Energy Wars II: Putin Disrupts Energy to Europe and Blames Ukraine

Its seems we’ve been down this road before.  It was the energy wars last summer that tipped us into dangerous economic times culminating in the subprime and banking meltdowns as people watched energy prices spiral out of sight.  With the global economic collapse, the price of energy has dropped like a rock, doing considerable damage to the economies of oil producing nations; especially the Russian Federation.  I can’t count how many times and how many days the Russian Stock Market had to close and how much damage has been done to the Ruble since the whole mess began but its doing more damage in Russia than the United States.  Granted that our turn may well come but the Russians are facing economic conditions that may challenge the stability of the Russian Government.  That’s pretty bad.

Now we’re in a position where the Russians, who feel they have nothing further to lose, are sticking it to the Europeans and blaming the Ukraine who, along with Georgia, may be the first couple of appetizers that Putin permits himself after Obama takes office on the 20th of January. The Russian Strongman says the Ukraine is stealing energy from the Russian pipeline and thus the integrity of their energy supply system to the rest of Europe is compromised.  Doubtless they’ll want to station Russian Troops soon to make sure the pipeline is not tapped so they can become a reliable energy supplier to Europe once the Ukrainian aggression is dealt with.  It’s for Europe’s own good and everyone is supposed to imagine a Europe where Russia didn’t keep the energy flowing.  Surely that’s worth the life of the Ukraine which everyone knows is Russian anyway.  (Just like Georgia is really Russia!) 

Putin has nothing to lose and potential civil unrest so he may as well do some territorial acquisition because he and Russia have already paid the price for the invasion of Georgia and perhaps for taking over Ukraine as well.  Taking some of the key former soviet assets like Ukraine and Georgia would do much to cement his strangle hold on European Energy supplies.  He might just figure that the economic and diplomatic fallout can’t get much worse so he may as well take over some countries for fun, and scare the pants of the Europeans and maybe scare oil prices back up, which can only help Russia.  What is Bush going to do in his last few weeks as President?  What’s Obama going to do other than exactly what guys like Sarkozy tell him?  In other words, why not finish what he started and just see if he can’t come out of this with higher oil prices, wipe the egg off his face and test Obama at the same time. Russia has nothing to lose by fomenting a war with Ukraine and perhaps Georgia at this time and everything to gain.

This event may well signal the resumption of the oil wars and Putin and his thugs are behind it.  The western economies are hurting and they’ll do anything to keep the energy flowing including turning a blind eye to the rape of Ukraine and Georgia.  That’s the bet that Russian Strongman Vladimir Putin is making and it would appear that it’s a good bet.  Europe won’t help Ukraine any more than it helped Georgia and Obama won’t do more than a stern diplomatic note that means nothing. 

Just when you thought energy was returning to sane levels it may well spike once again on significant threats to supply beginning in the Ukraine and perhaps spreading to the Middle East if the current war widens.  Here we go again.

Consider these clips from a Fox News Article and read the whole article at this URL:

http://www.foxnews.com/story/0,2933,476565,00.html

 

At least two Bulgarian cities were totally without gas Tuesday, and nations like Turkey were turning to Iran to bolster their supplies, as a natural gas crisis looms over Europe after a contract dispute between Russia and Ukraine led Russia to shut off gas supplies to seven countries and reduce gas deliveries to several others.

The shortfalls came one day after Russian Prime Minister Vladimir Putin ordered Alexei Miller, chief executive of the Russian state gas company Gazprom, to cut supplies shipped through Ukraine by amounts equal to those Russia claims Ukraine has “stolen,” AFP reported.

“Start reducing it from today,” Putin told Miller in a meeting at Putin’s residence.

Miller said the debt Ukraine owes Gazprom is still above $600 million, but said: “If they continue to illegally take gas it will soon be billions.”

In a sharp turnaround, the European Union blasted Russia and Ukraine, saying the sudden cutoff to some of its member countries was “completely unacceptable.” Just a day ago, the EU was trying to downplay any problems from the gas dispute.

The energy dispute sharply escalated Tuesday when six countries on the other end of the pipeline network running from Russia through Ukraine reported a complete shutoff. Russia supplies Europe with about a quarter of its gas, 80 percent of which is shipped through Ukraine.

Hungary, Bulgaria, Greece, Macedonia, Romania, Croatia and Turkey all reported a halt in gas shipments. Croatia said it was temporarily reducing supplies to industrial customers and urged consumers to use gas sparingly in their homes. Bulgaria said it had enough gas for only “for a few days.”

Moscow and Kiev, meanwhile, blamed each other. Naftogaz said Gazprom had sharply reduced its shipments to Europe through pipelines crossing Ukraine, triggering the cuts. Gazprom accused Ukraine of stealing gas shipments intended for other nations.

Kiev denied it was stealing Russian gas. It said was using some of its own gas as fuel to transport the rest of the Russian gas to Europe. Naftogaz says Gazprom is obliged to provide this gas but is refusing.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s