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  • Stop Enabling Russia's Energy Empire

    Just as Europe is in the midst of a particularly cold winter, Russia’s quasi-governmental gas giant Gazprom has turned off the gas taps to Ukraine, a major transit corridor for Russian gas into Europe. Gas shortages are being reported in several countries, including Romania, Bulgaria, Greece and the Czech Republic.

    Europe gets more than 40 per cent of its gas from Russia, although many European countries such as Poland are 100 percent reliant on Moscow for supplies. This isn’t the first time that Gazprom has engaged in energy-intimidation – it turned off the gas taps to Ukraine in January 2006 and heavily reduced supplies in March 2008.

    Russia has tended to be a reliable energy supplier to Western Europe, choosing instead to specifically target former Soviet states such as Ukraine as it seeks to carve out a Russian-dominated sphere of influence in its near abroad. However, Western Europe has now been brought into this dispute as Austria and Hungary feel the fall out from this latest round of gas cuts.

    Europe can no longer afford to stand idly by and hope that Moscow will continue to play fair with them in the future. This is all the more pressing considering that Europe’s energy-dependence on Moscow is growing. Europe can not allow itself to be boxed into a corner when dealing with Moscow on important foreign policy questions such as NATO enlargement, because it is scared of Russia turning off the energy taps.

    Europe must now diversify its supply routes and seek reliable alternate sources of energy such as nuclear power. It must also coordinate a policy toward Russia which confronts, rather than accommodates, an increasingly aggressive Moscow.

    Posted in International [slideshow_deploy]

    3 Responses to Stop Enabling Russia's Energy Empire

    1. Anthony, US says:

      Err, just where does the 'aggressive Moscow' come in again?

      Let's restate the facts:

      1) Gazprom has been selling gas to Ukraine at a substantially reduced rate for years. To put it in layman's terms, Gazprom has been subsidizing the Ukrainian economy. The reduced money inflow decreases both Gazprom's earnings and Russia's tax collections, something neither Gazprom nor Russia can afford in these economic conditions. And we should not expect them to, even if the economic conditions were good.

      2) Gazprom is paying $340 per 1000 cms of gas to Central Asian suppliers. Ukraine wants to pay no more than $201 for this same gas. In layman's terms, Ukraine makes the absurd suggestion that Gazprom should sell it gas for less than it buys it for.

      3) Gazprom made an offer to sell gas to Ukraine for $250 per 1000 cms. Putin called this a 'humanitarian' gesture to Ukraine. I don't think you can call it anything else. Ukraine refused, and started its annual tantrum.

      4) Not content with making absurd suggestions that Gazprom 'sell' it gas for a ridiculous price, Ukraine did not pay for the gas it consumed in the last months of 2008. I don't know about Ms Sally, but in my neighborhood, if I don't pay for my gas, the utility company will shut it off. While it looks like Ukraine finally coughed up some of the money, it refuses to pay late fees for the delayed payments. Again, in my neck of the woods, if I don't make a payment on time, my utility company will assess late payment charges.

      5) On Jan 1, Gazprom stopped supplying gas to Ukraine given that the Ukrainians don't have a contract to buy gas. The Ukrainians then started stealing gas meant for Europe. Where I come from, if I steal something that belongs to somebody else, I go to jail. And the people I stole from are considered my victims. For sure, nobody would label them 'aggressive' for demanding their property back.

      In conclusion, what Europe needs to do is to stop enabling parasite countries like Ukraine to hold it hostage, and speed up the Nord Stream and South Stream pipelines that bypass these countries and bring Russian gas directly to Western Europe without holding it hostage to the parasite's whims.

    2. Russ Dallen Sr, Detr says:

      Here in Michigan the gas pipelines give free gas to the owners of the land they have to cross. This also gives the gas co's the right to enter to repair the pipeline if necessary.

    3. Edward Foster says:

      What Anthony fails to mention is that the Ukraine is willing to pay more for Russian gas if Russia agrees to raise the transport fees it pays Ukraine to transport Russian gas to Western Europe. There are two sides to the story: Russia owns the gas; the Ukraine owns the means to get it to Western Europe!

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