Zippyjuan
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Do countries with friendly intentions towards good relations with their neighbors use energy blackmail to try to influence them?
http://www.csmonitor.com/2006/0103/p01s04-woeu.html
http://www.nysun.com/foreign/russia-cuts-oil-supply-to-czechs/81908/
http://www.eubusiness.com/news_live/1173366003.98/
http://www.csmonitor.com/2006/0103/p01s04-woeu.html
Russia-Ukraine gas standoff
With 80 percent of Russian gas exports flowing through Ukraine, wintry Europe could be hard hit.
Page 1 of 2
By Fred Weir | Correspondent of The Christian Science Monitor
MOSCOW –
Russian natural gas supplies to Europe, used to heat homes and businesses, fell sharply Monday as a pricing dispute between Russia and Ukraine turned nasty.
Monday, the Russian energy giant Gazprom cut off Ukraine's share of the gas flowing through the Friendship Pipeline. The pipeline carries about 80 percent of Russian gas exports through Ukraine to the West.
Russia says Ukraine is now "stealing" its share from Europe. Ukrainian officials deny it, but Serbia lost half of its gas supplies, forcing rationing and some industries to switch to oil. Hungary, Croatia, and Slovakia also reported a 30 percent drop in supplies Monday. By late Monday, Russia appeared to back down, vowing to restore full gas supplies to Europe by Tuesday night.
The Russian-Ukraine gas-price quarrel is stirring political passions on both sides and threatens to escalate into a much wider confrontation, experts warn. The gas conflict has its roots in Ukraine asserting its independence from Russia a year ago.
Moscow says Kiev should follow the logic of the "Orange Revolution," in which Ukrainians broke free from Russian influence, and accept that the days of Soviet-era energy subsidies must end. Ukraine, while agreeing in principle to higher gas rates, argues that the nearly five-fold price hike demanded by Moscow is unfair, abrupt, and politically motivated.
"Everybody understands that this is not about market pricing, it's pure politics," Oleksander Shushko, an analyst with the independent Institute of Euro-Atlantic Integration in Kiev. He says that the crisis may do great harm to Ukraine's energy-intensive economy in the short-run, but will show Ukrainians the need to wean the country's economy from dependence on Russia. "Unless we resolve this on our terms," he says, "it's clear that Russia will be able to play this card against us anytime it wants to."
The crisis erupted on the same day Russia assumed chairmanship of the Group of Eight (G-8) market-driven democracies, a high-profile position which Moscow has pledged to use to promote global "energy security."
German and US officials criticized the Russian cutoff as undermining its credibility as a European supplier. "Such an abrupt step creates insecurity in the energy sector in the region and raises serious questions about the use of energy to exert political pressure," said a statement released by the US State Department.
Gazprom, a state-run monopoly, set the 2006 price of gas for Ukraine at almost $230 per thousand cubic meters, up from $50 under an old contract that Kiev claims is still in force. Moscow says that's in line with the average $240 paid for Russian gas in the European Union. But Ukrainian President Viktor Yushchenko said Sunday that price "is unacceptable, because it is economically unfounded." Mr. Yushchenko has suggested $80 would be an acceptable new price.
Loyal Belarus pays just $47
Russia has long provided its former Soviet neighbors with cheap energy in return for political loyalty and economic preferences. The Baltic states of Latvia and Estonia - now EU and NATO members - pay $110 for the same amount of Russian gas. Russia's loyal ally, Belarus, pays just $47.
In late 2005, Gazprom said it charged its customers in Western Europe an average of $135 per 1,000 cubic meters, but expected that figure to rise to about $255 this year. Poland won't say what it pays, but media reports have said it pays between $200-$250, according to The Associated Press. Bulgaria now pays $180 per 1,000 cubic meters, but is expected to pay between $230-$260 in 2006.
About a third of Ukraine's gas is supplied by Russia, while Ukraine produces about 20 percent of its own needs. The remainder comes from former Soviet Turkmenistan, via Russian pipelines. Monday, Gazprom reportedly cut off Ukraine supplies from Turkmenistan, too.
http://www.nysun.com/foreign/russia-cuts-oil-supply-to-czechs/81908/
BERLIN — Russian oil supplies to the Czech Republic have been cut by almost half after Prague agreed to host part of America's controversial missile defense shield.
Czech officials have sought an explanation from Moscow about the reduction in supply, fearing that it could be retaliation for the radar base deal, signed last Tuesday.
A spokesman for the Czech trade ministry, Tomas Bartovsky, said yesterday that Russia had ruled out "political reasons" for the reduction and had blamed negotiations between suppliers for the problem.
But the Czech prime minister, Mirek Topolanek, was sceptical.
"I want to believe reasons which the Russian supplier states are only technical," he said.
The drop in Russian oil supplies coincided with the visit of Secretary of State Rice to Prague to sign the missile shield agreement, which Moscow fiercely opposes.
As the ink dried on the deal, which will provide radar control for an American silo of interceptor missiles due to be based in Poland, oil flow through the Druzhba — or Friendship — pipeline began to ebb.
Business leaders in the Czech Republic, which gets 70% of its oil from Russian deliveries, were reported to be unsettled after the cuts, fearing a prolonged energy war with Russia. Russia's vast natural resources have played a key part of its foreign policy strategy in the recent past.
Both Ukraine and Georgia, which have recently sought to distance themselves from Russian influence, have accused Moscow of "energy blackmail" designed to curb their independent spirit.
Russia briefly cut off all gas supplies to Ukraine in 2006, following a price dispute.
http://www.eubusiness.com/news_live/1173366003.98/
Lithuania seeks EU help to resume oil flow from Russia
08 March 2007, 17:07 CET
(VILNIUS) - The EU Commissioner for energy Andris Piebalgs has promised to discuss with Russia the reopening of an important oil pipeline to Lithuania, a government spokesman here said on Thursday.
EU and Russian leaders are due to hold a summit meeting on May 18 in the Russian city of Samara and the Druzhba-1 pipeline, which feeds Russian oil to Lithuania's Mazeikiu oil refinery will be a "key topic" for discussion, the government's information bureau said in a statement.
Lithuanian Prime Minister Gediminas Kirkilas got the assurance from Piebalgs on the sidelines of an EU summit in Brussels.
"This should be an example of Russia's credibility in the energy area," the statement quoted Piebalgs as saying after he met with Kirkilas.
The Druzhba-1 pipeline, which also feeds other facilities in the Baltic region, was shut down in July last year after a section of the Soviet-era duct ruptured in western Russia.
The halt in oil supplies came just weeks after Polish oil group PKN Orlen sealed a deal with Russian oil group Yukos to buy the Mazeikiu complex, apparently to the annoyance of Moscow which wanted the Baltic oil facility to be sold to a Russian company.
Since the shutdown, Mazeikiu, which is the only oil refining facility in the Baltic states, has had to bring in crude via an offshore terminal at Butinge, a more expensive way of transporting the oil.
As a result Mazeikiu's profits last year shrank five fold to 55.6 million euros compared with 2005.