Energy Pipeline Networks and Trust: The European Union and Russia in Comparative Perspective

Trust in international relations

Trust is important in international relations because trust, as many studies point out, facilitates cooperation and can help build viable security communities. ¹ Higher levels of trust are said to reduce international tensions, lower transaction costs, help ensure compliance with contractual agreements, and can overcome collective action problems. The lack of trust may lead to missed opportunities when suspicions policymakers dismiss overtures from competitor states as deceptive or insincere. ² However, most mainstream approaches in international relations have little to say about trust among states.

For realists, trust has little if any relevance to the conduct of relations among states, for states operating in an anarchic world are inherently suspicious of one another and rely solely on their own capabilities to defend their interests. In the realist world, trusting others is a naïve act that would leave a state vulnerable to exploitation by rivals; mistrust is a natural state in the world order. ³ Realists argue that given the potentially disastrous consequences of vulnerability, states do not, and should not, rely on trust in their relations with each other. In a Hobbesian world, mistrust is a prudent means of defending a state’s interests against adversaries that are constantly seeking advantage over rival states.

Liberal theorists tend to have a more optimistic view, theorizing that trust enhances cooperation, while reversing the causality argument and positing that repeated cooperation encourages reciprocity and often promotes learning and generates trust among states. In reality, states seldom take each other at their word – deeds are required to generate trust, and behaviors (policies and decisions) should be consistent over time if trust is to be preserved. Since there is a time lag between changes in behavior, states will need to act consistently in order to convince other parties that they can be trusted. Over time, states may find that trust can help them realize their interests. It takes many cooperative acts for a state (or person) to gain a reputation as trustworthy, but this trust can be destroyed in an instant by one untrustworthy act. ⁴ Inconsistency may call into question a state’s motives, whether the inconsistency is attributed to a single leader (authoritarian leaders are generally less predictable since they are by definition less institutionally constrained, and hence less trustworthy), or because bureaucracies work at cross-purposes within the state. Regardless of the origin, inconsistent behavior will tend to undermine trust.

Constructivists hold that leaders may shape identities in ways that promote either trust or distrust of other nations. Collective identities may be constituted within or across state boundaries, and levels of trust among members or with reference to out-groups may vary depending on how identities are constructed. Of course, trust is more likely among those who are similar. Norms and values may either contribute to shared identities or constitute significant barriers to trustful interactions. For example, the common values of those living in democratic systems should contribute to higher levels of trust. In contrast, the clashing values of authoritarian systems and democracies should make distrust more likely. ⁵ Constructivism may be faulted, however, for reversing the causality of trust and identity: shared identities may develop out of trusting relationships, rather than the reverse. ⁶

The literature on trust in politics and international relations can be divided into two broad approaches – the rationalist and the normative (or moral). Rationalist approaches conceptualize trust as based on interests and reciprocity. If actors are predictable – if they respond to positive inducements by cooperating rather than by taking advantage of another state and if they acknowledge shared interests and act accordingly – then a trusting relationship can develop. ⁷ For rationalists, trust develops out of reciprocity and expectations. It is based on evidence that the other actor is behaving predictably, upholding their part of the ‘contract’. Strategic trust is rationalist, predicated on uncertain expectations about how other actors will behave; it involves predictions about the behavior of other actors based on experience. Over time, states through their actions may develop reputations for trustworthiness, at least among certain states; conversely, their behavior may convince others that they are not to be trusted. Strategic trust is largely about reducing transaction costs by gaining additional information (either positive or negative) about other actors and by constraining relations within institutional arrangements. ⁸ This type of trust, which fits the rational actor model, involves an estimation of the degree of risk in interactions, with estimates of trusting derived from repeated experiences, and can be applied at either the individual or the state level. ⁹

The normative or moral approach to trust has a more positive view of human interaction, assuming that most people trust others under most circumstances. ¹⁰ Here, trust is based on a favorable belief in the integrity of a partner rather than a rational calculus of interests and incentives. Trust is expected to be stronger within identity groups that share norms and mores (these would include family, kinship, ethnic or national groups); conversely, trust will be lower or nonexistent toward out-groups that hold different beliefs and values. ¹¹ According to this approach, trust is more than the cognitive; it is the affective or emotional dimension of interaction. Trust then is optimism about the goodwill and competence of another, which could be a person, firm, or government body – the chief criterion for trusting is the other must have a will. ¹² While this form of trust, which is frequently linked to personal friendship or kinship ties, may not appear relevant to relations among states, a growing body of literature identifies the importance of shared norms and values as the basis for trust and friendship in international relations. ¹³

Neuroscientific inquiry into the neurologic basis of trust may help to shed some light on trust in the context of international relations as well as on the realist and moralist approaches. ¹⁴ In an article published in 2002, Winston et al. presented a series of faces to volunteers in a functional magnetic resonance imaging (fMRI) device, which measured changes in their brain glucose metabolism, a well-established proxy for changes in brain activity. ¹⁵ Those areas of the brain showing increased activity can be assumed to play a role in the mental processing of the stimuli presented. As these volunteers were presented carefully constructed faces, they were asked to rate the trustworthiness of each face. The results indicated that, from a cognitive processing point of view, facial information went to an ‘information processing’ region of the brain – the ‘what is this information?’ part of the process. From there, it flowed to both the amygdala and orbitofrontal cortex, both areas highly correlated to generation of emotional states.

It is not only facial stimuli that can generate biological responses relevant to trust behaviors. The field of neuroeconomics has begun to explore a wider biological basis for the mediation of emotion states facilitating trusting behaviors. Experimental research has shown that levels of oxytocin, a commonly occurring protein arising in the context of social attachment and affiliation in mammals, rises in the context of economically trusting financial situations. Additionally, its administration to experimental volunteers increases the likelihood of trusting behavior in financial interactions – that is, individuals with higher levels of oxytocin are more likely to interpret stimuli as reciprocal. ¹⁶

An important interpretation of these findings: not only visual cues but also the behaviors can affect an individual’s neurological state of being in a way as to change the probability of subsequent trusting behavior. Regardless of what type of stimuli is being processed, it is becoming clearer that trust in a neuroscientific context is a matter of both converting discrete external stimuli (a face or a behavior) into a cognitively identifiable object as well as then sending that object to the emotional centers of the brain in order to generate an answer to the question ‘what does this information mean?’ The creation of meaning is the fundamental substrate for whether trust or distrust will characterize an individual’s subsequent behavior. For ease of discussion, we can refer to the ‘what is this information’ component as ‘perception’ function and the ‘what does this information mean?’ component as the ‘meaning’ function.

