NOTTINGHAM TRENT UNIVERSITY

School of Arts and Humanities

LITHUANIAN ENERGY SECURITY: CHALLENGES AND PERSPECTIVES

by

Aiste KeselyteN0050763

2010

This dissertation is submitted in part-fulfilment of the requirements for the BA (Hons) in International Relations at The Nottingham Trent University. In submitting it the author undertakes that it is substantially the result of work undertaken exclusively for this specific project, and that it is the result of their own endeavour except where indicated through references and footnotes. All other help, material or argument used, other than of the supervisory tutor, is fully acknowledged in the text.

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Table of Contents

Abstract

Chapter One: Introduction 1.1 Introduction to the Area of Study

1.2 Research Goals

1.3 Significance of the Research

1.4 Dissertation Contents

Chapter Two: Theory and Methodology (Literature Review) 2.1. Core Questions and Aims of the Research

2.2. Theoretical Approach

2.3. Methodology

2.4. Concluding Remarks

Chapter Three: Historical Background: Price of Small Country Energy Dependence 3.1. Problem of Energy dependence in Lithuania (dependence in the oil sector; dependence in the gas sector;)

3.2. Russia’s Use of Energy as a Political Weapon

Chapter Four: Thoughts what to do about it 4.1. Lithuanians view on NEGP (North European Gas Pipeline) deal between Germany and Russia – now- NSGP- Nord Strean Gas Pipeline.

4.2. Deepening Regional Cooperation

4.3. Creation of EU Common Energy Policy

Chapter Five: Analysis – Institutions managing energy security 5.1. Is the EU Waking Up?

5.2. US Policy

5.3. NATO (Expert study group report- Madlen Obrait report)

Chapter Six: Conclusion 1500 zodziu6.1. Future of Lithuania’s Energy Security

Bibliography

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Abstract

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Acknowledgements

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CHAPTER ONE

INTRODUCTION

1.1 Introduction to the area of study (separately paged.)

Until the 1970’s and particularly, the oil embargo in 1973 impelled the

Lithuanian Government to realize that dependency on foreign energy suppliers

may have a damaging on the national economy as well as on Lithuanian national

security in the wider context of Foreign Affairs. Therefore the impact of global

energy crises raised a wave of academic research on economic and energy

security. The very concept of “energy security” was linked with protection of

national interests. Energy security is, at its essence, an issue of national security.

National energy security was for the most part defined as adequate energy

supply for a nation and its economy1. Due to the power that energy-producing

states have relative to transit and consumer countries, energy security must be

understood in terms of geopolitics.

After more than 50 years of occupation, Lithuania restored its independence on

March 11, 1990. Since than, it has taken steps to distance itself both politically

and economically from Russia. It has embraced market reforms and, in 2004,

became a member of both NATO and the EU. Yet, Lithuania remains

overwhelmingly dependant on Russia for both oil and natural gas. As Lithuania is

still an “energy island” in the EU system, Russia’s increasingly aggressive energy

policy, and dependence Lithuania’s dependence on Russia as the only supplier of

the energy sources Lithuania requires, represents a huge energy security risk.

Energy security is, at its essence, an issue of national security.

The gas cut off to Ukraine on January 1, 2006 is often called a “wake-up moment”

for Europe. Europeans become aware of their over-dependence on Russian gas.

Since the first days of Lithuania’s independence, energy security has been one of

1 Tatyana A. Mitrova, Global Energy Security, Moscow, 2006, p.4.http://en.g8russia.ru/agenda/nrgsafety/opinion/1.htmt [accessed 2010 07 03]

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the most sensitive issues of economic and political survival of the state, as owing

to its history of Soviet occupation, Lithuania’s energy infrastructure is oriented

eastward. Its main oil and gas pipelines must travel from Russia through

neighbouring Belarus before they enter Lithuania. Lithuania is wholly dependant

on Russia, as it has no pipeline connections with the European Union.

Whilst Russia has historically been a reliable energy supplier to Western Europe,

it has often used strong-arm tactics in Eastern Europe. Lithuania, in particular,

has had direct experience with Russia’s use of energy as a political weapon. Of all

EU and NATO members, the Republic of Lithuania, finds itself in a particularly

difficult situation with regards to energy security. It has no domestic natural gas

reserves, and its limited oil reserves are estimated at only 1.63 million tons2.

