A presentation on how the energy industry affects the relationship between Russia and Europe. It uses constructivism and neoliberalism as international relations theories and three case studies to explain the situation. The conclusion, it seems, is that the interdependence is making peace between the two groups more attractive.

1. Energizing
Cooperation:
An Alternative
View on EURussian
Relations
Elliott Morrow

2. Evolution of Relations
 Europe
(the West) and Russia (USSR)
fought a 40 year war, with Russia being
defeated economically
 Europe
is now dependent on Russia‟s
huge energy reserves (Van Der Meulen, 2009)
 Yet,
they are closer than ever (Padget, 2011)

3. Purpose
 With
all of the potential
struggles, how can
Europe and Russia be so
close?
I
will argue this is
because of the business
of energy and energy
security

4. Factors
 Development
of a large web of
international institutions
A
large amount of foreign direct
investment

5. Overview

Introduction
The current state of energy security
 The opposing view


Literature




International Institutions-Neoliberalism
International Institutions-Constructivism
Methodology
Case 1- Partnership and Cooperation
Agreements
 Case 2- The Energy Dialogue
 Case 3- Foreign Direct Investment



Analysis
Conclusion
References

6. Eu-Russia Energy Security
 Europe needs
(Van Der Meulen, 2009)
Russia‟s energy
 Russia
has the largest
reserves of natural gas
(Ndefo & Geng, 2007).
 Russia



has the second largest coal reserves
has the eighth largest oil reserves
Is the largest exporter and producer of oil in
the world (Shiryaevskaya, 2010).

7. Eu-Russia Energy Security
 Russia
needs Europe to buy Russian
energy

Europe is the destination of



70% of Russian exported gas
80% of exported oil
50% of exported coal (European Commission, 2009)
 Russia
needs European investment for
technology and to replace its rapidly
aging energy infrastructure (Orttung & Overland,
2011)

8. The Two Sides
 Russia
is using its abundance of
energy, and Europe‟s dependency as a
weapon against the EU (Stegen, 2011)
 The
EU and Russia are becoming more
cooperative due to mutual benefits
fostered by international institutions and
shared norms (Splidsboel-Hansen, 2002)

9. Literature Review
Constructivism
International
Institution
Neoliberalism

10. Neoliberalism
 International







Institutions-Keohane, Nye
Interdependence
Cooperation
Mutual Interests
Information Sharing
Maximum Integration
Expertise
Network in order to persuade powerful states

11. Constructivism
 International
Institutions- Checkel ,Finnemore, Sikkink, Haas

“When normative suasion takes place, agents actively and reflectively
internalize new under-standings of appropriateness” (Checkel, 2005)

Agents of change (Sikkink, Finnemore)

“…the location in which reflexive new practices and policies develop.” (Haas
& Haas, 2002)

“Institutions provide the receptive and supportive milieu for the conduct of
appropriate discourse to a much greater extent than would be the case if
individuals worked in isolation.” (Haas & Haas, 2002)

12. Methodology

Cooperation

To have cooperation there must be incentive to change,
through a process, to bring both sides into conformity
(Keohane, 1984)

Case Study: Partnership and Cooperation Agreements


Case Study: Energy Dialogue


evidence of integrating Russian and European markets
and economy on all levels
evidence of facilitating greater energy interdependence,
and preventing past conflict
Case Study: Foreign Direct Investment

evidence of increased FDI flow in the energy sector
creating an institution

13. Case 1: Partnership and
Cooperation Agreements





Began in 1994
Put into force in 1997
Series of meetings and agreements to set up
a legally binding framework for relations
In part created to simulate WTO conditions
Primary concern is to promote trade,
investment and harmonious economic sectors

14. Partnership and Cooperation
Agreements
 Created



the Four Common Spaces (2005)
Freedom, Security, Justice Space
External Security Space
Research, Education, Culture Space
 Economic
Space

15. Economic Space (PCA)
 Economic
Space

Enforce WTO “Technical Barriers to Trade”

Regulatory Dialogue

Transportation

17. Economic Space (PCA)
 Investment



Germany needs Russian labor
Russia needs European investment
Predictability and Transparency by
standardization
 Combining

financial sectors
Interdependence and independence

18. Economic Space (PCA)
 Trade




Standardize and Automate
Universal use of security checks and risk
assessment
Use of international institutions
Technical assistance to Russia

19.  russia-and-eu/

20. Economic Space (PCA)

Information and Communication
 The



Information Society
Approximate legislation
Increase interoperability of Russian and European
business through E-Businesses
Research and Development

21. Theory Application (PCA)

International institutions were created to incorporate
and combine Europe and Russian economies on
every level

Information is shared at a faster rate and more
accurately, which takes out guess work and reduces
risk

Transparency and Standardization creates the
platform for increased trade and investment

Cooperation instead of antagonism is seen as the
appropriate action

22. Case 2: Energy Dialogue

Created on October 30, 2000

More than 60% of Russia‟s export revenue
comes from the energy sector.

