Russia turns off the gas taps
Jan 2nd 2006
From The Economist Global Agenda
Gas supplies are being affected across Europe after Russia cut off supplies to Ukraine. Russia is now accusing Ukraine of stealing gas, while the European Union, which gets much of its energy supplies from Russia, has called an emergency meeting
AFP
RUSSIA has insisted that the row between its giant energy firm, Gazprom, and Ukraine over gas prices is purely a commercial dispute with no underlying political motives. But that is not how it looks to some, especially now that Russia has carried out its threat to cut off supplies to Ukraine for failing to accept a sharp rise in prices. On Monday January 2nd, the day after Gazprom cut the pressure on its pipelines into Ukraine, energy firms in several countries which import Russian gas via Ukraine reported a sharp drop in the supplies they were receiving—despite Russia’s promises that they would not be affected by its move—while Gazprom accused Ukraine of stealing gas intended for other countries.
Ukraine denies any theft of gas but says that if temperatures fall further, it may divert some of the gas that passes through its territory, arguing that its pipeline contracts allow for this. Amid growing worries about the risks to Europe’s energy supplies in the depth of winter, the European Union has called an emergency meeting for Wednesday, while America’s State Department has urged Russia and Ukraine to seek a compromise.
Gas has been a growing energy source across western Europe, which now receives about a quarter of its supplies from Russia, most of it via pipelines across Ukraine. Norway, which is the biggest gas exporter within western Europe, has given a warning that it is already producing at full capacity and would not be able to make up the shortfall from Russia. So far, supplies to households do not seem at risk, though if the dispute continues, some industrial gas users, including electricity generators, may have their supplies cut or rationed, with potentially serious economic effects.
Already, supply reductions are being seen across Europe. MOL, a Hungarian gas wholesaler which has reported a 40% cut in supplies from Russia, is asking industrial customers to switch to burning oil where possible. It is also cutting by more than 40% the gas it pipes onwards to Serbia and Bosnia. Germany, Italy, Slovakia, Austria, Poland, Croatia and Romania have also reported significant falls in their supplies of Russian gas.
Portents of things to come???....or tempest in Russian samovar.??
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MacDoc, this is no tempest. With a cold winter, this could break out into armed conflict.
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Paix
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I think it's a strong tug in the contest over Ukraine's "sphere of influence" membership and no I don't think armed conflict but colder...pardon the pun ...relations and possibly tip Europe into recession unless OPEC coughs up offsetting fuel.
I don't know the logistics of that.
NOT a welcome incident to kick off 2006.
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I agree with Macspectrum's view that "Russia fears a truly independent Ukraine especially one with membership in the EU." Russian imperialism is not beyond the realm of the astute imagination. We shall see.
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Dr.G.
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13" MacBooK Pro with Retina Display
Paix
"The man who does not read good books has no advantage over the man who can't read these books." Mark Twain
I was equally inclined to blame the Russians for this, and that may be warranted, but if they have invited a swiss inspector in to verify that Ukraine is stealing, either they are VERY good at sneakiness, or there is more than one side ot this debate. I suspect the latter...
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Obviously you haven't had the "pleasure" of being pawed by the Russian bear.
Russians are imperialists and pine for the old days of "empire."
Ukraine just wants a chance to get out from under the boot of Soviet, now Russian, opression.
Riddle me this.
Why did Ukraine dismantle its entire nuclear arsenal while Russia holds on to theirs?
The Ukraine wants the sweetheart deals of the Soviet era, without the Russian influence in their affairs. Russia has cut the Ukraine off while still offering deeply discounted gas to other still favored former soviet republics such as Belarus.
Ukraine would prefer graduated price increases over time, not quadruple price increase overnight
Putin and his cronies have made no secret of their disdain for the Yushchenko administration, especially after Putin's henchman, pro-Russian candidate Yanukovich, was ousted after the Orange Revolution
Also Russia is trying to keep Ukraine under it's "sphere of influence" as opposed to dealing with Ukraine as an equal with Ukraine applying for membership to the EU and NATO
Energy politics...
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