Posted by: Mark Scott on January 06, 2009
As the spat between Russia and Ukraine over natural gas trundles towards its seventh day, European countries now are being left out in the cold. On Jan. 6, Ukrainian gas company Naftogaz said Russian energy giant Gazprom had cut gas supplies to Europe by two-thirds. In response, Gazprom’s deputy Chief Executive Officer Alexander Medvedev claimed the Ukrainians had shut down three of its four export pipelines.
Whoever is to blame, the underlying fact is that Russia’s natural gas supply to Europe — about a two-fifths of the EU’s total gas imports — has been slashed (for the time being). That’s bad news for (predominantly Eastern) European countries that are highly dependent on Russian imports, particularly as temperatures plummet. It also raises questions over the EU’s push towards energy independence. Despite talk from European policy-makers about finding alternatives to Russian gas, the most recent Ukrainian-Russian stand-off just highlights the continent’s reliance on its Eastern neighbor.
The Jan. 6 cut fell most hard on Eastern European countries. Austrian energy company OMV, which operates a gas hub used by many in the region, said its daily supply of natural gas had fallen to 10% of the normal level. Not surprisingly, that had a knock-on effect: Romania reported a 75% reduction in gas supplies, Hungary's levels dropped by 25%, and Bulgaria confirmed between a 10% to 15% fall. Others, such as Croatia, Poland, and the Czech Republic, reported smaller shortfalls.
[UPDATE -- On Jan. 7, Gazprom shut down all supplies to Europe through Ukrainian pipelines. Both sides blamed each other for the ongoing argument. The further reduction in gas supplies exacerbated shortages across Eastern Europe. Slovakia said it was facing a state of emergency because of dwindling reserves, and Hungary now has limited the gas consumption by industrial users. Others, including Slovenia, Croatia, and Turkey, also have had their supplies either severely reduced or shut off completely. This Reuters article provides a full list of the countries affected.]
So which of these countries will be most affected by the taps being turned off? To answer that question, Pierre Noel, a researcher at the European Council on Foreign Relations, recently published an interesting study (from November, 2008). According to his calculations (on page 15), the most at risk – based on the amount of Russian gas imported and the level of natural gas as a percentage of total energy generation – are four countries: Latvia, Lithuania, Hungary, and Slovakia. All are highly dependent on imports, although, to be fair, natural gas still only constitutes less than 40% of the countries' total energy mix.
According to media reports, local authorities have stressed there's currently no need to place energy restrictions on consumers.
As for Europe's largest countries, Germany and Italy buy the most Russian gas, but again, the total percentage of imported natural gas viewed within the countries' total energy mix runs between 10% and 15%. What does that mean? Well, that while these countries import a lot of gas, they are by no means dependent on Russian supplies and will be able to call on other sources (including domestic storage facilities) to ride out any shortfalls.
Apart from individual countries feeling the pinch, the back-and-forth between Russia and Ukraine brings back memories of January, 2006, when Gazprom similarly cut gas supplies to its Western neighbor. That spat was eventually calmed through EU intervention, and led many European policy-makers to call for a new push towards 'energy security.' Along with finding new gas supplies away from Russia, the European Union outlined plans for more domestic gas storage, a unified gas pipeline network across the continent, and a united negotiating position towards Russia.
Three years on, analysts give the EU a scorecard of 1 out of 3. Gas storage (particularly in Italy and Spain) has been increased significantly. But on the other two goals, Europe mostly has passed the buck. Plans for a more efficient continent-wide gas pipeline network remain on the drawing board, while individual member-states -- specifically Germany -- have negotiated separate deals with Russia that have often undermined a possible unified negotiating position for the EU.
That could possibly change now that the Russian-wary Czechs hold the 6-month rotating EU Presidency, although most analysts don't expect European countries to alter their status-quo approach. And just like back in January, 2006, the Russians and Ukrainians will eventually make a deal. But the fact Europe still is beholden to these often arbitrary tiffs shows just how far the continent's energy policy still has to go.
A SIBERIAN’S VIEW ON THE RUSSIAN UKRAINIAN GAS DISPUTE
Presently, the economic situation in the Ukraine is such that there is no extant affordable price that the country could pay for its gas supplies. With much strain the Ukraine managed to scramble up 1.5 billion dollars and left an outstanding 614 million dollar debt to “Gasprom” for gas supplies in 2008, and that, when the price was slightly over a third of the European.