This neuroscientific perspective may provide a platform from which to appreciate the insights of both approaches and how together they might provide a stronger basis of analysis. In the rationalist theory, which posits that trust is generated primarily by perception within a context of ‘meaning neutrality’, it is important to realize that the meaning function of trust as it is created in the brain depends not only on the perception outputs reaching the amygdala and orbitofrontal cortex, it also depends on the very wiring of the meaning apparatus of an individual’s brain. Thus, trust is the product both of available and relevant external stimuli as well as the extant neurological ‘wiring’ of the meaning creation centers of an individual’s brain; it is inherently both objective and individually subjective. The rationalists posit that meaning is created from relevant stimuli independent of individual variations in the cognitive architecture of meaning portions of the brain – that all actors, regardless of identity, are ‘rational’. While international reputations may be built or may change based on stimuli over time, this reputational equity is generated from unbiased meaning architecture that is assumed to be consistent across national and ethnic identities.

Alternatively, the normative theory posits that the meaning architecture is in fact biased at baseline and that group affiliations matter in terms of how perception input is handled in the creation of meaning. When assessing perceptive data from sources identified as having a closer group relationship, an individual is more likely to conclude that the perceptive justifies trust; conversely, those with more distant relationships are less likely to generate trust. Given the vast diversity of human cognitive architectures – derived from widely variable genetic and autobiographical historical canvases – it seems unlikely that generalized statements about ‘The’ nature of human perceptive and meaning generation biases will suffice in terms of guiding an understanding of international relationships. As such, I will argue that an analysis based on both the normative and rationalist trust dimensions can provide a more nuanced perspective on EU–Russia energy relations. It is clear that EU–Russia relations are conditioned by interests, experiences, and expectations as the rationalist approach would suggest, but directing our attention to the normative factors, specifically identity expectations, can help to understand relevant constraints to the growth of trust.

Levels of analysis

The level of analysis issue should be addressed if normative trust is applied to international relations. In political science, trust is generally studied at the individual level, in terms of interpersonal trust and individuals’ levels of trust in government officials or institutions. ¹⁷ Just as it is possible to discern variations in interpersonal trust, and in trust accorded to government officials and institutions, so individuals may also hold varying levels of trust in other states or nations, with implications for their positions on world affairs. Opinions about the trustworthiness of other states take into account their credibility, predictability, and good intentions; they are shaped by the collective experiences of publics and by the domestic and the international environments. ¹⁸ If we accept the contention that states have wills and so may be deserving of trust (or mistrust), then we are justified in discussing trust among individual leaders and between states.

The rationalist approach holds that if states demonstrate over time they can be trusted, by fulfilling contractual obligations or not taking advantage of other states’ vulnerabilities, they will be more likely to develop trusting relationships. States that demonstrate they can be relied on to fulfill their commitments are deemed more trustworthy than those that frequently renege on their obligations. Leaders may use trust strategically, by encouraging mistrust of other elites, nations, or ethnic groups in order to consolidate their power. Conversely, they may develop personal ties that make them far more trusting of other leaders than are their own publics. Regardless, the personal ties that leaders develop are critical in either facilitating trust or eroding it. Realist approaches to international relations factor out this role of human agency, by conceptualizing the state as a rational unitary actor. ¹⁹

In contrast, the normative approach predicts that states, and leaders, are more likely to develop trusting relationships when they share values and identities. Identity proximity and shared values are clearly important in facilitating trust and cooperation among states and nations. In addition, close personal ties among leaders characterized by higher levels of trust can help nations overcome difficult obstacles to better relations, or reach complex agreements, while the absence of trust can raise tensions and hinder cooperation. Although difficult to measure, trust does vary between collective political units, even if ultimately trust is exercised through human actors playing political roles. ²⁰

One common definition of trust is the willingness to place one’s interests under the control of others in a particular context, on the assumption that the trustee will not exploit the trustor’s vulnerability. ²¹ This rationalist definition is perfectly workable for a study of EU–Russian energy relations; trust in the context of Russian–EU energy relations is the confidence one actor has that the other actor will fulfill its obligations as completely as possible under the circumstances, and the assumption that neither actor will intentionally exploit the other’s vulnerability. More complicated is specifying under what conditions trust increases or decreases. The rationalist approach seeks explanation in observable fulfillment or non-fulfillment of expectations (e.g. delivery of promised natural gas supplies), while the normative approach seeks explanation in more intangible conflicts of belief systems and identities.

The underlying basis for trust relationships may be either rationalist or normative. Both elements are important, but the normative dimension has been neglected, and will be elaborated in this study. Rationalist perspectives view trusting relationships as involving predictability, the expectation that other actors will do their best to keep their word once given. Trust may be reinforced, or eroded, based on experience between the parties. From a rationalist perspective, the erosion of trust in the EU–Russia energy relationship can be partly explained by the experiences of the Soviet and post-Soviet periods. The experiences of the Soviet period were almost entirely positive, as discussed in a subsequent section; not once did Moscow exploit Western Europe’s vulnerability. In contrast, after the collapse of the Soviet Union Europe’s energy security was repeatedly jeopardized by Gazprom’s disputes with the natural gas transit states, particularly Ukraine. Although on the Russian side a complex mix of state, corporate, and personal interests shaped Russian energy policies, the political discourse in Europe tended to place the blame on Putin and his government, calling into question Russia’s trustworthiness as a supplier. ²²

The normative basis for trust likewise evolved over the 40-odd years of the energy relationship, though in quite different form. The deep normative divide between Western Europe and the Soviet Union during the Cold War meant that values did not factor into the trust equation – quite simply, there was no expectation that Moscow would behave according to European norms of democratic governance, respect for human rights, and market economics. With the collapse of the USSR and Russia’s professed transition toward liberal democracy, the West assumed an eventual coincidence of norms and crafted its Russian policy accordingly. By the late Yeltsin period, Russian officials and academics regularly questioned the applicability of European norms to the Russian experience; this evolution culminated in the centralizing project of Vladimir Putin and a ‘return’ to historical Russian values. ²³ A EU characterized by liberal democratic, postsovereign norms found itself frequently at odds philosophically with an authoritarian Russia that prioritized national sovereignty and power restoration. These widely disparate political norms undermined the prospects for Russian–European trust.

In the following section, I outline EU–Russia energy relations. I start by sketching out the basics of EU energy consumption and imports from the Russian Federation and elsewhere. Then I discuss several of the most notable incidents that have impacted European trust in Russia as an energy supplier. Many studies have explored in detail the specifics of European unease regarding Russian oil and gas supplies. ²⁴ My purpose here is not simply to recount these events, but to explore the factors that undermine or promote trust in the EU–Russian energy relationship.

