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Energy Politics of Ukraine: Domestic and International Dimensions

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Energy Politics of Ukraine: Domestic and International Dimensions ENERGY POLITICS OF UKRAINE: DOMESTIC AND INTERNATIONAL DIMENSIONS A THESIS SUBMITTED TO THE GRADUATE SCHOOL OF SOCIAL SCIENCES OF MIDDLE EAST TECHNICAL UNIVERSITY BY ANASTASIYA STELMAKH IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY IN THE DEPARTMENT OF INTERNATIONAL RELATIONS MAY 2016 i ii Approval of the Graduate School of Social Sciences Prof. Dr. Meliha B. Altunışık Director I certify that this thesis satisfies all the requirements as a thesis for the degree of Doctor of Philosophy. Prof. Dr. Özlem Tür Head of Department This is to certify that we have read this thesis and that in our opinion it is fully adequate, in scope and quality, as a thesis for the degree of Doctor of Philosophy. Prof. Dr. Oktay F. Tanrısever Supervisor Examining Committee Members Prof. Dr. Meliha B. Altunışık (METU, IR) Prof. Dr. Oktay F. Tanrısever (METU, IR) Prof. Dr. Hüseyin Bağcı (METU, IR) Prof. Dr. Fırat Purtaş (GAZI U., IR) Assist. Prof. Dr. Yuliya Biletska (KARABÜK U., IR) iii I hereby declare that all information in this document has been obtained and presented in accordance with academic rules and ethical conduct. I also declare that, as required by these rules and conduct, I have fully cited and referenced all material and results that are not original to this work. Name, Last name : Anastasiya Stelmakh Signature : iii ABSTRACT ENERGY POLITICS OF UKRAINE: DOMESTIC AND INTERNATIONAL DIMENSIONS Stelmakh, Anastasiya Ph.D., Department of International Relations Supervisor: Prof. Dr. Oktay F. Tanrısever May 2016, 349 pages This PhD thesis aims to analyze domestic and international dimensions of Ukraine’s energy politics. The thesis focuses both on the developments at domestic level as well as Ukraine’s energy cooperation with the European Union and the Russian Federation. The main research problem of this dissertation is to determine the causal links between domestic and international factors as well as their impacts on the energy politics of on energy politics of Ukraine under Putnam’s two-level game approach. The thesis also aims to clarify the role of the oligarchic groups, who represent Russian interests in Ukraine. This thesis comprises seven main chapters. After the introduction, the second chapter develops the theoretical framework of the thesis by discussing the explanatory powers of IR theories and Putnam’s two-level analytical approach. The third chapter focuses on the dynamics of Ukraine’s energy policy during the period between 1991-2010. The fourth and fifth chapter discusses energy policy under the presidencies of Viktor Yushchenko and Viktor Yanukovych. The sixth chapter analyses the shift in energy politics after Euro-Maidan events. The seventh chapter presents comparative analysis the Ukranian case with the Belarusian one. The concluding chapter discusses the main findings of this thesis. Keywords: Energy Politics, Ukraine, EU, Russia, Putnam’s two-level approach. iv ÖZ UKRAYNA’NIN ENERJİ POLİTİKASI: ULUSAL VE ULUSLARARASI BOYUTLARI Stelmakh, Anastasiya Doktora, Uluslalarası İlişkiler Bölümü Tez Yöneticisi: Prof. Dr. Oktay F. Tanrısever Mayis 2016, 349 sayfa Bu doktora tezi Ukrayna'nın enerji politikalarının ulusal ve uluslararası boyutlarını analiz etmeyi amaçlamaktadır. Tez, hem Ukrayna’nın ulusal düzeydeki gelismelerini, hem de Avrupa Birliği ve Rusya Federasyonu ile olan enerji işbirliğini ele almaktadır. Bu tezin ana araştırma problemi, Putnam’ın ‘İki-seviye Oyun Yaklaşımı’ bağlamında Ukrayna enerji politikasındaki ulusal ve uluslararası faktörler arasındaki nedensel bağlantıları açığa çıkarmak ve arasındaki ilişkiyi belirlemektir. Tez aynı zamanda Ukrayna'ya Rusya’nın çıkarlarını taşıyan oligark grupların bu ülkedeki rolünü de ortaya koymayı hedeflemektedir. Bu tez yedi ana bölümden oluşmaktadır. Girişten sonraki ikinci bölümde uluslararası ilişkilerin ana akım teorileri ve Putnam’ın iki-seviyeli analitik yaklaşımı açıklanarak tezin teorik çerçevesi geliştirilmektedir. Üçüncü bölüm, 1991-2010 yılları arasındaki dönemde Ukrayna'nın enerji politikasının dinamikleri üzerinde durmaktadır. Dördüncü ve beşinci bölümler, Viktor Yuşçenko ve Viktor Yanukoviç başkanlığı yönetimindeki enerji politikalarını açıklamaktadır. Altıncı bölümde ise Euro-Maidan olaylarından sonra enerji politikasında meydana gelen değişimler analiz edilmektedir. Yedinci bölümde, bir vaka çalışması olarak Belarus ile Ukrayna’nın enerji politikası çerçevesinde karşılaştırmalı analizi yapılırken, sonuç bölümü ise tezin ana bulgularını ortaya koymaktadır. Anahtar kelimeler: Enerji politikaları, Ukrayna, AB, Rusya, Putnam iki-seviye yaklaşımı. v To my mother Svitlana Stelmakh, the strongest woman in my life, without whose faith and