Bordering Latvia in the north, Belarus to the south and east, and Poland and the

Kaliningrad region of Russia in the south and southwest, Lithuania relies on

Russia for 90% of its oil and 100% of its natural gas supply.

2 Zeyno Baran, white paper, p.1.

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1.2 Research goals

This dissertation will first discuss Russia’s use of energy as a political tool,

providing the context for Lithuania’s energy “insecurity”. It will then briefly

discuss US and EU efforts to develop policies toward improving the situation.

This study will next outline recent developments regarding Nord Stream, the

Mažeikių refinery, and the Ignalina reactor. Finally, this dissertation will

concentrate on Lithuania’s options for achieving energy security: connecting

with Europe, constructing a new nuclear plant, and accessing new sources of oil

and natural gas, including LNG.

The dissertation research goals are:

1. Describe Lithuania’s energy security dilemma.

2. To set Lithuania’s energy security in the institutional context including EU

and NATO.

3. Analyze and evaluate Lithuanian energy security.

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1.3 Significance of the research

National security, energy security, and cooperation in the energy sector between

Russia and the West have become a-popular subject. Lithuania has witnessed

that its energy security is impaired by not only Russian, but also their Western

partners’ unfriendly policies. Unfortunately, from back in the times of the

industrial revolution energy security has been a national matter, often much

dearer than “friendship”3. The period 2006-2007 could possibly mark the

beginning of a new stage in the development of international relations and the

international energy supply system. On January 1, the day Russia took over the

G8 presidency, Russian state-owned gas monopoly “Gazprom” cut off gas

supplies to the Ukraine. The Ukrainian incident was only another step in former

President Vladimir Putin’s strategy to strengthen Russia’s already strong

position in the Eurasian and European energy markets. This was a bold move

given that G8’s key issue that year was energy security. The Ukrainian incident

was a “wake-up call” for many people and Governments in Western Europe.

Today an ever-increasing role is played by threats to energy security. In recent

years, this problem has become particularly urgent in Europe because of the

change in the policies of the Russian Government. Russia’s conflicts with its

nearest neighbours, Belarus and Ukraine, over gas and oil prices, show its

aspirations to eliminate transit countries from participating in oil and gas

processing and transportation4. According to Gediminas Vitkus Russia’s attempts

to hinder, in every way possible, the implementation of alternative pipeline

projects, which circumvent Russia, the development of a more uniform European

Union energy policy, testify that energy issues in modern Europe are becoming a

part of their new agenda5. Recognizing energy security risk, US Vice President

Dick Cheney underlined on May 4 at the 2006 Vilnius Conference that “No

legitimate interest is served when oil and gas become tools of intimidation or

3 Kęstutis Budrys, EU- Russia Energy Dialogue and Lithuania’s Energy Security, Lithuanian Foreign Policy Review, Iss: 18, 2006, p: 1-48, on www.ceeol.com p.1.4 Gediminas Vitkus, p. 25.5 Gediminas Vitkus p. 25.

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blackmail, either by supply manipulation or attempts to monopolize

transportation”6.

A separate discussion could be held on the causes and the probable

consequences of such changes in the policies of the Russian Government.

However, I will not discuss this, since the primary objective of this dissertation is

not Russia, but Lithuania and its response to the current reality. This dissertation

intends to highlight Lithuanian interests and show that Lithuanian and Western

policy makers have to come to take action against Russian political and economic

aggression, because if the virtual Russian monopoly increases any further, then

Western European countries will have difficulty resisting Russian political and

economic pressure. Bullshit

6 Vice President’s Remarks at the 2006 Vilnius Conference, May 4, 2006, p. 6. http://merln.ndu.edu/archivepdf/russia/WH/20060504-1.pdf [accessed 30/07/2010]

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1.4 Dissertation contents…… describe dissertation plan. Good idea

At the beginning of the dissertation, a brief overview of the significance of energy issues on the global scale will be provided. A deeper analysis of the impact that energy issues have on Lithuanian energy security will follow.

