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Beware the Russian bear : the effect of energy insecurity on perceptions of Russia in postcommunist Europe Carter, Ryan 2019

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BEWARE THE RUSSIAN BEAR: THE EFFECT OF ENERGY INSECURITY ON PERCEPTIONS OF RUSSIA IN POSTCOMMUNUST EUROPE by  Ryan Carter  A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF  MASTER OF ARTS in THE FACULTY OF GRADUATE AND POSTDOCTORAL STUDIES (Political Science)  THE UNIVERSITY OF BRITISH COLUMBIA (Vancouver)  June 2019  © Ryan Carter, 2019   ii The following individuals certify that they have read, and recommend to the Faculty of Graduate and Postdoctoral Studies for acceptance, a thesis/dissertation entitled: Beware the Russian Bear: The Effect of Energy Insecurity on Perceptions of Russia in Postcommunist Europe  submitted by Ryan Carter in partial fulfillment of the requirements for the degree of Master of Arts in Political Science  Examining Committee: Lisa M. Sundstrom Supervisory Committee Member Allan Tupper Additional Examiner              iii  Abstract This thesis analyzes the effect energy insecurity has on perceptions of Russian interference in postcommunist Europe. It operationalizes energy insecurity as the level of energy dependence and hypothesizes a positive relationship between this and concerns of Russian interference: the more energy dependent a country is, the more it worries about Russian interference. The first section of this thesis explicates and defines energy insecurity as part of a trilemma wherein a state has unaffordable, unreliable, or undiversified energy prone to domestic and or foreign politicization. The second section tests energy insecurity’s effect on concerns over Russian interference by creating a new metric: ‘net dependence’. This metric goes beyond existing literature to consider energy production and exports in conjunction with Russian imports. However, contrary to the primary hypothesis, the second section finds that the relationship between energy dependence and fears over Russian interference is inverse: the more energy dependent a country is, the less it worries over Russian interference. Macro-level alternative variables find similar results. The third section examines three case studies: Poland, Romania, and Hungary. These cases show the importance of history, contemporary politics, and the legacy of the post-Soviet transition as key to perceptions of Russian threat and the severity of a state’s energy insecurity. Energy insecurity is more complex than previously considered and can be attenuated by domestic production or exacerbated by excessive exportation. Furthermore, its effect on concerns over Russian interference are contextually based.    iv Lay Summary This thesis explores the effect that dependence on Russian energy imports has on concerns over Russian interference in postcommunist Europe. To do so it defines this energy insecurity as when a country has unaffordable, unreliable, or undiversified energy which is vulnerable to political interference. It finds that as countries become more dependent on Russian energy they also become more worried about Russian interference. By examining the Polish, Romanian, and Hungarian cases this thesis shows the importance of a country’s history, current politics, and the lasting impacts of the transition period following the end of the Cold War. Energy insecurity is more than just the percentage of energy imports being of Russian origin, and its effect on concerns over Russian interference depends upon factors specific to each case.    v Preface This thesis is the original, unpublished, and independent work done by the author, Ryan Carter.    vi Table of Contents Abstract ......................................................................................................................................... iii Lay Summary ............................................................................................................................... iv Preface ............................................................................................................................................ v Table of Contents ......................................................................................................................... vi List of Figures ............................................................................................................................. viii List of Abbreviations ................................................................................................................... ix Acknowledgements ....................................................................................................................... x Dedication ..................................................................................................................................... xi Introduction ................................................................................................................................... 1 Section 1 Energy Security in Postcommunist Europe ............................................................... 3 1.1 Defining and Explicating Energy Security ....................................................................... 3 1.1.1 Defining and understanding energy insecurity .............................................................. 4 1.2 Energy Security in Postcommunist Europe ...................................................................... 6 1.2.1 Energy security in postcommunist Europe .................................................................... 7 1.2.2 Russia and the development of energy insecurity perceptions ....................................... 8 1.3 Pipelines and Securitization in Postcommunist Europe ................................................ 12 Section 2 Data Analysis ............................................................................................................... 15 2.1 Methodology and Data ..................................................................................................... 15 2.1.1 Limitations of existing methodologies ......................................................................... 15 2.1.2 Methods and hypotheses .............................................................................................. 17 2.2 Variables ............................................................................................................................ 18 2.2.1 Dependent variable: level of concern about Russian interference .............................. 18 2.2.2 Independent variable: net dependence on Russian oil and gas ................................... 18 2.2.3 Alternative independent variables ............................................................................... 20 2.3 Results and Discussion ..................................................................................................... 22 2.3.1 Net dependence and the Russian threat ....................................................................... 22 2.3.2 Alternative independent variables ............................................................................... 24 2.3.3 Discussion .................................................................................................................... 26  vii Section 3 Case Studies ................................................................................................................. 28 3.1 Poland ................................................................................................................................ 28 3.1.1 Twin narratives ............................................................................................................ 29 3.1.2 Barriers to breaking dependency ................................................................................. 32 3.1.3 Conclusion ................................................................................................................... 33 3.2 Romania ............................................................................................................................ 34 3.2.1 Historical legacy .......................................................................................................... 34 3.2.2 Future insecurity .......................................................................................................... 36 3.2.3 Conclusions ................................................................................................................. 38 3.3 Hungary ............................................................................................................................. 38 3.3.1 Energy and the post-Soviet transition .......................................................................... 40 3.3.2 Internal factors: Fidesz and energy prices .................................................................. 41 3.3.3 External Factors: the EU and Russia .......................................................................... 43 3.3.4 Conclusion ................................................................................................................... 44 Conclusions .................................................................................................................................. 45 Bibliography ................................................................................................................................ 46 Appendix ...................................................................................................................................... 50               viii List of Figures Figure 1: Kester’s energy trilemma ............................................................................................... 5 Figure 2: Gallup survey results. Esipova, Neli and Julie Ray. 2016. “Eastern Europeans, CIS Residents See Russia, U.S. as Threats”, Gallup.  ......................................................................... 19 Figure 3: Net Dependence, 2017 .................................................................................................. 21 Figure 4: Net Dependence vs. % Believe Russia is Greatest Threat ........................................... 23 Figure 5: % Below Poverty Line, GINI Index vs. % Believe Russia is Greatest Threat ............. 25 Figure 6: GDP per capita PPP vs. % Believe Russia is Greatest Threat ..................................... 25 Figure 7: % Agree EU is a Secure Place to Live, % Favouring EU Expansion, % Believe Voice Counts vs. % Believe Russia is Greatest Threat ............................ Error! Bookmark not defined. Figure 8: Case Studies; Sources of Oil and Gas, 2017  ............................................................... 29 Figure 9: Case Studies; Total Primary Energy Supply, 2016 ...................................................... 30 Figure 10: Case Studies; Electricity Prices, 2018 ........................................................................ 31 Figure 11: Case Studies; % Agree EU is a Secure Place to Live, % Favouring EU Expansion, % Believe Voice Counts ................................................................................................................... 35 Figure 12: Case Studies; Russian % of Crude Oil Imports, Russian % of Natural Gas Imports . 37  ig re 7:  gree  is a ecure lace to ive,  avouring  xpansion,  elieve oice ounts vs.  elieve ussia is reatest hreat………………………………………………………...……………. 26   ix List of Abbreviations bcm/y  Billion cubic meters of natural gas per year IEA  International Energy Organization IMF  International Monetary Fund ktoe  Kilotonnes of oil equivalent kWh  Kilowatt hours OBM  Obsolescing Bargaining Mechanism PCE  Postcommunist Europe SOE  State-Owned Enterprise TPES  Total Primary Energy Supply   x Acknowledgements  I would like to express my gratitude to Dr. Lisa Sundstrom for her work as my supervisor; the final product would be measurably worse without her invaluable advice and attention to detail. Furthermore, I would like to thank Dr. Allan Tupper for examining this thesis. I would also like to thank all the friends I have made within the department for their encouragement and support during the process of writing this thesis.    xi Dedication  To all the coffee shops I loitered in while working on this thesis.    1 Introduction  The dissolution of the communist bloc in 1991 heralded a new age in world politics: Russia was left in shambles while its former allies undertook what often became bloody revolutions and civil wars. Yet of all the instability that the region experienced, one area of continuity in postcommunist Europe (PCE) is energy politics. This region has remained to varying degrees reliant on Russia for oil and gas. That Russia acts a predatory state looming over its former allies and republics is a common refrain, but the relationship between it, energy insecurity in PCE, and the concerns states in the region have remains underexamined. This thesis seeks to better understand energy security and what effect it has on concerns over Russian interference in the region.  The first section of this thesis shows how insecurity is a future-oriented heuristic that allows politicians, political scientists, economic agents, and more to plan for the future. Energy insecurity will be seen to be more than a simple imports differential, but in fact is when a state has unaffordable, unreliable, or undiversified energy prone to domestic and or foreign politicization and disruption. Furthermore, securitization is a frequent response to energy insecurity.   