Russia, the EU, and trust in energy relations ²⁵

The evolution of Russian–EU energy relations in the two decades following the fragmentation of the Soviet Union were marked by behaviors – specifically the interruption of supply and pricing disagreements – that negatively influenced the trust relationship, even though these actions were generally not directed at European consumers. The rationalist basis for trust, however, was sufficient during the decade of the 1990s, when the incompetent but well-meaning Boris Yeltsin was president and expectations remained high for norm congruence. The erosion of trust peaked in the first decade of the twenty-first century after Vladimir Putin became the official face of a more aggressive Russia. More frequent and more visible instances of untrustworthy behavior (supply interruptions and price disputes) coincided with a growing identity gap and norm contestation between the two sides.

After the Soviet Union collapsed, the EU reached out to the former communist states, and especially Russia, with several institutional gestures of goodwill. Russia was one of the original signatories to the Energy Charter Treaty (ECT), in 1994. Moscow applied to join the Council of Europe in 1992, and although many Europeans had misapprehensions about Russia given the violence of the Chechen conflict, Russia was admitted to the Council in 1996. The following year Russia entered into a Partnership Cooperation Agreement with the EU, signing on to the PCA’s general principles of respect for democracy, international law, human rights, and market economics. In 1999, the EU adopted a ‘Common Strategy’ on Russia that articulated strategic goals – promoting a stable, open, and pluralist democracy governed by the rule of law and with a prosperous market economy.

Europe’s proposed relationship with the new Russia was based on the idea of closer cooperation and shared democratic values. Documents such as the EU’s ‘Common Strategy’ referred to Russia’s ‘rightful place in the European family’, implying a shared identity would supplant the deep normative divide of the Cold War. ²⁶ While Europe’s energy relations with the Soviet Union had been a matter of reliance based on necessity (the country, after all, constituted the single greatest threat to European security), it was expected that ties with postcommunist Russia would be based on its progress as a democratic and trustworthy partner. ²⁷ In effect, Europe was willing to grant Russia membership in the broader European community, with the corollary that Russia in turn would adopt European democratic norms.

Europe and Russia may have had common interests, as enumerated in these documents (e.g. energy and environmental cooperation, controlling organized crime and drug trafficking, and nuclear safety), but assertions of shared values clashed with a growing resistance in Russian political circles to Western pressures. The decisive break came in 1999 with the expansion of North Atlantic Treaty Organization (NATO) and the alliance’s bombing campaign against Serbia in support of Kosovo. ²⁸ After taking office, Vladimir Putin signaled that Russia had its own values, and while Russian political culture might be compatible with universal beliefs, Moscow would no longer resign itself to the Western-supported chaos and anarchy of the more democratic Yeltsin period. In his 2005 annual address to the Federal Assembly, where he lamented the collapse of the Soviet Union as ‘a major geopolitical disaster of the century’, Putin went on to assert that ‘As a sovereign nation, Russia can and will decide for itself the timeframe and conditions for its progress’ (toward democracy). ²⁹

Although trust and mistrust are difficult to measure, it is important to provide some empirical evidence of variations in trust levels toward Russia as an energy supplier among EU members. At the institutional level, the EU’s stated goal of diversifying natural gas suppliers away from overreliance on Russia is one key indicator of lack of trust. The planned Nabucco pipeline, which would bring Caspian basin gas to Europe along a southern route while avoiding Russian participation, is strongly supported by EU members Poland, the Czech Republic, and the Baltic states, while the larger Western European states – Germany, France, and Italy – are far less supportive of the project. ³⁰ France’s EDF, Germany’s Wintershall, and Italy’s ENI have contracted as Gazprom’s partners in the Russian sponsored South Stream pipeline, a competitor to Nabucco. Germany, France, and the Netherlands are strong supporters of the Nordstream pipeline, which supplies Russian gas directly to Lubmin on the Bay of Griefswald, since their major energy companies are shareholders in the project. ³¹

Statements by leaders of EU member countries indicate broad variations in the levels of trust toward the Russian energy connection, with certain East European members mistrustful of Russia, and the Western European members more trusting. Polish Defense Minister Radislaw Sikorski, for example, provoked vigorous protests in Moscow when he described Nordstream as the energy equivalent of the 1939 Molotov-Ribbentrop Pact. ³² Polish newspapers described the Nordstream pipeline as dangerous for Poland’s energy security, suggesting that Moscow would use the economically questionable project to advance its geopolitical interest at Poland’s expense, leaving the country at the Kremlin’s mercy. ³³ Czech Republic Prime Minister Mirek Topolanek has supported Nabucco, criticized Nordstream and South Stream, and warned that the Central and East European states had become objects in Moscow’s efforts to restore its national power through energy policy. ³⁴

Finally, much of the European public is concerned about the continent’s reliance on Russian energy supplies. Pew Research Center surveys conducted in 2007 and 2008 found that nearly two-thirds of Britons, Poles, and Germans indicated they were concerned about dependence on Russian energy supplies, as were 58 percent of French, 57 percent of Czechs, and 53 percent of Slovaks. ³⁵ Curiously, neither the level of concern is linked to the actual level of dependence on Russian energy (Britain is among the least dependent countries in Europe) nor are the differences between Western and Eastern Europeans significant. Moreover, the results suggest a gap between elite and mass perceptions of dependency in Western Europe.

Evolution of the energy relationship

The energy relationship dates to the Soviet era – oil exports began in the mid-1950s, and the first natural gas pipelines went online in 1967. Although the United States suspected Moscow would seek to undermine Europe’s autonomy by making it energy dependent, West Europeans resisted American pressure and expanded imports from the USSR, particularly in the wake of the 1973 and 1979 oil shocks. ³⁶ For Germany, the goal of energy diversification away from the Middle East coincided with the Brandt regime’s political interest in Ostpolitik and improving relations with the USSR. ³⁷ The Soviets were viewed as difficult negotiators but honored their agreements scrupulously once a bargain was struck. Notwithstanding the broader hostilities of the Cold War, the Soviet Union was perceived as a reliable actor in the specific field of energy. ³⁸ Reliability, however, is not the same as trust.