Today, the Ukraine is standing on the doorstep of complete financial and economic collapse, exacerbated by the hapless popularity of its president whose rating is nearing President Bush’s “shoe tossing” stance. The collapse of the so called “Orange” coalition is an obvious and indisputable fact and there is no need of any external nudging of which Russia is so often unfairly accused. There is enough folly inside the country to serve the purpose without anybody having to bestow more confusion from aside. Politically, the country is split among groups of warring coalitions none of which have the upper hand or a consolidating idea, and this state of affairs has become a perfect environment for anarchy and arbitrariness.
The “Gasprom’s” proposal of a 50% discount compared to European prices was turned down as was the salvaging offer of counting the gas debts of 2008 towards a prepayment for transportation expenses for gas intended for European consumers.
Russia has been often intensively criticized for making exceptionally low prices for former Soviet republics; the Ukraine was always on this short list, although President Yushenko has tread on Moscow’s heels too many times.
The rein of the “Orange” coalition has committed the Ukraine to political confusion, confrontation, and economic turmoil. Irresponsibility and nihilism have become the main traits of today’s Ukrainian policy. The country has been left without any accreditation that could be recognised as a consolidating factor capable of blending a politically disunited country.
I fear that very few realize how godforsaken the situation may become should the disruptiveness of the present situation not be dealt with adequate care and attention. Defining the problem as a “row” between Russia and the Ukraine, as it is has been stated in western media, makes things look uncivilized and urges us to forget where the sponsors of “Colour” revolutions come from and what caused the world crisis and consequently affected so drastically the situation in the Ukraine. It was definitely not Russia that has been subsidizing the Ukraine economy with dirt cheap gas prices ever since the disintegration of the Soviet Union.
read this
I think that EU understands very well what is going on and who is responsible for whole situation. But EU can't push Ukraine to resume gas transportation - it is politicaly difficult for EU to align with Russia in this argument because EU. Traditionally EU supported Ukranian "young democracy" and accused Russia of threatening Ukraine to it's "democratic choice". Stealing gas and failing to fulfill gas transit obligations doesn't fit very vell in image of "young democracy" EU supported.
But EU can't push Russia because it clearly undestands that it is not Russian fault that gas pipe dried out. Effectively it turns out that with unwise blind support of Ukraine EU has reduced it's own options in this situation. So EU only makes general statements and call sides to make negotiations.
How come Ukraine doesnt have any gas shortages and they are the ones who owe money. Ukraine steals European gas and everyone says Russia stopped sending gas to Europe. Why would the all of a sudden stop gas to Europe? What a coinsidence Ukraine didnt pay for gas and now Europe is short on supply. Ukraine doesnt have money to afford anything. They sold weapons to Georgia when they invaded South Osetia. Now they back on a Russian plate. They used to get discount price for gas for decades now. And after all those time when Ukraine turned its back on Russia, comrads finally decided to show they whos the real sherrif in town. I hope Europe realizes that and demand Ukraine to stop stealing gas and pay money like everybody else.
Probably true, but that doesn't excuse Russia's behavior. There are better ways to handle this situation other than cutting the Ukraine off. People with freeze to death without natural gas, what are they supposed to do. Ukraine is making a solid point through this whole thing that, Russia cannot at use natural gas as a leash on them while the pipeline to Europe goes through their country. Russia needs to rethink this thing because right now Ukraine is doing better than they are.
Fortunately for Europe, new pipelines are being laid which will completely bypass the lying-thieving-freeloading-Ukraine. Once those pipelines are complete, Russia can ship all the gas it wants straight to Europe and they won't have to deal with Ukraine anymore. Russia is not a charity and it's not Russia's responsibility to ensure Ukraine is toasty warm. That's Ukraine's problem. Let Ukraine go beg the rest of the world for free or subsidized gas and see how far they get.
Honestly I can't understand how Ukraine can "steal" gas if it doesn't exist in pipe?Russia always cheating West and lying about that Ukraine steals gas .
Putin as KGB colonel consummate liar.
First of all it is not problem of payment for gas - Ukraine has already paid for all gas debt ... It is war with Europe for influence by using pressure through Ukraine. This is like in the beginning of World War II when Hitler first took Poland and than Europe. Putin is trying to put EU on knee ... If nobody defense Ukraine -next will be our countries...
