 | The Permanent Oil Crisis Conference in Amsterdam, January 21 & 22, 2009 | The Oil Drum: Europe | Energy Policy: SER-2 [01] Introduction |  |
66 comments on The Russian Bear?
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66 comments on The Russian Bear?
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"I can't for the life of me understand why the EU wouldn't step in to help Ukraine pay a sensible price for the gas"
ROTFLOL, Ukraine has been charged less than half the going rate and they haven't even paid that on time as per contract. We know what happens when gas or oil etc are priced too low; it encourages demand and discourages efficiency - see SUV. should we be subsidising the cost of oil & coal elsewhere? give me subsidised energy and I will run plenty of energy intensive businesses and undercut those paying the market price.
Of course Ukraine should receive something for the transit but this must be a relatively small part of the overall cost. Typical rates are around $4 for 1,000 cubic metres of gas per 100km against a cost of say $400 for 1,000 cubic metres of gas.
Preventing your goods from being stolen is not an embargo.
The EU should be applying maximum pressure on Ukraine to agree to pay the market rate for gas, not steal any and agree the correct rate for transit. Otherwise why on earth should the EU want as a member a state that will not follow normal rules?
How is 400 USD/mcm consistent with market? At current FX rates this translates to 27-28 EUR/MWh which is about 20% *over* western european prices for the next 3 years.
400 USD/cm = 294 EUR/cm /10.4 = 28.3 EUR/MWh
Cal 10 TTF ~22.60
Cal 11 ~ 24
Can someone explain how this is "at market?"
I got my figures from platts
"... Last year Ukraine paid Russia around $179.50/1,000 cubic meters for gas supplies, compared with an average price for European importers of around $400/1,000 cu m. Gazprom had offered to supply gas to Ukraine at a price of $250/1,000 cu m in the first quarter of this year in last-minute negotiations at the end of 2008, but this was rejected by Naftogaz. Dubyna {the head of Ukraine's state oil and gas company Naftogaz Ukrayiny} said part of the dispute centered on how much money Ukraine receives for its services as a transit country.
Ukraine consumes around 6.4 Bcm/year of gas to maintain pressure in the transit pipelines, he said, which would become more costly if Ukraine has to pay Russia a higher price for its gas.
..."
Sounds like a lot of gas just to maintain pressure, maybe they're not stealing the gas it's just leaking :-)
Here's a free article
http://www.platts.com/Magazines/Insight/2008/dec/2e0qZ08120812BS0sQ92P0_...
Wouldn't it be nice if all the prices for gas were quoted using the same measure rather than say (USD/MMBtu UK: GBp/therm, Alberta: CAD/Gj) from upstream, $179.50/1,000 cubic meters ... I suppose that's the beauty of standards, there's so many to choose from:-)
One of the problems is that the whole russia/ukraine deal is murky involving third parties, so who knows what is being creamed off. I would like to hope that Putin is cleaning up after the criminal years of Yeltsin, but who really knows?
There's a good schematic map on the FT site that shows gas movements - principally from Russia and Norway - with production, consumption and transit figures for every country in Europe.
http://www.ft.com/cms/s/0/ceba9530-dcef-11dd-a2a9-000077b07658.html
Obviously Europe should not be reliant on one shaky source for a critical portion of its energy. After a few days of cold even the Germans might be in favour of some nukes, everybody will be willing to pay more for e.g. wind power, home solar water, European electricity grid linked to North Africa...