolonged geographical expansion. great power status. This interpretation is
One factor behind motivating conquest of based on Alfred Thayer Mahan’s Sea Power
new regions was natural resources e.g. theory. According to Russian Naval officer,
minerals which exist in Russian soil. The Admiral Sergei Gorskov, (see Heininen
Russian state’s historically recurrent drive 1991, 23 - 24) Russia is not only the biggest
to mobilize human and natural resources inland state, but because of geography, also
for economic development and war was a dominant sea power, whose coastline is
conducted under control of authoritarian almost two times longer than the United
political system. A strong sovereign has States’ shore. Admiral Gorskov stressed
been a dominant feature in Russia’s politics. the meaning of the navy as an economic
This together with the centralized economy and military powerhouse also during peace,
system and geographical expansion has led because with the help of the navy, a state is
Russia to several confrontations with the able to demonstrate its strength outside of
rest of the world. Russia’s foreign policy her borders. The definition made by admiral
has been shaped by the struggle to stabilize Gorskov is on based on technology models
empire’s borders through the centuries. That in classical geopolitics.
has led to permanent military mobilization
and frequent war, and has delayed country’s
123Energy policy and (energy security) as a part of... NGP Yearbook 2011
To outline Russian naval politics, it is of Russian energy policy becomes apparent
essential to notice one geographical fact; in different geopolitical aspects to the
Russia has only two harbours which are strategic “Rimlands”. The “Rimlands” that
free from ice and have an open access to surrounds the Russian Heartland create
the world’s oceans around the year. Rest of the geostrategic buffer zones between the
the Russia’s oceanic harbours are struggling East and the West. These buffer zones
with the severe ice conditions, or they are are defined militarily, economically and
located in inlet straits, which can be easily politically (Elo 2009, 54).
sealed (Heininen 1991, 23; Kefferpütz 2010, The early 21st century cuts in Russian oil
3). Because of vulnerable sea routes, Russia and gas exports for neighbouring countries
is often considered to be an inland power raised questions about relationship between
in compliance with the “Heartland” theory. energy and foreign policy. Western critics of
However, in recent years Russia has also Russia and President Vladimir Putin tend to
showed up as a credible sea power. This assume that everything the Kremlin does
is in line with Russia’s Maritime Doctrine is geopolitically motivated (Lo 2008, 135).
from 2001, in which it is stressed the aim to Russia was blamed for using “energy weapon”
reassert her position among other leading as tool in its foreign policy. However, this
sea powers (Maritime Doctrine of Russian “energy weapon” interpretation neglects two
Federation 2020 2001). This has appeared important factors. First, it underestimates the
as an increased military patrolling in the importance of commercial considerations
oceans around the world. The opening of in Russian decision making. The Russian
the new sea routes, which is the consequence government and major energy companies
of retreat of the sea ice, has led to the such as Gazprom, Rosneft, and Lukoil are
situation in which Russia has started to keenly interested in profits for its own sake.
patrol regularly in the Arctic Ocean. The The price hike for Belarus in December
year 2008 was the first time when she did 2006 highlighted the growing importance
that since the dissolution of the Soviet of commercial considerations (Lo 2008,
Union (YLE Uutiset 17.7.2008). 135; Liuhto 2010, 49 - 51; Casier 2011,
All of these theories describe the 545). Secondly, energy trade between Russia
regions that are important for energy and EU has almost 50 years long history
production and transportation. In order without cuts in supplies. The gas and oil
to discover the energy geopolitical reality infrastructures, which were constructed
it is necessary to look at the location of during the Cold War between EU member
resources and the lines of communication states and Soviet Union, were an expression
linking them. This brings in the concept of common economic interdependence; the
of security, due to the importance of Soviet Union needed western currency and
energy to modern industrialized societies. the EU desired energy to secure economic
The configuration of these two variables development (Stern 2005; Nies 2008,
assigns the strategic value to locations, 18). The energy cooperation during the
privileging some over others. The dynamics Cold War was a starting point for broader
124Nordia Geographical Publications 40: 4, 121–132 Jussi Huotari
geopolitical change which culminated to the Ukraine. The latter is able to divert natural
dissolution of the Soviet Union (Heininen gas, transported for the EU, for its internal
2002, 101-102). purposes (See more Balmaceda 2009;
Pirani, et al. 2009). The transit pipelines,
which bind Russia and Ukraine, were
Energy as a part of Russia’s built while the two countries were part of
foreign political goals in the Soviet Union as a transit and supply
geo-strategic regions pipelines. Any disruptions of internal
supplies may cause problems for external
Russia acts simultaneously as an energy transits, as the pressure in the pipeline will
producer, exporter, importer, consumer, change (Kropatcheva 2011, 556).