In order to provide a full picture of the situation under investigation for the reader, a description of the context and origins of Lithuanian energy dependence and insecurity in the energy sector follows. (Where is it?)

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CHAPTER TWO

THEORY AND METHODOLOGY

Understanding the connection between a theoretical framework and the

research topic is a crucial aspect of any academic research. This chapter presents

the theoretical framework of the project and describes the methods employed in

the research. It explains the techniques, concepts and tools used for collecting

and analysing the data. It also provides a concise review of how research was

conducted.

2.1. Core Questions and aims of the research

This dissertation will first discuss Russia’s use of energy as a political tool,

providing the context for Lithuania’s energy “insecurity”. It will then briefly

discuss US and EU efforts to develop policies towards improving the situation.

This study will next outline recent developments regarding Nord Stream, the

Mažeikių refinery, and Ignalina reactor. Finally, this dissertation will discuss

Lithuania’s options for achieving energy security: connecting with Europe,

constructing a new nuclear plant, and accessing new sources of oil and natural gas,

including LNG.

The project also aims to analyze the direction and intensity of the energy geopolitics

played between Russia, Lithuania and European Union. Utilizing an analytical

framework based on liberal institutionalist thinking, this paper seeks to uncover and

analyze Lithuania’s energy security dilemma. Moreover, this paper tries to analyze

the basic theoretical framework of liberal institutionalism and the way in which

elements of this perspective can be applied to set Lithuania’s energy security in the

institutional context including EU and NATO.

Hypothesis

Lithuania is stuck between Western Europe and Russia with all the resulting

effects on its energy security, and none of the parties are interested in changing

this situation. At present, there have been signs of developing the measures,

which could neutralise Lithuania’s vulnerabilities in the energy sector. However,

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many of them are beyond the means for a small state or even a group of states.

This dissertation states that the development of a new order enables Lithuania to

substantially improve its security status. That is based on the theory of the

formation of international regimes. This change lies in presenting European

Commission as a common focal point for energy policy, including security.

2.2. Theoretical Approach

As mentioned on the previous page, the research has been conducted within

Liberal Institutionalist theoretical framework, which is based on the premise

that institutions are an important mechanism of achieving international security.

Its core idea consists to demonstrate that institutions (stemming from norms

and regular practices) build a basis for stability and security of economic

relations. The process of legalization of international relations stems from the

juridical ideology: respect for law leads to a better security7. Liberal

Institutionalism largely operates within the Realist framework, but argues that

international institutions are much more important in helping to achieve

cooperation and stability. According to Robert O. Ethane, a leading liberal

institutionalist and Lisa L. Martin, “institutions can provide information, reduce

transaction cost, make commitments more credible, establish focal points for

coordination and, in general, facilitate the operation of reciprocity”8. Liberal

Institutionalist helps to overcome the problem of anarchy. This theory is drawing

on theoretical ideas developed outside international relations to explain why

anarchy inhibits collaboration and how to promote regime formation9. According

to John Baylis, international institutions themselves are unlikely to eradicate war

from the international system but they can play a part in helping to achieve

greater cooperation between states10.

One of the main characteristics of the neo-realist approach to international

security is the belief that international institutions do not have a very important

7 Reader IR theories. 2.8 Keohane and Martin, 1995: 429 John Baylis, Steve Smith and Patricia Owes, The Globalization of World Politics: An Introduction to International Relations, 4ed, p. 303.10 Baylis, p. 233.

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part to play in the prevention of conflict. Institutions are seen as being the

product of state interests and the constraints, which are imposed by the

international system itself. According to neo-realists, it is these interests and

constraints, which shape the decisions on whether to cooperate or compete

rather than institutions to which they belong11. These views have been

challenged by number of international relations specialists and states people. For

example, the British Foreign Secretary Douglas Hurd made the case in June 1992

that institutions themselves had played, and continued to play, a crucial role in

enhancing security, particularly in Europe12. This view is also shared by a

distinctive group of academic writers, which developed since the 1980s and

early 1990s. These writers share a conviction that the developing pattern of

institutionalized cooperation between states opens up unprecedented

opportunities to achieve greater international security and cooperation.

More than a decade ago, realists and neo-liberal scholars collided over the

efficiency of institutions to initiate and sustain cooperation among states. Johns J.

