Gas shortages were reported in Ukraine, the Balkans, Bulgaria, Poland, Italy, and Hungary.
The shortages were expected to extend to Germany, Austria and broader Europe, as a cold snap with temperatures below 20 F degrees is expected to increase demand for fuel in Eastern and Central Europe, The New York Times reported Tuesday. When the natural gas is flowing, Europe imports about 20% of its natural gas from Russia.
The current Russia natural gas cut-off has already lasted longer than the last Russian cut-off, in January 2006.
It's about price . . . and politics
The dispute pertains largely to price, but also involves geopolitics. Russia's oil and natural gas giant Gazprom is seeking to raise the price of natural gas to $450 per 1,000 cubic meters from $179.50 last year, and to collect fines for alleged late payments. The Times reported. However, analysts also believe Russia is upset with Ukraine's move to apply for North Atlantic Treaty Organization membership and the nation's closer ties with the United States and Europe. Ukraine is seeking to integrate more fully with the West, but Russia views Ukraine as part of its sphere of influence.
Regardless of Russia's intent, economist David H. Wang told BloggingStocks Tuesday Russia's move is a mistake, both politically and economically. "The behavior is totally unacceptable. This will seriously hurt Gazprom's reputation and the international corporate stance toward [President Vladimir] Putin's Russia," Wang said. "It will also provide increased public support in Europe to develop nuclear power and alternative energy sources. Europe's economy can not be held hostage to Russia's political moves."
Of the European states, France is the most energy self-sufficient, with a massive network of nuclear power plants. Conversely, Germany, with a large environmental lobby, is the least energy self-sufficient. Wang expects the later to change in Germany, and throughout Europe, stemming from Russia's natural gas tap turn-off.
"This will provide a major boost for energy self-sufficiency in Europe, and probably for nuclear power, as well. The E.U. now realizes that natural gas dependency on Russia is not feasible for the future, given Russia's unpredictable policies and power play tactics. Europe will decide it needs to be energy self-reliant," Wang said.
Energy Analysis: Suddenly, being dependent on natural gas from Russia doesn't look like such a good idea. Further, the situation in Europe -- widespread shortages of critical energy in the winter because of a power play by Russia -- should be a lesson for the United States: end the nation's dependence on foreign oil. Don't be energy dependent: develop renewable energy sources and increase conservation efforts, so that the nation will never again be held hostage by its energy policy. A failure to do so will result in the U.S. incurring a terrible predicament that Europe currently faces.
Reader Comments (Page 1 of 1)
2-18-2009 @ 3:07PM
SaucerfulOfSecrets said...
Russians are not such idiots to continue gas shortage to Europe where they have most of consumers. In the nearest future they will start gas supplies through North and South Stream (avoiding Ukraine) and all these outrages will be stoped.
Ukraine, which is now very near to bankruptcy, continue to pump out the gas (intended for European consumers) because this is the only way how they can provide it in full volume to its consumers and especially to industry, which is nearly ruined not only by crisis but also by stupid policy of president and government.
Geopolitic element? Yes, it's true...it's not a secret that president Yushenko, brought to power by US scenario (same as before was Saakashvily in Georgia) do every effort to blaŃken the Russia. I woun't be surprised if during the neaxt year Yushenko and his administration will initiate another scandal where Russia will be fully blamed.