The second section tests the effect energy insecurity has on concerns regarding Russia as a threat to PCE. This paper hypothesizes that as countries’ energy insecurity rises (measured by dependence on Russian energy), they view Russia with more hostility. Given the subjective nature of energy insecurity this thesis establishes the ‘net dependence’ metric to measure this term. Net dependence captures domestic production, total exports, and Russian fossil fuel imports in one calculation to compare states in PCE. Doing so shows that much of the region relies to some disproportionate degree on Russian energy, but not to the same extent as  2 previously argued. Testing net dependence against concerns over a Russian threat reveals findings opposite to the above hypothesis which are further supported by macro-level alternative variable tests.  The third section seeks to make sense of these surprising findings by analyzing three case studies: Poland, Romania, and Hungary. Poland represents an example of a country which is atypically hostile toward Russia given its level of net dependence. Conversely, Hungary is less fearful than its level of dependency would suggest. Lastly, Romania presents a typical case, albeit one at the far end of energy dependence. Together, these case studies help to reveal the importance of history, modern politics, and the legacy of the post-Soviet transition.   This thesis shows that, contrary to popular and academic conceptions of energy in security in PCE, the countries who fear Russia the most rely on it the least for their energy. Furthermore, energy insecurity must be better understood for it to have any explanatory power in political science. While it is trite to say that history matters, the differing relationships each of these countries has had with Russia is incredibly important to their opinions of Russia today. Yet a common factor in PCE is the lack of a comprehensive, long-term strategy of increasing energy security. While this is attenuated by the EU’s efforts to create a common energy market, this will not ameliorate the concerns people in non-EU states have. Further research is needed to better understand what affects concerns over Russian energy interference have in all of Europe.       3 Section 1 Energy Security in Postcommunist Europe  Differences in perceptions of Russia are typified in concerns over the country’s influence in postcommunist European energy. Those who accuse Russia of bullying countries in PCE with exploitative oil and gas prices and predatory bargaining reference damning statistics like Poland importing 63% of its energy from foreign sources.1 Statistics like these are indicative of a situation of chronic energy insecurity. While the second section will fully critique these figures and reveal a much more complicated energy dynamic, this section will critically analyze extant literature on the issue of energy insecurity in PCE. Doing so will better ground the relationship between energy insecurity resulting from dependence on Russian energy and perceptions of Russian interference in the region by presenting existing findings in a more holistic light.  To do so, this section will begin by explicating and defining energy insecurity, then situate the issue within PCE, and finally examine the role of pipelines and securitization in postcommunist European energy insecurity. This will show that energy insecurity in the region is about much more than an empirically-based reliance on Russia for oil and gas. Instead, it is the intersubjectively held perceptions of actors and agents within these states which exacerbate or mitigate the salience of quantifiable energy insecurity.  1.1 Defining and Explicating Energy Security  Energy insecurity is a kind of paradox; it is a concept focused on the future but affects the present. The dilemma therein for those interested in securing their energy often comes down to a paradox of sacrificing short-term well-being for long-term security.2 At the core of energy                                                         1 International Energy Association. 2017. “Poland: Balances for 2016”, IEA. Accessed online May 4, 2019. https://www.iea.org/statistics/?country=POLAND&year=2016&category=Key%20indicators&indicator=TPESbySource&mode=table&dataTable=BALANCES 2 Bernell, David and Christopher A. Simon. 2016. The Energy Security Dilemma: US Policy and Practice (Routledge), p. 4.   4 security is not just an abstracted science of quantifying dependence, but also the application of this data in elite and mass discourse. 1.1.1 Defining and understanding energy insecurity  One must first understand insecurity more broadly before they can understand energy insecurity. Insecurity is “a powerful political concept” which “energizes opinion and moves material power”.3 It does not simply have one logic but relies on multiple forms of insecurity which all rely on different techniques to ascertain the future. Moreover, it is not a purely empirical concept but instead a normative one which determines what is and what is not worth protecting, and also what is and is not a threat. Security therefore does not exist “out there” but instead is intoned by actors as an exercise of power.4 In this sense insecurity follows a discursive and intersubjective logic. Consequently, certain levels of energy dependency on Russia may be viewed as acceptable in one country and unacceptable in another. This cannot be explained by quantifiable factors alone and instead requires one to consider these discursive elements.   The intersubjective nature of insecurity does not only help to explain Russia influence in the region but also the varied responses from countries within the PCE region. That there exist variations in responses to Russian energy predation is significant; one cannot treat the region as a monolith in its level of insecurity or its responses. Insecurity therefore refers to a situation which has the potential to excite elite and mass opinions whereas energy insecurity is more specific and contextualizes this potential within a framework of an energy trilemma.   In order to understand energy security, Bernell and Simon consider Jack London’s short-story “To Build a Fire” wherein a man travelling the Yukon accidentally puts his foot in a                                                         3 Booth, Ken. 2005. “Security” in Ken Booth (ed.), Critical security studies and world politics (Lynne Reinner), p. 23. 4 Kester, Johannes. 2018. The Politics of Energy Security: Critical Security Studies, New Materialism, and Governmentality (Routledge), p. 56.  5 freezing river. Despite being warmly dressed, the man dies due to a lack of care in the use of the resources around him when trying to build a fire. Conversely, his dog survives by following a familiar path to civilization. They suggest that without needed energy resources, good planning, and awareness of the risks to security, one is doomed. Western societies therefore take an enormous risk every time one assumes that water will flow from the taps or that the lights in a room will turn on when a switch is flipped.5 While this risk is mostly taken for granted in the developed world, in PCE fears of energy insecurity exist at all levels, from macro-level energy dependence to the micro-level brownouts and the effects of pollution.  Energy security is a complex issue and captures more than energy flows. Kester suggests an energy trilemma of energy economics, environmental sustainability, and energy security (see Figure 1). In doing so he contends that threats to the stable and continuous use of natural resources are related to threats that follow from an actual disruption of resources. These are both the result and cause of threats that result from a continuous usage of resources.6 While it will be discussed in more detail in the third section, energy sustainability need not refer to environmental issues exclusively. For example, Romania is one of the few countries in PCE that has a wealth of resources, but these are quickly depleting. Long-term Romanian energy security is therefore as poor as its neighbours, irrespective of its current status as above average.                                                          5 Bernell, David and Christopher A. Simon. 2016. The Energy Security Dilemma, p. 1-2.  6 Kester, Johannes. 2018. The Politics of Energy Security, p. 41.  Figure 1: Kester, Johannes. 2018. The Politics of Energy Security: Critical Security Studies, New Materialism, and Governmentality (Routledge), p. 47.  6  Winzer provides another useful level of nuance for defining energy security by considering the speed, magnitude, duration, geographic spread, uniqueness, and perceived success of energy disruptions.7 All of these factors together help to delineate countries’ levels of energy insecurity by virtue of their vulnerability to deleterious disruptions. For example, both Poland and Ukraine consume roughly equal amounts of energy, and while the latter produces more than double the energy the former does domestically, Ukraine is more insecure due to the severity of Russian energy disruptions.  This paper therefore defines energy security as “the ability to obtain abundant, reliable, affordable, diversified supplies of energy (in terms of both fuel types and their geographic source)”.8 Furthermore, these supplies must be relatively free from disruptions – be they political or economic in nature – and they cannot be entirely sourced from energy which chronically reduces the wellbeing of the constituent population. To this end, energy insecurity can be defined as an unaffordable, unreliable, and/or undiversified supply of energy which is prone to disruptions and politicization either by domestic or foreign actors. This definition provides a firm basis for operationalizing and testing the dependent variable against net dependency.  1.2 Energy Security in Postcommunist Europe  If energy security is the sum goal of countries whose energy is unreliable, unaffordable, and/or undiversified in its origins and is frequently disrupted for political or economic reasons, then how we understand the issue in PCE will be necessarily complicated. This subsection analyses energy security in PCE by first considering the Russian factor and the relevant history of major players like Gazprom and Rosneft before examining the variability of states’ responses. This will show that predatory actions undertaken by Russian companies should not automatically                                                         7 Winzer, Christian. 2012. “Conceptualizing energy security” in Energy Policy (Elsevier), 46: p. 37-9.  8 Bernell, David and Christopher A. Simon. 2016. The Energy Security Dilemma, p. 3.   7 be considered as wholly political or wholly economic in nature. Both paradigms are relevant, and the responses to them by PCE vary by levels of state capture and state capacity. 1.2.1 Energy security in postcommunist Europe   While the classic paradigm of ‘capitalism vs. communism’ faded away with the fall of the Berlin Wall, the process of ‘othering’ Russia and Russia’s efforts to be more influential and remain salient factors in the discourse surrounding energy insecurity in Europe. One of the most fundamental reasons for the continuation of this trend is what Buzan and Wæver describe in their ‘Regional Security Complex Theory’ (RSCT). This theory posits that “simple physical adjacency tends to generate more security interaction between neighbours than among states located in different areas”.9 This has been further confounded by the ‘Europeanisation’ of politics, norms, imperatives, and values in PCE.10 By identifying the differing threats and perceptions of energy security in the region, one finds that they are based to a significant degree on socially constructed and normatively-based assumptions about the nature of dependence.  What constitutes an unsafe level of Russian fossil fuel imports across the region is based on intersubjectively-constructed norms and values. Zeniewski contends that Hungary and the Czech Republic acted strongly to avoid reliance on Russia whereas Poland did not.11 Yet as the second section details, the Czech Republic imports less Russian oil and gas than Poland but produces less domestically and so is roughly equally dependent upon Russia. Hungary is more reliant on Russian imports, but this is mitigated somewhat by higher domestic production and exports.                                                         9 Buzan, Barry and Ole Wæver. 2003. Regions and Powers: The Structure of International Security (Cambridge University Press), p. 45. 10 Featherstone, K. 1998. “Europeanization and the Centre Periphery: The Case of Greece in the 1990s” in South European Society and Politics (Routledge), 3(1): p. 24.  11 Zeniewski, Peter. 2011. “Poland’s Energy Security and the Oriigns of the Yamal Contract with Russia” in The Polish Quarterly of International Affairs (Polish Institute of International Affairs), 2: p. 44.  