Ukraine’s next crisis will be a devastatingly economic one, as violent conflict destroys critical infrastructure in the east and brings key industry to a halt, furthering weakening the energy sector by crippling coal-based electricity production.
The Ukrainian military’s showdown with separatists in the industrial east has forced coal mines to severely cut production or close down entirely. This has led to an electricity crisis that can only be staunched by cutting domestic production along with exports to Europe, Crimea, and Belarus — or worse, getting more imports from Russia.
We’ve spent a considerable amount of energy lobbying against this new tax law that essentially doubles taxes for private gas producers in Ukraine, to the benefit of local political-business elite.
This law is dangerous to the long-term security of Ukraine. It adds little to the budget and discourages drilling and investment in the upstream oil and gas sector as well as calls into question the ability to invest in Ukraine at all.