Ukraine Engages Lobbyist for US Campaign
Naftogaz Ukrainy has hired Yorktown Solutions to lobby on its behalf in the US, it said November 22. It is paying £37,000 for it to inform interested parties about the risks that building Nord Stream 2 will pose for the development of a single European gas market and for the progress of reform of Ukraine’s gas market.
Yorktown is headed by Daniel Vajdich. A fully-licensed lobbying consultancy, Yorktown has worked with the US government on matters affecting Ukraine and relating to energy. The contract is for the rest of this year and it did not say when it began, although NGW understands that Ukraine and Yorktown have been working together for at least a month.
The services include organising meetings in the US Congress and its committees, and with representatives of government organs of executive power and with leading analytical centres, Naftogaz said.
Ukraine’s engagement of Yorktown Solutions is linked to the need to react to the active lobbying by Gazprom to advance the construction of the pipeline Nord Stream 2. According to US mass media, during 3Q 2017 Gazprom spent almost $1mn in the US on this campaign. For example, top political website The Hill said it had hired "Capitol Counsel, the Hawksbill Group and Roberti Global to lobby in Washington this summer, spending nearly $900,000 to retain the three firms."
Vajdich, a non-resident senior fellow of the Atlantic Council (AC), helped draft bills that authorised $350mn for the provision of lethal military assistance to Ukraine, imposed sanctions on Russia for its destabilisation of Ukraine, and delivered $1bn in loan guarantees to the Ukrainian government, according to the AC website.
Naftogaz said it was advancing its cause in the US in response to an appeal by 16 members of the Ukrainian parliament who want to step up the effort of neutralising the threat to Ukraine’s energy security abroad.
The US administration though is not short of advisers and consultants who would like to see Gazprom's project stopped, even if they recognise the imperfections in Ukraine's gas market such as the tariff structure for gas consumers; and the lack of transparency in the government, particularly in its relations with financiers and energy companies.
Addressing the European Autumn Gas Conference in Milan November 7, an advisor to the US Department of Energy, Russell Roth, said the US supports the EU's Energy Union – vague though that term is – and wanted Ukraine to remain a key transit route for Russian gas. Ukraine though he said needs a more transparent, market-based economy.
What the US does not want is intensified warfare in eastern Ukraine, where 10,000 have died for a minor shift in the Russia-Ukraine border. With Nord Stream 2 and later Turk Stream flowing into Europe, Russia will no longer need to worry about the fate of the long-amortised transit gas pipelines. One pipeline has already been damaged in the hostilities. Even the opponents of Nord Stream 2 say they want Russian gas to flow through Ukraine, on the grounds that it means transit revenues for the badly hobbled state. Income from gas transit in the first nine months of 2017, at hryvnia 24.9bn ($0.9bn), was close what the government spent on education in the period.