Tuomas Forsberg has argued that the evolution of Soviet identity under Mikhail Gorbachev toward European values (the ‘Common European Home’) contributed to the development of normative trust with West Germany. ³⁹ As the Soviet Union redefined its identity toward Europe, expectations were raised that the USSR (and then its successor, the Russian Federation) would no longer be the principal Other for Europe but would become an integral part of Europe. Most Russian officials and academics profess a European identity, but the Russian leadership, particularly under Vladimir Putin, has refused to acquiesce to norms imposed on it from outside. ⁴⁰ From the Russian perspective, the EU applied a logic of conditionality to Russia, expecting it to adopt EU standards, norms, and policies in general, in other words, to become simply a norm taker. Brussels displayed the same integrationist logic in its energy dialogue with Moscow, seeking to establish a relationship that was basically imperial. ⁴¹

While the new democratizing post-Soviet Russia under Boris Yeltsin seemed to be drawing closer to the West in its values and identity, the regime was far less predictable than its predecessor, a development that might be expected to affect rational trust. The unitary character of Soviet foreign policy gave way to a fragmented policy process in which the executive, legislature, businesses, and regions all played a role. Deep divisions between the executive and legislature, and within the political class, made it difficult to develop a consensus on foreign policy. ⁴² President Yeltsin won an early contest with the parliament but was unable to contain the growing power of the oligarchs, many of whom were connected with the newly privatized oil and gas industries. In this chaotic period, energy supply disruptions were not unexpected, but the causes could be attributed to ineptitude rather than design. In other words, normative expectations trumped rational expectations based on the observed behavior.

Russia under Yeltsin appeared to be progressing toward democracy and a privatized energy sector. Moscow was accommodative to its European neighbors and Commonwealth of Independent States (CIS) partners, at least until the appointment of Yevgeny Primakov as foreign minister in 1996. ⁴³ Moreover, Russia’s new openness provided opportunities for Western companies to strike lucrative deals, including Shell’s joint venture on Sakhalin, the Caspian Pipeline Consortium (from Kazakhstan through southern Russia, in which Chevron took the lead), and BP’s investments in Western Siberia. Though the investment climate was risky, unpredictability resulted from the disruptions of simultaneous economic and political transitions, and the predatory nature of Russia’s new mafias, rather than a deliberately aggressive state policy. Thus Russia’s trustworthiness as a state was not unduly affected.

The perception that Russia uses its vast energy reserves to exercise power and influence in energy-poor Europe emerged dramatically during Vladimir Putin’s presidency. ⁴⁴ Russia under Putin sought to use one of its few strengths – its vast energy reserves – to strengthen its geopolitical position, which in turn heightened Europe’s sense of vulnerability to energy supply disruptions. The EU nations have limited domestic sources of hydrocarbons – in 2007, the EU-27 imported 82.6 percent of their oil and 60.3 percent of their natural gas. Russia’s pipeline network supplies 34 percent of EU oil and 40.8 percent of its gas; Norway, at 15.5 percent and 26.7 percent, respectively, is the second-largest energy provider. Algeria delivers an additional 16.9 percent of EU gas. ⁴⁵ Europe is reliant on Russian energy, both in terms of the significant proportion of oil and gas imported from a single supplier, and in terms of the existing pipeline distribution network, which makes switching to alternative suppliers costly.

The extent of this dependence, however, should not be overstated. While natural gas consumption in Europe has grown steadily since 1965, Russia’s share of the EU’s gas imports peaked at about 75 percent in 1990 and then declined to just over 40 percent by 2007. As a share of Europe’s primary energy consumption, gas imports from Russia stabilized at about 6.5 percent from 1990 onward. ⁴⁶ And natural gas accounted for just 19.9 percent of the EU-27’s total primary energy production in 2008. ⁴⁷ Europe’s increasing appetite for natural gas was met by expanding imports from Norway and Algeria (via pipelines and in liquefied form), and through liquefied natural gas (LNG) from the Middle East and Nigeria. Oil, unlike gas, is traded on an international market and easily stored, so oil supply interruptions can be readily addressed through the spot market and strategic reserves. European mistrust of Russia, then, appears grounded more in perceptions of vulnerability than in an objective evaluation of the level of energy dependence.

President Putin’s administration has sponsored ‘national champions’ as pillars of Russia’s drive to reachieve greatness. These corporations are expected to maximize profits, contribute to the modernization of the economy, and advance state interests. Among these firms, Gazprom, in which the Russian government owns a majority interest, is a key player, controlling about 80 percent of Russia’s total production and monopolizing exports through its control of gas pipelines. The gas supply interruptions of 2006 and 2009, which arose from a complicated mix of political and economic disputes between Russia and Ukraine, demonstrated Europe’s vulnerability to disruptions of this key commodity. The Russian–Ukrainian disputes were condemned by EU officials and led to widespread discussion of the need to diversify Europe’s energy sources.

Russia’s energy leverage extends to marketing and distribution arrangements and equity deals concluded with firms in nearly 20 European countries, many of whom are European ‘national champions’. Gazprom has partnered with German firms E.ON Ruhrgas and WIEH, together with the Netherlands’ Gasunie and France’s GDF Suez, for the highly politicized Nordstream pipeline, which will draw on the huge gas reserves of the Shtokman field in the Barents Sea. This pipeline originates at Russia’s northwest port of Primorsk and runs along the Baltic seabed directly to Germany, avoiding transit states. The Nordstream project has fueled suspicions among some Eastern Europeans that they would be more easily subjected to political blackmail by Moscow, would be denied transit duties, and have been sold out by the larger Western European countries that support Nordstream. Sweden and the post-Soviet Baltic states criticized the project on environmental grounds and feared the pipeline’s operation would be accompanied by increased Russian naval presence in the Baltic. ⁴⁸

The perception in Europe, particularly Eastern Europe, was of an energy relationship developing asymmetrically, and asymmetries in dependence provide sources of influence for actors. ⁴⁹ But pipeline networks also make suppliers dependent on consumers; Russian officials frequently claim their country is dependent on Europe as a customer for its gas, much as Europe is on Russia as a supplier. ⁵⁰ Russia’s premier national champion Gazprom is dependent on Europe for the bulk of its revenues, given restrictions on gas prices in the domestic market. In 2003, Europe accounted for 30 percent of Gazprom’s sales in volume but provided 65 percent of its revenues. Domestic Russian sales accounted for 62 percent of volume but less than 30 percent of income. ⁵¹ Clearly, European markets are critical for Gazprom’s financial success.

