Russia Wields Its New Arsenal: Fuel

WB 11 TV ^ | 30 December 2005 | Jeffrey Fleishman

[adamsjas]

"There are possibilities opening in Kazakhstan and gas fields in Turkmenistan."

I wouldn't put much faith in those sources, too many muzzies around those parts. Better to look closer to home, and perhaps build a reactor or two.

[Mount Athos]

So basically Russia is being capitalist by charging market prices, while these eastern Europeans countries are longing to keep soviet era socialist subsidies of well below market prices.

Russia sells gas to the USA for $222 per 1000 cubic meters, and we are trying to build infrastructure as fast as we can to buy much more from them. So how is it unfair to charge Ukraine $220, a price this article acknowledges is the world market price for gas?

[the invisib1e hand]

hate to say I told you so, but...

russia saw an historic opportunity to gain a foothold as superpower again, and laid out the strategy to do so using its assets.

Europe's strategy was to use the Euro. Fortunately, Europe is broke and the Euro is a joke.

Now, if things were to happen to marry Russian and European interests, against a common "competitor," (implying "enemy"), like you-know-who, the iplied backing of the Euro with the hard assets of Russia could be a deadly combination for a debt laden US.

Hopefully it's becoming clear to the reader why developing the assets within *our* proximity, including the Southern hemisphere, is of paramount strategic importance to us. It should also be obvious that long term cooperation with (and sensible, forward-thinking benficence to)as much of this hemisphere as possible is desirable, and yes, that includes, if necessary, educating and employing citizens from its various parts.

"Wake up, Uhmerica!"

[cynicom]

"during communist times."

Who does the author consider to be in charge now? It is the same group of people, with different hats, and the blood washed off their hands.

[Mount Athos]

Once again Russia is behaving like a dictator and not a democracy.

Hey Willy, does the fact that the United States charges market prices for its products indicate to you that the USA is behaving like a dictator and not a democracy? If Russia abandons soviet era below market communist subisides and charges world market prices for its gas, how is this an indication to you of behaving like a dictator? Just wondering.

[ez]

The race for the Caspian oil continues...

[son of caesar]

you lay the situation out very clearly, except for one wild card. if the low lifes in washington would realize that energy is the new gold, and maybe get a manhatten style program for the next enery paradigm before others do, well, they would be doing their job according to the oaths they took. ah, nevermind, i thought this was still america, not some sissy faced little punk just going whichever way the wind blows.

[twinself]

It is completely fair. And I don't critisize Russian authorities for it - just the opposite. Russia has been demanding brotherly prices for Brotherhood pipe gas, cool. In Yushchenko's place I'd buy broadcast rights from Brotherhood pipe cut-off ceremony on the 1st of January. He needs no better proof than that to show Ukrainians what he fought for was right and how Russia punishes disobediant servants.

[kipita]

Russia sells gas to the USA for $222 per 1000 cubic meters, and we are trying to build infrastructure as fast as we can to buy much more from them. So how is it unfair to charge Ukraine $220, a price this article acknowledges is the world market price for gas?

What do Wal-Mart, Chinese textile imports in Europe, DOHA and your comment have in common? Are there any true world market prices?

[GSlob]

Poland used to have coal of its own. If not depleted, it could be gasified - converted into oil and gas. Baltic bypass pipeline will start in something like 4 years. To build the necessary infrastructure during such short time is difficult, but might be doable - and will cut into 18% unemployment as well.

[twinself]

In my opinion Putin started the row all too early. Baltic pipeline is not there. Who knows if it will EVER be there. Main customers are Germany and France and ONLY transit routes now go via unfriendly Poland and Ukraine. His strategy will turn against him as nearly ALL ('cept lil USSR museum Belarus) East European neighbours will try to look for alternative providers. Apart from that do you think Ukraine should increase transit prices to the "world market level" ?

[Mount Athos]

Chinese textiles and WTO/doha relate to import duties and tariffs, while the prices being discussed for gas here doesn't relate to such taxes. It's a different subject, I don't think they have much in common. The radically different prices paid in the USA vs Western Europe for gasoline doesn't relate to the different world price for commodity oil, so much as drastically differing tax rates.

[raybbr]

ping

[Mount Athos]

In Yushchenko's place I'd buy broadcast rights from Brotherhood pipe cut-off ceremony on the 1st of January.

You would bring total economic collapse of Ukraine, for what? What is the mentality -- if I can't keep my soviet era massive socialist subsides of gas at 1/4 the market price, I will kill myself? Cutting this pipeline would cripple Poland and western europe as well.

His strategy will turn against him as nearly ALL East European neighbours will try to look for alternative providers.

That's how capitalism works, people and businesses are always looking for price improvements and better alternatives, for both seller and buyer. Barring ongoing contracts, Russia is under no obligation to charge any particular price, and Ukraine is under no obligation to buy.

Why shouldn't Russia get the best price they can for their products, something every country and company rightfully does. That's how capitalism is supposed to work right? If Poland and Ukraine started selling their products drastically below market prices like Russia has, there would be riots against leaders acting against the national interest.

Apart from that do you think Ukraine should increase transit prices to the "world market level" ?

Great idea! One which is already happening. Gasprom has already agreed to raise transit fees over Ukraine from $1.09 per 100/km to $1.75.

Poland and Ukraine are already reflexively antagonistic towards Russia regardless, right? You see some Polish and Ukraine people in this forum, they have deemed Russia a permanent enemy forever no matter what they do, everything is twisted into the worst possible light. How can Russia hope to improve relations with people of this mentality? It is like oil companies hoping for more fair and favorable relations with environmental activists.

[kipita]

Chinese textiles and WTO/doha relate to import duties and tariffs, while the prices being discussed for gas here doesn't relate to such taxes. It's a different subject, I don't think they have much in common.

What they have in common is the perception that a "World Market Price" is a worldwide market price. It should be stated as a "World Trading Price" meaning anyone can but it for that price (but most countries have "special" relationships and deals for lower prices). Maybe 30 years from now there will be true, realistic "World Market Prices".

[RossA]

We need to see the big picture here. Schroeder, while in power, was a staunch opponent of any energy initiatives inside Germany. While championing this pipeline, he has committed Germany to shutting down its nuclear plants and making it even more dependent on Russia's natural gas exports.

Next, he takes a job with Gazprom at a rumored $1,000,000/yr. Hmmm...Could there be a connection?


Gazprom's next project is supplying natural gas to the United States. Hmmm...Could they be involved in the politics delaying the natural gas pipeline from Alaska? Or in the ANWR controversy? Does a Gazprom job await our next Democratic President?

[twinself]

You would bring total economic collapse of Ukraine, for what?

For political independence meaning - something I value more than cheap gas from manipulative neighbour.

That's how capitalism is supposed to work right?

Right, and as I said previously I am not surprised Gazprom thinks that way too.

You see some Polish and Ukraine people in this forum, they have deemed Russia a permanent enemy forever no matter what they do, everything is twisted into the worst possible light.

In contrary to most of the people I see current situation as rather positive. For Ukrainians and all ex-USSR it is rather sobering experience. For Russians a chance to make a buck to improve their economy. If Russia wanted to hurt Ukraine it would have to hurt 8 million of Ukrainian Russians too, and in this game with Eastern Ukraine Putin wants to play a good cop. So Russia will only threaten, nothing more. All in all, good stuff.