At the height of the December 2005-January 2006 crisis over the demand of the Russian gas monopoly “Gazprom” to dramatically increase prices for natural gas sold to Ukraine, the Ukrainian government began to examine a number of responses designed to counter the new economic pressure from Russia. Some of these measures, if implemented by Kyiv, could affect Russia’s strategic deterrence posture. [1]

Early Warning Radars
The measure that has attracted most attention is the proposal to increase the rent charged by Ukraine for the use of the Mukachevo and Sevastopol radar stations. The Dnepr-type radar at Sevastopol and Dnepr-M radar at Mukachevo entered service in 1979. (Construction of a more advanced Daryal-UM radar at Mukachevo was not completed due to termination of funding in the late 1980s.) In 1992, following the breakup of the Soviet Union, Russia and Ukraine reached an agreement allowing Moscow to continue using data from these two radars, which would remain an integral part of Russia’s early warning system. That arrangement was codified in a 1997 agreement between the two countries.

The possibility of increasing the rent for the radars was first raised in early December 2005 by the Deputy Chief of the Secretariat of the President of Ukraine, Anatoliy Matvienko, who declared that if Russia wanted to move to world prices for gas, it would be only logical for Ukraine to demand that rent for military facilities in Ukraine be increased to world standards, as well. [2] This statement referred primarily to the rent for the use of Sevastopol as a base for the Russian Black Sea Fleet, but it also applied to other leases, including that covering the two radars in Sevastopol and Mukachevo. A few days later Vladimir Gorbulin, an assistant to the President of Ukraine, complained that since 1997, when the Russian-Ukrainian agreement on the use of these stations was concluded, the losses to Ukraine amounted to $50 million, because Russia was only paying for the equipment while Ukraine had to pay salaries of personnel. Gorbulin also mentioned that negotiations on a new arrangement were already underway between the Ministry of Defense of Ukraine, the National Space Agency of Ukraine, and the Ministry of Defense of Russia. The alternative solution, Gorbulin suggested, would be to cut Russia off from data supplied by these radars and provide it instead to the United States. [3]

These and subsequent statements, however, were apparently made in the context of preliminary discussions within the Ukrainian government, where the issue was reportedly discussed at a mid-December meeting of the Ukrainian National Security Council. No decision on the matter was made at that time.

Some Russian and Ukrainian sources speculated, however, that the issue of radar stations was not raised in response to the increase in natural gas prices, but rather that the decision to consider increasing the rent for the radars, as well as other similar steps, was made after a visit of U.S. Secretary of State Condoleezza Rice in early December 2005. [4] During a meeting with Secretary Rice, Ukrainian President Viktor Yushchenko is said to have given her a package of proposals, which included providing U.S. personnel access to the two radar stations. [5]

The loss of data from the Sevastopol and Mukachevo radar stations, according to former Russian commander-in-chief for space and missile defense Col.-Gen. Volter Kraskovski, would mean a complete loss of control over the southwestern sector of the airspace adjacent to Russia, including all of Central and Southern Europe, as well as the Mediterranean. [6] It would also create an additional blind spot in Russia’s strategic early warning system, at a time when the satellite component of the system is thought to be operating below full capacity. [7]

Although Russian media sources and nongovernmental experts regarded the issue with great alarm, the official Russian reaction to the possible confrontation over the Ukrainian radars was surprisingly calm. Minister of Defense Sergey Ivanov said on December 27, 2005, that the rent for the Sevastopol and Mukachevo radar stations was subject to negotiations. In response, Ukrainian Minister of Defense Anatoliy Gritsenko welcomed the statement of his Russian colleague and suggested that the issue could be resolved through consultations between the two organizations and should not cause tension between Russia and Ukraine. [8]

Almost simultaneously, Russia’s Space Forces announced that they were conducting tests of a new type of radar, “Voronezh-DM,” that would be deployed initially in the northwest of Russia. That radar is designed as a modular station; components are fully assembled at the factory and then can be quickly deployed to a desired location in a matter of weeks. It was specifically noted that in the “next few years” similar units would also be deployed in southern Russia, enabling it to eliminate reliance on the Sevastopol and Mukachevo stations. Thus, the Russian sources stated, that even if Russia were completely cut off from the data from Ukraine, the gap would not last longer than two or three years. [9] The disclosures regarding the new radars may help explain why the official Russian reaction to Ukraine’s veiled threat to withhold data from the facilities has been uncharacteristically calm and why Russia seemed ready to discuss increased payment for the use of the two existing radars: apparently Moscow does not expect that its dependence on Ukraine will continue for long.

SS-18 ICBMs
Another possible approach that Ukraine has been considering to respond to Russia’s energy pricing demands is cancellation of an already completed agreement on extending the service life of Russia’s multi-warhead SS-18 intercontinental ballistic missiles (ICBMs). These ICBMs were produced in Ukraine, at the PivdenMash (formerly YuzhMash) Scientific Production Corporation (NPO). The service life of all these ICBMs expired in the 1990s, but has been extended several times, and the Russian Strategic Rocket Forces, which are responsible for Russia’s land-based long-range missiles, expect to retain them for another 10-15 years.

