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Politics : I Will Continue to Continue, to Pretend.... -- Ignore unavailable to you. Want to Upgrade?

To: Sully- who wrote (24598)	1/3/2007 1:25:38 PM
From: Sully-	Respond to of 35834

Russia Uses Energy To Spread Tentacles By Captain Ed on Europe Captain's Quarters The state-owned Russian energy corporation Gazprom succeeded in its quest to capture a half-interest in the pipeline through Belarus as well as getting the price hikes it wanted from the former Soviet republic. As Der Spiegel notes, this latest power play by Vladimir Putin puts Europe in a difficult position: <<< Natural resources juggernaut Gazprom has scored yet another victory in its gas pricing war, gaining 50 percent of the Belarusian pipeline network. The deal demonstrates Gazprom's ruthlessness in securing power over neighboring former Soviet satellite states and raises questions about how reliable the Russian company is as an energy supplier to western Europe. It was deja vu all over again. Just as Moscow twisted the valve on the pipeline carrying natural gas from Russia to Ukraine one year ago, it threatened to cut off supplies to Belarus on New Year's Day. In the end, however, Minsk averted disaster by agreeing to double the bargain price it pays for natural gas from Kremlin-controlled Gazprom. Now, Belarus will pay $100 per 1,000 cubic meters of gas -- still far cheaper than the price of $290 typically paid in Western Europe. The tangle in Minsk highlights Belarus's energy dependence on neighboring Russia. A sudden halt to cheap gas from Gazprom would deal a crippling blow to the country's economy. >>> It wouldn't cripple Belarus alone. The Russians now control all of the pipelines up to the borders of the West, and it might not be long before Gazprom comes knocking on European doors to demand the same kind of ownership stake there. If the Europeans balk, they can expect at least the same level of toughness from Putin as he showed his supposed friends in Belarus. Belarus got a worse deal than DS reports. They got $5 less per cubic feet than the Russians demanded, but it's a temporary victory. They had to agree to a series of price hikes over the next two years that will eventually quadruple what they pay for energy now, the supposed "friend prices" that Belarus has enjoyed by remaining within the Russian sphere of influence. That kind of increase will cripple the Belarussian economy, making them more dependent on Russia for aid -- which they will not get from the West as long as Alexander Lukashenko remains as dictator. Putin cares about more than just the energy prices he can squeeze from Minsk or other points further west. He wants it clearly understood that Western energy supplies come from his personal good graces -- and that he has no problem threatening to cut off those supplies if not kept very happy. That will weigh heavily on European resolve in the coming days when dealing with Russian positions on Iran, as well as their relations with West-leaning Ukraine and any thoughts of NATO expansion into the former Soviet republics. Putin's consolidation of the Russian energy sector was no accident. The West, especially Europe, is about to get the bill. Once again, we see that energy independence for the West has strategic implications, not just economic implications, and it behooves us to start developing it as soon as possible. Interestingly, only the New York Times editorial board seems to see the issues here: <<< There was no global outcry this time. President Aleksandr Lukashenko, the utterly Soviet boss of Belarus, has no friends in the West. But this latest squeeze is another warning that the Kremlin will let nothing — personal loyalty, contracts, the law — halt its drive to reimpose state control on Russia’s energy sector. It is also another reminder that the West, a big consumer of Russian energy, remains vulnerable to President Vladimir Putin’s whims. The Belarus deal came less than two weeks after Royal Dutch Shell gave in to the Kremlin’s pressure and sold a controlling share in the Sakhalin-2 oil and gas project to Gazprom, Russia’s state gas monopoly. Moscow is now leaning on the British-Russian joint venture, TNK-BP, to give Gazprom a large and possibly controlling stake. >>> Their proposals for Europe make sense, too. The EU needs to start negotiating with Gazprom as a bloc instead of as individual states that Putin can play off one another. The EU and the US both need to send another message to Putin that the G-8 can shortly revert to the G-7 and the aid spigot can close as quickly as we see fit. The real key, however, remains finding alternate sources of energy that will leave the Russian monopoly empty-handed. captainsquartersblog.com spiegel.de nytimes.com

To: Sully- who wrote (24598)	1/4/2007 4:40:40 PM
From: Sully-	Respond to of 35834

