On Dec. 18, I presented a draft Law “On Principles of National Policy in the Sphere of Energy Security” as a complex solution to hybrid threats in energy.
The main aim of this draft is to create an institution responsible for energy security, set principles of energy risks management and coordination between branches of power.
Since 2014, Ukraine’s energy system has been constantly challenged by external and internal threats.
After Ukraine stopped purchasing gas from Russia’s state-owned Gazprom, the Russian Federation accelerated its plans to bypass Ukraine and some European countries in transporting gas to Europe through Nord Stream 2 and Turkish Stream pipeline projects.
Taking into account uncertainty with the current transit contract between Gazprom and Naftogaz, which expires on Dec. 31, 2019, the situation with Ukraine’s gas transit business remains ambiguous.
Losing Russia transit fees could cost Ukraine more than $2 billion annually, as well as potentially downgrade Ukraine’s role in the European energy security puzzle.
Ukrainian energy security is also threatened by high energy dependence on external energy resources’ suppliers and insufficient diversification level of their supply sources, especially with regard to nuclear fuel and coal.
The hybrid war of the Russian Federation against Ukraine is followed by hybrid challenges, such as, for example, cyber and terrorist attacks against energy infrastructure, external information attacks aimed at undermining the country’s image of a reliable transit partner and in relation to maintaining the safety standards on the power industry facilities, first of all on nuclear facilities.
In addition to the external threats, Ukraine has also internal challenges which are greatly undermining energy security.
The high level of depreciation of existing Ukrainian energy assets and infrastructure make its usage inefficient and dangerous in terms of its operational capabilities.
At the same time, such circumstances lead to extremely low energy efficiency and high energy consumption of the economy.
During the past few years, Ukraine has continuous problems with a coal deficit – power plants ensured with 40 percent of needed capacity, but some of them even less, at the level of 20 percent.
This poses a real risk for going through the heating season smoothly.
Additionally to the problems with resources, the energy sector is suffering from ambiguous tariffs schemes and absence of strategical thinking regarding further development of sectors, like, for example, nuclear generation. The aforementioned and other issues, which undermine stable operation of the energy sector, become a vital threat to energy security from the inside and caused emergency situation in energy sector as a whole.
Miscommunication, lack of political coordination and absence of comprehensive risk assessment are among the main problems in terms of strengthening energy security of Ukraine, in addition to those threats emerged due to the current security conditions. These all challenges can be tackled efficiently based on clear and common state energy security policy. However, in Ukraine this comprehensive approach is missing.
The coordination level between governmental authorities, whose activities are related to energy security, and major economic entities responsible for the energy resources supply and distribution remains on an extremely unsatisfactory level, and attempts of elaborating such legislative mechanisms are practically absent.
Systematic activities related to the development and implementation of guaranteeing Ukrainian energy security policies and mechanisms were absent, which has finally resulted in accumulating a critical scope of today’s hazards, which require clear and coherent work with the goal of neutralizing those hazards in the nearest future, as well as to create a vision of the domestic energy industry’s future and development of the energy security system for the coming years.
Energy security law is missing. What the new Law offers
Current system of governing in the field of energy security is not efficient enough under the criteria of all responsible parties’ actions coordination. Corresponding existing legislation does not meet requirements and isn’t able to cope with current energy security threats.
Therefore, Ukraine needs energy security legislative that would set up main principals and core framework for national energy security policy and identify national interests of vital importance in energy field and energy security threats that constitute a direct risk for the national security of Ukraine.
That is why, the draft law which has been presented on December 18, outlines basic principles and priorities of energy security policy for Ukraine, as well as defines state governing system in the area of energy security policy. The most important components of the draft deals with responsibilities, cooperation and coordination of the parties involved.
Without understanding and accurately assessing emerged threats and risk it would be complicated to identify the most appropriate measures to tackle them. Thus, the draft introduces the Energy Security Assessment Procedure, which will be used for assessing threats and efficiency of energy security strengthening steps, taken by all authorities.
In order to protect national energy interests outside the country, put into action competitive advantages of Ukrainian energy sector’s companies abroad, contribute to the expansion of the Ukrainian energy product representation geography, create joint companies and associations and develop business contacts, Ukraine needs to intensify implementation of the energy diplomacy. This process should begin with setting up of systematic work of relevant national agencies, companies and other energy sector’s participants. Ukraine needs full coordination between executive and legislative powers, relevant ministries, companies, experts and specialists in this area and society. That is why, in the document there is a part on energy diplomacy, which is aimed on protection national energy interests abroad and expanding business ties with foreign partners in order to develop opportunities for the diversification of energy resources.
Special envoy on energy security
Based on the international experience, efficient energy security policy can be conducted through single coordination center, which has to be headed by the special envoy on energy security or similar position, which would allow him/her to have comprehensive understanding of the national ongoing situation, and to have enough authority to fight for national energy interests abroad.
Such system works at number of countries and has already demonstrated its efficiency, however, it has different modalities based on the needs and system of countries. The closest example for Ukraine in terms of structuring energy security policy can serve the USA example. There is the Bureau of Energy Resources, responsible for international energy policy and energy security headed be the Special Envoy and Coordinator for International Energy Affairs. Special Envoy works at the international domain in order to protect energy interests of the USA for the sake of its economic and geopolitical interests. This system fully fits to the gap of the national energy security framework in Ukraine.
Taking into account the international practices, it is of crucial importance for our country to have a strong position at the geopolitical energy battlefield. The most appropriate system for Ukraine can be adapted from the U.S. case – creation of the Energy Security Bureau, headed by a special energy security envoy.
The draft has respective articles which introduce the institutional mechanism of special energy security envoy and his support branch – Energy Security Bureau.
As energy security is an integral part of the national security, the special energy security envoy will be mostly focusing in its work on the international domain, but will be fully engaged with solving all internal issues related to energy security. He will be working under the President of Ukraine and with the National Security and Defense Council of Ukraine on the energy matters. He will be also awarded with a diplomatic rank in order to have authority to conduct active foreign policy of protecting energy interests of Ukraine abroad.
Energy security envoy will mostly deal with understanding and assessing energy security risks and threats in order to suggest to the president and the government the most effective solution in timely manner. According to the draft he is responsible for coordination of all state agencies activities’ in the field of energy security and coping with energy threats.
The bureau will be the “brain” of energy security policy in Ukraine, which will issue its orders through the National Security and Defense Council of Ukraine.
Presentation of the draft law is one of the steps to finalize the law based on best international practices and with accordance to the existing national legal platform. In order to move forward it requires further involvement of the national and international energy security experts. Therefore, we believe, that based on common efforts we will establish solid platform to tackle existing and to prevent further challenges in energy security domain.
Nataliya Katser-Buchkovska is a member of the Ukrainian parliament and head of the parliamentary subcommittee on sustainable development, strategy and investments in the committee on energy, nuclear policy and security.
