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You're reading: Edward Chow: Ukraine’s energy system ‘optimized for corruption’

Madam Chair, it is my distinct honor to testify before your subcommittee. Unlike
my fellow panelist, who served with distinction at the Department of State and
White House, I come to you as a simple oil and gas analyst and practitioner in the
international energy industry for more than 30 years. In the past dozen years, I
have observed the Ukraine energy sector, sometimes up close, and written on the
subject. I had the occasion to advise four separate cabinets of ministers of Ukraine
on energy, including those led by then-prime ministers [Viktor] Yanukovych and
[Yulia] Tymoshenko. It is this experience and knowledge that inform me for today’s

I would start off my saying, with your forbearance, that as far as energy is concern
Ukraine – a country which seems perpetually at crossroads – is no longer in that
position. It may have been at crossroads in 2005, right after the Orange
Revolution, when there was a tremendous opportunity to shed its Soviet legacy and
incomplete economic transition; and to embark on a path of energy reform that
could have greatly enhanced its domestic energy condition and improved energy
security for both itself and Europe. However, infighting among the Orange
political forces, including over energy rents, and secondarily insufficient attention
and support from the West extinguished these prospects.

Since then, Ukraine has been on a dangerous path toward energy insecurity, which
has accelerated in the last two years. All the pity as Ukraine has enormous
potential as an energy producer, efficient consumer, and key transit partner for
Russia/Central Asia and Europe.

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