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INTERDEPENDENCE DIVIDES

When Interdependence Produces Conflict: EU–Russia Energy Relations as a Security Dilemma

Pages 3-26 | Published online: 05 Mar 2015
 

Abstract

Contrary to the expectations of liberal theories, interdependence between Europe and Russia in the energy sphere has exacerbated security tensions between the two sides, leading to the competitive foreign policies that now see them at loggerheads in Ukraine. Interdependence has not worked because both sides have been worried that in the future interdependence will become asymmetrical (that is, that they will become more dependent than the other side and that the other side will take advantage of this weakness) and they have adopted policies to reduce their exposure, but they cannot reduce their own dependence without also threatening to increase the dependence of the other side. As a result, the relationship looks like a classic security dilemma – where neither side can improve its own security without threatening the security of the other side. These findings dispel commonly held notions about the pacific effects of interdependence and show that interdependence can exacerbate security tensions, particularly when it is focused on one area and falls short of complex interdependence.

ACKNOWLEDGEMENTS

The author thanks the Unger Family Foundation for its generous support for the research conducted in preparation for this article.

Notes

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2. Per Högselius, Red Gas: Russia and the Origins of European Energy Dependence (New York: Palgrave Macmillan, 2013).

3. Immanuel Kant, Kant's Political Writings. 2nd ed. Hans Reiss (ed.), H. B. Nisbet (trans.) (Cambridge: Cambridge University Press, 1991 [1795]); John R. Oneal, Frances H. Oneal, Zeev Maoz and Bruce Russett, ‘The Liberal Peace: Interdependence, Democracy, and International Conflict 1950–85’, Journal of Peace Research, Vol. 33, No. 1 (February, 1996), pp. 11–28.

4. Polachek, ‘Conflict and Trade’ (note 1); O'Neal and Russett, ‘Clear and Clean’ (note 1); Maoz, ‘The Effects of Strategic and Economic Interdependence' (note 1).

5. Doyle, Ways of War and Peace (note 1), Ch. 8.

6. O'Neal and Russett, ‘Clear and Clean’ (note 1); Maoz, ‘The Effects of Strategic and Economic Interdependence’ (note 1).

7. Vladimir Ilich Lenin, Imperialism, the Highest Stage of Capitalism (Reprint. New York: International, 1990); Fernando Henrique Cardoso and Enzo Faletto, Dependency and Development in Latin America (Berkeley, CA: University of California Press, 1979).

8. Albert Hirschman, National Power and the Structure of Foreign Trade (Berkeley, CA: University of California Press, 1945); Aurthur A. Stein, ‘Trade and Conflict: Uncertainty, Strategic Signaling, and Interstate Disputes’, in Edward D. Mansfield and Brian M. Pollins (eds), Economic Interdependence and International Conflict (Ann Arbor, MI: University of Michigan Press, 2006), pp. 111–26.

9. Geoffrey Blainey, The Causes of War (New York: Free Press 1973); Barry Buzan, ‘Economic Structure and International Security: The Limits of the Liberal Case', International Organization, Vol. 38, No. 4l (1984), pp. 597–624; Jack S. Levy, ‘The Causes of War: A Review of Theories and Evidence', in Phillip E. Tetlock, Jo L. Husbands, Robert Jervis, Paul C. Stern and Charles Tilly (eds), Behavior, Society, and Nuclear War, Vol. 1 (New York and Oxford: Oxford University Press, 1989), pp. 212–333.

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12. Mark Gasiorowski, ‘Economic Interdependence and International Conflict: Some Cross-national Evidence', [International Studies Quarterly], Vol. 30, No. 1 (1986), pp. 23–38; Katherine Barbieri, The Liberal Illusion: Does Trade Promote Peace? (Ann Arbor, MI: University of Michigan Press, 2002).

13. Mark Crescenzi, Economic Interdependence and Conflict in World Politics (Lanham, MD: Lexington Books, 2005).

14. Erik Gartzke, ‘The Capitalist Peace', American Journal of Political Science, Vol. 51, No. 1 (2007), pp. 166–91.

15. Keohane and Nye also make an important qualitative distinction between sensitivity interdependence, where events in one state are contingent on events in another, and vulnerability interdependence, where it will be costly for states to break or forego their relationship with one another. The concept of vulnerability interdependence captures the opportunity costs of disrupting the relationship of interdependence and is thus much more important for the purposes of this study. For the sake of clarity, I will use the term interdependence to refer to vulnerability interdependence: Robert Keohane and Joseph Nye, Power and Interdependence: World Politics in Transition (New York: Little, Brown and Company, 1989).

16. Keohane and Nye, Power and Interdependence (note 15).

17. Hirschman, National Power (note 8).

18. Barbieri, The Liberal Illusion (note 12), pp. 67–70.

19. Ibid., p. 124.

20. Dale Copeland, ‘Economic Interdependence and War: A Theory of Trade Expectations', International Security, Vol. 20, No. 4 (1996), pp. 5–41.

