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Ukraine Continues To Seek Independence

As tensions continue to rise in the Middle East, so does the price of oil and concerns that energy supplies from the region may be disrupted.  U.S. dependence on Middle East oil has long been a topic of concern, with little being done to alleviate the situation.  Presidential candidate Mitt Romney has said that he will move forward with the Keystone XL pipeline project that would bring oil from Canada to the U.S.  Meanwhile President Obama has taken only symbolic and essentially useless action on the Keystone project, leaving a major decision on the table until after the election.  A similar situation has been playing out in the biggest country in Europe as well, Ukraine.

Ukraine achieved independence from Russia in 1991 and has a presidential-parliamentary system of government.  President Viktor Yanukovych has been working, along with Prime Minister Mykola Azarov, to help the country become energy independent and join the European Union (EU) which would be the final steps to becoming truly independent from their long history with Russia.  Much as the U.S. has been dependent on Middle Eastern oil, Ukraine has been beholden to Russia for their gas supplies.  Russia supplies almost a quarter of the gas consumed by the EU, with 80% of it flowing through pipes in Ukraine.  The power Russia has enjoyed in controlling the EU and Ukraine’s gas supplies has led, on more than one occasion, to gas being completely shut off due to disputes.  The heated situation most recently led to the jailing of Ukraine’s former Prime Minister Yulia Tymoshenko.  Russia’s state-controlled gas company, Gazprom,  is currently being investigated by the EU for violating antitrust rules, including interfering with competition between gas companies and setting unfair prices.  Even as President Obama has indicated an interest in a closer relationship with Russia, Ukraine has decidedly had enough.

For 2013, Ukraine has requested only half the current amount of gas they receive from Russia’s Gazprom.  Instead they will be focusing on developing their own supplies.  Ukraine actually has a large reserve of natural gas and serves as an energy corridor between the Caspian Basin and Europe.  A corridor which, incidentally, is not subject to Russian interference.  Additionally, Germany is working with with Ukraine on providing additional gas in the same way the U.S. could benefit from the Keystone project with Canada.

In early 2011 Ukraine joined the EU’s Energy Community and, along with other nations, will work to ensure regulations and practices in energy that serve everyone equally.  However, their participation in the Energy Community is only one part of ongoing efforts by Ukraine to comply with the EU’s standards of membership.  The Association Agreement, an important step to joining the EU, was initialed by both countries in March 2012.  Along with it, the Deep and Comprehensive Free Trade Agreement (DCFTA) was also  initialed and highlights the successful trade relationship between the two countries.  Exports from Ukraine to the EU  jumped 47% last year and imports from the EU were up 40.9%.  Their move towards Westernization has already proved to be the right direction as their economy has experienced growth amidst economic turmoil across the globe.

Ukraine is looking ahead to a more prosperous and Democratic society, and later this month they will be hosting the most open elections in their history.  To fight the corruption of the past, they will be employing new web cameras at polling stations and expect 5,000 observers to monitor their elections.  Meanwhile, the U.S. will be struggling to stave off growing election security concerns that will affect the future of Ukraine’s independence.  Should the U.S. continue to build their relationship with Russia, they will come upon the question of whether to support President Putin’s Customs Union.  The Customs Union is similar to the EU, and while both would welcome Ukraine membership, joining both isn’t an option.  Ukraine appears to have made it’s choice.  Now it’s time for the U.S. to make theirs.

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