The participation of the organization that produced these missiles is vital for the plan, because replacement components cannot be acquired anywhere else. According to independent estimates, without the participation of PivdenMash, Russia might have to retire its SS-18s – a backbone of its nuclear deterrent – faster than anticipated. The cost of eliminating the SS-18 and deploying new ICBMs to replace it is estimated at $3-4 billion. [10] The contract for replacement components was expected to be signed in December 2005, but, according to Ukrainian sources, in late 2005, Kyiv began to delay the signing. [11]
The proposed cancellation of the SS-18 agreement has also been linked, by both Russian and Ukrainian sources, to the visit of Secretary Rice to Kyiv in early December 2005. Russian media sources have also expressed concern that Ukraine could transfer to the United States all technical data about the
SS-18 system. [12]

So far there has been no official Russian reaction to this possibility.

SOURCES:
[1] Gazprom stated that it was no longer prepared to sell gas at $50 per 1,000 cubic meters, while the price for gas sold to its European customers was expected to reach $255 per 1,000 cubic meters in 2006. Its new proposed price was $160-170, but when Ukraine refused to accept this offer, the proposed price was further increased to $230 per 1,000 cubic meters. Since an agreement was not reached by the end of 2005, Gazprom halted gas supplies to Ukraine on January 1, 2006. A compromise deal was negotiated on January 4, 2006: Gazprom sold gas to an intermediary (a joint Russian-Ukrainian-Swiss venture) at $230 per 1,000 cubic meters, and the intermediary mixed it with gas delivered from Turkmenistan at $60 per 1,000 cubic meters. The mix was then sold to Ukraine at $95 per 1,000 cubic meters. The compromise was sharply criticized in Ukraine and led to a no-confidence vote by Verkhovna Rada (the Ukrainian parliament) against the government. It is possible that the crisis will resume by the middle of 2006, when Turkmenistan is expected to increase the price of its gas, which will affect the price of the mix delivered to Ukraine.
[2] Kseniya Solyanskaya, Aleksei Levchenko, “Voennye Bazy po Kurortnomy Tarifu” [Military Bases at Resort Rates], Gazeta.Ru, December 9, 2005.
[3] “Dvoinoe Dno Gazovoi Problemy” [The Double Meaning of the Gas Problem], forum on http://www.from-ua.com, December 22, 2005, reprinted from “RusBalt” information service.
[4] “Zagranitsa Nas Pomanit” [The Abroad Will Induce Us], UkrInformBureau, December 22, 2005 (http://urkinform.info); Aleksandr Lubenski, “Gas, Flot, TsRU i Yadernye Boegolovki” [Gas, Navy, CIA, and Nuclear Warheads], December 25, 2005, NuclearNo.Ru (the site of a Krasnoyarask-based Civil Center for Nuclear Nonproliferation) (http://nuclearno.ru).
[5] Petr Bologov, “’Gazprom’ Na Ekranakh Ukrainskikh Radarov” [Gazprom on the Screens of Ukrainian Radars], Lenta.Ru, December 12, 2005; Vladimir Mukhin, “Ukraina Ugrozhaet Radiolokatsionnoi Bezopasnosti Rossii” [Ukraine Threatens the Radar Security of Russia], Nezavisimaya Gazeta, December 12, 2005.
[6] Vladimir Mukhin, “Ukraina Ugrozhaet Radiolokatsionnoi Bezopasnosti Rossii” [Ukraine Threatens the Radar Security of Russia], Nezavisimaya Gazeta, December 12, 2005; Nikita Petrov, “Gosudarstvo Uvelichivaet Financirovanie Voennogo Kosmosa,” Strna.Ru, May 26, 2005.
[7] See e.g., David Hoffman, “Russia’s Myopic Missile Defense,” Washington Post, February 10, 1999
[8] “Moskva Gotova k Peregovoram s Kievom o Tsene za Arendu RLS” [Moscow is Ready for Talks on the Rent for Radars with Kiev], Strana.Ru, December 27, 2005.
[9] “Kosmicheskie Voiska Ispytyvauyt Radar Novogo Pokoleniya” [Space Forces Testing a New Generation Radar], Rambler.Ru information service, December 30, 2005; “Dvoinoe Dno Gazovoi Problemy” [The Double Meaning of the Gas Problem], forum on http://www.from-ua.com, December 22, 2005, reprinted from “RusBalt” information service; “Minoborony RF Ispytyvaet Noveishuyu Protivoraketnyuy RLS” [Space Forces Testing Brand New Antimissile Radars], Lenta.Ru, January 11, 2006.
[10] Petr Bologov, “’Gazprom’ Na Ekranakh Ukrainskikh Radarov” [Gazprom on the Screens of Ukrainian Radars], Lenta.Ru, December 12, 2005; Vladimir Mukhin, “Ukraina Ugrozhaet Radiolokatsionnoi Bezopasnosti Rossii” [Ukraine Threatens the Radar Security of Russia], Nezavisimaya Gazeta, December 12, 2005.
[11] “Zagranitsa Nas Pomanit » [The Abroad Willl Induce Us], UkrInformBureau, December 22, 2005 (http://urkinform.info).
[12] Aleksandr Lubenski, “Gas, Flot, TsRU I Yadernye Boegolovki” [Gas, Navy, CIA, and Nuclear Warheads], December 25, 2005, NuclearNo.Ru (the site of a Krasnoyarask-based Civil Center for Nuclear Nonproliferation) (http://nuclearno.ru).