45% of Russian imports originate in Europe

88% of Russian oil and 70% of Russia‟s gas
exports are sent to Europe

75% of Russian FDI originates from Europe

23. Energy Dialogue

24. Energy Dialogue
 Europe‟s
only real option for energy is
Russia
 Russia‟s only real option for energy sales is
in Europe
 European demand is growing since the
expansions of 2004 and 2007

26. Energy Dialogue
 “Bilateral
Cooperation Mechanism”
 Included:



Governments
Corporations
Individual Experts
 Permanent
Partnership Council

27. Energy Dialogue
 Thematic

Russian Energy Strategy until 2030
 New


Groups
technology and tap new resources
Web based platform to quickly share
scenarios and solve problems
Fair use of pipelines

28. Energy Dialogue
 Create
a dialogue from
raw material providers to
end users
 Synchronizing
the
electricity system and
unbundling
 Tacis
program

29. Energy Dialogue
 Early




Warning System
Solves the problems of the 2006 and 2009
gas crises
Direct line between Moscow and the
European Commission
Obligates each side to inform of looming
problems
Allows 3rd party experts to contribute to
solutions and forecasting

30. Theory Application

Improves security of supply to
Europe(predictability)

Allows Russia to extract more resources (increased
mutual benefits)

Creates mechanisms to prevent past conflicts
(mitigating conflict through institutions before the
fact)

Creates arena for change towards a mutual free
market

31. Case 3: Foreign Direct
Investment

Siemens AG announced that it will invest €1 Billion into Russia over
the next 3 years

"Our far-reaching investments underscore Russia's great importance as
a strategic core market for Siemens. By entering into a technology
partnership, we're supporting the country's ambitious modernization
plans and placing our close cooperation with our Russian partners on a
new, even broader basis," said Peter Löscher (Siemens AG CEO)

Siemen‟s repowering project (March 2012)


increased productivity almost 3 times and reduced emissions and
amount of gas used
Demonstrated the value of European investment

33. Foreign Direct Investment
 The




Russian South Stream Project (2008-2015)
15% -German Wintershall
15% -French Electricite de France (EDF)
20% -Italian Eni
50% -Russian Gazprom
 Bypasses
transit countries to directly connect
Russia with Europe
 Attracting European Investment Bank interest

35. Foreign Direct Investment

Russia investing into Eurozone

"We are ready to invest all financial means to
back the European economy and the
eurozone”-Medvedev

15 billion euros to International Monetary Fund
resources intended for use in stabilizing the
eurozone

41% of Russian currency is invested in the Euro

36. Theory Application
 Increased
investment creates a situation
where it is in each side‟s interest for the
other to succeed
 European
investment in Russian energy
combines both business sectors
 Creates
an institution of confident
investments with precedents

37. Analysis
 International
Institutions have integrated
European and Russian Economies at almost
every level
 This
has spurred efforts to prevent conflict in
the future and invest in each other‟s futures
 The
identities of Russia and Europe have
been changing from all perspectives into a
more cohesive and cooperative image

38. Analysis
 Shortcoming

This paper looks at Europe as a whole,
when individual state‟s politics play a role

39. Conclusion

Russia and Europe need each other for capital
and the energy necessary to exist

Institutions have been setup to facilitate this fact

Mechanisms have been set into place to minimize
conflict and maximize mutual gain

Russia and Europe are slowly but surely becoming
closer and more cooperative through institutions
on all levels

41. References

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
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Press.
Blake, J. & Kostomarova, A. (2011, October 18). Siemens commits €1 billion to
russian modernization. Russia Today
Checkel, J. (2005). International institutions and socialization in europe:
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generation sector with eur 250 million to contribute to energy efficiency and
emission reduction.
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European Trade Commission (2008, November 13).Securing your energy
future:
Commission presents energy security, solidarity
and efficiency proposals.

42. References








European Trade Commission (2009). Eu-russia energy relations.
European Trade Commission. (2010, May). Russia-trade
European Commission. (2011, December 2). Information society:
Thematic portal.
European Commission. (2011). Euratom nuclear research international cooperation.
European Union. (2011). Eu russia energy dialogue. European
Commission: Directorate
General for Energy, 61-85.
Finnemore, M. (1993). International organizations as teachers of norms:
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Finnemore, M., & Sikkink, K. (1998). International norm dynamics and
political change. International Organization, 52(4), 887-917.
Haas, E., & Haas, P. (2002). Pragmatic constructivism and the study of
international institutions.Millenium- Journal of International Studies, 31,
573-600.
Hughes, J. (2006). eu relations with russia: partnership or asymmetric
interdependency?. (pp. 13-29, 56-72). London, England: London
School of Economics.

43. References







Keohane, R. (1984). After hegemony: cooperation and discord
in the world political economy. (pp. 18-30, 217-230). Princeton,
New Jersey: Princeton University Press.
Keohane. R. & Nye. J. (1973): Power and interdependence,
Survival: Global Politics and Strategy, 15:4, 158-16
Ndefo, E. & Geng, P. (2007, February 13). Russia: A critical
evaluation of its natural gas resources russia. Energy Tribune
Orttung, R., & Overland, (2011). A limited toolbox: Explaining the
constraints on russia‟s foreign energy policy.Journal of Eurasian
Studies, 74-85.
Padget, S. (2011). Energy co-operation in the wider europe:
Institutionalizing interdependence. Journal of Common Market
Studies, 49(5), 1065-1087.
Portela. (2001, May). Eu-russia co-operation in the security
domain: Problems and opportunities.
Reuters. (2009, November 16). Eu, russia agree to "earlywarning" mechanism for gas issues, The Moscow Times

44. References

Edf, wintershall to each get 15% in south stream gazprom head. (2011, September 06). RIA Novosti

Shiryaevskaya, A. (2010, January 2). Russian oil output
climbed 1.2 percent in 2009 (update1). Bloomberg
News
Splidsboel-Hansen, F. (2002). Russia‟s relations with the
european union: A constructivist cut. International
Politics, 399-421.
Stegen, K. (2011).
Deconstructingthe„„energyweapon‟‟:russia‟sthreattoeur
opeascasestudy.Elsevier: Energy Policy, 39, 6505-6513.
Van Der Meulen, E. (2009). Gas supply and eu-russia
relations. Europe-Asia Studies, 61(5), 833-856.

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