21. Robert Jervis, ‘Cooperation under the Security Dilemma', World Politics, Vol. 30, No. 2 (1978), pp. 167–74.

22. Keohane and Nye, Power and Interdependence (note 15).

23. Daniel Deudney and G. John Ikenberry, ‘The Nature & Sources of Liberal International Order', Review of International Studies, Vol. 25, No. 2 (April, 1999), pp. 179–96.

24. Permanent Mission of the Russian Federation to the European Union, EU-Russia Trade 2014, http://www.russianmission.eu/en/trade

25. ‘Zhelezni zaxvat Evropi’ [A Steel Takeover of Europe], Kommersant, 24 May 2006.

26. Andrew Kramer, ‘Russia Gas Pipeline Heightens East Europe's Fears', New York Times, 12 October 2009.

27. European Union, EU Energy in Figures (Luxembourg: Publications Office of the European Union, 2013).

28. United States Energy Information Agency, Annual Energy Outlook 2014, http://www.eia.gov/forecasts/aeo/pdf/0383.pdf

29. Heli Simola, Laura Solanko and Vesa Korhonen, Perspectives on Russia's Energy Sector (Bank of Finland: Institute for Economies in Transition Online, No. 3, 2013), http://www.suomenpankki.fi/pdf/172269.pdf

30. Edward Lucas, The New Cold War: Putin's Russia and the Threat to the West (London: Palgrave Macmillan, 2014); Janusz Bugajski, Dismantling the West: Russia's Atlantic Agenda (Washington, DC: Potomac Books, 2009).

31. Sergei Kortunov, Interview with Author, Moscow, 12 July 2007.

32. Boyce Greer, ‘European Economic Security', in Stephen Flanagan and Fen Osler Hampson (eds), Securing Europe's Future (Dover, MA: Auburn House, 1986), pp. 221–42. EU Energy in Figures 2013.

33. Högselius, Red Gas (note 2), p. 181.

34. European Commission, Assessment Report of 2004/67/EC On Security of Gas Supply, 16 July 2009, http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=SEC:2009:0978:FIN:EN:PDF

35. Högselius, Red Gas (note 2), p. 131.

36. Bugajski, Dismantling the West (note 29); Lucas, The New Cold War (note 29); Marshall Goldman, Oilopoly: Power, Putin and the Rise of the New Russia (Oxford: Oxford University Press, 2010).

37. Sergei Medvedev, ‘The Stalemate in EU-Russia Relations: Between “Sovereignty” and “Europeanisation”', in Ted Hopf (ed.), Russia's European Choice  (New York: Palgrave Macmillan, 2008), pp. 215–32.

38. Tatiana Romanova, ‘Energy Partnership – A Dialog in Different Languages', Russia in Global Affairs, Vol. 5, No. 1 (January–March 2007), pp. 32–45.

39. Ibid., p. 43.

40. Daniel Yergin, ‘Ensuring Energy Security', Foreign Affairs, Vol. 85, No. 2 (2006), pp. 69–82.

41. Associated Press, ‘Russia Wants Explanation of EU Energy Blueprint', 21 February 2011.

42. ‘Putin Harangues Europe on Businesses', Moscow Times, 29 November 2010.

43. Alan Riley, ‘Gazprom and the Rule of EU Law: Europe Should Hold Its Ground Against Russia's Ex-imperial Arrogance', Wall Street Journal Europe, 15 March 2011.

44. Tatiana Romanova, ‘Russian energy in the EU market: Bolstered institutions and their effects’, Energy Policy, Vol. 75 (November, 2014), pp. 44–53.

45. Sergei Kolchin, ‘Why Russia Refuses to Ratify Energy Charter', RIA Novosti, 4 July 2006.

46. Emil Ismayilov, ‘BTC Increases Oil Transportation Through Turkey', Eurasia Review, 3 August 2014, http://www.eurasiareview.com/03082014-btc-increases-oil-transportation-turkey/

47. Vladimir Socor, ‘The Curtain Falls on Nabucco's Last Act’, Eurasia Daily Monitor, Vol. 10, No. 123, 28 June 2013.

48. Ibid.

49. United States Energy Information Agency, Technically Recoverable Shale Oil and Shale Gas Resources: An Assessment of 137 Shale Formations in 41 Countries Outside the United States (2013), http://www.eia.gov/analysis/studies/worldshalegas/pdf/fullreport.pdf

50. Morena Skalamera, ‘EU-Russia Cooperation in a Rapidly Changing Interregional Gas Market', Economics and Policy of Energy and the Environment, Vol. 2, No. 3 (2013), pp. 31–65.

51. ‘Gazprom Bows to Demand with Gas Price Cut', Financial Times, 12 February 2012.

52. Harley Balzer, ‘Vladimir Putin's Academic Writings and Natural Resource Policy', Problems of Post-Communism, Vol. 53, No. 1 (January/February 2006), pp. 48–54.

53. Goldman, Oilopoly (note 35).

54. Ibid.

55. Mark Lenard and Nicu Popescu, A Power Audit of EU-Russia Relations (London: European Council on Foreign Relations, 2007); Bugajski, Dismantling the West (note 29).