and a transit state. Russia’s foreign energy The land between Belarus and China
policy is influenced by the factors of global comprises a hot spot for which states in
politics and economy, as well as by the the world community are positioning for
developments at regional and bilateral levels, (Juntunen 2009, 129). This very region has
and the dynamics of the energy market. This been a target for power struggle between
diverse role in energy sector becomes clearly great powers from the 19 th century. In
evident in the progress of the neighbouring the 21st century the Great Game is going
countries. The CIS2 countries, former Soviet on in the region between the United
states are, despite their independence, often States, China and Russia. Central-Asia, the
still regarded to be included in Russia’s Caucasus and the South-East corner of the
sphere of influence, where Russia has Europe constitute a chain which control is
legitimate interests (Medvedev 2008). essential for energy exports from Russia to
The reasoning for Russia’s interests in her EU. In this regard, natural resources and
near neighbours is explained by existing their transport infrastructures play a key
geopolitical status quo, in what the shifts role in the geo-strategic power game of
would mean global geopolitical instability. Central Asia and Caucasus region. With
Despite political changes in the relations its vast pipeline network, Russia acts as an
CIS vis-à-vis Russia, there are still elements important gatekeeper for Central Asian
from the Soviet system in the economic energy exports. Gatekeeper position is
relations. The economic networks, e.g. oil not only improving Russian foreign policy
and gas infrastructures are difficult, if not position vis-à-vis the Central Asian countries,
impossible to dissolve. The CIS countries which are dependent on hydrocarbon
are dependent on Russian energy imports exports, but also strengthens Russia’s
which give Russia the option to use these powers of negotiation towards Ukraine
imports as an instrument of political power. (Liuhto 2010, 11-12; Shadrina 2010,
Nevertheless, Russia’s opportunities to use 108-109; Casier 2011, 545). The Central
energy exports to the CIS countries as a Asian countries have started to look for
political “weapon” are quite limited. The geographical diversification of their energy
Russian Federation is vulnerable to the ties, for reducing their dependence on
disruptions to its deliveries to the EU by Russian pipeline network. Over the last
125Energy policy and (energy security) as a part of... NGP Yearbook 2011
couple of years, Russia has been faced with For China, energy is not an instrument of
competition, especially from China’s side, geopolitical ambition, but the principal
for Central Asian oil and gas. The purchase- for more assertive foreign policy, on the
agreement of China for Turkmenistan contrary for Russia; possession of vast oil
gas has helped the Central-Asian states to and gas resources is the power-equivalent of
demand higher prices for their gas from nuclear weapons in the Soviet era. Energy
Russia. is not just an instrument of influence in
Moscow has been aiming to restore its itself, but impacts on other dimensions
presence in the Asia-Pacific region through of power: military, political, economic,
increases in oil and natural gas exports. technological, even cultural and normative.
Energy Strategy for Russia the Period up to 2030 (Lo 2008, 132-133.) The most fundamental
envisioned that Russia would increase its is that Russia and China have very different
exports of oil so that the use of Russian understandings of energy security. China
oil would increase in the Asia-Pacific is most concerned of security of supply.
region would increase from 8 percent to The biggest threat to its energy security
of oil used in 2008 to 22 – 25 percent in is an interruption to or a reduction in
2030. Natural gas exports were predicted the physical flow of energy, and a rise in
to increase from 0 percent up to about 20 the price of energy. To reduce these risks
percent in the same period (Ministry of China has diversified its energy imports to
Energy of the Russian Federation 2009, around the world (EIA 2010; Andrews-
140-141). The strategic goals for Russia in Speed & Dannreuther 2011, 65 - 71). For
its so called eastern vector are, on the other Russia energy security means security of
hand, to increase energy exports toward the demand. Oil and gas account for over two
Asia-Pacific for creation of an “Asia card” thirds of Russia’s exports and a quarter of
vis-à-vis the nations of the Europe Union, the country’s GDP (Liuhto 2010, 9). The
and on the other hand, to attract domestic dependence of the Russian economy on the
and foreign investments to modernize energy sector means that Russia’s interest is
economic backwardness of eastern Siberia to have long term contracts for its energy
and the Far East, which Moscow considers exports to protect commercial interests
a Russian weakness vis-à-vis geopolitical both in the Far East and in the Europe.