Russian officials have occasionally hinted that gas supplies could be shifted eastward to Asian markets in response to European efforts at diversification, thereby framing the energy dialogue in confrontational terms that undermine trust. Russia is indeed developing hydrocarbons for the Asian markets, having completed the first leg of the East Siberian Pacific Ocean oil pipeline (with a spur to Daqing) in 2011. ⁵² However, these threats are not entirely persuasive when it comes to natural gas – at present, the only gas reaching the Asian market is from the Sakhalin II project, which was never intended for the Europe. Siberian gas pipelines at present do not extend much further eastward than Tomsk, in Western Siberia; developing the infrastructure will be an extended and expensive process. China and Russia have been at odds over a gas pricing structure for years, impeding the conclusion of a gas pipeline deal. ⁵³ Finally, recent developments in gas shale technology and the prospect of China developing gas shale domestically make expensive, long-distance Russian gas pipelines less feasible. ⁵⁴

The Russian government, led by Vladimir Putin, has supported an export monopoly position for Gazprom domestically and has promoted the company’s expansion in Europe. One of Gazprom’s primary goals has been to prevent efforts to diversify central Europe’s gas supply and to control major pipelines in the region, so that it can benefit from transporting as well as selling natural gas. Gazprom has sought control over central Europe’s natural gas wholesale infrastructure, and the high capacity pipelines and storage facilities that deliver gas to distributors, thus positioning the company as both buyer and seller of natural gas. Russia’s goals with regard to oil are similar, but the diversity of oil suppliers (both Russian and non-Russian) and the more fungible nature of oil have focused Russian efforts on securing leverage by controlling the transit pipelines and the wholesale infrastructure. Establishing a hegemonic energy position in Europe is central to what some observers have termed the ‘new Russian imperialism’. ⁵⁵ However, Europe has its own national champions in the energy field, which suggests that economic nationalism is not solely Russia’s preserve.

Europe’s vulnerability to Russian natural gas varies, with Western Europe on the whole less dependent than Eastern Europe. Germany relies on Russia for 39 percent of its domestic consumption, Italy 31 percent, and France 24 percent. By contrast, the three post-Soviet Baltic states get 100 percent of their natural gas from Russia, Slovakia and Bulgaria 99 percent, and the Czech Republic 77 percent. Finland, Greece, and Austria are also heavily dependent on Russia, at 98, 82, and 69 percent, respectively. ⁵⁶ One might expect those states with higher levels of dependency, which are generally the former communist states of Eastern Europe and the Baltics, to be more mistrustful of Russia’s motives. This has indeed been the case among state officials in Poland and the Czech Republic, less so in Bulgaria. But Pew and German Marshall Fund data suggest that Western European publics are equally, if not more unfavorably, inclined toward Russian than their East European compatriots. ⁵⁷

The gas disruptions of 2006 and 2009 demonstrated that Europe is vulnerable to disputes between Moscow and the transit states arising from the unique Soviet pipeline legacy. ⁵⁸ According to the rational actor model, we might expect mistrust to be apportioned between Gazprom as supplier and Ukraine as the main transit state involved in supply interruption. Instead, much of the blame was directed toward the Russian government. The Russian state and its national oil and gas companies have worked together in a neomercantilist blend of political and economic goals. Under these conditions, it is not surprising that mundane pricing disputes between supplier and transit states can escalate into politicized conflicts that undermine trust. Russia’s evolving identity – in the direction of norms that clashed with basic European values – further strained the trust relationship.

Sovereignty, images of the enemy other, and trust

The absence of shared norms and identity differences contribute to lower levels of normative trust, while insufficiently developed institutional arrangements negatively affect rational trust by increasing unpredictability. In the Russian–EU relationship, contested norms include views of sovereign authority, and liberal values of individual rights and limited state power. Contrasting positions on formal institutional arrangements in the energy sphere, as well as rule of law issues more generally, have been an additional cause of mistrust.

Russia and the EU differ significantly in their conceptions of sovereignty. Over more than half a century, Europe has undergone an integration process that, while hardly smooth, has at least shifted identities toward supranational institutions and partly eroded traditional Westphalian concepts of sovereignty. ⁵⁹ By this measure, one may argue that the EU is well ahead of Russia in generalized levels of trust among the member states. While the EU’s origins and its evolution have not been free from conflict, the community’s development has been predicated on relinquishing a certain measure of sovereignty, without which many key institutions could not have been established. European integration has necessitated a certain level of trust among the member states. ⁶⁰

Since 2000, Russian leaders have been striving to reassert Moscow’s sovereignty over domestic governance and to limit encroachments on their influence among the former Soviet republics. Russia’s experience since the collapse of communism has been one of high levels of mistrust internally and mistrust of the West internationally. In Russia, the collapse of the Soviet state led to a two-decade long period of searching for a new identity, which by the late 1990s turned defensive, confrontational, and increasingly nationalistic. Much of Russia’s foreign policy since 1999 has been focused on restoring and protecting Russian sovereignty, shielding the country from interference in the country’s internal affairs, particularly from the influence of the sole remaining superpower, the United States. In the words of the Kremlin’s chief ideologist, Deputy Prime Minister Vladislav Surkov, sovereignty is a political synonym for competitiveness through a strong state – it is Russia’s right to have a seat at the table as one of the world’s major powers. Surkov’s concept of ‘sovereign democracy’ justifies centralization, a strong state, personalistic rule, and a uniquely Russian political culture. ⁶¹

Russian government under Putin has often been described as purely pragmatic, but there is an underlying ideology among Russian elites that has evolved over the past two decades, based on a philosophical perspective that elevates centralized state authority and regards pluralism as state weakening. The ideas underpinning sovereign democracy derive from the writings of Carl Schmitt, perhaps the most widely regarded political theorist in Russia today, at least among conservatives and nationalists. ⁶² Schmitt’s antiliberalist philosophy, the central importance of the friend–enemy distinction, his emphasis on national sovereignty and a strong state, territorial expansion, and the need for a powerful executive resonated in Russia’s chaotic post-Soviet milieu, much as it did in Weimar Germany. ⁶³ Post-Yeltsin politics in Russia contains all these elements, each of which stands in stark contrast to EU norms. Russia’s energy policy reflects this aggressive, strong state philosophy and negatively impacts trust between supplier and purchaser.

Rationalist approaches emphasize the importance of rule-based, predictable institutions for their role in promoting trust among states. Mechanisms such as treaties or trade agreements may reduce uncertainty about future behavior, replacing the need for trust in the relationship. Logically, more complex and binding written arrangements indicate a basic lack of trust, while more general or vaguely written agreements indicate higher levels of trust. Rules that provide actors with greater freedom indicate higher levels of trust; specific and binding sets of rules are needed when parties are distrustful. ⁶⁴

Domestically, Russia’s postcommunist culture is one of extensive formal rules in both politics and business, but many, if not most, are violated on a regular basis. Formal state institutions are distrusted by the population, so informal practices dominate. ⁶⁵ Predatory capitalism and questionable wealth accumulation, violent and illegal business practices, and general unresponsiveness and lack of accountability in government contribute to low levels of trust among Russians toward their economic and political institutions. In Russian–EU energy relations, a comparable lack of institutionalization has impaired rationally based trust. For example, the ECT, Europe’s framework for developing energy cooperation in the Eurasian space, has encountered resistance from the Russian government. According to the ECT website, ‘the Energy Charter Treaty … plays an important role as part of an international effort to build a legal foundation for energy security, based on the principles of open, competitive markets and sustainable development’. By strengthening the rule of law in energy issues, the ECT seeks to mitigate risks associated with energy investment and trade, thereby strengthening trust. ⁶⁶

