Russia Turns the Natural Gas Screws on Ukraine, Europe Feels Effect
02 January 2006
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| Major natural gas pipelines in Europe. Russia is the source, Ukraine a major bottleneck. |
As widely reported over the weekend, Russian halted natural gas deliveries to the Ukraine over a price dispute. The mechanism—halting pipeline deliveries to the Ukraine—is imprecise, and by Monday a range of European countries were reporting reductions in their deliveries.
Russia’s gas monopoly Gazprom supplies a total of 21 countries in Europe with 150 billion cubic meters (bcm) of gas a year, equivalent to 25% of Europe’s gas needs. The gas flows through a mesh of pipelines (map at right, Click to enlarge), but 80% of European-bound gas flows travels via Ukraine.
Russia is now charging Ukraine with tapping into the gas for Europe. Ukraine denies this, but says that it will do so if temperatures fall below freezing.
The situation—although not yet an international crisis—illustrates the vulnerabilities in natural gas supply.
Since 2000, with the publication of the Green Paper—Towards a European Strategy for the Security of Energy Supply, the EU has been actively working on various means of establishing a more secure energy supply (the definition of which includes reductions in carbon dioxide emissions) of all types, including direct discussion with Russia as well as supporting the planning and development for alternate transport networks.
Aside from Russia, Iran and the Caspian region countries offer natural gas (and oil) supplies, given development of the resources and a pipeline network that could handle the volume.
Along these lines, the EU funds the INOGATE—Interstate Oil and Gas Transport to Europe—Program. INOGATE is an international co-operation program which promotes the regional integration of the pipeline systems and facilitates the transport of oil and gas both within the greater newly independent states (NIS) region and towards the export markets of Europe, while at the same time acting as a catalyst for attracting private investors and international financial institutions to these pipeline projects.
INOGATE is the source of the pipeline map above. The wide blue lines indicate proposed priority pathways for natural gas—note that while four of those emerge from Russia, the Caspian area (including Iran) is the other major area of attention.
Transportation is not the only long-term issue. According to the EIA, Russia, with 1,680 trillion cubic feet (Tcf), has the largest natural gas reserves in the world, followed by Iran. Accordingly, in 2004, Russia was the world’s largest natural gas producer (22.4 Tcf), as well as the world’s largest exporter (7.1 Tcf).
But three major fields (called the “Big Three”) in Western Siberia—Urengoy, Yamburg, and Medvezh’ye— constitute more than 70% of Gazprom’s total natural gas production. These fields are in decline, and the government and Gazprom each project steep declines in Russia’s natural gas output between 2008 and 2020.
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Ukraine has to pay market price, so US can't object to capitalism.
This is direct result of Ukraine's orange revolution.
Posted by: anon | 02 January 2006 at 01:34 PM
At that price, we will see big biogas digesters up and operational in no time. All you need is lots of cow and horse shit.
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