In an attempt to create a complete picture with circumstances, factors and motives that underline Belarus’ energy policies and create grounds for future developments, this discussion will adopt and follow three conceptual models and corresponding questions presented and developed by Graham Allison and Philip Zelikow (1999) in their book “Essence of Decision. Explaining the Cuban Missile Crisis.”

Although authors provide and focus on a specific case in explaining their models, their analytical tools are nevertheless applicable in much broader context of foreign affairs and strategic decision-making. Thus, an analysis of Belarus’ energy policy, its dependency on Russia and potential political problems stemming from it will be applied through their conceptual models.

Model I:

Analysis in Model I assumes that decisions made by states or actors are rational in their nature. It also attempts to explain a conflict or issue from a “why” perspective and by trying to identify goals, objectives, options and choices available or responsible for a particular problem. It stresses that “strategic market conditions-creates incentives and pressures for a government to choose a particular course of action” (Allison, Zelikow, 1999).

a) What are the circumstances that form Belarus’ perception of threats or opportunities?

Belarus has a limited amount of oil, gas reserves; however, those resources can only cover about 7% of its total energy needs (World Bank, 2006). Belarusian economy and particularly its heavy industry sector took off rapidly in the years following the Second World War. As a result, on the eve of independence Belarus found itself having 125 industrial plants and factories (Tiurina, 1994) producing durable goods for the most part.

Such heavy industrialized economy requires significant human capital along with all necessary machinery and electricity to power it. In case of Belarus, 95.4% of its electricity was produced from gas that makes up 60% of country’s energy balance and comes primarily from one source-Russia (Balmaceda, 2004).

And since durable goods along with non-durable goods and service constitute the consumption in economy, then Belarus can only consume that many tractors, appliances and electronic defense systems. The rest, often of uncompetitive quality, is being absorbed by Russian markets.

Therefore, in a current economic and political state, Belarus has Russia as the primary supplier of energy and consumer of its goods. It makes Belarus highly dependable on Russia’s energy supplies and vulnerable to energy price increases.

b) What are the options available to address the issue of energy security as well as rising energy prices?

Belarusian government headed by President Lukashenka does understand that having Russia as the only energy supplier threatens Belarus in variety of ways including freedom of political decision-making. In attempt to improve this situation, the government proposed the following solutions:

(i) To develop domestic natural resources and make larger use of renewable energy sources (Ozerets).

(ii) To build a nuclear reactor on a territory of Belarus. President Lukashenka’s plan calls for construction of 2000 megawatt nuclear plant, consisting of two water-cooled and water moderated reactors (Loukianova, 2008).

(iii) Continued well-structured gas transit business could be a major source of revenue for future state expenditures as well as political leverage (World Bank, 2006).

c) What are the costs and benefits of given options?

(i) Representatives of Belarusian government (Ozerets) made it clear that it views renewable energy sources as a viable option for Belarus. Although current technologies have some limitation, for example, it is not conceivable today to support country on solar, wind and bio-energy alone, they nevertheless help to reduce state’s dependency on conventional sources such as oil and gas.

As evidenced in the example of some European countries, the use of renewable energy is possible, encouraged and committed to by developed countries. However, it requires patient approach and long-term vision, something that seems to be missing in case of Belarus despite strong official rhetoric.

(ii) On one hand, nuclear power is a solution to many problems including an ecological one, although it is disputed by some scientists. It faces two major problems: one is moral as 20% percent of Belarusian territory is uselessly rendered by the explosion in Chernobyl. Another one is familiar to many: where can Belarus find financing for projects with costs estimated to be between 5 to 8 billion USD?

Among potential bidders for the construction contract are Russia, France and USA. It is widely believed that Russia is a likely winner as it has significant experience in building nuclear reactors. However, if this is the case, then the idea of energy security and diversification becomes obsolete. If Russia receives a tender, all technologies, raw materials and supplies necessary for day-to-day station operations would belong to Russia, essentially increasing Belarus’ dependence on it.

(iii) Oil and gas transit remains not only the source of significant cash inflows for Belarus, but also gives it political advantage in its dealings with Russia. Belarus is the second largest exporter of Russian gas after Ukraine. Although Russia attempted to diversify its exports through various networks and proposed couple of alternative routes such as Nord Stream that bypass Belarus, it nevertheless remains tied to Belarusian networks for not only they provide more or less reliable transit but they are also cheaper when compared with competitors such as Ukraine. Belarus also offers oil refinery business for Russia and makes it attractive from strategic as well as financial aspects.

While Belarus certainly derives numerous advantages from its status as a transit state, it slowly gives up its energy infrastructure ownership. Being unable to meet financial obligations, face increased energy costs and unwilling to redirect its economy towards marked based model, Belarus needs significant cash infusion to support various state owned enterprises as well as social obligations to its population. Such situation leaves Belarus with no choice but to give up certain state-owned assets. Although reluctant, in 2007 it promised Russian Gazprom an ownership stake in “Yamal I”, its major gas pipeline, thus significantly reducing points of political advantage.

Related posts:

1. How do energy politics impact national sovereignty of Belarus? Introduction.
2. How do energy politics impact national sovereignty of Belarus? Situation overview
3. How do energy politics impact national sovereignty of Belarus? Soviet Success
4. How do energy politics impact national sovereignty of Belarus? Most Perfect Soviet’ Republic
5. How do energy politics impact national sovereignty of Belarus? 1990′s

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