Meaesheimer’s article “The False Promise of International Institutions” in

1994/95 issues of International Security13 attempted to represent the inherent

weaknesses of institutionalist theories, particularly liberal institutionalism. He

strongly argued that institutionalist theories were defective and had minimal

influence on state behavior14. In response to Mearsheimer’s critique, Robert O.

Ethane and Lisa L. Martin claimed that institutions mattered in the conduct of

state behavior and the task was to “discover how, and under what conditions”15.

Because according to the authors, international institutions play the main

mediating role and act as the principal means to achieve and maintain

cooperation between states, as mutual interests of the states minimize

differences, pave the avenues for cooperation16. Liberal scholars such as

11 Baylis, p. 232.12 Baylis, p. 233.13 Johns J. Meaesheimer “The False Promise of International Institutions” in 1994/95 issues of International Security14 Mohammed Nuruzzaman “Liberal Institutionalism and Cooperation in the Post- 9/11 World”, p. 1. Emeile detales.15 Keohane and Martin, 1995: 40.16 Mohammed Nuruzzaman “Liberal Institutionalism and Cooperation in the Post- 9/11 World”, p. 2. Emeile detales.

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Ethane17, Nye18, Axelrod19, Haas20, Levy, Lipson21 and Milner22 states that, states

become willing to cooperate once institutions are seen as beneficial.

There are two contending research/theoretical approaches within political

science, which identify themselves as Institutionalist today: Rational Choice

Institutionalist and Historical Institutionalist (is it Liberal Institutionalist?). The

role institutions play in these two analytic traditions overlaps in many ways. In

both schools, institutions are important for politics because they structure

political behavior. However, theoretical, particularly, epistemological goals of

scholars in these two schools separate them in some rather fundamental way.

Analyst Douglass North has provided a crucial contribution to institutional

analysis. According to his definition, institutions are “the rules of a game in

society or, more formally, are the humanly devised constraints that shape human

interaction”23. North suggests that institutions provide the constraints under

which decisions are made but that individuals and organizations can alter those

constraints24. North belongs to the Rational Choice perspective of institutional

analysis, which believes that institutions are created purely out of the goals they

are attempting to reach. For Rationalist scholars, as for a highly regarded

Rational Choice Institutionalist scholar at Harvard, Morris Fiorina the central

goal is to uncover the Laws of political behavior and action, as she believes that

once these laws are discovered, models can be constructed that will help us

understand and predict political behavior25.

Historical Institutionalist are primary interested in understanding and

explaining specific real world political outcomes. They do not argue that

17 Keohane 1984, 1989……18 Keohane and Nye, 2000…..19 Axelrod and Keohane, 1985….20 Haas, Keohane and Levy, 1993….21 Lipson, 1984….22 Milner, 1992….23 Douglass North, Institutions, Institutional Change and Economic Performance: Political Economy of Institutions and Decisions, 1990, Cambridge: Cambridge University Press, p. 3.24 Douglass North, “North’s institutionalism and the prospect of combining theoretical approaches”, Cambridge Journal of Economics, Vol. 26, Nr. 2, p. 217-235.25 Morris Fiorina…..

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institutions are the only important variables for understanding political

outcomes. Quite the contrary, these scholars generally see institutions as

intervening variables through which battles over interest, ideas and power are

fought26. According to Steven Steimo, institutions are important both because

they are the focal points of much political activity and because they provide

incentives and constraints for political actors and thus structure that activity.

Rather than being neutral boxes in which political fights take place, institutions

actually according to the author, structure the political struggle itself27.

Different institutions deal differently with energy security problems. In this

dissertation I will analyze European Unions (EU) and NATO capability to deal

with energy security problems facing not jus Lithuania but Europe as well. The

issue of energy security becomes particularly important since the energy shocks

of the 1970s, when present asymmetries between the geographical distribution

of resources and energy consumers had been consolidated by oil shortages in the

petroleum-dependent countries. Since then, the energy security has been

integrated into the debates of the IR theories. I will use liberal institutionalism

theory in my dissertation. I will argue that institutions can create peace and

cooperation out of international anarchy, and that international institutions are

important in helping to achieve grater cooperation and stability between states.

