The case of Eastern Europe
The energy dilemma and Chernobyl legacy The overall impact of the Chernobyl disaster on Belarus and Ukraine, already mentioned at the beginning of this chapter, is described further in greater detail in the box. Given this tragic legacy, why are both Belarus and Ukraine currently considering expanding their nuclear energy generating capability? The answer lies in the special role played by energy, and energy security, in Eastern Europe. Energy is vital for the internal and external security of all three countries (see figure). A secure, affordable domestic energy supply is critical to economic development, particularly in energyhungry industrial sectors. It is also essential to meet social needs (heating, transportation, etc.) especially for vulnerable groups. Since the region’s own energy resources and production capacities, especially in Moldova and Belarus, are insufficient, a significant proportion of energy has to be imported (see table), primarily from Russia. This is, in turn, a major factor in the external security of Eastern Europe. Another factor is the location of the region at the crossroads of major energy transport corridors linking producers in Russia and the Caspian region with consumers in Central, Western and Northern Europe. In the context of rising global demand for energy and
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higher hydrocarbon prices, the stability of oil and gas transportation routes is becoming increasingly important for Russia, the EU, the United States and other countries19. A good illustration of the external aspect of energy security was the heated debate over arrangements for the supply of Russian natural gas to Belarus and Ukraine, tariffs for transporting gas across these countries, and ownership of gas transportation facilities. Belarus, a traditional Russian ally, was purchasing Russian gas at $47 a cubic metre 20 until the end of 2006. From 2007, the price of the gas was increased to more than $100 a cubic metre. In the context of price negotiations, Belarus also agreed to sell 50% of shares of Beltransgaz – the Belarus national gas distribution and transportation company – to Russia’s state-owned Gazprom. The dispute between Russia and Ukraine over gas prices in early 2006 resulted in disruption of gas supplies to Western Europe sparking a strong reaction from the EU that had worldwide resonance21. While most observers considered that Russia was exerting political pressure by increasing gas prices, others pointed out that before the 2006 deal Gazprom had been supplying Ukraine at a fifth of the market price, equivalent to Russia subsidising the Ukrainian economy by $3 to $5 billion a year 22. A similar dispute over tariffs on export of Russian oil and its products to and through Belarus resulted in a brief disruption of oil supplies to Poland and