Monday, January 09, 2006

Nice Exceptions

Sometimes I find articles that recover my trust in the freedom of press in Europe. In case with the Russian-Ukrainian gas conflict 99% of Western mainstream media were printing articles using blueprint: “Russia is imperialistic because it enslaves its neighbors with cheap gas. Russia is imperialistic because it enslaves its neighbors with market prices.” But from time to time one find out that there are some dissidents even in the UK. Here’s a articles published in The Times “Europe has left it too late to wrest back control from Russia over gas” By Carl Mortished.

It is brutal, but it is business. Gazprom’s imposition of an enforced new year energy slim on Ukraine brought a loud squeak from Kiev, followed by the sound of spanner on metal as Ukrainians tapped the Russian firm’s gas export lines to Europe.

If you think the Russians cruel for cutting off their neighbour, try the Ukrainian option when the gas bill next drops on your doormat (the price we pay in Britain, too, is about to soar). Tell the gas company that the price is unreasonable, refuse to pay and see what happens.

I can predict a flurry of indignant correspondence, the offer by the gas company of a brief period of relief and interim credit. Shortly thereafter, expect the arrival of a man in a little van to turn off your tap.

All this happened in Ukraine, except, unlike you, Ukrainians were enjoying very cheap gas, less than a quarter the price charged to most Europeans, a subsidy worth several billion dollars a year. Ukraine’s Orange Revolution (a declaration of independence from Moscow that never mentioned the word “gas”) released Gazprom from the political obligation to support financially a former Soviet comrade. So it behaved like any dominant supplier of a vital commodity in huge demand — it jacked up the price, in this case fourfold.
Europeans ought to know that the gas price is a thorny problem. It was the European Union and the United States that held up negotiations over Russia’s accession to the World Trade Organisation, arguing that Russian industry was enjoying an unfair energy subsidy from cheap gas. Eventually, the Kremlin agreed that Gazprom would raise gradually its domestic fuel price from $27 per 1,000 cubic metres in 2004 to a still cheap $60 by 2010. It would be difficult for Washington and Brussels to argue, then, that Ukrainians should be treated with kid gloves. Do we really want cheap Ukrainian steel, subsidised by underpriced Russian gas, dumped on our markets?

Russophobes in Washington and elsewhere may find it difficult to accept, but this is business, albeit of a Godfatherish variety. It may be true that President Putin egged on the gas merchants, savouring the discomfort of the naive President Yuschenko, who a year ago thumbed his nose at the Kremlin. Amusing, perhaps, for Mr Putin to present gas bills to Ukrainians as they shuffle to the polling booth next March. But Gazprom has its eyes on something bigger than Ukraine.

It is all about pipes. The Russian company wants control of its export routes, hence its insistence that payment for gas transit fees across Ukraine would no longer be made in gas but in cash at market rates. Initial talks about bringing the transit lines into a German- Russian-Ukrainian consortium are off the table, Ukraine having realised that it would lose its last bargaining chip.

Good job, Carl! You are among the few who can see the problem with eyes not harnessed.

9 comments:

AN Ryan said...

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W. Shedd said...

Black scarf questions aside ... (I mean, Russians already wear too much black, perhaps you should select a more colorful and contrasting color?)

I was in Russia for the New Years holiday, and no Russian I spoke with saw Putin's (and Gazproms) actions as anything other than muscling Ukraine. In fact, they were giggling and rather happy about it. Most everyone was happy that Russia was flexing some muscle. Ukraine had dared to act independently, after all ... shame on them! And how dare those greasy buggers down south say that maybe they weren't always treated well by Russia in the past! Time to show them who's boss! This is a very widespread public opinion in Russia, at least based on the 40 or so Russians that I speak with regularly.

I'm not sure where you are reading western media accounts claiming that Russia is being imperialistic. That is silly ... do you even know what "imperialistic" means? I think you are overstating what the western media has written and acting defensively. What Russia and Gazprom is doing is tactical muscling of Ukraine (and by extension) the EU with gas and petroleum. It falls short of imperialism in its scope, Ukraine isn't about to become a colony of Russia (again), but it is effective in making Russia a world player in the future.

Gazprom is well within its rights to charge market prices ... that is the definition of "market prices", Konstantin. What becomes troublesome are the TACTICS employed to destabilize another country through the use of petroleum politics ... in the name of "market prices". Further, it is a clear revenge tactic being employed by Putin via Gazprom. Ditto this paranoia about NGOs, as the Putin government blames NGOs for the so-called "color" revolutions (but that is a topic for another time).

You can cite all the dates and meetings and such that you want, in an attempt to rationalize. That is missing the forest for the trees. Take a step back and see the bigger picture: if Russia is so willing to tug on the leash it has on Ukraine, for purely political (and let's not be blind ... vengeful) reasons ... how do you think it will behave once it has Germany, Japan, and China on that same leash?

You can say it is the same as any other petroleum producer, but even during the heyday of OPEC in the 1970s, middle-eastern countries didn't SHUT OFF the supply of oil and natural gas, even as a poltical stunt. And OPEC has responded less to political measures, and more to market forces, in making their decisions. The New Years shut off by Putin was clearly staged and political. It certainly made many Russians smile on New Years to think that they are a powerful country again.

Tim Newman said...

I'm not sure where you are reading western media accounts claiming that Russia is being imperialistic.

I'm not sure either. Some links would be helpful.

Tim Newman said...

Sometimes I find articles that recover my trust in the freedom of press in Europe. In case with the Russian-Ukrainian gas conflict 99% of Western mainstream media were printing articles using blueprint: “Russia is imperialistic because it enslaves its neighbors with cheap gas. Russia is imperialistic because it enslaves its neighbors with market prices.”

Do you honestly believe that if 99% of the European press is stating the same thing, it is due to the press not being free in Europe? Do you honestly think that there is something preventing papers from writing an alternative view?

Anonymous said...

I'm not sure where you are reading western media accounts claiming that Russia is being imperialistic.

In times like these, Goooooogle is your friend.

Do you honestly believe that if 99% of the European press is stating the same thing, it is due to the press not being free in Europe?

The guy is obviously exagerating. I don't know much about European press, but I'd say just like any press, it is biased like the American press.

Do you honestly think that there is something preventing papers from writing an alternative view?
And here, documentaries are your friends. Just tune in to Sundance or DTMS in case a docu about biased journalism comes up. And if you have comcast, On Demand has them showing too.

Tim Newman said...

The guy is obviously exagerating. I don't know much about European press, but I'd say just like any press, it is biased like the American press.

...

And here, documentaries are your friends. Just tune in to Sundance or DTMS in case a docu about biased journalism comes up.


Thank you for demonstrating your inability to distinguish between a press that is biased and a press that is not free. I am in no way claiming the press is not biased, as it clearly is. But the reason it is biased is not because it is not a free press.

Anonymous said...

re: the manipulation by gas supply. You might be interested in the methodology of the west as told in "Economic Hit Man", the premise is chilling. The west is draconian in it's manipulation.

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