Ukraine energy crisis

[VetLegion]

OK, so Putin seems to have closed the pipe that takes gas to Ukraine, but the problem is the gas for the rest of Europe goes through the same pipes!

Croatia recieved 30% less gas today because Russia is playing tough with the breakaway dominion!

What do you think about the whole affair?

BTW., these are the prices:

GAZPROM'S 2006 TARIFFS PER 1,000 CUBIC METRES OF GAS

Ukraine: US$230
Belarus: US$47
Romania: US$280
Average EU charge: US$240
source: AP news agency

[VetLegion]

Notice how Putin still subsidises Lukashenko?

[DRoseDARs]

You should mention the fact that Russia tried to quadruple the price Ukraine paid for the gas. The $230 was the new price Russia wanted them to pay.

[VetLegion]

Yeah, well, it's the market price. They won't subisidize Ukraine because Ukraine doesn't want to be a pawn. There is no natural right to be subsidised by a neighbour...?

[Spiffor]

I think Putin is shooting himself in the foot with this one. Yushchenko could easily exploit the situation with nationalist posturing, and the EU would be more than happy to give some money so that the initial shock isn't too catastrophic for the Ukrainians.

Unless Yushchenko caves in very quickly, I think Putin has really lost his satellite here.

[DRoseDARs]

That was my thinking too. Either Putin wants Russia to be closer to Europe or he doesn't. Looks like he doesn't and it also seems he wants to alienate Eastern Europe to while he's at it.

[PLATO]

Hmmmm....the Bear is getting his feet back under him.

[Dinner]

This is good and bad for Russia. It is good because they'll now get market price for Russian gas but the other side of the coin is that once you use a lever like this everyone takes notice and begins searching for alternatives. I suspect that new pipeline which bypass Russia will soon be in the works; things like the the new Turkish line taking Caspian Sea oil to market without going through Russian terrirtory. We could see a gas pipeline following a similiar route.

Long run there is likely going to be a push to replace natural gas with electrical power where possible (like for winter heating) as the electrical heating systems can be powered by nuclear power plants, alternative power sources (wind, geothermal, hydro, maybe even solar), or even old fashioned coal which Europe has no shortage of. They could even push for a gas pipeline from North African fields to Europe via Spain. No one likes being held hostage so it is likely everyone is going to look for ways to lessen the hold Russia has over Europe's energy market.

[Gatekeeper]

Putin, et al., might have a more solid base to stand on in terms of charging Ukraine more for natural gas if Russia agreed to make its vassals, err, allies in Belarus pay a similar rate. As it is now, it's pretty transparent what Russia is doing — using what muscle it has left to influence events in Ukraine (which, if memory serves correctly, has an election coming up sometime this year).

Gatekeeper

[Colonâ„¢]

Originally posted by VetLegion
Yeah, well, it's the market price. They won't subisidize Ukraine because Ukraine doesn't want to be a pawn. There is no natural right to be subsidised by a neighbour...?

An article mentioned they had a contract til 2008 (?) with the previous price, so Gazprom doesn't seem to be respecting a contract.

[C0ckney]

...before the 2nd page

anyone fancy a bet on how many posts before we see serb

[Colonâ„¢]

15.

[Colonâ„¢]

http://news.yahoo.com/s/ap/20051231/ap_on_re_eu/ukraine_russia_gas

Illarionov said that in August 2004, Gazprom signed a deal with Ukraine's gas company that envisaged five years of gas supplies at $50 per 1,000 cubic meters

So Gazprom wants a new deal, and because Ukrain won't fully agree to the terms, they cut off the supplies? Doesn't seem quite right to me. A contract is a contract.

[DanS]

AFAIK, market prices have been driven up over the last couple of years. So the difference between market and political satellite prices wasn't so big a couple of years ago.

A couple of thing to note...

The pipelines in the Ukraine that are used to export gas to Europe are owned by Ukraine, so Ukraine is right to be paid a fair, modest transit fee. They have to compromise on a market price and a trasnit fee.

There is a backstory here regarding the Germans going along with Russia to build a second pipeline to go around the Ukrainian pipeline directly from Russia to Germany. Gerhard Schroeder (the perfidious bastard) now works for Gazprom trying to smooth the way for the pipeline. IMO, with the new pipeline, Germany is buying what it could get for free by virtue of Ukraine now looking toward the EU. It is helping to take away one of the Ukraine's best ways to defend itself against Russian foreign policy.

The US didn't want any part of it...

[VetLegion]

Colon thanks for the info, didn't know that