Epistemological and ontological foundations

Knowing about ontology and epistemology is important as it helps us be aware

of the biases and limitations of our chosen research strategies. The general

epistemological viewpoint of this dissertation is interpretive, the view that all

knowledge is a matter of interpretation. Truth is not absolute, but decided by

human judgement. It’s about understanding ‘meaning’ of action from actor’s

perspective28. Thus, one of the main objectives of this research will be to explore

the ways in which Lithuania make sense of they world29. According to

26 Reader 3.27 S Steimo, “The new Institutionalism” Barry Clark and Joe Foweraker (eds.) The Encyclopedia of Democratic Thought, London: Routlege, July 2001.28 Judith L. Green and Gregory Camilli, Handbook of Complementary Methods and Education Research, look at amazon.29 Williams, 1996 dissertation.

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interpretivist epistemology, knowledge is “derived from day-to-day concepts and

meanings”30. The emphasis of this epistemological approach is on understanding

what is happening in the given context, not explanation.

Interpretivist positions of the research are based on anti-fundationalist

ontology. The world is viewed as socially constructed and cannot be accessed

directly31. From this perspective, knowledge is theoretically and discursively

laden, and therefore, value-free analysis is impossible. This ontological position

also entails the axiological attitude of the project, which adheres to the belief that

‘knowledge is information in action’32.

2.3. Methodology

This study seeks to explore Lithuania’s energy dependence on Russia as one of

the most problematic threats for economical security of Lithuania. Given the

nature of enquiry, Qualitative approach seems particularly appropriate for this

project. Qualitative methods deliver more in-depth understanding of the social

and political processes and are especially good in situations, which are complex

and involve a number of different issues. Moreover, Qualitative research seeks to

understand phenomena in context-specific settings and aims to provide

illumination of multiple perspectives33.

Nonetheless, the research involves the integration of quantitative and qualitative

method tools. The information analyzed in the dissertation is presented in both

narrative and numerical/graphical forms, as a combination of quantitative and

qualitative methods can be highly effective in making the most of the strengths of

the research. The quantitative data includes gas prices, volume of export,

expenses, maps and other relevant variables.

In order to assess energy security of Lithuania the notion has to be precisely

defined. What is energy security? Energy security is a complex definition.

30 Kirk at al… dissertation, 200631 Cruickshank, 2003.32 Nordin et al 2008.33 Hoepfl, M.C. 1997. Choosing qualitative research: A primer for technology education researchers. Published by: Journal of Technology education 9 (1).

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President of CERA (Cambridge Energy Research Association, Inc) – one of the

most famous think-thanks in energy politics – Daniel Yergin gives the following

definition of energy security: “the aim of energy security is to ensure adequate,

reliable energy supplies at reasonable price and so as not to jeopardize the main

national values and objectives”34. In a similar way the European Commission and

the International Energy Agency define it as the provision of reasonably priced,

reliable and environmentally friendly energy35. The World Energy Council in

1992 defined a national energy security as “a state of protection of individual

citizens, society, economy and nation from threats to reliable fuel and energy

supply”36.

The particular definition of energy security may depend on specific interests of

national states. There could be specified several groups of countries, where

different interpretations of energy security could apply. Characteristics of

Lithuanian economy and energy sector, given in Tomas Janeliūnas and Arūnas

Molis article at Research Journal of International Studies indicates that Lithuania

should be put among the countries of the first and fourth group (see table 1.

Approaches to energy security in different groups of countries). Therefore in this

dissertation we will define energy security following priorities of Lithuanian

energy security for the most part not very different from West European

countries.

Three main tasks for ensuring energy security of Lithuania:

1. Ensuring reliable energy supply and functionality of energy

infrastructure;

2. Diversification of energy supply sources;

3. Reduction of dependence on energy sources import (by reducing energy

intensity and switching to alternative or renewable energy sources)37.

Literature reviewIn order to analyze and investigate Lithuanian energy security challenges and

perspectives I analyzed Dr. Tomas Janeliūnas, Dr. Arūnas Molis, Dr. Zeyno Baran,

34 D. Yergin, “Energy Security in the 1990s”, Foreign Affairs, Vol. 67, No. 1, Fall 1988, p.111.35 Sascha Muller-Kraenner, Energy Security (London: Earthscan, 2008) p. xi.36 Russia’s Security. Legal, Social, Economic, Scientific and Technical Aspects. Energy Security (Energy Industry and State). Moscow: MGF Znanie, 200, p. 304. Article molis.37 Janeliunas and Molis, p. 14-15.

