News & Current Affairs

January 6, 2009

Europe’s reliance on Russian gas

Europe’s reliance on Russian gas

A gas storage and transit point on the main gas pipeline from Russia in the village of Boyarka near the capital Kiev, Ukraine

Turned-off taps have caused gas shortages in Europe

The latest developments in the dispute over the price Ukraine pays Russia for its gas has yet again affected deliveries to other countries.

Several countries in Europe have reported a sharp decline or even complete cessation of gas supplies from Russia via pipelines through Ukraine.

This has reinforced unease in Europe about the important role that Russia has a supplier of gas.

A quarter of the gas used in the European Union (EU) comes from Russia.

And that share will rise.

Increasingly dominant

Europe’s need for gas is likely to increase.

Europe’s gas pipeline network

Economic growth, when it resumes after the current recession, will mean more demand for electricity.

Gas accounts for about a fifth of the EU’s electricity and the share is likely to grow, partly because gas produces less by way of greenhouse gas emissions than coal or oil.

The EU does have other suppliers, including Norway and Algeria by pipeline, and Qatar and Algeria, again, by ship.

But Russia, with the world’s largest gas reserves and an extensive network of pipelines to Europe, is likely to be increasingly dominant.

Soviet legacy

The EU, unless it drastically changes its energy strategy, will need Russia.

EU GAS IMPORTS FROM RUSSIA
100% dependent on Russia: Latvia, Slovakia, Finland, Estonia
More than 80% dependent: Bulgaria, Lithuania, Czech Republic
More than 60% dependent: Greece, Austria, Hungary
Source: European Council on Foreign Relations, 2006 figures

But Russia in turn needs Europe to buy its gas, and also its oil.

So it is not in Russia’s interest for Europe to become more wary of using gas as an energy source.

So far the disturbances to EU supplies have been a side effect of the recurrent dispute between Russia and Ukraine, with both sides blaming the other for the reduced supplies to the west.

The quarrels are a legacy of the end of the Soviet Union.

Ukraine has been receiving relatively cheap gas.

Russia’s Gazprom wants to charge more, and the negotiations are complicated further by questions about what fees Ukraine should receive for gas crossing its territory.

Some European countries are protected with substantial stocks to cover any supply disruptions for many weeks, although some, such as Bulgaria have very little cover.

The disruptions also reinforce the attractions of developing new pipelines that avoid potential problem areas.


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September 5, 2008

Ukraine ‘must live without fear’

Ukraine ‘must live without fear’

US Vice-President Dick Cheney (r) and Ukraine's President Viktor Yushchenko

Mr Cheney aims to strengthen ties with Russia’s neighbours

US Vice-President Dick Cheney has said Ukraine has the right to live without fear of invasion, adding that the US stands by its bid for NATO membership.

Mr Cheney met both the prime minister and president in Kiev, the last stop of a tour aimed at underlining support for US allies in the former Soviet Union.

Mr Cheney reassured the president that the US had a “deep and abiding interest” in Ukraine’s security.

Analysts fear Ukraine could be the next flashpoint between Russia and the West.

“We believe in the right of men and women to live without the threat of tyranny, economic blackmail or military invasion or intimidation,” Mr Cheney said, in an apparent reference to Russia’s military intervention in Georgia.

‘Hostage’

Mr Cheney arrived in Ukraine just days after the country was plunged into political turmoil.

Earlier this week, Prime Minister Yulia Tymoshenko’s party blocked a motion condemning Russia’s actions in Georgia, and sided with the opposition to vote for a curb on the president’s powers.

Members of President Viktor Yushchenko’s party walked out of the coalition government in protest, leading the president to warn that he could be forced to call a snap general election.

Mr Cheney urged the politicians to heal their divisions and be “united domestically first and foremost”.

“Ukraine’s best hope to overcome these threats is to be united,” he said following separate meetings with Mr Yushchenko and his former ally turned political rival, Yulia Tymoshenko.

Mr Cheney expressed support for Ukraine’s bid to become a member of Nato.

Yulia Tymoshenko and Viktor Yushchenko (image from February 25, 2008)

“Ukrainians have a right to choose whether they wish to join Nato, and Nato has a right to invite Ukraine to join the alliance when we believe they are ready and that the time is right,” he said.

Russia is strongly opposed to any further expansion eastwards of Nato, and is furious that Ukraine and Georgia have been told that, one day, they will be offered membership.

But Mr Cheney – recognizing Ukraine’s contributions to NATO missions in Afghanistan and Kosovo – said that no country beyond NATO would be able to block Ukraine’s membership bid.

President Yushchenko says Ukraine is a hostage in a war waged by Russia against ex-Soviet bloc states.

The strategically-located country is important to Russia, with pipelines that carry Russian gas to European consumers and its Black Sea port, home to a key Russian naval base.

Russia has a powerful tool at its disposal, namely the large ethnic Russian population in Ukraine’s southern province of Crimea.

Open aggression

Mr Yushchenko has restricted Russia’s naval operations, and insists Moscow must leave when an inter-state treaty expires in 2017.

Ukraine has said it is ready to make its missile early warning systems available to European nations following Russia’s conflict with Georgia.

Mr Cheney’s visit comes at an awkward time for President Yushchenko, with the country’s largely pro-Western ruling coalition divided in its attitude toward Russia.

The leaders’ faltering relationship has now boiled over into open aggression, with Mr Yushchenko threatening to dissolve parliament and call a snap election.

The president has been a staunch supporter of his Georgian counterpart, Mikhail Saakashvili.

But Ms Tymoshenko has avoided outright condemnation of Russia, leading analysts to suggest she may be hoping for Moscow’s backing in a possible bid for the presidency in 2010.

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