Tag Archives: Russia

Bulgaria Says “Thanks, But No Thanks”

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Over at TYR, I argued that the explanation of the Ukraine-Russia gas dispute was an effort by the Russian side to break up the European gas customers as a negotiating block by exploiting the conflict between the transit states (like the Ukraine) and the customers (like Germany). This gave rise to further discussion down-blog right here on AFOE, in the comments to this post of Tobias’s, where this was said…

I think he was trying to play off the customer states against the pipeline states, in order not to deal with a European monopsony. Unfortunately, the pipeliners and customers were rather induced to hang together rather than swing separately, and he backed down in order to prevent the point of payment being moved to the Russian-Ukrainian border, which would have effectively put the Ukraine in the EU for gas purposes.
Posted by Alex at January 5, 2006 10:50 AM

“I think he was trying to play off the customer states against the pipeline states”

Interesting theory, but how do Moldova and Armenia fit into this. The former was cut off and the latter has been badly threatened?
Posted by Edward at January 5, 2006 11:02 AM

Armenia – rather different case. The pipeline/customer thing doesn’t apply (AFAIK), but as Armenia is a small customer relative to Russian gas production, the relationship is very different. No need for anything complicated, just a shakedown for more cash.

Moldova – interesting question. It’s not on the way to anywhere is it?
Posted by Alex at January 5, 2006 03:32 PM

“It’s not on the way to anywhere is it?”

Not that I know of. It just seems to have been……forgotten.
Posted by Edward at January 5, 2006 03:43 PM

It seems Moldova is sitting on the pipeline to Romania and Bulgaria.
Posted by Oliver at January 5, 2006 03:53 PM

That’s it, then: a power grab for control of (or at least cheaper rates on) two export lines, by trying to play off the customers against the pipelines. Armenia was pure opportunism.
Posted by Alex at January 5, 2006 04:43 PM

“It seems Moldova is sitting on the pipeline”

“That’s it, then: a power grab”

Fascinating! This certainly gives plausibility to the idea that they were going for control of the landline installation. The issue now is how will the customers respond.
Posted by Edward at January 5, 2006 09:28 PM

Now, though, we may be about to find out. Bulgaria has been faced with a demand from Gazprom very similar to the one to the Ukrainians, and it seems they’ve given them the brushoff in much the same way. A very similar logic applies, as Bulgaria is both a transit provider (it’s odd how this Internetworking terminology creeps into what is after all a discussion of networks) and a fair-sized gas customer. The Russians seem to have been of a mind to use the latter fact to force changes on the former, and the Bulgarians have adopted an identical strategy.

Which would predict a settlement in double quick time, if we’re right.

Quick Response?

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Well the news is coming in thick and fast. The EU Observer informs us this morning that:

The EU might build a new gas pipeline on the Adriatic Sea coast in order to ease reliance on Russia following the Russia-Ukraine gas dispute. Hungarian economics minister Janos Koka told news wires about the plan following a meeting of EU energy experts in Brussels on Wednesday (4 December). Under the scheme, tankers would deliver liquid gas from the Middle East and North Africa to an Adriatic region entry point into Europe. A feasibility study is due by March. The EU experts’ meeting was orginally tabled for May, but was brought forward after Russia turned off gas supplies to transit state Ukraine on Sunday causing sharp drops in deliveries to the EU.

I think all this takes us back to the strategic importance of EuroMed.

All Gas Or Just Hot Air?

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This is a kind of bits-and-bobs post without a lot of coherence, as I am trying to make sense of something which is hard to make sense of, so anyone with more specialist knowledge, please chip-in.

Now I think what we have here is a highly complex situation, and if individual actors behave strangely in a complex situation, this should not in fact surprise us. The big picture scenario is the economic take-off of what are going to be two enormous energy consumers – India and China – and a growing per-capita consumption of energy in the rest of the OECD towards the previous US ‘highs’. This has lead to a large and significant increase in oil prices, and the rest of what is happening can be seen as the scrum which has assembled in the wake.

Now what else do we know?
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Unfit To Lead The G8?

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The question as to whether or not Russia ” truly belongs in the prestigious Group of Eight (G-8) advanced liberal democratic market economies”, and even more to the point, whether it is in a fitting condition to take the helm in that organisation is a question which was asked by Taras Kuzio (Visiting Professor at the Elliott School of International Affairs, George Washington University) in yesterday’s issue of Eurasia daily monitor, – a publication which is rapidly becoming a ‘must read’ for those of us who want to follow what is happening along the EU’s eastern frontier.
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What’s in it for Putin?