8 Contentions like these are common within the field because, as seen in the discussion of defining energy security, quantifiable energy dependence and the relevant normative ideas and values are not causally related. Should Zeniewski be correct in his assessment of sluggish Polish responses to predatory Russian energy interests, then this cannot be explained by Poland’s dependence on Russia alone, as it scores atypically high on concerns over Russia.12 Similarly, the interplay of Europeanisation and RSCT is contentious because of the differing conceptions of energy insecurity and dependency. The values and ideas regarding Russia’s role in energy insecurity in the region are constantly being discussed and reified in real time and do not exist in isolation; they both shape and react to activities in the political sphere which in turn are shaped by and react to the construction of new pipelines, energy disruptions, and other salient issues.  1.2.2 Russia and the development of energy insecurity perceptions Modern concerns over predatory Russian interference in postcommunist energy sectors began with the fall of the Berlin Wall and the disintegration of the Soviet Union. Any pretense of a united communist bloc disappeared, and with them a raison d’être for expropriation of labour and capital to the core of the Soviet Union; Russia. Examining this change sheds needed light on the role that Russia and its SOEs, chiefly Rosneft and Gazprom, have played in developing perceptions of energy insecurity in Russia. The dissolution of the Soviet Union caused enormous political, economic, and cultural change. However, the energy sector was seen as an area of continuity between the former Soviet Union and the rest of Europe; the former had been selling oil and gas to the latter for decades and the two had engaged in numerous joint projects including pipelines that are still in operation.13                                                         12 See Figure 2. 13 Dannreuther, Ronald. 2018. “Energy security in Central and Eastern Europe: An IR theoretical dimension” in Wojciech Ostrowski and Eamonn Butler (eds.), Understanding Energy Security in Central and Eastern Europe: Russia, Transition, and National Interest (Routledge). p. 19.   9 Both sides had gone to considerable effort to insulate energy sales from politics and the hope was to continue this in the post-soviet era.14 However, the chaotic and incomplete nature of the Russian economic and political transition during the 1990s – which at its worst saw President Boris Yeltsin order tanks to fire on parliament – led to an inevitable rise in tensions between NATO and Russia.15 This incomplete transition allowed for shadowy intermediary companies to engage in rent-seeking and reward Russian and client-state elites, thereby slowing and distorting the transition process in both Russia and economically connected countries.16 The West’s relatively benign view of Russia changed with Vladimir Putin’s election to the presidency. Putin’s overt desires to “reassert Russia’s ambitions to be a great power and to reverse the decentralising dynamics of the Yeltsin era” caused a great deal of concern in the West.17 Russia became more hostile toward the EU following the 2004 and 2007 EU expansions, and it was around this time that the country twice cut off gas to Ukraine which badly affected the Balkans and Eastern Europe.18 However, the 2008 market crash ushered in an eerie chill in relations between Europe and Russia. While Russia’s chief geopolitical tool is gas, the collapse of oil prices badly affected its total bargaining power. Energy issues have been once more isolated from the annexation of Crimea in a manner commensurate with Europe’s reliance on Russian energy as before and after the fall of the Berlin Wall.19  Despite both Europe and Russia’s efforts to isolate energy issues from politics, as the political strain between the two has increased, so too has attention paid to energy insecurity in                                                         14 Högselius, Per. 2013. Red Gas: Russia and the Origins of European Energy Dependence (Macmillan).  15 Tumanov, S A. Gasparishvili, and E Romanova. 2011. “Russia-EU relations, or how the Russians really view the EU” in Journal of Communist Studies and Transition Politics (Routledge), p. 120-141.  16 Dannreuther, Ronald. 2018. “Energy security in Central and Eastern Europe”, p. 20-21.  17 Ibid, p. 21.  18 Ibid.  19 Casier, T. 2016. “Great game or great confusion: the geopolitical understanding of EU-Russian energy relations” in Geopolitics (Routledge), 21(4): p. 763-778.   10 both Western and postcommunist Europe. It is rather ironic that the current decade has seen a resurgence in energy security talk given that the EU – the chief party opposed to Russian energy hegemony on the continent – is less reliant on Russian oil and gas than ever before.20 This speaks to the discursive and intersubjective nature of energy security in PCE. While at the core of energy security debates is a concern over a preponderant reliance on Russian oil and gas, how actors perceive this reliance is key. Issues such as the historical relations between a country in PCE and Russia, the modern political dynamics such as the incidence of pro-Russian elements in the Yugoslavian successor states or the radical right in Central and Eastern Europe, and the geographic proximity toward Russia all play major factors in attenuating or exacerbating actual levels of concern over Russian interference.  Principal to the development of modern energy insecurity in PCE has been the predatory behaviour of Russian energy SOEs, chiefly Gazprom in the natural gas sector and Rosneft in the oil sector. Following the breakup of the Soviet Union, Western governments had hoped that the privatization of Russian energy in the 1990s would lead to the liberalizing of Russia, but due to the aforementioned chaotic and incomplete nature of its transformation, many newly-privatized businesses became state-owned within a decade. Privatization in the 1990s allowed oligarchs to consolidate ownership over oil and gas companies through Russian banks making loans to the state and the state transferring oil companies to the banks as collateral. Following the failure to repay, the companies were handed over.21 Just as the 2000s marked a turning point for Russian-European political affairs, so too did this decade mark a transition to government control.                                                         20 Eurostat. 2018. “EU imports of energy products – recent developments”, European Union. Accessed May 4, 2019. https://ec.europa.eu/eurostat/statistics-explained/index.php/EU_imports_of_energy_products_-_recent_developments#Main_suppliers_of_natural_gas_and_petroleum_oils_to_the_EU   21 Rossiaud, Sylvain and Catherine Locatelli. 2018. “Russian energy companies and the Central and Eastern European energy sector” in Understanding Energy Security in Central and Eastern Europe: Russia, Transition, and National Interest, (eds.) Wojciech Ostrowski and Eamonn Butler (Routledge), p. 56.   11 The turning point in the industry from privatization back to state control was the Yukos-Khodorkovsky scandal. Mikhail Khodorkovsky was charged with fraud, tax evasion, and other economic crimes, but his status as an oil oligarch was especially damning to the independence of the industry. While the 1995 Presidential Decree No. 971 had begun the process of returning oil and gas companies to state control, the Khodorkovsky scandal catalyzed the process.22 Yukos’ assets have since been transferred to Rosneft, which has led to further politicization of Russia’s energy industry.23 Similarly, continued state control over Gazprom has proved to be a constant concern for many states in PCE due to their preponderant reliance upon Russian natural gas.24 Yet, while Russian SOEs play near total roles in their respective industries, their capacities to affect the energy insecurity of countries in PCE is not equal. The highly portable nature of gas means that it is a more effective tool for predatory business dealings between Gazprom and postcommunist governments – pipelines are cheaper to build and can be much longer. Gazprom has therefore used two strategies within the region. Acting as a profit-maximizing monopolist, it charges exorbitant rates for gas in non-competitive markets like Belarus and Bulgaria. It has also acted in response to the liberalization of the EU gas market by moving further downstream to avoid price and volume risks.25 Bulgaria, Lithuania, Hungary, Romania, and Slovenia all have oil refineries owned by Lukoil. Furthermore, Bulgaria, Czechia, Estonia, Poland, Romania, and Slovenia all have filling stations owned by either Yukos or Lukoil.26 This can be seen as a situation of economic capture. The insecurity that a preponderant                                                         22 Falola, Toyin, and Ann Genova. 2005. The Politics of the Global Oil Industry (Praeger), p. 216-19.  23 The New York Times. “Russia’s state oil company wins another Yukos auction” in The New York Times. Accessed December 4, 2018. https://www.nytimes.com/2007/08/08/business/worldbusiness/08iht-yukos.4.7045853.html  24 Rossiaud, Sylvian and Catherine Locatelli. 2018. “Russian energy companies and the Central and Eastern European energy sector”, p. 60.   25 Ibid, p. 61.  26 Ibid, p. 63.   12 reliance on Russian oil and gas causes – though chiefly gas in many cases – is therefore further augmented by the predatory business practices of Russian SOEs. These companies do not necessarily act on behalf of the state, per se, but instead act for their own profit – the results of which have been to the detriment of the energy security of countries in PCE. Yet the level of concern over Russian interference has been mixed. Poland and Romania are deeply distrustful of Russia while the Yugoslavian successor states seem comparatively complacent.27 States in PCE are autonomous actors, and it is a failing of macro-level IR theory to not recognise the capacity for small states to manipulate and play off external powers to protect domestic interests. Moreover, differing views of Russian energy as either a threat, an economic necessity, or otherwise mean that one must be careful not to only consider the empirical aspect of energy insecurity.28  The next section shows that while half the countries studied are in a situation of moderate or extreme dependency on Russian oil and gas, this does not line up with conceptions of Russia as a threat. 1.3 Pipelines and Securitization in Postcommunist Europe  Measuring energy insecurity necessarily requires one to include some factors and exclude others. Should popular sentiments over state and personal wellbeing be insecure, the level of dependence on Russian oil and gas be high, and the government be interested in responding to them, then a high level of concern over Russian interference should be expected. If energy insecurity drives this level of concern, then securitization is a process that responds to energy insecurity. Securitization is an intersubjective phenomenon that considers how relevant policies have shifted from the status quo to ones of security. There will exist a heightened sense of                                                         27 See Figure 2. 28 Dannreuther, Ronald. 2018. “Energy security in Central and Eastern Europe”, p. 26-7.  13 urgency and a justification to spend resources on the issue.29 Securitization is similar to energy insecurity insofar that it is an inherently intersubjective phenomenon. Kester provides the example that, until a natural gas well explodes, the threat originates in the shared imagination that it may do so.30 The process of securitization can be considered the response to energy insecurity – it reacts to how individuals are collectively conceiving of real-world issues.  Janeliūnas and Tumkevič suggest that “the higher the energy dependence, the more extraordinary measures are needed to overcome it and the more intense the securitization to support such measures formalized in security documents and strategies”.31 They argue that a lack of expensive, long-term, and extraordinary projects is indicative of a state which does not have high energy insecurity and is therefore less likely to securitize the energy sector.32  The matrix of pipelines originating in Russia and spiderwebbing across Europe is most developed between the former Soviet Union and its allies. Despite the sizable amounts of oil and gas originating in Northern Europe, any reasonable individual would not expect there to be many expensive, long-term, and atypical projects being undertaken to divest a country of its reliance on Scandinavian fossil fuels.33 This is because energy insecurity is not strictly an issue of quantifiable dependence, but instead the threat of state capture and disruptions. Recalling the definition provided for energy insecurity, a state is more likely to securitize its energy sector when its principle resources are unaffordable, unreliable, undiversified, or ripe for political or economic capture. Security, therefore, is “something that is made; it does not exist out there but                                                         29 Kester, Johannes. 2018. The Politics of Energy Security, p. 75. 30 Ibid, p. 76. 31 Janeliūnas, Tomas and Agnija Tumkevič. 2013. “Securitization of the Energy Sectors in Estonia, Lithuania, Poland, and Ukraine: Motives and Extraordinary Measures” in Lithuanian Foreign Policy Review (Foreign Policy Research Center, 30: p. 67-68.  