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View Full Version : Could this have something to do with Russia's invasion of Ukraine?



Little-Acorn
03-04-2014, 01:29 AM
The big naval base at Sevastopol, on the Crimean peninsula of Ukraine, may be one reason.

But there are also major natural-gas pipelines running from Russia, through Ukraine, to Europe, and to warmwater ports on the Black Sea.

Natural gas is one of Russia's major exports, and a source of hard cash needed to buy food, equipment, and military hardware.

If anything threatens the stability or ownership of the pipelines through Ukraine, is it any surprise that Russia reacts quickly and aggressively?

Here's an interesting article. How much is hype, and how much is fact?

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http://www.theguardian.com/world/2014/mar/03/europes-gas-supply-ukraine-crisis-russsia-pipelines

Is Europe's gas supply threatened by the Ukraine crisis?

Russia supplies about 30% of Europe's gas – should we be worried?

Jon Henley
The Guardian, Monday 3 March 2014 18.44 EST

Last December, Ukraine's now-deposed, pro-Moscow president Viktor Yanukovych abandoned a trade deal with the European Union in favour of closer ties with Russia. One of the sweeteners in the $20bn support package that helped persuade him was a steep discount – around 30% – on the price that Russia's gas giant, Gazprom, was then charging Ukraine for the natural gas on which it relies. This weekend, as relations between the two countries descended to an alarming new low, Moscow warned that the cut-price deal was unlikely to last much longer.

Gazprom, which controls nearly one-fifth of the world's gas reserves and supplies more than half of the gas Ukraine uses each year, insisted the threatened price rise merely reflected cash-strapped Ukraine's inability to meet its contractual obligations. The state-owned company said that Kiev owes it $1.55bn for gas supplied in 2013 and so far in 2014, and shows little evidence of paying up. But this is not the first time Russia has used gas exports to put pressure on its neighbour – and "gas wars" between the two countries tend to be felt far beyond their borders. Russia, after all, still supplies around 30% of Europe's gas.

In late 2005, Gazprom said it planned to hike the price it charged Ukraine for natural gas from $50 per 1,000 cubic metres, to $230. The company, so important to Russia that it used to be a ministry and was once headed by the former president (and current prime minister) Dmitry Medvedev, said it simply wanted a fair market price; the move had nothing to do with Ukraine's increasingly strong ties with the European Union and Nato. Kiev, unsurprisingly, said it would not pay, and on 1 January 2006 – the two countries having spectacularly failed to reach an agreement – Gazprom turned off the taps.

The impact was immediate – and not just in Ukraine. The country is crossed by a network of Soviet-era pipelines that carry Russian natural gas to many European Union member states and beyond; more than a quarter of the EU's total gas needs were met by Russian gas, and some 80% of it came via Ukrainian pipelines. Austria, France, Germany, Hungary, Italy and Poland soon reported gas pressure in their own pipelines was down by as much as 30%.

http://www.lonelyplanet.com/maps/europe/ukraine/map_of_ukraine.jpg

http://www.voltairenet.org/IMG/png/Russian_pipelines.png

http://en.ria.ru/images/15520/63/155206369.jpg

CSM
03-04-2014, 06:52 AM
Yep. This is why I believe the EU will do little other than bluster and whine about the situation.

Little-Acorn
03-04-2014, 11:34 AM
Couple other interesting charts.

The vast majority of Russia's exports, are mineral fuels: Coal, natural gas, and oil.

The proportions probably vary from year to year. But it's not hard to see what the dominant export is. I'm not sure what proportion of these combined mineral-fuel exports, are natural gas.

http://economists-pick-research.hktdc.com/resources/MI_Portal/Article/rp/2012/09/453133/1348804419354_453133Russia1_453133.jpg

Russia is by far the largest exporter of natural gas, nearly doubling the amount exported by its nearest competitor, Qatar.

http://energytomorrow.org/blog/2013/february/~/media/EnergyTomorrow/blog/Top_LNG_exporting_nations_2011_for_postpng.ashx

Interestingly, the U.S. is the top producer of natural gas, though it doesn't appear on this chart of exporting countries. Does the U.S. really consume nearly all the natural gas it produces? Or does it simply convert it to Liquefied Natural Gas (LNG), which is not measured in "billion cubic feet per day (bcfd)" and so doesn't appear on this export chart, and then export that?

http://energytomorrow.org/blog/2013/february/~/media/EnergyTomorrow/blog/Top_NG_producing_nations_2011png.ashx

fj1200
03-04-2014, 02:02 PM
Interestingly, the U.S. is the top producer of natural gas, though it doesn't appear on this chart of exporting countries. Does the U.S. really consume nearly all the natural gas it produces?

US companies are not allowed to export NG by law.

Drummond
03-04-2014, 04:05 PM
Yep. This is why I believe the EU will do little other than bluster and whine about the situation.

... and I think you're spot on !! I see no chance of anything else emanating from the EU. A few 'stern' words (and very measured ones) at absolute best, but that'll be it.

Do you know, by the way, that yesterday, BBC News were commenting on how STRONG Obama's stance was against Russia in all this ?

CSM
03-05-2014, 07:43 AM
... and I think you're spot on !! I see no chance of anything else emanating from the EU. A few 'stern' words (and very measured ones) at absolute best, but that'll be it.

Do you know, by the way, that yesterday, BBC News were commenting on how STRONG Obama's stance was against Russia in all this ?

It's all a matter of perspective, isn't it! Reminds me of an old cartoon where a mouse is flipping the bird at a hawk which is about to eat it. The mouse undoubtedly thought it was a "strong stance" against the hawk but ended up being eaten anyway. The fact is that the mouse did not have a lot of other options to replace its last act of defiance.

Anyway, all the sanctions, strongly worded letters, petitions and statements still results in the mouse (Crimea in this case) getting eaten. All the analysis and opinion over Putin and the wisdom of Russia's decision to "protect its interests" in Ukraine don't mean a heck of a lot when Crimea is under duress. In fact, it is my opinion that any and all actions such as the aforementioned are useless UNLESS they are done from a postion of strength. IF the mouse had a shotgun, the cartoon would have been very different!