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If there’s one mystery trumping all the others in the recent Russian-Ukrainian gas supply row, it is the one concerning the role and intentions of the Kremlin, particularly with respect to Vladimir Putin: Why fight a public battle over an issue that is almost as intransparent and complicated as the geological processes that created the gas in the first place? Veronica Khokhlova is trying to make some sense of the deal –

On the surface, it’s all clear and nice: they’ve reached an agreement, and we aren’t paying what Gazprom initially wanted us to pay. Europe can relax, too. But … it’s a complex deal. The Reuters piece [she cites on her blog] doesn’t mention Rosukrenergo as part of the scheme, an intermediary company that will be buying Russian gas from Gazprom for $230 and then selling both Russian and Turkmen gas to Naftogas for $95. A Gazprom affiliate and Austria’s Raiffeisen Investment AG own 50/50 stakes in Rosukrenergo, which, in a way, means that Gazprom will be buying gas from itself. Rosukrenergo is registered in Switzedrland, and Raiffeisen Investment AG has, allegedly, nothing to do with Raiffeisen Bank. Oleksandr Turchynov, former head of SBU and Yulia Tymoshenko’s man, launched an investigation into Rosukrenergo in summer 2005, but was not allowed to finish it.”

And Jerome at Eurotrib keeps arguing that all this is (simply) a matter of oligarchic infighting at the expense of the peoples involved (as they are paying significatnly higher energy prices than those paid by their countries/oligarchs energy corporations).

Be that as it may – the real question at hand is, as I see it, the following: did Russia/Putin want to appear weak in this matter, demonstrating to the west that he needs to do in Russia what he deems necessary (remember Yukos, the NGO law), or is the Kremlin/Putin indeed so weak that it has to accept oligarchic infighting to the extent of creating a foreign policy crisis, and that, as a result, the Kremlin needs to tighten its grip? Quite frankly, neither alternative is likely to make anyone happy.

Not Everything It Seems To Be?

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It was the late AJP Taylor who suggested that the efficient (or proximate) cause of the first world war was to be found in the the way the national railway timetables had been drawn up. Without wishing to take issue with Taylor (either for or against), it does occur to me that a certain amount of light may be thrown on the otherwise puzzling decision of Gazprom to throw the tap by taking a quick look through looking the election timetables of all the key players (in both Eastern and Western Europe). I was put in mind of this point by the following opening gambit in what is in fact a very interesting and to the point article in today’s FT:

“Russia’s row with Ukraine has triggered fresh concern over the security of Europe’s energy supplies and some see nuclear power as the biggest beneficiary.”

Nuclear power, hmmmm. I hadn’t thought enough about this point when I knee-jerked my response yesterday.
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Running On Half Gas

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The big news today I suppose is that Ukraine has just received a mid-winter present: someone turned off the gas. The issue here seems to be not the what but the how. Ukraine has been receiving gas at incredibly subsidised rates from Russia, and there is no good reason why this should continue indefinitely. But for those of us who are worried that Russia – as a wanabee rogue state – could present possibly the most important future threat to EU stability, the way this has been done is surely far from re-assuring.
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More Bigtime Divergence

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As people may have noted, last weekend Tobias and I were in Stockholm. One of the topics I wanted to post on but couldn’t was the latest Human Development report from the UN. There was plenty of press coverage: here, here, and here

There was even coverage in the blogs, but the tone seemed to be set by Slugger O’Toole who seemed mainly to take issue with Ireland’s rating in the HDI.

Personally I think the issues involved are much bigger than this.
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A Certain Irony

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In a post back in May about the bloody repression in Uzbekistan I noted that Crooked Timber’s John Quiggin was suggesting that US troops should be withdrawn immediately (I didn’t agree if you read the post). Well he seems to have got his way, and the reasoning behind the Uzbekistan parliament decision is of course interesting. The parliament has backed a government order which gives the United States six months to vacate the Karshi-Khanabad airbase. The suggestion is that this order is not entirely unconnected with the U.S. decision to join international demands for an independent investigation into May’s bloody crackdown.

While I’m up posting on Uzbekistan,
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