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Gediminas Vitkus, Kęstutis Burdys, Keith C. Smith, Tom Rostoks, Arianna Checchi,

Arno Behrens and Christian Egenhofer and many other author works to be able

give good Lithuanian energy security analysis.

Dr. Tomas Janeliūnas, an associate professor at the Institute of International Relations

and Political Science of Vilnius University and the Editor of the Lithuanian Foreign

Policy Review, former States Security Department officer and analytic, indicates that

Lithuania has faced many challenges on energy security, however the situation in the

energy sector has not undergone much change. Lithuania is still rather isolated

regarding energy infrastructure. Author states that solution for this difficult situation

requires strong regional cooperation, as political initiatives are not sufficient to initiate

development in energy sector. Dr. Arūnas Molis, who’s academic interests include

EU foreign, security and defence policy, NATO transformation, political and

economic processes of the Central and Eastern European States, Russian foreign

policy, energy security supports the same views as Tomas Janeliūnas on Lithuanian

energy security. According to both authors problem of Lithuanian energy security and

dependence on Russia is acute from the restoration of the independence and that this

problem is not solved yet. According to the authors the main structural changes in

Lithuania’s energy security sector could take place only if EU will consolidate its

Common Energy Policy38.

Authors state that energy dependence on Russia is one of the most problematic threats

for the economical security of Lithuania. Dr. Gediminas Vitkus, professor of the

Political Science Department at the Lithuanian Military Academy, supports Dr.

Tomas Janeliūnas and Dr. Arūnas Molis position. Author indicates that as

Lithuanian energy structure was essentially established in the ‘60s, ‘70s, and ‘80s

of the last century and this infrastructure creates serious problems to Lithuanian

energy security. It creates gas dependence on Russia’s supply, the absence of

electricity network links with other European countries. Author indicates that as

gas sector remains completely dependant on the Russian Gazprom’s supplies

situation of Lithuanian energy security remains unfavourable. According to the

38 Tomas janeliunas and molis, p. 31.

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author, Lithuania cannot solve its own energy problems without the

participation of its neighbours and the European Union39.

Kęstutis Budrys, adviser to the Lithuanian President, is not so pessimistic about

Lithuania’s energy security. Author indicates that January of 2006 Russia’s cut off

of natural gas supplies to Ukraine was a turning point to Lithuanian energy

security, as this blockade destroyed the regime of energy relations between the

Western Europe consumption zone and the Russian production zone, which

formed a unique situation requiring the development of a new regime that must

meet the interests of Lithuania, among others40. Author indicates that there have

been signs of developing measures, which could neutralise Lithuania’s

vulnerabilities in the energy sector. However, many of them are beyond the

means of small country or even a group of states. According to the author, that

not before the energy sector becomes a “normal” business submitting only to the

laws of economy will it submit to other, geoenergetic, laws41.

Zeyno Baran, director of the Centre for Eurasian Policy and a Senior Fellow at the

Hudson Institute located in Washington D.C, interested on issues ranging from

US-Turkey relations to Islamist ideology to energy security in Europe and Asia is

one of the authors who helped me to highlight Lithuanian energy security

problems. According to the author the lack of reliable and sustainable access to

energy is a clear threat to European security, therefore enhancing EU energy

security cooperation is essential to withstand Russian pressure42. Author’s views

contribute to Kęstutis Budrys indications on energy security problems facing

Lithuania, and that institutional helps is required.

Keith C. Smith currently a senior associate in the CSIS New European

Democracies Project, former U.S. ambassador to Lithuania, in CSIS report

“Russian Energy Politics in the Baltics, Poland, and Ukraine: A New Stealth

39 Gediminas Vitkus, Russian pipeline diplomacy, p. 46.40 Kestutis Budrys “EU- Russia energy dialogue and Lithuanian’s Energy security” P.4641 Kestutis budrys, p. 2.42 Zeyno Baran, “EU Energy Security: Time to End Russian Leverage”, The Washington Quarterly, Autumn 2007, p. 133.