Although Russia signed the ECT, the Duma has never ratified the document, and Russian officials have repeatedly emphasized their dissatisfaction with the Treaty. As Prime Minister Putin expressed at his February 2009 speech to the Davos forum:

Unfortunately, the existing energy charter has failed to become a working tool that could be used to solve problems. I propose to work out a new international legal framework for energy security. If implemented, our initiative could have the same economic impact as the Treaty establishing the European Coal and Steel Community. That is, we will be able to unite consumers and producers in a common energy partnership that would be real and based on clear-cut international rules. ⁶⁷

Mr Putin expressed Russian distrust of the ECT when he decried the ‘discrimination and double standards’ in energy commerce and the problem of safe transit of energy supplies. Russians see the treaty as primarily benefiting consumers (Europeans) rather than producers (Russians).

In an interview with Spanish journalists shortly after Putin’s speech, President Dmitri Medvedev proposed a new energy charter that would benefit both producers and consumers, and in April 2009, Medvedev released his ‘“Conceptual Approach to the New Legal Framework for Energy Cooperation’, designed as a substitute for or amendment to the ECT. ⁶⁸ The document is fairly broad, proposing to include all major energy-producing countries, transit states, and energy importers and covering virtually all forms of energy. Unconditional state sovereignty over energy resources is a key point of the proposal, as are the responsibilities of transit states, and there is an expressed preference for diplomatic over legal mechanisms for resolving disputes. ⁶⁹ Presidential aide Arkady Dvorkovich explained that the times had changed, as had EU principles, so that the ECT now contained contradictions that could be dealt with only through new agreements. ⁷⁰ European leaders dismissed the proposal as unworkable, and the European Parliament overwhelmingly approved the Third Energy Packet of liberalization measures the following month.

Russian mistrust arises from several problems with the ECT and the Transit Protocol. First, Russian officials point out that the ECT was sponsored by the EU, and the legal regime reflects liberal European regulatory and economic values to which Russia does not subscribe. ⁷¹ Second, the Transit Protocol is viewed as discriminatory (unbalanced) since Russia becomes subject to provisions as a transit country (for gas or oil from Central Asia), while the same provisions would not bind Poland, now a EU member. Third, the Transit Protocol would require Russia to allow third party access to Gazprom’s export pipeline network, undercutting the monopoly position of this key national champion. Finally, Moscow is opposed to an energy regime that applies only to the countries of the former Soviet Union and not to other producers and suppliers. ⁷² In sum, Moscow views the ECT and the Transit Protocol with distrust as European sponsored arrangements disadvantageous to Russia and ineffective to boot. From the European perspective, Russia’s substitute proposal is so broad and inclusive as to be unworkable and does not represent a serious effort to resolve Russian–EU energy issues.

Although Russia has not generally manipulated energy supplies against EU member states, it has employed pressure tactics against states around its periphery. One Swedish study found that there were 55 energy incidents involving Russia and its neighbors in the period from 1991 to 2006, some of which were politically motivated. ⁷³ The same study found that the Russian government and firms were often working in tandem, calling into question the Kremlin’s claim that supply disruptions are purely business disputes. The bulk of these incidents were directed against CIS and Baltic states, rather than Central or Western Europe, but the use of energy as a weapon in one geographic region clearly calls into question the reliability of Russia as a supplier in general terms. A more recent analysis identified 31 energy conflicts from 2000 to 2010, with the bulk of these rooted in prices (15) and asset ownership (13), with only five conflicts overtly political. ⁷⁴ Of course, since the conflicts all involved state-controlled entities Gazprom and Rosneft, separating the purely economic from the political is problematic.

As one European observer noted, Russia, energy security and Europe’s dependence on Russia bring out deep differences within the EU; Europe has great difficulty in speaking with a single voice when it comes to Russia. In part, this results from Russia’s policy of ‘divide and conquer’ in its energy relations with Europe, courting the more cooperative Western European states while confronting suspicious Eastern European EU members. This policy is evident in the appointment of Gerhard Schröder as Chairman of the Shareholders’ Committee of Nord Stream, and the offer to Romano Prodi to be Chairman of South Stream AG. In the broader context, European levels of trust in Russia vary based on how Russian behavior is perceived. For those states and leaders inclined to be critical of Putin and Russia, trust has been negatively affected in recent years by increasingly authoritarian governance, the Russo-Georgian war of August 2008, Russia’s assertive posture toward its neighbors, manipulated elections, human rights abuses, and the unsolved killings of journalists. More positively inclined, business-oriented leaders may dismiss such behavior as the expected imperfections of an otherwise ‘normal’ state.

European consumer states can draw both on their own energy experiences with Russia and on the example of Russia’s energy diplomacy with the former republics of the Soviet Union, in assessing how much trust to accord Russia. The record has not been wholly positive. Adam Stulberg depicts Russia’s energy diplomacy with its Eurasian neighbors as ‘strategic manipulation’. ⁷⁵ He found that the success of Moscow’s coercive energy diplomacy varied across sectors (most effective in natural gas, least effective in nuclear energy), but the point is that Moscow has made manipulating energy interdependence a central component of its diplomatic repertoire. Since Moscow uses energy relations with its neighboring states and allies in the CIS, Collective Security Treaty Organization (CSTO), or Shanghai Cooperation Organization (SCO) to realize strategic advantages, we might expect similar behavior in relations with Europe. Russia’s strategic manipulation of energy supplies, especially gas, not only may be an effective means of restoring its great power status but also generates rationally based mistrust among European energy consumers.

Interdependence arising from energy pipeline networks does not automatically generate mistrust. European reliance on Norwegian oil and gas, and the US–Canadian energy relationship, could be cited as examples of energy ties based on high levels of trust, but in these cases, supplier and consumer share a wide range of norms. More puzzling, and more comparable to the Russian–EU energy relationship, is the case of Algeria and the EU, where the energy relationship has not been characterized by mistrust even though there exists a deep normative gap between the two sides. The following section explores the Algerian energy relationship.

A comparative perspective

Do the cooperative relationships embedded in oil and gas pipeline networks enhance trust among nations in other contexts, or do the dependency relationships incurred generate mistrust and suspicion? If we hypothesize that shared norms enhance the prospects for trust, then we might expect the Algerian–EU energy relationship to resemble that between the EU and Russia. But in the Algerian case, the relationship has been businesslike, defined by rational forms of trust, though not completely free of tensions.