32 Ibid, p. 88-90. 33 Pontera, Andrea. 2017. The New Politics of Energy Security in the European Union and Beyond: States, Markets, Institutions (Routledge), p. 90-91.  14 is called upon or written by politicians, concerned citizens, security exports, insurers, etc.”.34 Energy security is not a banal process that simply exists in absence of actors.  Energy insecurity is a state of unaffordable, unreliable, or undiversified energy vulnerable to potential economic and/or political capture. This has been the case in PCE for some time and has necessitated strident securitization in many states following Russia’s incomplete transition and the predatory behaviour of Russian energy SOEs. Those that have not acted aggressively to reduce their reliance on Russian oil and gas have either not been especially reliant in the first place or suffer from a lack of effective domestic pressure demanding energy sector securitization.                                                                       34 Kester, Johannes. 2018. The Politics of Energy Security, p. 96.  15 Section 2 Data Analysis  In 2006, US Vice-President Dick Cheney remarked that “no legitimate interest is served when oil and gas become tools of intimidation or blackmail, either by supply manipulation or attempts to monopolize transportation”.35 While much has been said about the influence Russia exerts through manipulating energy insecurity in PCE, less has been said about the effect energy insecurity has on levels of concern over Russian interference. This paper contends that there is a positive relationship between the extent of energy insecurity and concern over Russian interference in PCE. Put differently, as a country becomes more dependent on Russian energy, it is expected to become more concerned with Russian interference. Previous literature has either failed to address concerns over Russian interference or it has not sought to test for other explanations while the independent variable is frequently presented in a simplistic manner.   This section will begin by presenting the methodology with reference to the limitations of existing scholarship. It will then introduce the dependent and independent variables as well as a number of alternative independent variables. The balance of the section will be devoted to examining the results. These findings show that there is an inverse relationship between dependence on Russian oil and gas and concern over Russian interference. Furthermore, only macro-level alternative variables find similar results to the initial statistical analysis. 2.1 Methodology and Data 2.1.1 Limitations of existing methodologies  Much work has been undertaken to understand the consequences of energy insecurity in PCE. For example, Janeliūnas and Tumkevič suggest a preponderance of Russian energy imports                                                         35 Stern, Jonathan. 2006. The New Security Environment for European Gas: Worsening Geopolitics and Increasing Global Competition for LNG”, Oxford University Energy Studies (Oxford University Press), p. 6.  16 leads to the securitization of the energy sector. This paper has argued that it is only axiomatic that energy sector securitization is a response to energy insecurity.  Janeliūnas and Tumkevič contend that “an external actor, dominant in the energy market, might be more easily associated with some “other” who poses a threat for ‘us’” wherein Russia presents the “perfect target” for the “other” in securitizing energy threats.36 This excellent merger of energy politics and political psychology helps to justify a broader analysis. It raises questions over the confidence people have in the state to protect them against this other and in the EU for relevant members to ensure the wellbeing of the bloc. Yet despite this excellent proposition they only consider energy insecurity as the extent to which countries rely on external sources to meet their energy needs. This does not consider the level of domestic production or whether imports are subsequently exported for a profit.  Harsem and Claese use the European Council on Foreign Relation’s five policy approaches to delineate responses to Russian aggression, ranging from ‘trojan horses’ like Cyprus and Greece to ‘new Cold Warriors’ like Lithuania and Poland.37  However like Janeliūnas and Tumkevič they also fail to fully consider postcommunist countries’ full energy portfolios.38 There is also a near-complete absence of work done on the effect energy insecurity has on concerns people in a country have over their wellbeing and that of the nation as a whole. While this paper will consider this and other issues with data ranging from 2016-18, future scholarship would benefit by examining energy insecurity over time.                                                          36 Janeliūnas, Tomas and Agnija Tumkevič. 2013. “Securitization of the Energy Sectors in Estonia, Lithuania, Poland, and Ukraine”, p. 70.  37 Harsem, Øistein and Dag Harald Claese. 2013 “The interdependence of European-Russian energy relations” in Energy Policy (Elsevier), 59: p. 787. 38 Ibid, p. 788-89.  17 2.1.2 Methods and hypotheses  There exist serious limitations to existing literature on energy insecurity and a near-total dearth of work done on energy insecurity’s effect on concerns over Russian interference in the region. This paper will therefore endeavour to explain this relationship as clearly as possible using descriptive statistics. In doing so it will provide a “needed analytical framework for relating the impact of states’ actions on the markets for various sources of energy, with the impact of these markets on the policies and actions, and indeed the economic development and national security of states”.39 The dependent variable is the level of concern over Russian interference in the state, and the independent variable is energy insecurity which is operationalized as the level of dependence upon Russian energy imports. Several alternative variables are also tested against concerns over Russian interference which capture both macro- and micro-level issues. This analysis will test whether energy insecurity is related to perceptions of security more broadly pertinent to external influences. While they will be explicated in detail below, this paper hypothesizes the following:  H1: As energy dependency increases, concerns over Russian interference increase.  H2: As people become poorer, essential services become more inaccessible, and societies become more unequal, concerns over Russian interference will increase. H3: The poorer the average citizen, the more they will fear Russian interference.  H4: The less a country trusts EU institutions to protect them, the more they will fear Russian interference.                                                         39 Strange, Susan. 1988. States and Markets (Continuum), p. 3.  18 2.2 Variables 2.2.1 Dependent variable: level of concern about Russian interference  Accurately testing perceptions of Russian interference is inherently a difficult task due to issues of biased framing and priming, and so to capture concerns over Russian interference this paper uses a Gallup survey conducted in 2015. This survey asked the same question across PCE: “What one country in the world would you say poses the greatest threat to your country?”.40 Figure 2 shows the results where blue responses indicate Russia as the greatest threat and by what amount while orange results indicate another country. Of note is that no Yugoslavian successor state views Russia as their main threat; all are concerned with their neighbours. This is likely due to the legacy of the Yugoslav Wars. Due to the limited availability of the full survey results, this thesis can only analyse and compare those countries which view Russia as their greatest threat. Further research is needed to examine countries whose second or third greatest threat is Russia and the effect this has on their energy insecurity. 2.2.2 Independent variable: net dependence on Russian oil and gas  This paper has repeatedly mentioned the shortfalls of previous analyses of energy insecurity in PCE, and so the independent variable herein used requires a thorough explanation. While energy insecurity is an inherently subjective term, at its core is the previously mentioned level of dependence on foreign energy. This thesis operationalizes energy insecurity as net dependence, but it is important to remember that this is only part of the energy insecurity issue. Future research is needed to measure other aspects of energy insecurity.                                                          40 Esipova, Neli and Julie Ray. 2016. “Eastern Europeans, CIS Residents See Russia, U.S.as Threats”, Gallup. Accessed online May 1, 2019. https://news.gallup.com/poll/190415/eastern-europeans-cis-residents-russia-threats.aspx?g_source=Eastern%20Europeans&g_medium=search&g_campaign=tiles  19 Previous analyses have used simplistic metrics to measure energy insecurity. This thesis defines the total energy sector as gross production + imports. Imports constitute over 50% of all total energy sectors in the full 20-country analysis, and 60% of the Russia-fearing 10-country set.41 This is a deceptively high level of dependence given that energy insecurity in the region is expected to be driven by Russian energy imports as a percentage of the total energy sector.   An entirely different picture emerges after examining the percentage of Russian crude oil, oil products, and natural gas imported into each country.42 No country but Belarus is over 50% reliant on Russian fossil fuel imports as a function of the total energy sector. Yet even this measurement does not capture the effects that domestic production or export markets have in attenuating the influence of Russian fossil fuels.   This paper has therefore developed the ‘net dependence’ metric. Using the total production, imports, and exports of all energy resources, it first calculates the total energy sector                                                         41 IEA. 2018. “[Country]: Balances for 2016”; see imports. International Energy Agency. Accessed online May 1, 2019. https://www.iea.org/statistics/?country=WORLD&year=2016&category=Energy%20supply&indicator=TPESbySource&mode=table&dataTable=BALANCES 42 Observatory of Economic Complexity. 2019. “Where does [country] import [product] from (2017)?”; use left-hand navigator for countries and products (crude petroleum, refined petroleum, and natural gas), MIT. Accessed online May 1, 2019. https://atlas.media.mit.edu/en/visualize/tree_map/hs92/import/blr/show/2709/2017/ Figure 2: Esipova, Neli and Julie Ray. 2016. “Eastern Europeans, CIS Residents See Russia, U.S.as Threats”, Gallup. Accessed online May 1, 2019. https://news.gallup.com/poll/190415/eastern-europeans-cis-residents-russia-threats.aspx?g_source=Eastern%20Europeans& 0%10%20%30%40%50%60%70%80%90%100%AlbaniaBelarusBosnia and Her.BulgariaCroatiaCzech RepublicEstoniaHungaryKosovoLatviaLithuaniaMoldovaMontenegroNorth MacedoniaPolandRomaniaSerbiaSlovakiaSloveniaUkraine% Mentioning Country as Biggest Threat, 2016 20 mixture for each, the domestic usage (production – exports) and the gross production (domestic usage + exports). From this, net oil and gas dependence is calculated as follows: [Gross Production (% of total energy sector)] + [Exports (% of total energy sector)] – [Imports (% of total energy sector)] = net oil and gas dependence While it may seem odd to include exports separately and as part of gross production, using domestic usage in lieu of gross production would otherwise imply that all production is used domestically. This is unwise given that in most cases some domestically-made energy is exported. By including both exports and gross production together, this calculation avoids assuming that the amount of energy exported is not to the detriment of domestic usage.   A final step to calculating net dependence on Russian oil and gas is to isolate the amount of fossil fuels being imported from Russia. The calculation is as follows: [Gross Production (% of total energy sector)] + [Exports (% of total energy sector)] –  [Russian oil and gas imports (% of total energy sector)] = net dependence Net dependence is not a percentage but instead a metric used to represent the level of dependence a country has on Russian oil and gas imports. The more negative the score, the more dependent a country is on Russian energy imports. The results are listed in Figure 3. It shows that the traditional story of its energy domination by Russia over a country such as Lithuania is not entirely true. While 91% of its oil and gas is imported from Russia, over half is exported out. This leaves the country in a perilous, though quantifiably neutral position. 2.2.3 Alternative independent variables  While net dependence captures a more nuanced picture of energy insecurity, there exist many other non-energy related insecurity factors that could potentially explain a distrust of Russia. This paper tests seven alternative variables against the dependent variable.   