Our first problem of the year is an energy one
Posted by Heading Out on January 1, 2006 - 1:58pm
Topic: Supply/Production
Tags: europe, natural gas, russia, ukraine [list all tags]
Since the Russian government is likely to expand this policy to other countries that have left their sphere of influence, this could be the beginning of a whole new set of political realities. And it is a set where Western Europe and the United States, since we do not have the reserves, will be unable to help much.
UPDATE The New York Times points out that it is not only Ukraine that is involved.
Effects were starting to be felt in Europe tonight. The Hungarian natural gas wholesaler MOL said that deliveries from the affected pipeline were down more than 25 percent, according to Reuters. The news agency added that in Poland, supplies dwindled 14 percent.Because the amount of gas that flows through a pipe is controlled by the driving pressure that is used to push the gas along, the Russians have reduced the pressure in the pipeline. This, in turn, lowers the volume that the pipe will deliver over its length. In note that in the stories there is apparently some evidence that the Russians have that the Ukrainians are tapping the pipe as it carries the gas through their country. This was expected , according to a Russian spokesmanPolish officials said reserves were adequate for now, and the Hungarian company asked big gas consumers to switch to oil where possible.
The dispute comes a year after the Orange Revolution brought a pro-Western government to power in Ukraine, and ends a decade of post-Soviet subsidies in the form of cheap energy that allowed Moscow to retain some influence over the former Soviet republics. At the heart of the conflict is a jump in Moscow's utility bill for Ukraine: Russia is now asking for $220 to $230 per 1,000 cubic meters of natural gas, up from $50 now. Ukraine's economy has depended on buying cheap energy from Russia.
From the very beginning the Ukrainian authorities had plans to begin to use gas without permission from January 1," said Kupriyanov. "To be more precise, they planned to start to steal gas -- steal it from European consumers." Ukrainian officials have sent mixed messages about their intentions. Yushchenko has said that supplies to other European countries would not be affected by the dispute, but Ukrainian Prime Minister Yuri Yekhanurov said his country was entitled to 15 percent of the gas crossing Ukraine as a transit fee.




k Nation (Jim Kunstler)






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