Algeria is the third-largest supplier of natural gas to Europe after Russia and Norway. The country has an authoritarian government that exercised brutal repression during the civil war of the 1990s, and the country is heavily Muslim. Periodic tensions have emerged over gas supplies and contracts. In the early 1980s, Algeria was involved in a gas pricing dispute with France and Italy. Algiers was seeking parity based on crude oil prices, a formula resisted by its European customers, and refused to deliver gas through the newly completed Transmed pipeline until the dispute was resolved. Algeria also abrogated contracts with El Paso Corporation for the Arzew III gas liquefaction plant and unilaterally canceled long-term LNG contracts with the Netherlands and West Germany. ⁷⁶ The European gas market was in turmoil at this time, with the Soviet gas deal just being concluded and the planned Iranian Gas Trunkline (IGAT II) pipeline swap canceled in the wake of the Iranian revolution. From 2007 to 2009, Algeria’s national oil company Sonatrach was involved in a dispute with Spain’s Gas Natural and Repsol, with Spanish company officials accusing Sonatrach of using strong-arm methods comparable to those employed by Gazprom.

And yet the Spanish government describes Algeria as a ‘reliable partner’, dismissing fears that the country would use energy as a geopolitical weapon. ⁷⁷ Algeria has adhered to international agreements – for example, complying with IAEA regulations on nuclear power – and has reliably filled its gas contracts to Southern Europe. Algeria could have used energy diplomacy to enhance its political influence over the issue of Western Sahara but has refrained from doing so. However, in recent years, the Algerian government has entertained Russian plans to form a natural gas cartel, threatening Europe’s efforts to diversify supplies. ⁷⁸

The Transmed pipeline does not involve a transit state, since it runs directly from Algeria under the Mediterranean to Italy, but the Maghreb-Europe pipeline crosses Morocco before linking to Spain through Gibraltar. ⁷⁹ The Maghreb-Europe pipeline, also known as Pedro Duran Farrell, has the potential to become politicized. Relations between Algeria and Morocco have been hostile in part because of Cold War legacies and partly due to rivalry over control of the Western Sahara. However, the construction of the Maghreb-Europe pipeline and the Moroccan Convention created vested interests in three states – Algeria is responsible for providing the gas, Morocco for transit, and Spain for distribution. The Moroccan state owns 540 km of the pipeline, and its investment of US$760m in the project makes it a responsible stakeholder. The international operating consortium includes Algeria’s Sonatrach, and Metragaz, a joint venture of Spain’s Sagane, Transgas of Portugal, and Morocco’s SNPP. The formation and structure of the Maghreb-Europe pipeline has resulted in a cooperative arrangement, with predictability of supply and few if any political disputes. This contrasts sharply with the Russia–Ukraine and Russia–Belarus legacy pipelines, where the supply and transit parties have greater incentives to politicize the situation in order to capture rents.

One additional factor that could explain better relations between suppliers and consumers is the level of corruption. Are these supplier states more trustworthy because they are less corrupt? Russia was ranked 143 (out of 182) on the Transparency International Corruption Perception Index in 2011. ⁸⁰ The CPI is quite relevant to a discussion of trust and energy interdependence since the methodology for TI’s data is based on surveys of experts and business people and is directly related to the links between business and politics. The symbiosis of big business and government in Russia clearly contributes to corrupt practices and undermines trust both within society and in foreign economic relations.

But it should be noted that Algeria also has high levels of corruption (though not approaching Russian levels), ranking 112 on the CPI in 2011. The Algerian example would suggest that corruption may not be a definitive factor affecting trust in energy pipeline relationships. Further complicating matters, the level of dependence is rather low; Algeria provides 17 percent of Europe’s natural gas, less than half the amount provided by Russia, with smaller quantities of oil going to select European countries (Algeria is not among the top eight oil exporters to the EU). Perhaps more importantly, supplier and consumer states and participating firms from the start invested significant amounts of capital in the Algerian–European projects. There were no legacy pipelines and transit states as in the Russian–European gas relationship.

The less confrontational nature of the EU–Algerian energy relationship may also be explained by the absence of any expectations of norm congruence between the two sides, as occurred in Russian–EU relations. There was no expectation that Algeria would become more democratic or would adopt a more European identity and therefore no comparable disillusionment. In this case, rational trust, in the form of reliability of supply and reciprocity, sufficed as a basis for energy relations.

Pipeline legacies, cooperation, and normative trust

Predicting how others will act is especially difficult over longer time periods, since circumstances are likely to change significantly. Unlike oil supplied by tankers, gas pipelines make this commodity less fungible – they bind the seller and consumer into long-term arrangements, and so trust becomes riskier in this context. Economic transactions are a form of cooperation and so involve an element of trust, but most exchanges are also short term, and the interacting parties can terminate the relationship fairly easily. Moreover, it is often relatively simple to find substitutes. Energy, however, is fundamentally different from other goods or commodities given its strategic importance in the modern world. In addition, energy supplied through pipelines is unique given the huge costs of building infrastructure, long planning, construction and operating timeframes, and the monopolistic or oligopolistic nature of the supply relationship. Energy pipeline networks bind nations together in webs of interdependence that are mutually beneficial, but which at the same time place countries in vulnerable positions. Furthermore, trust is not absolute. Relationships involve varying degrees of trust or distrust, depending on the circumstances, the behavior of the actors, and the level of risk or the value of the interest at issue. One country might trust another on a wide range of issues, yet be wary of fully trusting the other on particular matters where the costs of being wrong are very high. ⁸¹

Trust and cooperation are not the same thing, although they are closely linked. Cooperation is behavioral, while trust is attitudinal. Cooperative interaction over time may lead to greater levels of rational trust, as actions become more predictable. ⁸² Or one can argue the reverse that the higher the level of trust, the higher the likelihood of cooperation. As Diego Gambetta has pointed out, though, cooperative behavior does not depend on trust alone. ⁸³ Countries (and individuals) may cooperate based solely on interests, unaffected by trust or mistrust. However, it is clear that trust facilitates cooperation: ‘when trust breaks down, interaction between parties declines, as does the level of cooperation’. ⁸⁴ Rational trust is generally established over time, as consistently positive behavior validates the trust parties place in each other. However, this trust can easily break down when the behavior of one party is perceived as violating the trust of the other party.

The Soviet collapse led to greater unpredictability on the European continent and created a unique and distorted set of incentives for the successor states, particular the transit countries. As Adam Stulberg has pointed out, ‘in cases where pipelines precede establishment of cooperative political relationships, such as the situation resulting from the Soviet breakup, pipeline and transit relations often serve as a source of friction and contention between states’. The existence of ‘legacy pipelines’, those constructed during the Soviet era that transit the former republics, distort incentives and encourage producer and transit states alike to capture rents without regard for the consequences. In this context, states are not focused on realizing returns on investment since the existing infrastructure was built long ago and none of today’s stakeholders have sunk costs in construction. ⁸⁵ This rent-seeking behavior is rational from the perspective of the supplier and transit states, but it contravenes the expectations of the consumer states and so erodes rationally based trust.