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Imperialism?” highlights special relationship between Russian energy companies

and influential business leaders in Central Europe, Baltic States, Poland, and

Ukraine. In his monograph author attempted to create as accurate picture as

possible of Russia’s use of its energy power and the political and security risks

that this substantial power, if unchecked, poses for the creation of a Europe

whole and free43. Author indicates that energy dependence in and of itself not

poses a serious threat to a country’s political or security system. The key is,

according to Keith C. Smith, is to limit an energy supplier’s influence, that means,

recipient country’s ability to diversify its sources of energy imports44. However

we will see that Lithuania has difficulties in doing so, as Lithuania become locked

into a Moscow- direct energy supply network during the 70 years of the Soviet

Union’s existence.

Toms Rostoks concentrates on regional energy security problems, and helps to

identify that EU that wields considerable potential for improving energy security

of the member states, among them and Lithuania45. In his the article based on the

results of the research project “Energy: pulling the Baltic Sea region together or

apart?” carried out by the Latvian Institute of International Affairs (LIIA) author

also indicates that security and business interests may cause friction in the

energy debate, as security interests force governments to be more influential in

the energy sphere while commercial interests point in the opposite direction and

suggests that energy sphere should be not become the battle ground between

national governments and should instead be left to business interests. Toms

Rostoks aims to outline the main reasons that facilitate and those that hamper

energy cooperation thus pushing countries toward finding individual solutions

to their energy problems46.

2.4. Concluding remarks

Most of the current literature on Lithuania’s energy security focuses on

Lithuania’s energy dependence on Russia. Authors indicate that Lithuania has

43 Keith C. Smith. P. vi44 Keith Smith, p. 27.45 Toms Rostoks, 150.46 Tom Rostoks, p. 144.

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faced many challenges on energy security, and the situation in the energy sector

has not much change. Lithuania is still rather isolated regarding energy

infrastructure. As a result of this, many commentators tend to exaggerate

Russia’s ability to use oil and gas as “weapons” to augment Russian influence

over its neighbors and on the world state.

The findings of the literature review also indicate that regional cooperation and

EU could change current unfavorable energy security situation in Lithuania. As

enhancing EU energy security cooperation is essential to withstand Russian

pressure, not just in Europe, but in Lithuania as well.

CHAPTER SIX: CONCLUSION: In Pursuit of Energy Security

CONCLUSIONS: FURURE OF LITHUANIA’S ENERGY SECURITY

The Lithuanian energy infrastructure was essentially established in the ‘60s,

‘70s, and ‘80s of the last century. This infrastructure was meant to serve the

interests of the Soviet Union and not those of Lithuania. The problem of

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Lithuania’s dependence on Russia is dire from the restoration of the

independence. That problem is not solved yet. Even more – after Russian

government started to use energy companies as instruments of its foreign policy,

threats to Lithuania’s energy security have grown.

In Kęstutis Budrys words, Lithuania has witnessed that its energy security is

impaired by not only Russia’s, but also Western partners unfriendly policy47.

However, there have been signs of developing the measures, which could

neutralise Lithuania’s vulnerabilities in the energy sector. It is clear that

Lithuania cannot solve its own energy security problems without the

participation of its neighbours and the EU. The main structural changes in

Lithuania’s energy security sector according to Tomas Janelūnas and Arūnas

Molis, could take place only if EU will consolidate its Common Energy Policy48.

This task is very complicated keeping in mind those EU members has different

energy security priorities because of different energy sources and energy import

routes. Diversification of energy supply sources for biggest EU countries is

secondary or even thirdly task in energy policy. Most of the old EU countries give

priority to bilateral dialog with energy suppliers and speak for more effective

usage of the existing instruments. It is clear that Lithuania needs to take a very

proactive position in its EU policy to ensure the security interest in energy

sector. With some help from others new members of EU it is possible to avoid

bilateral deals beneficial only for some national states but not for the whole EU49.

This dissertation presented detailed information on Lithuanian energy security

challenges and perspectives. However there are some limitations of the research

as the sources used in the project present a distorted view of the problem of

energy security of Lithuania due to personal bias of the author.

