Gazprom's actions reveal Russia's weakness

JONNY

Don't get it.
Russia's keeps snug and warm.
Eastern and Middle Europe freezes.
So who's the weaker? Who's losing out?
It's called Realpolitik, Garvan.

Faceless Bureaucrat

So, Ukraine has stockpiled enough gas to get it through the Winter. Just remind me again how many day's supply of domestic gas the UK has stockpiled?...

Dean

I agree with much of your analysis. But unfortunately you make the same mistake that all advocates of globalisation make: you assume that economics will always trump politics, when in fact the reverse is nearly always the case, particularly when - as you say - one is dealing with an autocrat like Putin.

It was sheer folly for continental Europe ever to place itself in a position where it became reliant on Russia for its gas supplies. Given the naivety of our own politicians, we would no doubt have done the same had it not been for the North Sea.

Now Russia is in a position to blackmail whoever it wants at a time of its own choosing. We need to remember that Russia has always aspired to great power status and put its own geo-political interests first. Europe should re-think its energy policies pretty damn quick.

It's also high time the UK and other Western countries ditched the ideological assumption that globalised free trade always benefits everyone, and started thinking strategically again, as we did in the Cold War. If we don't, we will have other nasty surprises in store in the years ahead. Wait till China starts flexing its economic muscle...

Barnaby Trubble

The threat to cut off supplies was far better left as a threat. Once you use it, you concentrate the minds of the other party. The victim countries will find a way to get their energy elsewhere. It's an illustration of the way of thought that goes on in Russia that political considerations can overrule commercial in this way. It's still a dirigiste nation, not really a globalised free trade economy at all. The cold war continues, at least in Putin's head.

Hawkeye

So, how long will it be until the Russian invasion of Ukraine?

Augustus

Blackmail, pure and simple. Putin likes to act the Czar, afer all. Playing politics with liquid gas has become an annual trick. Luckily Western Europe appears to have adequate stores and can also obtain further supplies from Norway. But the West should not be bullied by this man.

Susan Hill

This is the very first time in 17 years that I have been delighted that we do not have and could not get, a gas supply to my house.

Draughtsman

Faceless bureaucrat - we have not had strategic gas storage in the UK because we have not needed it up to now. In times of high demand there has been sufficient capacity within the tranmission system simply to increase the supply from the North Sea. In the eighties a number of LNG peak shaving plants were constructed for times of exceptionally high winter demand and also back up storage was constucted using a depleted North Sea gas field and in leached underground salt cavities.

Additional salt cavity storage facilities are being constructed now by a few companies but the number of suitable sites in the UK is limited. LNG is starting to be imported at new terminals and these terminals have a large storage capacity. LNG is expensive however. The gas has to be liquefied in the first place and subsequently revaporised for use.

IMHO gas should never have been used for bulk power generation whatever the economics and environmental issues all the time we have such massive coal reserves. It is a premium domestic and specialised industrial fuel and should have been conserved as such.

Faceless Bureaucrat

Draughtsman.

Thanks for that - so in other words, about a couple of weeks then?...

Draughtsman

Faceless Bureaucrat - yes that is about right at the moment but it is increasing all the time as new facilities come on stream. Even so we are unlikely ever to have the seventy five to ninety days strategic supply that they have in France and Germany.

Plans were made in the late eighties for a number of very large plants to make synthetic or substitute natural gas (SNG) from coal feedstock as it was obvious that the North Sea could not supply us for ever, but of course these plans never came to fruition. That said there have been and are projects for the underground gasification of coal for use in power generation and possibly for general distribution in the future.

Alexander

You've mentioned Ukraine's GDP 14 per cent fall. Who's responsible for that? Russia?! No, those people who came to power in 2004 thanks to the so-called Orange revolution. They spent 4 years destroying the country’s economy and organisisng countless “democratic” elections in order to define who’s more Orange and democratic among them. People in Ukraine demand President Yushchenko resignation (check questions he received during the recent Q&A session)! What was his response? He started this gas war, behaves like a pickpocket – stealing gas from a huge pipe which passes through his country’s territory from Russia to Europe.
Is Russia blackmailing anybody? No, it just asks Ukraine to pay regular market price, the same that other East European countries pay. What’s wrong with that? If you want gas – PAY for it. If you don’t pay – DON’T STEAL it. It’s not weakness. It’s not even politics. It’s business. Just business.

Alex

Seven ways of stealing from budget

3. "Layer".
Nobody writes and talks about it, but such things happen. Some big state company ordered the equipment abroad. It was bought not at the manufacturer, but at a foreign firm that purchases the necessary equipment, and resells it gaining 10-20 %. But if you would call there you would hear Russian voice. And as the equipment - boring, costs over $1 billions you would tell, who the customer is. By the way, RosUkrEnergo is a kind of such pattern.
http://ua-ru-news.blogspot.com/2009/02/seven-legal-ways-of-stealing-from.html