However, trust may also be normatively based. Here, trust among states is not merely a function of rational calculation and reciprocity but takes into account emotional ties linked to shared norms or proximate identities. From this perspective, liberal democracies are more likely to trust other democracies and less likely to trust authoritarian states. ⁸⁶ States that are willing to relinquish some of their sovereignty in favor of a new supranational identity may prove less trustful of states that defend an absolutist version of sovereignty, one that brooks no interference in domestic affairs. And states that have suffered violations of their sovereignty and national pride will view efforts to constrain their exercise of sovereign authority with suspicion.

While the Soviet Union and East Europe were shedding the communist political–economic framework and rediscovering nationalism, the EU member states were becoming increasingly postmodern and supranationalist. Europe has not abandoned the concept of sovereignty – far from it. Yet the community-building process has resulted in an understanding of nationalism and sovereignty that is distinctly different from that in Russia. Many European elites are strongly committed to the European project, and while their publics identify more with the nation-state, a large proportion also feels European. ⁸⁷ Within the EU, differing perceptions of sovereignty and nationalism set ‘older Europe’ apart from the newer members in the East; the new EU members from the former Communist bloc appear somewhat less committed to the European community, and more suspicious of the former hegemon, though there is a wide range of opinion on the subject among elites and mass publics. ⁸⁸ Those newly independent states further to the East – the transit states and Russia itself – pursued nation building by promoting nationalism, which often took the form of antagonism toward former partners.

It is also likely that weak institutionalization is a factor related to lower levels of trust. There are great variations among democracies in levels of trust. Democracy does not necessarily breed trust, although levels of generalized trust are higher in long-standing stable democracies than in new democracies. In contrast, authoritarian governments such as those in the former Communist states set people against each other, and so make trust more hazardous; trust is quite low in these societies. ⁸⁹ Russia is a society with weakly institutionalized political system, an underdeveloped legal structure, and personalistic rather than routinized politics. Russia also has high levels of corruption and a poor record of governmental performance, both of which are negatively correlated with trust. The same may be said of the transit countries, Ukraine and Belarus. Poor institutionalization, corruption, and a weak rule of law make for unpredictability, and this lack of predictability can lead to rational mistrust, while the absence of congruent values – between democratic and authoritarian states – may make it more difficult to establish normative trust.

Conclusion

Many of the problems in the EU–Russian energy relationship can be usefully conceptualized as issues of trust, both rational and normative. The definition of trust used here – the confidence one actor has that the other actor will fulfill its obligations as completely as possible under the circumstances and will avoid taking advantage of the vulnerability of the first actor – illuminates certain problems in EU–Russian energy ties. The Russian definition of trust is specific and rationally based – Russian officials argue that their country has consistently, over decades, fulfilled its contractual obligations to deliver oil and natural to Europe, not once restricting the flow to European consumers. Any interruptions have been the fault of transit states such as Ukraine or Belarus and are not Moscow’s responsibility. Russia from this perspective has faithfully adhered to its obligations and is deserving of trust, not mistrust. ⁹⁰ Moscow avers that its domestic affairs are of no concern to outsiders and that its energy relations with the CIS states are conducted according to purely economic considerations.

The European perception of trust vis-à-vis Russia is more generalized and is negatively influenced by serious normative disagreements. Objectively, except for the 2009 gas crisis, European energy supplies have not suffered any significant disruptions since the pipelines’ inception, but there are other reasons to withhold trust. Moscow and Gazprom (and the perception is that Russia’s national champions and the government are synonymous given the interlocking directorates of business and officialdom) have clearly used political pressure to force concessions from their CIS partners and the post-Soviet Baltic states. Even former President Medvedev, generally seen as less aggressive than President Putin, described those states around Russia’s periphery as being within its ‘sphere of privileged interests’, generating fears that Russia is pursuing neoimperialist strategies. Russia’s authoritarian politics, its human rights violations, the Russo-Georgian war, and belligerent statements by President Putin and other officials provide considerable supporting evidence that Russia cannot be trusted in a normative sense.

Is the problematic energy relationship between Russia and the EU unique? The example of Algerian–EU gas pipeline networks suggests that the Russian–EU relations are indeed marked by a far higher degree of politicization and tension than elsewhere. On the European side, the lack of trust appears to be related to efforts by Russian national champions such as Gazprom to dominate the European energy market, using divide and conquer strategies to split the Community; the use of strong-arm tactics against CIS members and transit states; a resistance to accepting international legal mechanisms not sponsored by Moscow (the ECT); and the existence of corruption and undemocratic governance within Russia. From Moscow’s perspective, the EU fails to acknowledge that Russia has been a reliable energy supplier for decades and that the two sides are mutually dependent, plays down the responsibility of transit states for recent supply disruptions, seeks to impose its legal norms on Russia, discriminates against Russian firms seeking legitimate investment opportunities while seeking full access to Russia’s natural resources, and in general fails to practice reciprocity in the relationship.

A central element in the suspicion and tensions of recent years is the existence of transit states whose ties to Russia are problematic, and the existence of legacy pipelines in which the successor states have incentives to capture rents rather than realize legitimate returns on investments. Other pipeline networks in Europe and North America were developed with all parties becoming responsible stakeholders. It may not be possible to avoid all political disputes, especially when domestic economic and political interests are involved, but it does make state manipulation of energy resources far more costly. Restrained behavior contributes to predictability and higher levels of rational trust.

These findings provide insights into possible developments in Russian–European energy relations. Much of the rational mistrust stems from the peculiar legacies of the collapse of communism and the emergence of supplier and transit states lacking sunk costs. If so, this suggests that the current tensions and mistrust may be temporary and will subside as newer pipelines supplant older ones. In the Russian–European case, construction of new pipelines that bypass third parties, such as Nordstream, would presumably solve these problems.

However, the normative bases of mistrust may be more difficult to surmount. The EU project has evolved from narrow functionalism into a broader political entity, and the construction of a supranational identity and higher levels of trust among liberal democratic member states is a central element of the community. In Russia, Putin’s nation-building program sought to strengthen national identity and exclusiveness by stressing the country’s unique history and mission, as neither fully European nor purely Asian. Russia’s nationalist authoritarianism and disdain for liberal democratic values, when combined with growing social stratification and a discourse of zero-sum international competition, have fostered persistently lower levels of normative trust domestically and internationally.