Direct Speech, Energy, EU – Baltic States, Gas, Lithuania, Security

International Internet Magazine. Baltic States news & analytics Wednesday, 18.09.2019, 14:56

Lithuania’s strive for energy security

Vytautas Bakas, Chair of the Committee on National Security and Defence, Seimas, The Republic of Lithuania, Baltic Rim Economies, Pan-European Institute, University of Turku, 30.05.2019.Print version
Having suffered a nearly 50-year-long occupation, Lithuania has, over the recent 29 years of its independece, built a competitive market economy, become a member of the EU and NATO, and continues to build a welfare state. Ensuring energy security was and continues to be a major challenge on this road. The following are some of my thoughts on the ways energy resources can be turned into weapons used against sovereign states.

Lithuania is among the countries which import almost 100 % of their fossil fuel. The country has also been struggling, ever since its independence in 1990, to secure energy supply. In times of the Soviet occupation, Lithuania, much like the other Baltic States, was forced into isolation from the rest of Europe, and so was its energy infrastructure, including its oil and gas pipelines and power grids. For many years, even after its accession to the EU, Lithuania remained an energy island which was heavily dependent on Russian energy supply.


Due to its pro-Western path of integration, Lithuania has for many years, been subject to Russia’s energy pressure exerted through Russian state monopoly corporations, established in each energy sector and controlled by the Kremlin. The weapons of exerting pressure in the energy sector involve constant disruption of energy supply, price manipulation, and forced selling of energy infrastructure. The monopoly corporations create various sophisticated schemes involving intermediary energy suppliers, which are being exploited to bribe the political elite, civil servants, the academia and the media.


By causing oil supply disruptions and manipulating oil prices, Russia has, for years, exerted pressure on Lithuania in an effort to take over the Lithuanian oil refining infrastructure. When eventually those efforts failed in 2006, Russia cut off oil supply to the Lithuanian oil refinery.


Over the years, Gazprom, a Russian state-owned monopoly corporation, was the single gas supplier for Lithuania and the rest of the Baltic States. There used to be no other alternatives to gas supply. For several years (2011–2015) Lithuania used to pay the highest price for gas in the EU as a punishment for its progress in implementing the EU Third Energy Package, which was undermining the domination of Gazprom.


In 2017, the Committee on National Security and Defence of the Seimas of the Republic of Lithuania conducted a parliamentary investigation which disclosed the non-transparent influence on the Lithuanian politics that Rosatom, a state-owned corporation controlled by the Kremlin, had wielded in the long-run, including its attempts to change the geopolitical vector of the Lithuanian energy sector.

Besides putting pressure on the neighbouring countries on a bilateral basis, Russia is making use of yet another powerful energy instrument to strengthen its influence. This entails large-scale energy projects that are economically unsound, but geopolitically motivated, such as Nord Stream 2 or the nuclear power plants in Astravyets, Belarus, and the Kaliningrad Region (the construction of the latter has been frozen, but not terminated).


With these projects, Russia seeks to strip its neighbouring countries of a possibility to pursue their energy security policies independently, strengthen the Kremlin’s influence over the EU by increasing the latter’s dependence on Russian energy resources, and secure strong support of lobbyists in the capitals of certain countries and EU institutions.


Under the pretence of trying to ensure diversification of supply routes, Nord Stream 2 is actually aimed at concentrating the control over the entire chain of supply in the hands of a single holder. What is more, attempts are made to engage large Western companies in the project for the sake of binding consumers to using Gazprom’s pipeline and binding Western companies with their investments, thus making them both hostages of and lobbyist for Russian politics. Therefore, the implementation of this project undermines the solidarity of EU Member States, threatens the security of supply to Central European countries, and thwarts Ukraine’s prospects of European integration.


The same applies to the Rosatom-led nuclear projects at the Lithuanian borders. The projects are aimed at hampering the synchronisation of the electricity transmission networks of Lithuania and the rest of the Baltic States with the continental European network. In addition, the construction of the nuclear power plant in Astravyets, Belarus, is pursued in violation of international conventions and nuclear safety standards and thus represents a threat to the security, environment and public health of Lithuania and Europe as a whole. This February, the Meeting of the Parties to the Espoo Convention in Geneva has concluded that Belarus has infringed three articles of the Convention thus failing to prepare proper documentation for and justify the selection of the construction site, consult with the countries that are most likely to be affected, and adopt properly the final decision.


In response to the existing energy security challenges, the aspiration for energy independence from Moscow’s dictatorship has become Lithuania’s strategic interest – the thing that has been supported by all the political forces in Lithuania. This is the basis of our national security. Eventually, we have managed to gradually end our energy isolation and diversify our routes of energy supply.


Having built its own oil terminal, Lithuania established an alternative way to importing oil via the Baltic Sea. Thanks to the terminal, the Lithuanian oil refinery, being the only oil refining facility in the Baltic States, manages to compete successfully on the regional market for petroleum products.


In 2014, Lithuania was among the first states around the Baltic Sea to build its own LNG terminal with a floating storage unit in Klaipėda. As a result, Gazprom lost its exclusive position of a single gas supplier having a monopoly over the gas sector. With the emergence of alternative gas supply, the price for gas has dropped almost by half. Moreover, Lithuania has also acquired unique competences in the field of LNG that can be shared with other Baltic States.


Lithuania now has electricity interconnections with Sweden (NordBalt) and Poland (LitPolLink), while Estonia is connected with Finland (Estlink-1 and Estlink-2). These interconnections enable participation of the Baltic States in Nord Pool, the largest European power market. Lastly, there is only one more step left on the road towards energy security, i.e. the project of synchronisation of the electricity transmission networks of the Baltic States with the continental European network. Once it is completed in 2025, energy security will no longer be dependent on the decisions taken in the Kremlin.






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