rival, China (Itoh 2011, 1). Another strategic compass point in
In the Sino-Russian energy relationship Russia’s foreign energy policy is north.
energy and geopolitics are intertwined. Global climate change has catapulted
At first sight the relationship appears to the Arctic in the centre of the global
be based almost ideal complementarity: geopolitics, as melting ice reveals options
on one side the world’s biggest exporter for new oil and gas deposits. According to
of oil and gas; on the other, one of the Russian sources, most of these Arctic’s oil
largest consumers of energy in the world. and gas resources are located in Russian
Also, China and Russia have a common territory (e.g. Kontorovich, et al. 2010).
border which makes possible to transport The Arctic region is considered to be
energy via pipelines without third parties. primary resource base and potentially
126Nordia Geographical Publications 40: 4, 121–132 Jussi Huotari
important corridor for future ship traffic Comparison of Russia’s
between the Atlantic and Pacific Oceans policy between
(Security Council of the Russian Federation geo-strategic regions
2008; Ministry of Energy of the Russian
Federation 2009). However, it was not until The changes in Russia’s energy policy from
2008 that the Russian Federation managed year 2000 to 2011 have appeared, mainly,
to formulate a comprehensive state policy as dynamics between internationalisation
in its Arctic region. The Arctic State policy and nationalisation of energy sector. This
is strongly linked to other federal strategies dynamics has influenced to the meaning of
and policies that are aiming to reduce analysed regions in Russia’s foreign policy.
socio-economic gap between regions First common thing between the Eurasian
within the Federation (Heininen 2011, 48). “Rimlands” is their meaning in the protection
The development of the Northern Sea of “Heartland”, and that is why the strategies
Route (NSR) alongside with the extraction and policies of the Russian Federation
of hydrocarbon resources is one of the which consider these regions include along
fundamental goals of Russia’s Arctic policy. with the other goals a security aspect. The
This shipping channel is perceived as the security aspect is emphasized by concept
sole means of transportation for Russian of energy security which legitimates the
petroleum products from coastal and states participation in energy production
insular Arctic regions (Zysk 2010, 105). and transportation. In this regard, Russia to
Potential opening of the trans-arctic sea shows up as an actor who has a messianic
routes and options for energy resources task to take care stable distribution and
has got also the non-arctic states to look for supply of energy in the Eurasia and Asia-
the benefits of them. For example China, Pacific regions. By using a comprehensive
whose economy is dependent on imported understanding of energy security, Russia
energy and foreign trade, follows the justifies state’s control over the energy policy.
development of the Arctic region carefully Matters, like environmental protection
(Jakobson 2010). and human aspects, are well noticed in the
In the future the meaning of the Arctic concept of comprehensive energy security,
oil and gas resources for global energy and these kinds of “soft” security means are
security may increase. Events like, ´Arab making the comprehensive energy security
Springs´, an earthquake in Fukushima, a received and eligible state of affairs. To
Japan and Germany’s decision to close its succeed in this, Russia needs to control over
nuclear power plants by end of 2022 have its energy infrastructure and that is why
promoted the Arctic’s energy reserves as a pipelines are in strategic position.