56. According to official Russian government estimates, Russia will need to invest USD 565–509 billion into the energy sector for the period 2009–2030. See Energeticheskaya strategiya Rossiii do 2030 goda [Russia's Energy Strategy till 2030] (2009), http://minenergo.gov.ru/aboutminen/energostrategy/

57. Romanova, ‘Russian Energy in the EU Market’ (note 43), pp. 27–46.

58. Sadek Boussena, and Catherine Locatelli, ‘Gas Market Developments and Their Effect on Relations Between Russia and the EU’, OPEC Energy Review, Vol. 35, No. 1 (March 2011).

59. ITAR-TASS, ‘European Commission Launches Antitrust Investigation Against Gazprom', 5 September 2012.

60. Interfax, ‘Major Russian Companies Told to Coordinate Actions With Kremlin', 12 September 2012.

61. Russia was able to undercut Turkmen and Uzbek efforts to sell their gas directly to Europe and Turkey by flooding both markets with Russian gas, which was more attractive to these consumers because it came from established sources and moved through established pipelines. See Adam Stulberg, Well-Oiled Diplomacy: Strategic Manipulation and Russia's Energy Statecraft in Eurasia (Albany, NY: SUNY Press, 2007). In recent years, however, Russia has begun to lose its grip over central Asian gas as China has built pipelines and signed contracts from substantial gas volumes. Over half of Turkmenistan's gas exports now go to China. See Ben Aris, ‘China Buys up Russia's Backyard', Business New Europe, 3 February 2014.

62. Martha Brill Olcott, International Gas Trade in Central Europe: Turkmenistan, Iran, Russia, and Afghanistan (Program on Energy and Sustainable Development, Stanford University, 2004), http://www.rice.edu/energy/publications/docs/GAS_InternationalGasTradeinCentralAsia.pdf

63. ‘Nord Stream Is Giving Europe Gas', Moscow Times, 8 November 2011.

64. Boussena and Locatelli, ‘Gas Market Developments’ (note 57).

65. Ladka Bauerova, ‘Putin's Pipeline Bypassing Ukraine Is at Risk Amid Conflict', Bloomberg, 14 August 2014.

66. Reuters, ‘Putin drops South Stream Gas Pipeline to EU, Courts Turkey', 1 December 2014.

67. Sergei Blagov, ‘Russia Tries to Scuttle Proposed Trans-Caspian Pipeline', Eurasianet.org, 27 March 2006, http://www.eurasianet.org/departments/insight/articles/eav032806.shtml.

68. Stulberg, Well-Oiled Diplomacy (note 60).

69. Bugajski, Dismantling the West (note 29); Lucas, The New Cold War (note 29).

70. Reuters, ‘Putin drops South Stream Gas Pipeline to EU’ (note 65).

71. Timofei Bordachev, Moscow Interview, 10 December 2014.

72. ‘China Makes 25mln Loan to Trans/Rosneft’ Moscow Times, 17 February 2009.

73. Liam Halligan, ‘China Russia Gas Deal Spells Trouble for the Dollar’, Business New Europe, 28 May 2014.

74. European Union, EU Energy in Figures (note 27).

75. Tatiana Mitrova, ‘The Implications of Global Natural Gas Market Developments for China’, Oxford Energy Forum, No. 95 (February 2014), pp. 13–16. http://www.oxfordenergy.org/wpcms/wp-content/uploads/2014/04/OEF-95.pdf

76. Romanova, ‘Energy Partnership’ (note 37), p. 43.

77. Ibid., p. 44.

78. Fedor Lukyanov, ‘Not to Frighten but to Scare off. A World Without Rules', Rossiyskaya Gazeta, 3 April 2013.

79. Suzanne Maloney, ‘Engagement with Iran: The Sequel', The Fletcher Forum of World Affairs, Vol. 37, No. 1 (Winter 2013), pp. 91–103.

80. Wayne M. Morrison, ‘China-U.S. Trade Issues', Congressional Research Service, 5 December 2014, https://www.fas.org/sgp/crs/row/RL33536.pdf

81. Daniel H. Rosen and Thilo Hanemann, ‘New Realities in the US-China Investment Relationship', RHG Investment Note, 29 April 2013, http://rhg.com/notes/new-realities-in-the-us-china-investment-relationship

82. Jeff Faux, ‘Complacent Consensus on China’, Huffington Post, 13 August 2013, http://www.huffingtonpost.com/jeff-faux/complacent-consensus-on-c_b_3751104.html

83. Shang Jun, ‘On Guard Against Spillover of Irresponsible U.S. Politics’, Xinhua, 10 October 2013.

84. G. John Ikenberry, Liberal Leviathan: The Origins, Crisis, and Transformation of the American World Order (Princeton, NJ: Princeton University Press, 2012).

85. Gartzke, ‘The Capitalist Peace’ (note 14).

86. Charles Krauthammer, ‘Obama's Pathetic Response to Putin's Invasion of Crimea', Washington Post, 21 March 2014; Victor Cha, ‘Crimea Sets Dangerous Precedent for Asia', Asia Times, 27 March 2014.

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