Imperialistic Gas

How many lies and distortionы can an editor of Washington Post pack into one editorial? Let us count them in this piece called “Imperialist Gas. Russia doesn't want to "politicize" energy sales. It just wants to use them to bully its neighbors.” Published April, 23.

Last week the chairman of the state-controlled gas exporter, Gazprom, which provides a quarter of the European Union's supply, crudely threatened E.U. governments that his company will sell its product in other markets unless they give way to its "international ambitions."

What is meant here by “crudely threatening”. EU governments stated plain and clear, that they see Gazprom only as a wholesale gas supplier.

EU governments stated plain and clear that they want to “diversify” gas supply and started looking for alternative suppliers. Gazprom is highly dependent on European consumers. When it started asking evident questions – would “diversification” mean buying less gas from Gazprom or would it mean that Gazprom’s strategic plans to increase gas supply to Europe are useless, EU governments hinted that, “Yes. When we find alternative suppliers we will buy less gas from Russia”.

Gazprom made a conclusion - in this situation EU markets become too risky and the company might think about alternative consumers in Asia. This statement was regarded as blackmail and crude threats. Where is a threat? Who is threatening whom? What alternatives does Europe give to Gazprom? Why does a natural desire of a company to increase its profits makes EU so hysterical? 49% of GP shares are publicly traded and major Europeans mutual funds have them in their portfolios.

The chairman, Alexei Miller, was reacting to reports of British unease at the possibility that Gazprom might seek to purchase Britain's largest gas company.

“Unease” here means that British government thinks about a special bill with the sole purpose – to ban Gazprom from privatization tender of Centrica. If someone doesn’t know – Gazprom doesn’t sell gas to the UK. The country has its own resources.

Lacking Soviet military might or a large economy, Mr. Putin now describes Russia as an "energy superpower."

It’s a lie. Putin never described Russia as an “energy superpower”.

He offered a taste of what this might mean in January, when he personally ordered a cutoff of gas to Ukraine -- which had the temerity to reject his candidate in a presidential election -- even though this also meant a shortage of gas in Vienna, Rome and Berlin.

“Even though” this meant that Ukraine started stealing Italian, Austrian and German gas. In this conflict Putin acted as a pathetic weakling. He immediately agreed to go on subsidizing Ukraine with cheap $95 per 1000 m3 gas. He immediately agreed with Ukraine’s demand to pay twice for gas transportation. The only “good” thing – before the conflict Ukraine was stealing gas with impunity. Now it informs post factum how much it siphoned for its own needs and promises to pay for it later - $800 million so far in just 4 months.

As for the politicization of economic markets, Europeans wondering about Russia's intentions need look no farther than Georgia and Moldova, two former Soviet republics that, like Ukraine, have attempted to consolidate democracies and establish independence from Moscow.

Anyway, Moscow is eagerly helping them to establish independence – no more subsidized gas and no more imports of poisonous ersatz-wine. Total independence and freedom!

Late last month Russia abruptly banned the import of their wines, even though these supply more than 40 percent of the Russian market and account for a large part of the two countries' foreign exports. The health reasons cited by Russian officials were unserious.

If health reasons are not serious why then American and European authorities ban wine exports from Georgia and Moldova? American FDA was the first to do it. The reason is simple – health dangers. In this perverse world civilized countries don’t want to endanger health of their citizens but “uncivilized” Russia must import wine with DDT. There is one very easy way for civilized countries to help Ukraine – pay for Ukrainian gas. Refusal. Another very civilized way to help Moldova and Georgia – import their wine. Europe refuses yet again – this wine is a far cry from civilized standards. But somehow “uncivilized” Russia (with uncivilized health standards, I persume) must do what American and European friends of young democracies refuse to.

If St. Petersburg can become the forum at which Western leaders make clear they will not accept Russia's use of economic blackmail or military force to dominate its neighbors, or its backing of a dictatorship in Belarus, then the summit might be worth having after all.

Western leaders for so long played with Russia typical “win – loose” games that they are horrified at the possibility that a scenario could be “win – win”. What should Western leaders do for that?

1. Stop economic blackmail – let Gazprom to European retail natural gas markets.
2. Accept Kosovo scenarios for Transniest, Abkhasia and South Osetia.
3. Stop protecting opium production in Afghanistan and stop heroine traffic from Afghanistan to Russia. Destroy opium plantations. US troops can do it a one week.
4. Agree to buy natural gas at the border of Russia and not at the border of Ukraine. Negotiate directly with Ukraine transportation prices and “mystical gas disappearance” problems.