On May 27, 2015, Amos Hochstein, the Special Envoy and Coordinator for International Energy Affairs leading the Bureau of Energy Resources (ENR) at the U.S. Department of State, spoke at the German Marshall Fund in Washington, D.C. about exporting Liquified Natural Gas (LNG) into Eastern European countries who are primarily dependent on Russia for their energy supply. Russia has been using its vast supply of energy into Europe as a geopolitical tool to influence and harass its neighboring countries.
Back in January 2006, Russia completely cut off its supply of natural gas to Ukraine, where a great deal of gas flows to Western European countries. This caused shortages of gas all across Europe and this trend has not slowed since. Just this past February, Russian leaders threatened to cut off Russia's supply of natural gas to Ukraine again if they do not pre-pay their months supply. Russia has also vowed to start cutting off all gas that flows through Ukraine permanently in 2018 and rerouting through Turkey. Russia uses an essential resource for development, energy, as a bargaining tool to influence its neighboring states. How can any country hope to negotiate equitably and successfully with Russia if their energy supply is on the bargaining table? Using this essential resource as a political weapon destroys any chance of improving relations between Russia and its neighbors.
This discussion highlights the importance of expanding the connection between the European Union and Eastern European countries, as well as expanding connections with the United States. If the United States can expand its exports of LNG to countries that are entirely dependent on Russia for their energy needs, like Croatia and Serbia, this could ease the energy dependence of those countries and loosen their connection with Russia, supporting a free energy market in Europe in order to promote healthy competition which benefits the economies of all countries involved.
The European Union is trying to expand reverse gas flows back into Ukraine from Slovakia, Poland, and Hungary in order reduce Ukraine's dependence on Russian gas. An increase in reverse flows back into Ukraine could force the Russian gas company, Gazprom, to lower price of its gas to Ukraine and throughout Europe. Russia could lose some of its bargaining power if Ukraine can buy its gas from other sources in the EU. In recent news, Hungary has reached a private new deal with Russia that would cut off all reverse flows into Ukraine in exchange for lower natural gas prices.