It is all driven by politics. One person said it beautifully in one of the blogs before. The US political elite can't forgive the Russia for not supporting US neo-imerialistic policies in Middle East, Eastern Europe, etc. and will support anything anti-russian in nature whatever it is in nature adn wherever it comes from (Poland, Ukraine, Georgia). It is still the same continuing Cold War on Russia but at lower temperatures.
But it appears that the american policies are not working well against Russia in neighbouring countries with ordinary people. Long after the breakdown of the Soviet Union, the sovereign nations are not living better as one would expect. But who cares ordinary people or what ordinary peole in Ukraine think? American-installed puppet leaders in Ukraine, Georgia, and the like think only about serving their masters who keep them on $$$ life support. Their job is to be hostile to Russia, and try to pinch Russia at every possible moment. As a result, these leaders do not command a support of ordinary people. The approval rating of both is dismal. Ordinary people in those countries start to understand what they really want. And - voila - they just want a better life. I had a chance to visit Ukraine not long ago an I saw people are getting smarter. They understand that American-installed puppets can't give them that. They are too busy doing what their american masters are telling them, too busy stealing gas and stuffing their own pockets while they can. I wonder who got the proceeds in Ukrane for gas that has been stolen for a long time? Where do the money go? To ordinary people in Ukraine? You betcha!
Europeans can understand the real situation, not the one told us from CNNs, Business Weeks, and so forth, better than Americans do. There are 3 pipelines to Europe now. One via Turkey, one via Belarus, and one via Ukraine. I don't remember I ever heard of the problems with the first two. Maybe the reason is that their governments are not subject to American influence as the third one? I think that the Ukranian and Gerogian puppets need conflict (with Russia). Otherwise, they are useless to Americans, and their $$$ life support is not warranted.
Hence, the conflict with Ukranian pipes.
I think the sooner the the US-led new Cold War on Russia ends, the sooner the people in both Western and Eastern Europe will start living better. But who really cares about people? Tell me.
I do not see Russia as a former Soviet Union. People who are on a US payroll in Ukraine keep saying that if Ukraine falls, Europe is next. I do not beleive it. I do not see any genocide in South Osetia from Russia's side either. Native population keeps living there. I do not see Russian Slavs coming and kicking anyone out. I try to see what real people are doing, not what CNN tells me. And I saw 95% of refugees displaced during South Osetian conflict were running north to "authocratic" Russia, not south to "democratic" Georgia. That was the decision of real people on the ground. I wonder why is that?
Russians are getting smarter too. Puting is probably the first smart person I see heading Russia for a long time, unlike his predecessor alcoholic (with who, for the West, it was obviously easier to deal with before). They are not willing to subsidize openly hostile to Russia US regimes in neighbouring countries. It appears that they are even willing to sucrifice some of thier democratic freedoms to ensure their country's survival in the new current Cold War era. And I don't blame them. After all it was always Europeans who invaded Russia in the past, not vice-versa. We, civilized Western Europeans are resonsible for 25+ millions Soviet lives in WW2. Stalin (another distinguished Georgian) responsible for 20+ million Soviet lives through repressions internally. I think, Stalin (Georgian cowboy), responsible for post WW2 era Eastern European policies, who physically eliminated more Russians in GULAGs etc. than Eastern Europeans is often associated with current Russia. But that does not go along with current US policies. And since most Americans (as well as some others) have not read history books, they can swallow whatever CNN will tell them.
To: Francois
Too much attention to Russia...
It's a terrorist state, and hatred to all who live better than them is the only policy in Russia.
They hate Americans, and they use their technology. They call them stupid, and use all the inventioms Americans made.
They hate asian people, and use them as slave workers at the constructions sites.
Any attempt of any republic to separate from this hateful monster is punished by Russian special forces. They easily kill its own people for their wish to be free. When Chechens wanted to separate from Russia, they killed chechens by thousands...
Hatred is infectious in Russia. You may recognize Russians in any country by their gloomy looks and rude behavior.
Exceptions are rare.
Europe will find ways to avoid Russian
natural supplies, and will be free from the stupid bear games...
To: ANNA
The only way to "avoid Russian natural supplies and... be free from the stupid bear games" and also be free from the insecurity and high cost of imported LNG, is for the EU to produce its own gas.