21  The micro-level variables are inequality (measured by the GINI index),43 the percentage of the population living below the poverty line,44 the percentage of population paying over 10% on out-of-pocket for healthcare expenditures,45 and GDP per capita PPP.46 These metrics test for insecurity at the personal level and allow one to posit that there is an inverse relationship between deepening personal poverty and rising fears of Russian interference (H2). Those who feel personally less secure will be more likely to feel vulnerable to Russian interference. Furthermore, if a country is more fulsomely poor then there may be an increased lack of confidence in the state. Deepening poverty of this kind, as expressed by GDP per capita PPP, is hypothesized to increase levels of concern over Russian interference as seen in H3.                                                         43 World Bank.2019. “GINI index (World Bank estimate), World Bank. Accessed online May 3, 2019. https://data.worldbank.org/indicator/SI.POV.GINI?end=2017&locations=XK-ME-AL-HR-UA-MK-SI-BA-EE-RS-RO-CZ-LV-PL-HU-MD-BG-SK-LT-BY&start=2000 44 World Development Indicators. 2019. “Poverty headcount ratio at national poverty lines (% of population)”, World Bank. Accessed online May 3, 2019. http://datatopics.worldbank.org/world-development-indicators/themes/poverty-and-inequality.html 45 World Development Indicators. 2019. “Proportion of population spending more than 10% of household consumption of income on out-of-pocket health care expenditures”, World Bank. Accessed online May 3, 2019. http://datatopics.worldbank.org/world-development-indicators/themes/people.html 46 World Bank. 2019. “GDP per capita, PPP (current international $), World Bank. Accessed online May 4, 2019. https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?locations=AL-BY-BA-BG-HR-CZ-EE-HU-XK-LV-LT-MD-ME-MK-PL-RO-RS-SK-SI-UA BelarusMoldovaPolandCzech RepublicSlovakiaBosnia and HerzegovinaBulgariaHungaryLatviaSerbiaKosovoMontenegroEstoniaNorth MacedoniaLithuaniaSloveniaUkraineRomaniaCroatiaAlbania-0.60-0.40-0.200.000.200.400.600.80Net Dependence on Russian Oil and Gas, 2016Figure 3: For imports, exports, and production statistics, see IEA. 2018. “[Country]: Balances for 2016”. International Energy Agency. For Russian oil and gas import percentages, see: Observatory of Economic Complexity. 2019. “Where does [country] import [product] from (2017)?”; use left-hand navigator for countries and products (crude petroleum, refined petroleum, and natural gas), MIT. See Appendix for details.  22  Three EU-level polls were picked from the Eurobarometer 89 and the Special Eurobarometer 464b to test macro-level insecurity. These polls questioned whether respondents felt that the EU is a secure place to live,47 whether they favoured further expanding the EU,48 and whether they thought their voices count in the EU.49 EU countries in PCE were moderately less inclined to believe the EU is a safe place to live, much more likely to favour EU expansion, and on par that their voice counts in the EU. H4 therefore suggests an inverse relationship between levels of trust in the EU and fears of Russian interference. 2.3 Results and Discussion 2.3.1 Net dependence and the Russian threat   The results of the descriptive statistical analysis of the dependent and independent variables reveal an unexpected relationship. While H1 posits that as a country becomes more dependent on Russian oil and gas it will become more worried about Russian interference, the result is not so. Figure 4 shows the level of net dependence on Russian oil and gas imports graphed against the Gallup poll’s responses in 2016. It shows that there is an inverse relationship: the more dependent a country is on Russian oil and gas, the less likely it is to view Russia as its greatest threat.  This directly contradicts much of the research done in the past 30 years, but it must not be viewed as irrefutable; Esipova and Ray’s Gallup poll questioned what                                                         47 See QB1.1; European Commission. 2017. “Special Eurobarometer 464b: Europeans’ attitudes towards security”, European Union. Accessed May 4, 2019. http://ec.europa.eu/commfrontoffice/publicopinion/index.cfm/Survey/getSurveyDetail/instruments/SPECIAL/search/464/surveyKy/1569 48 See QA16.3; European Commission. 2018. “Standard Eurobarometer 89: The views of Europeans on the European Union’s Priorities”, European Union. Accessed May 4, 2019. http://ec.europa.eu/commfrontoffice/publicopinion/index.cfm/Survey/getSurveyDetail/instruments/STANDARD/surveyKy/2180 49 See D72.1; European Commission. 2018. “Standard Eurobarometer 89: Public opinion in the European Union”, European Union. Accessed online May 4, 2019. http://ec.europa.eu/commfrontoffice/publicopinion/index.cfm/Survey/getSurveyDetail/instruments/STANDARD/surveyKy/2180  23 country presented the greatest threat and did not question the issue of energy. Furthermore, net dependence only captures one important aspect of energy insecurity.  There are multiple explanations for why this may be, many of which revolve around issues of state capacity and the power of civil society. To this end one should might expect countries which score negatively on net dependence to be trapped in a “vicious circle… where the governance deficit exacerbates external vulnerability, which, in turn, locks in policy capture at home”.50 A fruitful comparison is found in the Balkans where Romanian infrastructure is domestically owned and the population is hostile to Russia, while Bulgaria’s only refinery is owned by Lukoil and the population feels more threatened by the US.51  These findings also suggest the possibility of reverse causation which would mean that concerns over Russian interference drive energy dependence. Given this counter-explanation it is sensible that the countries who fear Russia the most will be the least dependent. However this explanation does not stand up to scrutiny because of the slow-moving nature of the energy                                                         50 Bechev, Dimitar. 2018. “Bulgaria” in Understanding Energy Security in Central and Eastern Europe: Russia, Transition, and National Interest, (eds.) Wojciech Ostrowski and Eamonn Butler (Routledge), p. 139. 51 Ibid, p. 138. Figure 4: See IEA and OEC sources. Note that due to the restrictions of Esipova and Ray's Gallup poll, only the ten countries who view Russia as its greatest threat can be presented. Czech R.EstoniaHungaryLatviaLithuaniaMoldovaPolandRomaniaSlovakiaUkraine0%10%20%30%40%50%60%70%80%-0.4 -0.3 -0.2 -0.1 0 0.1 0.2 0.3 0.4% Believe Russia is Greatest ThreatNet DependenceNet Dependence vs. % Believe Russia is Greatest Threat, 2016 24 dependence variable. Despite an atypically high level of concern over Russian interference, Poland has succeeded in reducing its crude oil reliance on Russia by only 5% from 2000 to 2015. Romania’s high levels of concern have failed to drive further independence from Russian energy: natural gas imports have increased by 23% in the same period.52 This slow rate of change can be explained in part by the existing infrastructure between PCE and Russia, the prohibitively high costs of building new energy infrastructure, privatization taking power away from governments to divest their energy sectors of Russian influence, and more. Given the results of this analysis and the speculative nature of these explanations, further long-term analysis is needed before one can ascertain whether there exists an inverse relationship.  2.3.2 Alternative independent variables   The utility of these alternative variables is that they capture insecurity at both the micro- and macro-level. From the prior section securitization can be understood as a response to insecurity, and so states which are more unequal will feel more threatened by Russia, those which are richer will not be as threatened by Russia, and those which have the most faith in EU institutions will feel less threatened. If the alternative variables capture relevant factors to energy insecurity then they should reinforce the previous findings. Should this be the case, these variables should heighten the level of concern over Russian interference if they play a role in addition to energy dependence. If they do not, then energy dependence alone would appear to be playing a significant role. However, these variables may instead capture different aspects of insecurity that do not turn into a fear of Russia as a threat.   Micro-level indicators present a relatively convincing picture in proving H2. Both the percentage of people below the poverty line and the relationship between the proportion of the                                                         52 Observatory of Economic Complexity. 2019. “Where does [country] import [product] from [year]?”; use left-hand navigator for countries and products (crude petroleum, refined petroleum, and natural gas), MIT.  25 population spending greater than 10% on out-of-pocket healthcare have weak positive correlation with increases in fears of Russian interference. While these findings contradict those of H1, they do support H2 (see Figure 5): as quality of life decreases, concerns over Russian threats increase.   GDP per capita PPP has no significant relationship with concerns over Russian interference in the state and therefore disputes H3. The highly scattered nature of the ten countries which view Russia as their greatest threat is very inconsistent (See Figure 6). This implies that GDP per capita PPP may capture spurious factors unrelated to concerns over Russian interference.  Confidence in the EU as expressed by favouring expansion, believing one’s voice counts, and believing that the EU is a secure place to live are all positively correlated with the percentage of society believing that Russia is the greatest threat (see Figure 7). This contradicts H4 which posited that greater confidence in EU institutions will result in lower rates of concern about Russian threats. Whether these countries are more Western in outlook, view the EU as an Czech R. EstoniaHungaryLatvia LithuaniaMoldovaPolandRomaniaSlovakia Ukraine0%10%20%30%40%50%60%70%80%$0.00 $10,000.00 $20,000.00 $30,000.00 $40,000.00% Believe Russia is Greatest ThreatGDP per capita PPPGDP per capita PPP vs. % Believe Russia is Greatest ThreatFigure 6: See World Bank sources for GDP per capita PPP data. Figure 5: See World Bank and World Development Indicator sources. Ratio of increases are roughly 0.625 for both state poverty and inequality as a function of Russian threat. Czech R.EstoniaHungaryLatviaLithuaniaMoldovaPolandRomaniaSlovakiaUkraine0%10%20%30%40%50%60%70%80%0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00%% Believe Russia is Greatest Threat% Below Poverty Line% Below Poverty Line vs. % Believe Russia is Greatest ThreatCzech R.EstoniaHungaryLatviaLithuaniaMoldovaPolandRomaniaSlovakiaUkraine0%10%20%30%40%50%60%70%80%22 27 32 37x% Believe Russia is Greatest ThreatGINI IndexGINI Index vs. % Believe Russia is Greatest Threat 26 effective shield against Russian influence, or if another logic holds is unclear. These results nevertheless correspond to the relationship found in the analysis of H1. Energy independent and pro-EU countries are more suspicious of Russia.  2.3.3 Discussion  The prior subsections have presented a complicated and conflicting picture of the relationship between fears of Russian interference and net dependence on Russian oil and gas. The paradoxical findings show that those who are less reliant on Russian fossil fuels are more suspicious of Russia. EU-level variables find a similar pattern. This contrasts with the micro-level findings regarding personal wellbeing, such as inequality, poverty, and average wealth which showed that fears of Russian interference increase with insecurity. The critical conclusion is that micro-level insecurity does not covary with concerns about Russian interference like energy insecurity because they operate on different logics.  One explanation for the differences in the covarying relationships of H1 and H4 compared to that seen in H2 and H3 is because the latter concern individuals’ lives. Czech R.EstoniaHungaryLatviaLithuaniaPolandRomaniaSlovakia0%10%20%30%40%50%60%70%80%30% 40% 50% 60% 70%% Believe Russia is Greatest Threat% Favouring EU Expansion% Favouring EU Expansion vs. % Believe Russia is Greatest ThreatCzech R. EstoniaHungaryLatviaLithuania PolandRomaniaSlovakia0%10%20%30%40%50%60%70%80%10% 30% 50%% Believe Russia is Greatest Threat% Believe Voice Counts in EU% Believe Voice Counts vs. % Believe Russia is Greatest ThreatCzech R. EstoniaHungaryLatvia LithuaniaPolandRomaniaSlovakia0%10%20%30%40%50%60%70%80%45% 50% 55% 60% 65% 70%% Believe Russia is Greatest Threat% Agree EU is a Safe Place to Live % Agree EU is a Safe Place to Live vs. % Believe Russia is Greatest ThreatFigure 7: See European Commission sources for data on Eurobarometer and Special Eurobarometer data.  27 These micro-level variables do not dispute the findings of H1 and H4, but instead show that personal insecurity is less likely to be attributed to Russian interference. Furthermore, postcommunist Europeans may be more objective at the macro-level than they are at the micro-level. It is also possible that people do not view energy dependency on Russia as having a direct effect on their well-being.  