Belarus To Russia: Game On By Captain Ed on Europe Captain's Quarters After Belarus caved on New Year's Eve to Russian demands for a rate hike on gas supplies as well as a piece of Belarus' action on pipeline service to the West, the dispute looked over. Belarus, however, just declared a new round in the battle: <<< Belarus has imposed big taxes on Russian oil pumped through its pipelines to customers in Europe. The move comes three days after Belarus reluctantly agreed to demands by the Russian state energy giant, Gazprom, to a doubling of gas prices. Belarus says it will charge Russia $45 (£23) per tonne of oil. Analysts said the move was unlikely to affect world oil prices but could cause short-term disruption to refiners in countries like Germany. Every day Russia transports around a fifth of its oil exports - or one million barrels - through Belarus, mainly to refiners in Poland and Germany. >>> This will prove interesting. The Belarus tax could make the gas so expensive that Russia's customers might find it more appealing to look elsewhere for supplies. Of course, considering the efforts of Vladimir Putin to consolidate energy companies into his control, it's not a bad idea anyway -- but Belarus's tax may force their hand. Putin probably didn't foresee this as a potential outcome. He needs the flow of hard currency from the West to continue, and his little power play with Alexander Lukashenko may have jeopardized that. It looks like Belarus may have the last word on the price war after all. UPDATE: One effect that the Belarussian move has is to make Norway a more economically viable alternative to Russian imports: <<< It is estimated that one-fourth of the world's oil and natural gas reserves lie hidden away in the Arctic. Some of them lie beneath the ocean floor, in the Barents Sea. At the end of this year, the Norwegian energy concern Statoil wants to begin extracting natural gas in the area. Getting the resource from the ice desert to central Europe by pipeline would be too expensive. Pipelines more than 3,000 kilometers (1,864 miles) long aren't worth the cost, and the Barents Sea is simply too far away. That's why Europe's first major facility for the liquification of natural gas is now being built on the island off the port of Hammerfest. Once the natural gas has been liquified, it can be shipped all over the world by sea. The production of so-called "liquified natural gas" (LNG) -- a clear, colorless, non-toxic liquid -- is becoming increasingly important in the energy business. LNG already accounts for a quarter of the global natural gas trade. Qatar, the country in the Persian Gulf that has the world's third-largest reserves, is investing massively in liquification technology, and Algeria, Indonesia and Malaysia are fast following suit. The entire market is expected to grow by about 8 percent a year until 2025 -- much faster growth than is expected from the pipeline business. Until recently, Western European countries like Germany paid little attention to the trend. But ever since the Russian-Ukrainian dispute over natural gas prices in early 2006 and the more recent rift between Russian gas monopoly Gazprom and Belarus, concern has been growing in Berlin that Germany's dependence on Siberian natural gas reserves has become too great. Now LNG shipments could become one of the most important alternative sources of natural gas. >>> It may have more than strictly economic attractions, especially if Norway can break Gazprom's grip on the European market. It could interrupt the guaranteed currency pipeline that Putin needs for his consolidation of power in Russia. captainsquartersblog.com news.bbc.co.uk spiegel.de

To: Sully- who wrote (24598)	1/9/2007 1:46:10 PM
From: Sully-	Respond to of 35834

Will Russian Standoff Help Belarussian Dictator? By Captain Ed on Europe Captain's Quarters The dispute between Russia and its former satellite republic Belarus escalated again yesterday, and now Europe will pay part of the price for the standoff. After Belarus slapped a high duty on oil as a reaction to a massive hike in energy prices from their Russian suppliers, Russia cut off all deliveries through the pipeline to Poland and Germany: <<< Russia halted oil exports to Europe via Belarus yesterday as a bitter trade dispute escalated, renewing concerns that Moscow is bent on pursuing aggressive energy diplomacy. Taps were turned off on pipelines to Poland and Germany but the European Commission said there was no immediate risk of shortages in either country because of ample stocks in refineries. The commission was also investigating whether the supply was cut on another branch of the 2,500-mile pipeline feeding Slovakia, Hungary and the Czech Republic. >>> This has now escalated into something much larger than a price dispute. Vladimir Putin has played games with oil prices in the past, especially last year when he attempted to quadruple the price to Ukraine, which had left the Russian political orbit after the Orange Revolution. The surprise here has been that Putin has launched an economic attack on the one European former republic that still remained close to the Kremlin. However, Alexander Lukashenko has started talking about national sovereignty, which points towards what might be the heart of the dispute. It has been rumored that Putin wants Belarus to commit to an anschluss of sorts, annexing itself to Russia proper and accepting provincial status. Lukashenko has balked at this suggestion despite his former closeness to Putin, and this price war appears to be Putin's punishment for Lukashenko's nationalism. This could just be an attempt by Lukashenko to rally his people around his rather unpopular government in a crisis. However, it fits with Putin's plan to expand Russian influence in the region, and the two men signed an agreement years ago to have Belarus give the pipeline to Putin and accept provincial status in exchange for assistance from Russia. Now that the bill has come due, Lukashenko has suddenly discovered his nationalism, and he wants to inspire a groundswell of support for his sudden Russophobia. It might even work. Lukashenko has little popularity among the Belarussians, but defending the homeland will certainly help improve his standing, even among those who want close ties to Moscow. Putin may find that his plans to recreate the Greater Russia of the Soviet Union will be dashed -- again -- on the nationalism of it former component parts. And in this case, Putin may have created a nationalist nemesis out of what he had considered a lackey. captainsquartersblog.com telegraph.co.uk washingtonpost.com