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Ukraine crisis: How will energy influence May elections?

The atmosphere in Ukraine is increasingly tense ahead of its May presidential elections, with pro-Russian militia groups continuing to occupy buildings in eastern Ukraine. The country's energy history and future will help shape Ukraine's presidential elections. 

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Reuters
A gas flare is seen at an underground gas storage facility of the Chernomorneftegaz company in the village of Glebovka, in Crimea's Chernomorsky district.

As protests in Ukraine鈥檚 eastern region turned violent on Sunday leading to the death of a Ukrainian security officer in a shootout with pro-Russian militia, Kiev threatens military action while Moscow flexes its geo-economic warfare muscles.

Pro-Russian militia groups have seized government buildings and police headquarters in Ukraine鈥檚 eastern city of Donetsk and Slovyanks--where the shoot-out took place--and despite a Monday morning聽聽by the Ukrainian government, these groups have shown no sign of giving in.

There has been no movement by the Ukrainian military to make good on its ultimatum; indeed, the messages have been unclear and contradictory.

Acting president Oleksander Turchinov has dangled the idea of a referendum that would seek to address the demands of the region鈥檚 Russian-speaking population for more autonomy. In the same breath, Turchinov on Sunday promised a 鈥溾 to prevent another incident such as Crimea, which was annexed by Russia last month.聽

, Moscow requested an emergency meeting of the United Nations Security Council (UNSC), while聽聽with estimations that Russia had amassed up to 40,000 troops in more than 100 locations along its border with Ukraine.

This is the atmosphere that leads us up to聽聽in Ukraine, which will be shaped by metamorphosing relations with Russia鈥攁nd by energy.

Over the past few years, Ukraine鈥檚 relationship with Russia has become increasingly adversarial, in tandem with Russian President Vladimir Putin鈥檚 desire to increase his status and dominion. (Related Article:聽)

But it is through the spectrum of energy that we have seen the more poignant phases of this change. The current controversial gas supply agreement Ukraine has with Russia was put in place less because of Putin鈥檚 negotiating skills and more because of a concerted effort by former prime minister and current presidential candidate聽聽to destroy the Ukrainian gas lobby run by oligarch聽.

While Ukraine has always struggled with gas supply issues, this really changed the dynamic.聽鈥攆ormer energy minister and another current presidential candidate--has gone from a close working relationship to a very strained one with Russia as he sought to both keep the population supplied with cheap gas and to increase the country鈥檚 independent energy supply.

Boyko鈥檚 plans to further diversify the industry were halted when he was promoted to the position of vice-prime minister and Eduard Stavitsky, a member of ousted president Viktor Yanukovych鈥檚 inner circle, was given the energy portfolio. At that point, all efforts towards energy independence abruptly ceased.聽 聽

What鈥檚 going on now is geopolitical and geoeconomic battle for the region, driven by loss of Russian credibility and Moscow鈥檚 control of the Ukrainian presidency when Yanukovych was ousted in February.

But it鈥檚 important in all of this to pay close attention to what Russia is airing as its grievances, which included: an illegitimate Ukrainian government led by radicals; unprotected Russian speakers in the eastern regions; and $11 billion in unpaid Ukrainian gas debt.

What Moscow is saying, then, is that the current administration has zero representation from the eastern portion of the country. It is important to remember that over 40% of the Ukrainian population鈥攁ll from the east鈥攚as against signing the economic cooperation agreement with the European Union, which was carried out immediately after the annexation of the Crimea in late March.

Russia can realistically argue that the Maidan protest movement drove the political section process, and that the current government is not representative of the country as a whole. The current administration was interested in placating the Maidan and moving towards Europe, not necessarily in united the country.

And what have they accomplished? Nothing. There are still people protesting in the Maidan; Crimea is gone; and eastern Ukraine is under threat of attack from Russia. (Related Article:聽)

The current leadership should also take responsibility for its role in provoking the current situation. They refused to speak with Russia once they assumed leadership, stating they had support from Europe and the United States. At the same time, some politicians and ministers are busy conducting their own brand of justice, accusing anyone that is of the former government of crimes with little to no justification and trying to take advantage of their few remaining weeks in office to position themselves for future power.

What Russia wants is an integrated representative government. If this is realized, Moscow will no longer be able to play the legitimacy card. If Petro Poroshenko, who is leading in the polls right now, wins聽, then Ukraine will need a prime minister that is accepted in the east in order to have an integrated government.

This new government will also need to find an effective way to pay the country鈥檚 gas debt to Russia, because that will not disappear. The only way to do that is to start selling off energy assets and聽.聽 聽

Russia has been able to manipulate Ukraine鈥檚 energy dependency to the benefit and pursuit of its foreign policy goals. We鈥檙e seeing this very clearly today as Putin has called for the payment of $38 billion from Ukraine, the result of unpaid gas sales and the removal of the discount for the Black Sea port in Crimea. 聽

Ukraine鈥檚 economic crisis had been transformed into geoeconomic warfare caused by Russia鈥檚 control of supply to Europe and Ukraine鈥檚 failure to develop its own internal energy resources. And it cannot be coincidental that Russian troops are building up close to Ukraine鈥檚 gas pipelines.聽
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Ukraine presents the most powerful example of Russia鈥檚 use of the energy weapon as a means to influence the foreign policy orientation of a post-Soviet state, and as 鈥渢esting ground鈥 for Russia鈥檚 possible use of energy as a foreign policy weapon elsewhere in the former USSR and beyond.

However, Ukraine鈥檚 new leadership has to take responsibility here as well. The current situation is not as black and white as our Cold War mentalities tempt us to believe. The onus is now on Kiev, and there are diplomatic and economic ways to halt the violent progression and render Moscow鈥檚 arguments moot.

厂辞耻谤肠别:听

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