For those countries that are highly insecure at the macro-level, a lack of administrative, financial, and state competency coupled with a lack of EU protection in countries presents an ideal position for predatory Russian interests to potentially exert their influence. This may be the case in Moldova or Slovakia. As recently as 2016, pro-Russian President Igor Dodon called for a referendum on extricating Moldova from its EU agreements.53 Furthermore, he has since suspended a bill in parliament that would have stopped Russian broadcasts in the country.54 It is likely that only in countries which are sufficiently free of Russian energy dominance can there be open dialogue about the dangers of energy insecurity. Otherwise, Russian interests may influence the media and polity such that challenges to the energy insecure status quo are either abortive in nature or fail from the outset. Further research is needed to explicate the micro-level variables at play in concerns over Russian interference.                                                             53 Paun, Carmen. 2016. “Moldova’s choice: Russia or the West”, Politico. Accessed online May 6, 2019. https://www.politico.eu/article/moldovas-choice-russia-or-the-west-maia-sandu-igor-dodon-presidential-election-andrei-nastase/ 54 Gillet, Kit. 2019. “A Global Geopolitical Crisis Comes to Moldova”, The Atlantic. Accessed online May 6, 2019. https://www.theatlantic.com/international/archive/2019/02/moldova-elections-voters-europe-russia/583351/  28 Section 3 Case Studies The previous two sections have explicated energy insecurity as a state of unaffordable, unreliable, or undiversified energy which is prone to domestic and foreign politicization. The primary internal driver of energy insecurity is fears over Russian interference. The primary external drivers of energy insecurity in PCE are Russia’s government, Russian energy SOEs and their privately-owned counterparts. Yet while some countries closely align with the trends seen in Figure 4 between net dependence and the belief that Russia is the greatest threat, others do not.  Three cases are worth considering: Romania, Poland, and Hungary. Romania is the most independent and wary of Russia and represents the strongest refutation of H1. Conversely, Hungary is very dependent upon Russian energy but is less concerned than the trend would suggest. Poland is slightly more dependent upon Russia for energy but over 50% of Polish respondents view Russia as the greatest threat. Examining these three countries helps to explicate some of the factors attenuating and exacerbating concerns over Russian interference regarding energy insecurity. 3.1 Poland  While Poland and Hungary score similarly on energy dependency – the former receiving a score of -0.14 and the latter -0.07 – what drives the vastly different perceptions of Russia cannot be explicated by the net dependence score alone. A complicated and ugly history of war and conquest stretching back several centuries has left Poland with a strong mistrust of Russia, whereas Hungary’s domestic political concerns have dominated energy issues. Yet the net  29 dependence metric scores Poland lower for good reason. Seen in Figure 8, Poland produces the least domestic oil and gas and imports the most Russian fossil fuels. Moreover, the country also imports the least non-Russian product as well. This high net dependence helps to explain the political salience of Russian energy interests in Polish political discourse. Lastly, the lack of progress made in energy diversification has left the country with a strong perception of energy insecurity.  3.1.1 Twin narratives Energy insecurity is a naturally politicized issue and in Poland this topic has taken on a strongly historical tone. The competition of differing values and ideas regarding national independence and security have left Poland without a coherent energy plan to face both internal and external challenges.55 Janeliūnas and Tumkevič note several projects indicative of energy sector securitization, including the LNG terminal in Świnoujście or the possibility of shale gas fracking, but without a coherent plan, none of these can be counted on to actually reduce Poland’s energy insecurity and consequently ameliorate their fears of Russian interference.   The crux of the issue is a disagreement between two schools of thought over energy insecurity and Russia’s involvement in postcommunist Poland. These are those who espouse energy interdependence and those who wish for energy independence. The interdependence                                                         55 Janeliūnas, Tomas and Agnija Tumkevič. 2013. “Securitization of the Energy Sectors in Estonia, Lithuania, Poland, and Ukraine”, p. 81. Figure 8: IEA. 2018. “Poland: Balances for 2016”; “Hungary: Balances for 2016”; and “Romania: Balances for 2016”. International Energy Agency.   0.00%5.00%10.00%15.00%20.00%25.00%30.00%35.00%Poland Hungary RomaniaSources of Oil and Gas, 2017Production % Non-Russian Imports % Russian imports % Exports % 30 position is a technocratic one that notes that oil and gas only make up a small proportion of the total primary energy supply (TPES) in Poland – almost 50% of Polish energy comes from domestically produced coal (see Figure 9).56 The competing position is that “the Russian state will abuse its position to meddle with Polish political and economic affairs”.57 This disagreement is indicative of the subjective nature of energy insecurity. Insecurity is a content-less term; it must be filled with meaning by agents. Similarly, energy insecurity may be quantifiable but what is and is not included in that equation is a subjective issue. To this end some see Poland’s energy sector as vulnerable to Russian meddling whereas others see the high domestic coal production as a more relevant factor. However, Kester’s trilemma of energy security, economics, and sustainability is a potent reminder of the cost that an energy source like coal has.58 While it may provide a domestic source of energy, the high costs on environmental sustainability and its relatively inefficiency are significant factors for consideration.  Energy insecurity has remained a relevant issue not because of Russian interference alone. The infighting between the interdependence and independence camps has worsened due to deals struck between Russian energy actors and Polish politicians.59 At the crux of the ‘Orlengate’                                                         56 IEA. 2018. “Poland: Balances for 2016”, International Energy Agency.  57 Ostrowski, Wojciech. 2018. “Poland” in Wojciech Ostrowski and Eamonn Butler (eds.), Understanding Energy Security in Central and Eastern Europe: Russia, Transition, and National Interest (Routledge), p. 116. 58 Kester, Johannes. 2018. The Politics of Energy Security, p. 47. 59 Ostrowski, Wojciech. 2018. “Poland”, p. 124-5. 49.53%8.77% 16.66%40.71%58.00%55.67%4.88%7.23%31.04%18.00%0.00%20.00%40.00%60.00%80.00%100.00%120.00%Poland Hungary RomaniaTotal Primary Energy Supply, 2016% Coal % Fossil Fuels % Hydro% Nuclear % Renewables % othersFigure 9: IEA. 2018. “[Country]: Balances for 2016”, International Energy Agency.  31 scandal was the J&S Company who were responsible for the majority of Russian oil sales to Polish refineries. The company had been entirely ignored given the focus most Poles had on Lukoil and Rosneft, but by all appearances had appeared to act as a middleman for Russian oil interests in Poland. The scandal marked a watershed moment in Polish history with the demise of the post-communists as a serious political force and the rise of the Law and Justice Party (PiS). The result of ‘Orlengate’ has been a disproportionate focus on energy security in the country and a deep suspicion of Russian energy interests in the country.60  Recent efforts at rapprochement between the two speak to the volatile nature of energy relations in Polish politics.61 Concerns over Russian interference remain high, but other aspects of Poland’s poor energy security speak to why Russian involvement may be viewed as necessary. The lack of a coherent energy security plan has meant that 43% of Poland’s power production facilities are over 30 years old, 37% are 20-30 years old, and only 8% are 5-10 years old.62 Moreover, a lack of consistent investment in infrastructure reconstruction has led to numerous power failures in the winter.63 To this end, energy prices in Poland are the most expensive of the three case studies (see Figure 10) . The volatile nature of energy security in Poland has only further politicized energy by virtue of its reliability.                                                          60 Ibid, p. 127. 61 Daborowski, T. 2014. “Breaking the boundaries: The transformation of Central European gas markets” in OSW Point of View (Centre for Eastern Studies), 46: p. 8.  62 Fraczek, Pawel, Maciej Kaliski, and Pawl Siemek. 2013. “The Modernization of the Energy Sector in Poland vs. Poland’s Energy Security” in Archives of mining Science (Versita), 58(2): p. 308. 63 Ibid, p. 306.  Figure 10: GPC. 2018. “Electricity Prices [kWh]”, Global Petrol Prices. Accessed online May 8, 2019. https://www.globalpetrolprices.com/electricity_prices/ $0.17 $0.13 $0.15 $0.00$0.05$0.10$0.15$0.20Poland Hungary RomaniaElectricity Prices (USD per kWh), 2018 32 3.1.2 Barriers to breaking dependency  One of the major contributing factors to Russia’s role in postcommunist European energy insecurity is the lack of a common energy framework across the EU. This has allowed Russia to create more asymmetric bilateral energy deals with comparatively weaker countries in PCE.64 Yet, despite this, Polish respondents to the 2018 Eurobarometer were the most positive of the three case studies. 53% of Polish respondents believe their voice counts in the EU, which is higher than 43% in Hungary and 47% in Romania.65 Given its position as the most energy dependent of the three cases this result may seem surprising, but a major factor may be that with a population of 38 million people Poland has the largest voice of PCE in the EU.66   Nevertheless, even if the Polish feel well-represented in the EU, this has not attenuated their concerns over Russian interference in the energy sector. There exists a pattern of dependency to the Polish energy sector. This is typified by a negligence in investing in new coal deposits which results in no excess power capacity, a strong reliance on Russia for the oil and gas that the country does use means the state is vulnerable to disruptions and price fluctuations, and a lack of gas infrastructure means increasing its domestic production is impossible.67  Should modernization efforts actually be carried out, they will still not meet EU pollution emissions standards. Moreover, rising household energy costs will likely exacerbate popular demand for change to the country’s asymmetrical energy relationship with Russia. Put simply, the status quo is making Poland more and more insecure by the day. While just under half of Poland’s total primary energy supply (TPES) comes from coal, much of the 40% that is sourced                                                         64 Stuermer, Michael. 2008. Putin and the Rise of Russia (CPI Mackays), p. 135. 65 European Commission. 2018. “Standard Eurobarometer 89: Public opinion in the European Union”.  66 Eurostat. 2019. “Population on 1 January”, European Union. Accessed online May 8, 2019. https://ec.europa.eu/eurostat/tgm/refreshTableAction.do?tab=table&plugin=1&pcode=tps00001&language=en 67 Fraczek, Pawel, Maciej Kaliski, and Pawl Siemek. 2013. “The Modernization of the Energy Sector in Poland vs. Poland’s Energy Security”, p. 306.   33 from fossil fuels comes from Russia. The perceptions undergirding chronic energy insecurity felt in the country will likely only continue to foment political instability.   Given these barriers and the strong lobbying role Russia has played as seen in the ‘Orlengate’ scandal, it should prove unsurprising that construction of the Yamal pipeline went ahead despite having few benefits for Poland. Due to poor forecasting which both overestimated current usages at the time and did not take into account efficiencies, Poland has ended up paying for gas it does not need.68 Given that natural gas comprises only 15% of Poland’s TPES, it is unsurprising that a pipeline with as large a capacity as Yamal would prove unviable.69  Furthermore, the ‘take-or-pay’ contracts signed with Gazprom required Poland to take upwards of 12.5 bcm/y (or 11,250 ktoe) by 2010, which would have grossly oversupplied the country even as recently as 2016.70 The low transit fees to which EuroPol Gaz agreed necessitated the Polish SOE to borrow loans from Gazprombank to finance the first leg of the Yamal pipeline which meant that EuroPol Gaz’s ownership of the pipeline was conditional on continual loan payments to Russia’s gas SOE, Gazprom.71 Despite recent amendments reducing the amount of gas Poland must buy, the Yamal pipeline indicates how contrasting desires for interdependence and independence have rendered the Polish energy sector paralysed vulnerable. 3.1.3 Conclusion  Poland presents a unique example of a country which follows the expected logic of H1: a country which is reliant on Russian oil and gas imports and is also very worried about its influence. However, the results of the previous section show this to be an anomaly. One of the                                                         68 Brown, Heather. 2016. “Post-Communist Poland and the European Union: Energy Policy and Relations with Russia” in The Polish Review (University of Illinois Press), 61(3): p. 90.  