The EU has huge gas resources within its own borders in the form of coal bed methane (CBM) and stranded coal deposits at depth which are amenable to being gasified underground and extracted (UCG) using new environmenlally sound technologies successfully trialled in the Surat Basin, Queensland, Australia.
Local CBM and UCG are the only viable options capable of securing Europe’s gas supplies long term!
Valentine Akishkin
Russian entrepreneur
TIME TO AWAKE FROM TRANSATLANTIC ILLUSIONS
Bolstered by the Bush administration the EU has been rigorously digging itself into series of ungovernable brisances. Two coloured revolutions in Georgia and the Ukraine sponsored and adorned by transatlantic unity have brought nothing but confusion. Bush’s spate to expand NATO by including these two subversive handcrafted “democracies” was premeditated as an instrument to vie “resurgent” Russia; the whole evasion being enshrouded behind a veil of “honorable” purposes.
Not the least pertinacity was paid to either diagnose the consequences of hastily ushering these machinated political appendages into power or determine why the cheerleaders of these “democracies” so insistently sought entrance to NATO. In the first case the EU’s unscrupulous and unresisting demeanor, consecrated by US doggedness was humbly assumed by Saakashvili to be a blessing for his bloody swashbuckling assault of South Ossetia.
At the same time, the EU bestowed itself the role of an innocent, sinless bystander, whereas EU stolidity and disregard multiplied by US pandering was the fuse that instigated Saakashvili’s intervention of South Ossetia.
Today, Europe is facing its next self-pollinated Gordian knot based on the same quaint transatlantic doctrine, “Russia can never be right”. The present day “orange” political elite in the Ukraine; a regime that the Transatlantic Unity has so lovingly fostered has emerged with an “orange” interpretation of resolving financial problems. Apart from siphoning or bluntly saying sealing Russian gas, transatlantic fostering has brought Yushenko and his associates to the belief, similar to the case of Saakashvili, that there is no limit to unheeding maleficence as long as it implies harm on Russia. Blocking Russia gas supplies, crucial to Europe, found pardon in the “transatlantic agenda”, although it is only fair to say that the negative impact affected mainly on east European countries, some of which are not EU members, and others have little say in European affairs.
Ukraine’s blocking gas supplies to Europe is only a consequence of today’s toothless European policy following up “transatlantic fraternity” stipulating that support to any regime be offered as long as it opposes Russia. What better way would there be to contend Russia other than surrounding it with a military block or by showing how vulnerable its gas supplies were. The US plan of finding an alternative route for gas to Europe is scoring points supported by the Ukraine’s disrupting gas supplies to Europe. Immediate Ukrainian interests fall in unison to US long term aspirations and explain how Yushenko with a popularity rating of 2 % dares to harass both Russia and the EU.
Transatlantic patronizing of “colour” revolutions, the expansion of NATO or the installation of US anti rocket systems in Europe will not disgruntle “resurgent” Russia as it will at length backfire on Europe itself. Georgia has lost all hope of finding a way to integrate South Ossetia and Abkhazia and the Ukraine has become a territory of unpredictable political upheaval. The EU must understand that the time has come to put serious doubt on the Cold War reflexes that constitute today’s transatlantic agenda.
2 Anna
You tend to be not very intelligent telling all that
First
«too much attention…» would like to remind you that we are the biggest country in the world with near 140 million people. I think its a reason itself «to pay attention».
Next we don’t like Americans because of the cold war, because it was one of the reasons of our deep economical recession for many years. French and English people don’t like each other….and what’s then? Every country has friendly nations and NOT friendly a well.
Then we haven’t got slave workers from Asia, but we have a lot of Asian people came for earnings, because we have higher wages (for you to be aware we have never ever had slaves, we only had serf labour until 1861)
About Chechens…its very contradictory question.
why when Georgia was killing thousands of children, women and old people in Ossetia, was destroying schools, hospitals and houses of innocent people, all Europe took the part of Georgia…?Why a lot of countries are pro-Israel then? No logic. May be because of yours «impartial» media?
You will never avoid Russia even because of the latest oil agreements. All European countries so far portrait the negative opinion about the Russian policy to avoid our consolidation. And you are the good example of that.
And yes our nation has few problems with behavior…sometimes we are too straight. Also there are a lot of people who were very poor and then become richer….and as a result don’t really know what to do with their money. To put it simply money spoils those who don’t really have it….
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