M-RCBG Associate Working Paper No. 53
International Law and EU-Russian Gas Relations
Ole Gunnar Austvik and Carolina Lembo
This paper studies the impacts of international law on the political maneuvering rooms for Russia and the EU in the natural gas sector. The outset is that Russian energy policy with its long tradition of strong state control conflicts with the EU, representing a far more liberal economic ideology, both in terms of for whom policy should work and how it should be performed. At the same time, natural resource trade and investments have fewer international legal regulations than other international economic exchange. In this void, both sides pressure legal cases to make or prevent, respectively, Russia moving towards a Western-styled industrial organization and export policy. The paper asks to which extent Russia, as result of international law, eventually will change its energy policy to become more similar to the Western world. First, the article revisits the continued competing positions in economics and trade of Russia and the West. Second, the Russian accession to the WTO and the legal elements that directly affect the energy sector are presented. Third, the special treatment of natural resources in international law is outlined. Fourth, current legal EU-Russian natural gas disputes are discussed. The paper concludes that Russia’s steps towards greater economic integration with the outside world, and following increased importance of international law in its policy making, leads to greater similarities with the West in political forms and processes. However, path dependencies dominating society and politics, and the particularities of the energy industry, indicate that domestic Russian energy policy and external gas export policy may not necessarily lead to the same degree of similarity in actual political content, and, hence, real political convergence with the West.