69 IEA. 2018. “Poland: Balances for 2016”, International Energy Agency.  70 Zeniewski, Peter. 2011. “Poland’s Energy Security and the Oriigns of the Yamal Contract with Russia”, p. 41-2.  71 Ibid, p. 43.  34 central reasons why Poland does not follow the trend line seen in Figure 4 is political paralysis caused by two competing camps regarding Russian energy. Poland’s energy sector has been largely unchanged since the end of the Cold War, but this strongly conflicts with the country’s historical antipathy toward Russia. The deep sense of insecurity Poles feel regarding the country’s wellbeing are despite the fact that roughly half of Poland’s energy comes from domestically-produced coal. Poland must carefully invest in domestic natural gas, renewables, and nuclear energy to divest itself of Russian energy without unduly aggravating the country.  3.2 Romania  Few countries had as unique a relationship with the Soviet Union as Romania. Under the brutal dictatorship of Nicolae Ceausescu, the country became isolated and resembled a Stalinist totalitarian state well into the 1980s. Today, Romania represents one of the extremes with regard to energy security and concerns over Russia. Totally at odds with H1, Romania has a high positive net dependence score and is one of the most distrusting of Russia in the 20 cases considered. Romania’s level of concern is 12% lower than Poland’s at 57% (see Figure 4), but remains the highest of the net independent countries. The major factors which have led to this are Romania’s unique history with the Soviet Union and its natural resources reserves. Romania provides the ideal-typical example of a net independent country. 3.2.1 Historical legacy  Ceausescu’s bid to rid Romania of external influence was largely driven by eliminating the country’s foreign debt. While successful in doing so, his regime impoverished the nation so severely that a sudden popular uprising in December 1989 led to his demise.72 So severe were                                                         72 Mihalache, Anca-Elena. 2018. “Romania” in Wojciech Ostrowski and Eamonn Butler (eds.), Understanding Energy Security in Central and Eastern Europe: Russia, Transition, and National Interest (Routledge), p. 98.  35 Ceausescu’s isolationist policies that even the democratic transition was run from within by communist party insiders. Romania’s privatization was slow and only began to speed up in 1996 with the election of a centre-right government. Moreover, this acceleration was undertaken chiefly for clientelistic rather than liberalizing purposes.73   The result of the slow and halting Romanian transition was that state assets were split between interest groups. Both domestic and Russian companies in the Romanian market acted not for political but economic gains as they reaped the profits of privatization. More recently accession into the EU as of 2007 has complicated the situation further by imposing new energy standards on a troubled energy sector.74 Yet despite this the EU is held in a relatively positive light in Romania. Romania scores the highest of the three case studies on two of three EU barometer surveys considered (see Figure 11).  Bulgaria provides a useful foil for Romania. Whereas Bulgaria views the US more suspiciously than Russia, Romania is much more concerned about Russia. Principle to the                                                         73 Ibid, p. 99. 74 Ibid, p. 93. 53.00%43.00%47.00%40.18%PolandHungaryRomaniaPCEVoice Counts in EU, 2018Total 'Agree' Total 'Disagree' Don't Know59.00%60.00%68.00%60.36%PolandHungaryRomaniaPCEEU is a Safe Place to live, 2017Total Agree Total Disagree Don't know65.00%61.00%65.00%55.18%PolandHungaryRomaniaPCEAgree to Enlarge the EU, 2018For Against Don't knowFigure 11: See D72.1; European Commission. 2018. “Standard Eurobarometer 89: Public opinion in the European Union”; QB1.1; European Commission. 2017. “Special Eurobarometer 464b: Europeans’ attitudes towards security”; and QA16.3; European Commission. 2018. “Standard Eurobarometer 89: The views of Europeans on the European Union’s Priorities”.  36 differences between the two Balkan states is their energy insecurity. It is arguable that Bulgarian politics and economics have been more susceptible to capture, directly or indirectly, by Russian interests. Given Romania’s isolationist history in the Soviet sphere of influence it should prove unsurprising that the country has been so hostile to Russian actors.75  3.2.2 Future insecurity  Romania’s energy security allows it to stand as relatively advantaged when compared to the other case studies, but its medium- and long-term prospects are not ideal. While it has a wealth of resources, these are quickly running out and may leave the country as vulnerable to state capture through Russian SOE interference or unequal bilateral trade deals as the rest of the Balkans.   As of 2017 Romania is the third most energy independent country in the EU. This stands in stark contrast to its dismal GDP per capita PPP; Romania is 30th among the IMF’s 40 European countries.76 This is the perennial paradox for Romania and shows how a lack of energy insecurity does not automatically entail wealth. However, the country still retains the largest oil production in the postcommunist bloc and is the fourth largest in the EU. Despite this, production is not enough to cover either the country’s oil or natural gas needs (see Figure 12). However, Romania remains in a good position when compared to the other case studies.  Given the high levels of domestic production, much of the natural gas dependency that might otherwise be ignored by more simplistic metrics are mitigated by the net dependence metric which scores Romania at 0.29. While there is enough coal left in Romanian mines to last another 45 years, the previous case study has shown that increasing coal usage may improve                                                         75 Ibid, p. 94. 76 International Monetary Fund. 2019. “Report for Selected Countries and Subjects”, International Monetary Fund. Accessed online May 8, 2019. https://bit.ly/2VVQgvJ  37 short term energy security but it is detrimental in the long-term. The pollution it causes and its relative inefficiency when compared to natural gas would only exacerbate Romania’s new energy insecurity in the mid-21st century. In this situation one would expect to see a concomitant fall in concerns over Russia as a relationship with the Soviet core became more necessary.   However, to say that Russia has no sway in Romania would be incorrect. There exist officials friendly to Russia in Romania but their ability to affect change is limited at best given the strong anti-Russian sentiments amongst the Romanian people. Nevertheless, Lukoil did purchase the Petrotrel Oil Refinery in 1998, though still struggles to make a profit following its early 2000s upgrades.77 Whereas Russian interests have not found it necessary to invest downstream in Poland due to their domination over the Polish import market – 64% of Polish oil and gas imports are from Russia – this is not so in Romania. Due to Romania’s stronger domestic market, purchasing the Petrotel refinery was likely viewed as a necessary step by Lukoil to enter the Romanian market.                                                          77 Mihalache, Anca-Elena. 2018. “Romania”, p. 104-5.  0.00%10.00%20.00%30.00%40.00%50.00%60.00%70.00%80.00%90.00%100.00%Russian % Natural Gas Imports, 2000-2015Hungary Poland Romania0.00%10.00%20.00%30.00%40.00%50.00%60.00%70.00%80.00%90.00%100.00%Russian %Crude Oil Imports, 2000-2015Hungary Poland RomaniaFigure 12: Observatory of Economic Complexity. 2019. “Where does [country] import [product] from (year)?”; use left-hand navigator for countries, products (crude petroleum, refined petroleum, and natural gas), and year, MIT.  38 3.2.3 Conclusions  Some of the major challenges facing Romania’s energy security are based around the issue of governance. Major political parties have yet to agree to a long-term energy strategy which would include the requisite financial and institutional reforms. Moreover, the ad-hoc nature of decision-making has led to a proliferation of private interests. Gas interconnectors and inland transportation structures have often been a target for this kind of high-level corruption.78 Failure to address these issues will likely exacerbate energy insecurity and create a situation where Romania’s dwindling resources are squandered, leaving it ripe to predatory bilateral treaties with Russia and invigorated interests by Lukoil, Gazprom, and private Russian corporations. Given the results of the second section of this thesis, without aggressive action, future energy insecurity may lead Romania into Russia’s orbit.  3.3 Hungary  The previous two case studies have shown the importance of domestic politics and history in explaining concerns over Russian influence via energy insecurity. In Romania this is based in a historically-entrenched suspicion of Russian hegemony whereas in Poland it is due to the policy paralysis induced by a dichotomy of beliefs over the role Russia can play in energy. While the prior two case studies have emphasized the importance of considering more than the international political economy, the Hungarian case study shows the importance of domestic politics unrelated to Russia when analyzing energy insecurity.  Previous work has focused heavily on exogenous factors like the global oil market of broader ideological trends, and within the context of the postcommunist bloc it follows the logic                                                         78 Center for the Study of Democracy CSD. 2018. “Romania: National Energy Security Indicators and Policy Challenges”, Center for the Study of Democracy (Southeast European Leadership for Development and Integrity), p. 4-5.  39 of the Obsolescing Bargaining Mechanism (OBM). This theory posits that international actors are in a powerful position when governments lack capital, technology, or expertise to effectively extract resources.79 Yet this theory is flawed because it focuses on the international context and overlooks domestic elements. When OBM responds to re-nationalization as seen in Hungary it continues to favour analyzing international oil and gas companies and the lack of compensation given to them rather than how governments understand their actions to be providing a public good to alleviate energy insecurity.80   While the Hungarian case follows the examples of the previous two by focusing on domestic politics, here the focus is on Fidesz’s ‘soft re-nationalization’. Isaacs and Molnar define the term as “an incomplete takeover of a foreign-owned asset” wherein “host governments can also place constraints on foreign investors’ ability to make profit”.81 In Hungary this form of soft re-nationalization has included controlling prices and buying up shares to gain larger stakes in energy companies to gain greater sovereignty over energy distribution. This response to energy security calls into question the more holistic reality of energy insecurity. While energy dependency is a slow-moving variable, Hungary’s illiberal government has co-opted enough of the state apparatus to make rapid changes. The sweeping privatization of the mid- to late-1990s and early 2000s has equipped Hungarians with a different focus for solving the issue of energy insecurity that does not focus solely on Russian interference.                                                          79 Partlett, William. 2008. “Understanding Post-Soviet Resource Nationalism and Contractual Negotiation: The Demand for Foreign Capital and Contractual Stability”, working paper, p. 3-4. Accessed online May 9, 2019. http://miamioh.edu/cas/academics/centers/havighurst/cultural-academic-resources/havighurst-working-papers/index.html#eight. 80 Isaacs, Rico and Adam Molnar. 2017. “Island in the neoliberal stream: energy security and soft re-nationalisation in Hungary” in Journal of Contemporary European Studies (Routledge), 25(1): p. 111. 81 Ibid, p. 109.  40 3.3.1 Energy and the post-Soviet transition  While very dependent upon imports from both Russia and elsewhere, energy insecurity has not been framed as an existential threat in Hungary as has been done so elsewhere. Instead, a more pragmatic acceptance of dependency has evolved over the past 30 years where Russia’s involvement in energy is all but taken for granted. However, the process of privatization helps to explain why concerns over foreign ownership in general remains such a contentious topic.  The Hungarian Democratic Forum (MDF) government (1990-94) undertook a slow and cautious privatization program, and privatized only 13% of state assets in the first half their mandate. Butler blames much of this slow progress on confusion among business leaders and potential investors due to conflicting aims laid out in government policies.82 A lack of expertise and ideological incongruence within the governing coalition prevented domestic and foreign investors in accessing Hungarian state assets.83 However during the following coalition in 1994 between the socialists and liberals, Hungary gained the somewhat dubious distinction of selling the most of its energy sector on a per capita basis than any other country.84  This new era of privatization also saw the selling of the MOL group. MOL’s competencies in oil exploration, extraction, refining, and capable management all made it a valuable asset for the state and its sale would result in the ‘Oilgate’ scandal.85 Given more recent re-nationalization efforts it seems that this period of privatization was too quick. While government management of industry is generally less efficient, in the context of a neighbour whose energy interests are frequently predatory, state ownership may help to avoid state capture.                                                         