It is clear that the greatest progress in Lithuanian energy infrastructure has been

made by the oil sector. This sector, in spite of the undeclared blockade pursued

by Russia, is continuing to successfully function due to the Būtingė marine oil

47 Kestutis budrys, p. 1.48 Janeliunas and molis, . 30. 49 Janeliunas and molis, p. 31.

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import and export terminal build in 1995-199850. Būtingė marine investment today

has proven to be success from both the financial and geopolitical standpoints as it

guarantees to some degree Lithuanian energy security. Electric energy sector have

made some progress. The building of electric networks links in 2006 and 2007

between Baltic States, Scandinavia, and Poland should be considered a substantial

achievement. However gas sector remains one of the most political problems in

Lithuania energy sector. A complete dependence on Russia’s state owned company

Gazprom’s supplies is the weakest link of the Lithuanian energy security.

Energy security issues in modern Europe are becoming a part of their new

addenda, because of a change in the policy of Russia. Russia’s conflicts with its

nearest neighbours, Belarus and Ukraine, over gas and oil prices, show its

aspirations to eliminate transit countries51. While many European countries still

foster certain illusions about Russia, the Lithuanian politicians do not. Lithuanian

politicians and general public do not hide any doubts that Russia will make

attempts to employ its new advantages that have emerged because of

considerable increase in energy source prises. Consequently, the energy and

pipeline business developed by Russia during recent years is seen in quite

different context.

Lithuania plays no role in the transit of natural gas to other European nations. A

hypothetical cut off of supplies to Lithuania would therefore not attract much

attention in Western Europe. NEGP is only one of the projects, which indicates

Russian desire to create favourable conditions for resource supply, to decrease

dependence on transit countries and to make considerable influence on energy

importing countries. This project also will increase Lithuania’s energy insecurity.

Even though NEGP reduces possibilities of the Baltic States and Poland to resist

one-sided Russian energy policy, it also gives new impulse for solving the energy

security problems by common efforts. Baltic and Central European countries

have got a chance to strengthen regional cooperation in the energy sector.

Besides that, they have attracted the attention of the EU member states on

50 Gediminas vitkes, p. 45.51 Gediminas vitkus, p. 25.

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threats, which may arise from dependence on one energy supplier. There are

already actions taken while trying to build alternative pipelines of gas and oil

supply. Even NATO joined the discussions on state energy supply.

The research has been conducted within Liberal Institutionalist theoretical

framework, which is based on the premise that institutions are an important

mechanism of achieving international security. My dissertation presented a

liberal institutionalist explanation of Lithuanian energy security. By applying the

elements of liberal institutionalism, such as relative gains problem, we could

identify issues facing Lithuanian energy security. According to John Baylis,

international institutions themselves are unlikely to eradicate conflict from the

international system but they can play a part in helping to achieve greater

cooperation between states52. Liberal scholars such as Keohane, Nye, Axelrod,

Haas, Levy, Lipson and Milner states that, states become willing to cooperate

once institutions are seen as beneficial. We could see that progress has been

done. Lithuania together with other states, EU and NATO institutions stated to

cooperate in energy security sector.

Liberal institutionalist approach has proved to be useful research model for

describing Lithuanian energy security problems. The study achieved its goals of

developing a better understanding of Lithuanian energy security challenges and

perspectives, and presented plausible explanations of the issue. The research has

shown that although Lithuania is still facing energy security risks, institutions

play an important role in Lithuanian energy security sector.

The research suggests that the Russia may have a powerful position as a major

energy supplier, but it cannot dictate terms in its relations with the rest of the

world. As Rutland indicates, no single country or company is capable of exerting

decisive influence over the energy market. Trade is a relationship of mutual

benefit and dependence between buyer and seller, and use of trade as a

“weapon” can hurt the supplier as much as the customer53. This dissertation

52 Baylis, p. 233.53 Rutland, P. “Russia as an Energy Superpower”, New Political Economy, Vol. 13, Nr. 2, June 2008. dissertation

24

demonstrated that not before the energy sector becomes a “normal” business

submitting only to laws of economy would it submit to other, geoenergetic,

laws54.

54 Kestutis budrys, p. 2.

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