support this thesis would not have been written vi ACKNOWLEDGEMENTS I am indebted to many people, who in different ways have assisted me in the long process of writing of this thesis. I can think of no way to thank everyone, but I owe particular debts to the following people. First of all, I would like to acknowledge my supervisor and mentor, Prof. Dr. Oktay F. Tanrisever. The jury members Prof. Dr. Meliha Altunışık, Prof. Dr. Hüseyin Bağcı, Prof. Dr. Fırat Purtaş and Assist. Prof. Dr. Yuliya Biletska provided me with invaluable advice and recommendations, which undoubtedly improved the quality of this thesis. I appreciate time and sober thoughts that my interviewees shared with me. My great thanks go to Jim Bown, Sergii Diachenko, Ildar Gazizullin, Michael Gonchar, Kaido-Paul Kranfeld, Viacheslav Kniazhnytskyi, Dmytro Naumenko, Roman Nitsovych, Volodymyr Omelchenko, Grygoriy Perepelytsia, Gennadii Riabtsev, Lemlem Said Issa, Oleksandr Todiychuk, Sergii Yasynskii, Alla Yeriomenko, Dave Young and three anonymous interviewees from Delegation of the EU to Ukraine, NERC and Verkhovna Rada. I am also most grateful to Andriy Tyushka for his invaluable comments and editorial suggestions. Additionally, I would like to thank Sergei Konoplyov for his kind support and access to Harvard Library. Lastly, this dissertation would not be possible without financial support from TUBITAK, the Scientific and Technological Research Council of Turkey. As well I am thankful to Erasmus Mundus External Cooperation Window Lot 6, which provided me with scholarship and covered my tuition fees during first two years of my studies. On my personal note, appreciation goes to my big Turkish-Ukrainian family, which by being in Turkey, Ukraine and the USA provided me with much support during difficult process of writing this PhD thesis. I am especially indebted to my husband, Polat Kizildag, for his never-ending understanding and support. He was my inspiration and my support regardless my ups and downs within writing process. I also am highly indebted to my daughter Ela Adel, who by following good sleeping patterns, allowed me to work on my thesis. Finally, I would like to express my gratitude to all my dear friends for their never- ending encouragement. vii TABLE OF CONTENTS PLAGIARISM …………………………………..………………………………...….…… iii ABSTRACT …………………………………………………..…………………………… iv ÖZ ………………………………………………………………..………………...……… v DEDICATION …………….………………………………………………………...…..… vi ACKNOWLEDGEMENTS………………………………………………….……….....… vii TABLE OF CONTENTS ………………………………………………………….…….. viii LIST OF TABLES ………………………………………………………………….…….. xii LIST OF FIGURES ………………………………………………………….…………... xiii LIST OF ABBREVIATIONS ……………………………………………….…………… xiv A NOTE ON TRANSLITERATION …………………………………………......…...… xvi CHAPTER 1. INTRODUCTION ……………………………………………………….…………..…. 1 1.1. Research scope and objectives …………………………….………………….. 3 1.2. Research questions ……………………………………………………………. 5 1.3. Argument …………………………………………………………...………… 6 1.4. Literature review ……………………………………………………………… 6 1.5. Research design and methodology ……………..……………………………. 12 1.6. Thesis structure ………………………………………………………...……. 16 2. BUILDING UP THEORETICAL FRAMEWORK ……………….……………….. 18 2.1. Concepts and their operalization …….……………………………………… 18 2.1.1. Realist theoretical paradigm …………………………………...…….. 20 2.1.2. Geopolitics and Energy Politics ………………………………...…… 24 2.1.3. Neoliberal institutionalism ……………………………………...…… 28 2.1.4. Rent-seeking ……………………………………………...………...… 33 2.2. Integrating Putnam’s two-level game analytical approach ………………….. 35 3. ESTABLISHING OF ENERGY POLITICS DYNAMICS DURING FIRST YEARS OF INDEPENDENCE UNDER KRAVCHUK AND KUCHMA’S PRESIDENCIES ………………….………………………….…………………..…... 48 3.1. Ukraine’s energy profile ……………………………..…….………………….…. 49 3.2. Ukraine’s energy policy under Kravchuk …………………..……….……….….. 58 3.2.1. Domestic policy ……………………………………………………....…… 58 viii 3.2.2. Ukrainian-Russian relations …………………………….….…….…..……. 61 3.2.3. Diversification attempts of energy supplies …………………………….… 66 3.3. Ukraine’s energy politics under Kuchma ………………………...……………… 70 3.3.1. Political system under Kuchma and its implications on energy policy …………………………………………………………..……… 71 3.3.2. Domestic energy reforms and the establishment of Naftogaz ..............…… 72 3.3.3. The raise of the independent actors …………...…………………………… 80 3.3.4. Relations with Russia ……………………………………………………… 83 3.3.5. Relations with Western countries and institutions ……..............…..……… 88 3.4. Causal links of energy politics between domestic politics and international relations in the early 2000s ………….…...……………..…….. 92 4. EVOLUTION OF ENERGY POLITICS UNDER YUSHCHENKO’S PRESIDENCY …………………………….…………………………………..……… 97 4.1.Conflict of interests in domestic politics and lack of proactive approach ……………………………………………………………..…...…97 4.1.1. Tymoshenko’s reforms in
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