choice for global energy security. A second common phenomenon is a
geopolitical rivalry for the control over
the strategic “Rimlands” which is levelled
mainly at the United States and Nato. This
is interpreted to mean that Russia’s uses its
energy assets as an instrument of power
127Energy policy and (energy security) as a part of... NGP Yearbook 2011 for protection of its national interests. Transport infrastructure is crucial part of However, in the light Russia’s Energy state’s capacity to control energy policy. strategy, in which country’s foreign energy One of the biggest differences between policy objectives are defined “the maximum analysed regions is also related to energy efficient use of the Russian energy potential transports. In the southern “Rimlands” of for full-scale integration into the world Eurasia energy is transported via pipelines, energy market, enhancement of positions where as in the Arctic main transport mean thereon and gaining the highest possible is planned to be oil and gas tankers. The profit for the national economy” (Ministry existing pipeline network has its advantages of Energy of the Russian Federation 2009, and disadvantages. On the other hand, the 55), the “stick and carrot” policy seems pipeline network which Russia controls to be false interpretation. Use of energy binds and makes former Soviet states as a foreign policy mean is like a double dependent on Russia, but then again it edged sword, because any threat of cutting prevents Russia from diversifying its energy or reducing energy supplies will have a exports geographically and from achieving negative effect to Russia’s reputation as maximum commercial profits. In this sense a liable trade partner. In this regard the the use of tankers in energy transports geopolitical competition is not contested seems to be logical, since it provides global by means of the Cold War rhetoric’s, and markets for Russian energy. that is why it does not necessarily mean the In Central Asia and the Caucasus region return to arms race. In fact, this struggle is Russia acts mainly as a transit state, while fought according the rules of international region Russia’s role in the Arctic and law and international regional institutions.3 the Asian Pacific is energy producer and Russia is chasing to pursue extensive and exporter. These different roles influence multicentre cooperation, in which foreign Russia’s foreign energy policy in analysed policy’s goal is to get the maximum profit regions. The gatekeeper position in Central from the eastern and western markets. Asia allows the control of energy transports A third common feature underlines between China and the EU. The Central the state sovereignty. In Russia’s energy Asian states are trying to reduce their policy, state sovereignty is manifested in the dependence on Russia by concluding discussion of infrastructure and transport bilateral relationships for energy exports routes. By keeping the pipelines and oil and by planning alternative pipelines and gas tanker fleet under state ownership, e.g. Nabucco project which are bypass Russia shows that, even though the country Russian territory. On the other hand, in is ready to open its strategic energy sector the Arctic region Russia is dependent to foreign investments, she not willing to on both technological and economical give up the control of energy transport foreign investments. In order to encourage infrastructure. The desire to avoid transit investments Russia has had to change the states countries by building up new supply energy sector and to make it more open. routes e.g. Nord Stream and South Stream, support Russian foreign energy policy goals. 128
Nordia Geographical Publications 40: 4, 121–132 Jussi Huotari
Conclusions However, the use of “energy weapon” is
bad policy from Russian point of view,
Energy became more central to Russian because it reduces the incentive to do
foreign policy due to the rapid rise in the business with Russia in other sectors. After
world market price of oil in the beginning oil prices’ peaked in 2008 Russia tried to
21 st century. High prices resulted from modernize its economy by reducing the
the exports of fossil fuels became the country’s economic dependence on natural
most important income for state. Rapid resources. The modernization policy has
economic recovery and centralization of softened Russia’s foreign policy. This has
power revised character of Russian foreign increased the prestige in doing business
policy. The strengthening of Russia did not with Russia and has strengthened Russia’s
mean return to expansive foreign policy, credibility. A politically and economically
thus Russia’s foreign policy is guided by the strong and steady Russia is crucial for world
objective maximize its economic growth. geopolitical stability and peace.
After Vladimir Putin’s accession to
power, both domestic and foreign policy
was economy-oriented. The economic End notes
system was capitalist even though state’s
role was bolstered up. This affected also 1
All these three regions are vital for Russia’s
the energy sector in which state control energy and foreign policy. It has been
increased as compared to privatization estimated that one fourth of the world’s
policy during 1990’s. Strong state policy, undiscovered hydrocarbon resources and
led by president Putin, promoted better strategic sea route for energy transports
execution in reaching Russia’s national exists in the Arctic region (Circum-
interests. Putin’s foreign policy did not mean Arctic Resource Appraisal: Estimates
Russia’s isolation from the world markets of Undiscoverd Oil and Gas North of
because Russia still tried to integrate strongly the Arctic Circle 2008). Also the role of
into the global economy. However, the the Central Asian and Caucasus states as
integration would only happen according a non-OPEC and non-Russian oil and
to Russia’s national interests. gas producer is strategic; however these
Russia’s foreign, security and energy countries are dependent on Russian energy
policy documents and strategies do not transport infrastructure i.e. pipelines.
differ from their targets as compared to (Palonkorpi 2007, 57.).
Western documents, even though Russia
and Western countries’ have different 2
CIS= Commonwealth of Independent
approach to the post-Cold War world. States.
Despite this, interpretations of the Russian
strategies often highlight the security 3
In the High North under Arctic Council
aspects of strategies and policies. This and Barents Euro-Arctic Council, in the
has politicised oil and gas, when Russia East Asia, Central Asia and Caucasus
has had conflicts with other countries. regions under Shanghai Cooperation
129Energy policy and (energy security) as a part of... NGP Yearbook 2011
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