Gas deliveries resume but European concern about relying on Russia grows

Money Sense ^ | January 3, 2006

[twinself]

Russian natural gas surged through Ukraine to countries across Europe on Tuesday, banishing the spectre of immediate and prolonged shortages because of Moscow's price dispute with Kyiv.

But relief was tempered by the realization that the continent's dependence on Russian natural gas means it is vulnerable to future energy crises. About one-quarter of Europe's gas comes from Russia - 80 per cent of that via Ukraine - and the standoff raised fears of serious gas shortages during a cold winter.

European officials sought to dispel anxieties left after some countries saw gas supplies from Russia and crossing Ukraine cut by as much as 50 per cent - a result of Moscow's decision to halt deliveries to Kyiv - before Russia pumped extra gas and deliveries returned to normal. European Union spokesman Johannes Laitenberger suggested the standoff between Ukraine and Russia was little more than a business disagreement, describing it as "first and foremost a dispute between a gas supplier and (a) transit operator."

"There is no immediate crisis of supply in the European Union," he said in Brussels.

But EU energy commissioner Andris Piebalgs touched on the Europe-wide insecurity left by a day of energy fears.

"The situation has shown how vulnerable the Union is to shortages of gas supply," he said.

Piebalgs said a Wednesday meeting of representatives of the 25 EU member states and the gas industry would discuss how they would react to the current crisis and deal with future threats to Europe's gas supply.

Both Russia and Ukraine showed interest Tuesday in resolving their standoff, which led to Monday's Europe-wide shortages, Russian accusations that Ukraine was at fault for stealing Europe-bound gas and Ukrainian denials. OAO Gazprom, Russia's state-run natural gas monopoly, said talks were planned with Ukrainian officials later in the day aimed at resolving the dispute.

Hungary, Austria, Slovakia and Serbia - where officials contemplated gas rationing after a 50-per-cent drop in deliveries - were all reporting normal flows by Tuesday. Moldova's fuel crisis also showed signs of easing after its president said that Turkmenistan had offered to ship his country natural gas to compensate for a Russian cutoff - again over a price dispute.

Before being disconnected Sunday, the former Soviet republic drew all its natural gas from Russia.

Even with full deliveries restored, Europe's gas scare reawakened fears over Russia's reliability and potential for belligerence - criticism that comes as the country assumes the chairmanship of the Group of Eight, a position it wants to use to boost its international prestige. "Ukraine is being punished for its decision to become a European, fully democratic country," wrote the Czech Republic's daily Lidove Noviny.

[coconutt2000]

France has a plan.

They're going to support genocide in Sudan in order to free up land for energy development.


(Ironic that environmentalists go bonkers over trying to save the caribou, but saving Sudanese Africans from extermination doesn't even spark interest.)