82 Butler, Eamonn. 2018. “Poland” in Wojciech Ostrowski and Eamonn Butler (eds.), Understanding Energy Security in Central and Eastern Europe: Russia, Transition, and National Interest (Routledge). p. 159-60.  83 Kiss, Yudit. 1992. “Privatization in Hungary – Two Years Later” in Soviet Studies (Taylor and Francis), 44(6): p. 1015. 84 Freeman, Jeff. 1996. “Hungarian Utility Privatization Moves Forward” in Transition (Indiana University Press), 2(9). 85 Butler, Eamonn. 2018. “Poland”, p. 161.   41 There is a certain irony in that, while privatization is a liberal doctrine, it has contributed to the rise of a self-styled illiberal regime.86  Following the Fidesz government’s relatively hostile position toward Russia in 1998-2002, the socialist-liberal coalition returned with a pro-Russian position once more. Then-Prime Minister Medgyessy explained that Hungarians “are happy to receive Russian investors, Russian merchants, [and] we aim at a long-term cooperation” with “no prejudices against Russian investment in Hungary”. Shortly after this statement was made in 2002, Russian Prime Minister Kasyanov visited Hungary and expressed Russia’s interests in the liberalizing Hungarian energy market. Gazprom, Yukos, and Lukoil also expressed interest in investment.87  However, it was during this period that, after Ukraine siphoned gas meant for European customers, Gazprom shut off pipelines headed to Europe. During this brief period Hungary lost between 40-60% of its gas capacity, and without enough store capacity to make up the difference the country suffered from brownouts and shortages during an atypically cold winter.88 While this has been seen as a watershed moment in relations between Russia and PCE in other states, for Hungary this incident did not galvanize the government against Russia. Following the more extended 2009 gas shut-off and the re-election of Fidesz and Viktor Orbán with a supermajority in 2010, Hungary has framed energy security through the lens of soft re-nationalization.  3.3.2 Internal factors: Fidesz and energy prices  Following Fidesz’s landslide victory in 2010 the Hungarian government has taken a hard nationalist right-turn. Fidesz’s efforts have included culturally extremist elements like the                                                         86 See Orbán, Viktor. 2018. “Prime Minister Viktor Orbán’s speech at the 29th Bálványos Summer Open University and Student Camp”, Government of Hungary. Accessed online May 9, 2019. https://www.kormany.hu/en/the-prime-minister/the-prime-minister-s-speeches/prime-minister-viktor-orban-s-speech-at-the-29th-balvanyos-summer-open-university-and-student-camp 87 Butler, Eamonn. 2018. “Poland”, p. 165. 88 Ibid, p. 166.  42 politicizing of the contentious Treaty of Trianon, sweeping constitutional amendments empowering the prime minister, reducing judicial independence, and more.89 Given the scope of the re-nationalizing project it is clear that, unlike in Poland and Romania where energy politics are often treated as a unique category, in Hungary energy security is considered part of a greater picture. Rather than the goal be to divest the country of Russian energy, the Fidesz government instead focuses on simultaneously increasing the state presence’s in numerous sectors.   Rather than view Russia’s position as the main supplier in the energy sector as a threat, Hungarian politicians focus on the vulnerability that a lack of diversified energy sources presents. To this end “‘additional’ – as opposed to ‘alternative’ – supply routes and suppliers [are] considered the preferred solution”.90 According to the Hungarian National Energy Strategy 2030, part of the reason for this is that “for the time being we [Hungary] cannot afford giving up fossil fuels”.91 In this sense while dependency on Russian fossil fuels is a reality for the vast majority of PCE, environmentalism is only available for countries which can afford it. As will be discussed below nuclear power also does not provide a perfect solution.  However, privatization has resulted in corruption. Hungary’s ‘Oilgate’ scandal shows how a lacky of transparency can exacerbate energy insecurity where it may not have initially been a large factor. While the privatization of MOL in the 1990s allowed the government to recover outstanding debts Russia owed to Hungary via extended oil deliveries to MOL, the opposition at the time argued that a lack of transparency regarding imports left Hungary at a disadvantage.92 A cross-party parliamentary investigation into ‘Oilgate’ uncovered severe                                                         89 Isaacs, Rico and Adam Molnar. 2017. “Island in the neoliberal stream”, p. 115-16.  90 Butler, Eamonn. 2018. “Poland”, p. 158. 91 Ministry of National Development. 2012. “National Energy Strategy 2030”, Government of Hungary, p. 11. Accessed online May 9, 2019. https://www.iea.org/media/pams/hungary/HungarianEnergyStrategy2030.pdf 92 Felkay, Andrew. 1997. Out of Russian Orbit, Hungary Gravitates to the West (Greenwood Press, p. 108.  43 irregularities in the work of the inter-department commission overseeing Russian debt repayment as well as links to the energy sector.93 Yet Russia was not seen as a key conspirator and instead the focus remained on Hungarian political and economic elites. That a deal was signed to jointly create Panrusgaz is evidence of the friendlier relationship Russia has with Hungary in comparison to Romania and Poland.94 Even after 2010, soft re-nationalization has positioned energy as a public good which has necessitated state intervention. In doing so Fidesz has framed the issue of energy insecurity without specific reference to Russia. 3.3.3 External Factors: the EU and Russia  The two largest forces external to Hungary are the same as those for Romania and Poland: the EU and Russia. Given the low level of concern they have about Russia, the threat it poses to Hungarians is markedly more modest than for Romanians and Poles. However, EU regulations and its “faceless bureaucracy” have become a common refrain for Orbán and his government.95 Yet Ámon and Deák posit that it would be in error to view the Hungary-Russia relationship as much beyond a business partnership: Russia is simply the cheapest source of energy and there exist no credible plans to change this.96 This relationship has been a productive one for Hungary given that concerns over energy insecurity have yet to be politicized in the same way as they have been in Poland and Romania. Concerns do exist over Russian influence, but it is important to note that while the government is not explicitly anti-Russia, Hungarians themselves may be less amiable toward Russia.                                                         93 Ibid.  94 Butler, Eamonn. 2018. “Poland”, p. 163. 95 Ámon, Ada and András Deák. 2015. “Hungary and Russia in Economic Terms – Love, Business, Both or Neither?” in Jacek Kucharczyk and Grigori Mesežnikov (eds.), Diverging Voices, Converging Policies (Heinrich Böll Stiftung), p. 87.  96 Ibid.   44 International concerns over Russian involvement in Hungarian energy arise frequently and they are seen best in the recent expansion of the Paks nuclear power plant in 2014. While nuclear energy is often touted as an excellent method of achieving energy security, the Hungarian plan was based on a 30-year €10 billion Russian loan, Russian nuclear fuel, and Russian technology. Consequently the European Atomic Energy Committee (EURATOM) effectively vetoed the project.97 Whether Russia’s involvement in the project would have led to it being the de facto decision-maker is unclear, but it nevertheless presents a situation that would only prolong Hungarian dependence on Russian energy.  3.3.4 Conclusion  While both Romania and Poland are extremely suspicious of Russia, Hungary presents an interesting yet still atypical example. From the results seen in the statistical analysis in the second section of this paper, 35% of Hungarian respondents should view Russia as their greatest threat. That only 14% do is significant and speaks to several factors that have been herein explicated. Hungary’s comparatively advantaged position in the former Soviet Union’s sphere of influence, the repercussions of privatization, and the soft re-nationalization of the energy sector by Orbán and Fidesz have all mitigated Hungarian concerns over Russian interference.                                                             97 Butler, Eamonn. 2018. “Poland”, p. 171-2.  45 Conclusions  At one time, the end of the Cold War was heralded as the “triumph of the West” and “the end point of mankind’s ideological evolution”.98 Yet, while the fall of the Berlin Wall heralded the titular death knell of the Soviet Union, it did not result in the “end of history”.99 In the maelstrom of civil wars, colour revolutions, and the overthrow of dictators, energy policy has continued largely uninterrupted. This is largely due to the varying level of energy dependency states in PCE have toward Russia. Yet while it was once silenced by the Soviet apparatus, discontent with this status quo is now clearly heard.   This paper has sought to understand the effect energy insecurity has on perceptions of Russia in PCE. It incorrectly hypothesized that as levels of energy insecurity increase so too would concerns over Russian interference. The first section explicated energy security and insecurity and how they operate in a trilemma of energy issues. The second section refuted the primary hypothesis (H1) and showed how the relationship between energy insecurity and concerns over Russian interference are inversely related. Using case studies of Poland, Romania, and HUngary the third section showed the importance of history, political perceptions, and state capacity in explaining levels of concern. This paper has not sought to reconcile all points of view on energy insecurity and Russia’s role in modern postcommunist politics, but instead present a new metric to understand energy dependency and to call attention to the gaps in energy and security studies. While more research must be done to better understand the relation between the two, this thesis has gone to great lengths to evince a more thorough understanding of energy politics in the 21st century.                                                            98 Fukuyama, Francis. 1989. “The End of History?” in The National Interest (Center for the National Interest), 16: p. 3-4. 99 Ibid, p. 1.  46 Bibliography Bernell, David and Christopher A. Simon. 2016. The Energy Security Dilemma: US Policy and  Practice (Routledge).   Booth, Ken (ed.). 2005. Critical security studies and world politics (Lynne Reinner).  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Accessed online May 3, 2019. http://datatopics.worldbank.org/world-development- indicators/themes/people.html  Zeniewski, Peter. 2011. “Poland’s Energy Security and the Oriigns of the Yamal Contract with  Russia” in The Polish Quarterly of International Affairs (Polish Institute of International  Affairs), 2: p. 38-62. 50 Appendix  Countries Region Production Imports Russian Imports Exports Total Energy Sector Production % Imports % Russian Import % Exports % Net Oil/Gas Dependence  Net Dependence  Albania SE 1091 1226 18.39 905 3320 32.86% 36.93% 0.55% 27.26% 0.6 0.23 Belarus E 1855 35514 35353.652 15259 48539 3.82% 73.17% 72.84% 31.44% -0.38 -0.38 Bosnia and Herzegovina FMR Y 0 2227 1079.4633 218 8171 0.00% 27.25% 13.21% 2.67% -0.11 -0.25 Bulgaria SE 100 11745 7229.19 4636 24190 0.41% 48.55% 29.89% 19.16% -0.1 -0.29 Croatia FMR Y 2130 5756 132.72 2427 11936 17.85% 48.22% 1.11% 20.33% 0.37 -0.1 Czech Republic C 369 16995 8842.9886 2220 48968 0.75% 34.71% 18.06% 4.53% -0.13 -0.29 Estonia E 0 2276 1001.24 1110 7290 0.00% 31.22% 13.73% 15.23% 0.01 -0.16 Hungary C 2421 16452 8361.9 3816 30864 7.84% 53.30% 27.09% 12.36% -0.07 -0.33 Kosovo FMR Y 0 675 0 9 2751 0.00% 24.54% 0.00% 0.33% 0 -0.24 Latvia E 0 3721 1240.74 833 6790 0.00% 54.80% 18.27% 12.27% -0.06 -0.43 Lithuania E 65 13518 7751.82 8700 16673 0.39% 81.08% 46.49% 52.18% 0.06 -0.29 Moldova E 6 3073 1109.32 16 3852 0.16% 79.78% 28.80% 0.42% -0.28 -0.79 Montenegro FMR Y 0 361 3.0324 15 1128 0.00% 32.00% 0.27% 1.33% 0.01 -0.31 North Macedonia FMR Y 0 1443 93.4343 172 2869 0.00% 50.30% 3.26% 6.00% 0.03 -0.44 Poland C 4580 44836 29048.29 8021 118581 3.86% 37.81% 24.50% 6.76% -0.14 -0.27 Romania SE 11518 11661 5777.96 5268 38139 30.20% 30.58% 15.15% 13.81% 0.29 0.13 Serbia FMR Y 1447 4912 2302.08 734 16695 8.67% 29.42% 13.79% 4.40% -0.01 -0.16 Slovakia C 303 11168 7205.2124 4177 21607 1.40% 51.69% 33.35% 19.33% -0.13 -0.31 Slovenia FMR Y 4 5296 747.68 2064 9816 0.04% 53.95% 7.62% 21.03% 0.13 -0.33 Ukraine E 17479 18491 2753.878 49 95476 18.31% 19.37% 2.88% 0.05% 0.15 -0.01 

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