DTN News - UKRAINE CRISIS: Europe Has Little Reason To Fear Russian Gas Cut-Off
Source: DTN News - - This article compiled by K. V. Seth from reliable sources DW(NSI News Source Info) TORONTO, Canada - March 8, 2014: More than one third of Europe's gas needs are covered by Russian gas. The crisis in Ukraine has kindled fears that Russia could stop the flow.
The crisis in Ukraine is not only about politics, it's also about natural gas. Russia, a key gas producer, supplies Europe with about a third of the gas it needs - and Ukraine is an important transit state.
Almost 40 percent of the gas used in Germany comes from Russia. The Baltic States' dependency is even greater: Russia supplies them with almost 100 percent of the gas they need. Ukraine, too. The crisis in Ukraine, which also depends on Russian gas, has unleashed increasing concern about Europe's energy supplies. Moscow has been known to employ energy giant Gazprom to serve political ends.
Twice since 2006, Russia cut gas flows to Ukraine because of disagreements over transit conditions and prices. Russia also suspected Ukraine of siphoning gas from Russian pipelines passing through the country. Gazprom announced this week it would cancel a 30 percent discount on natural gas for Ukraine, and demanded the country settle its debts - a harsh blow for a country teetering on the brink of bankruptcy.
What if the dispute escalates and Moscow stops the flow of gas? Experts have said Western Europe would probably not be that badly affected.
"That wouldn't affect the EU very much," said Jonas Grätz of the Center for Security Studies (CSS) in Zurich, adding a cut would hit eastern nations like Hungary and Bulgaria more than states in Western Europe, where the gas reservoirs are still filled to about 60 percent - enough for up to four months.
"There's a glut on the international gas markets," said Claudia Kemfert, an energy expert with the Berlin-based German Institute for Economic Research (DIW). But Kemfert said in the long run, Europe is insufficiently prepared to purchase a third of the gas it needs elsewhere. "That is true in particular for countries in Southeast Europe that buy large amounts of gas in Russia."
Russia has many ways to transport natural gas -it could easily cut off UkraineIf transit via Ukraine were blocked, Russian gas could instead flow through the Nord Stream Pipeline that takes natural gas from Russia to Germany under the Baltic Sea. Then, there's the Yamal-Europe natural gas pipeline which runs across Belarus and Poland to Germany.
Should Russia halt all shipments, tankers could bring liquid natural gas to Europe from the Middle East. But Germany, for one, doesn't have a terminal to unload such tankers. In case of a longer disruption, gas buyers could also turn to Algeria and Norway.
Russia's biggest customer
Both the EU Commission and the German government maintain that the Crimea crisis does not endanger gas supplies to the European Union. Germany Economy Minister Sigmar Gabriel pointed out that Russia has always honored its contracts with Western Europe.
"There's no reason to be concerned at the moment," EU Energy Commissioner Günther Oettinger said, adding that the gas reserves are actually higher than they were last year due to Europe's mild winter temperatures.
Russia is not likely to cut gas supplies to Europe. "Russia heavily depends on energy deliveries to Europe," Kemfert said. "Some 60 percent of Russia's state income is due to oil, gas and coal sales - and a large part of that goes to Europe."
Halting all gas exports to Europe would hurt Russia's economy
Grätz added that "a different approach was needed to be taken to Russia's dependence on the European market." One possibility, he said, would be the strict implementation of European market rules on all dealings with Gazprom. Russian President Vladimir Putin has often used the energy giant to serve his own geopolitical goals. If European countries cut imports of Russian energy, it would negatively impact Gazprom as 60 percent of its revenue comes from the European market.
"When Gazprom has problems then Putin will also have problems because he needs the company in order to achieve projects in Russia, such as Sochi, and the supply of gas to rural regions as well as using the company as a means to conduct foreign policy," Grätz said.
Pressure on Ukraine
Russia is currently the European Union's third largest trading partner. In 2012, Russia exported 215 billion euros ($300 billion) worth of goods to the EU and imported 123.4 billion euros from the 28-member bloc. Germany currently represents Russia's third largest trading partner, exporting mainly cars, machines and chemical products. Russia, however, is Germany's 11th most important trade partner, just behind Poland.
The situation in Ukraine, however, is very different, and the EU is concerned about the country's energy supply. After meeting this week with EU energy ministers, Oettinger said the bloc was considering helping Kyiv pay its energy bill. It is also considering sending gas to Ukraine in pipelines that run through Slovakia.
Related Images on Ukraine Crisis;
*Link for This article compiled by K. V. Seth from reliable sources DW*Speaking Image - Creation of DTN News ~ Defense Technology News *Photograph: IPF (International Pool of Friends) + DTN News / otherwise source stated*This article is being posted from Toronto, Canada By DTN News ~ Defense-Technology News Contact:dtnnews@ymail.com ©COPYRIGHT (C) DTN NEWS DEFENSE-TECHNOLOGY NEWS
DTN News - UKRAINE CRISIS: Putin Rebuffs Obama As Ukraine Crisis Escalates*Obama urges Putin to pursue diplomacy*Ukraine standoff intensifies, Russia says sanctions will 'boomerang'
Source: DTN News - - This article compiled by K. V. Seth from reliable sources Reuters(NSI News Source Info) TORONTO, Canada - March 7, 2014: (SIMFEROPOL,Ukraine) President Vladimir Putin rebuffed a warning from U.S. President Barack Obama over Moscow's military intervention in Crimea, saying on Friday that Russia could not ignore calls for help from Russian speakers in Ukraine.
After an hour-long telephone call, Putin said in a statement that Moscow and Washington were still far apart on the situation in the former Soviet republic, where he said the new authorities had taken "absolutely illegitimate decisions on the eastern, southeastern and Crimea regions.
"Russia cannot ignore calls for help and it acts accordingly, in full compliance with international law," Putin said.
Ukraine's border guards said Moscow had poured troops into the southern peninsula where Russian forces have seized control.
Serhiy Astakhov, an aide to the border guards' commander, said there were now 30,000 Russian soldiers in Crimea, compared to the 11,000 permanently based with the Russian Black Sea fleet in the port of Sevastopol before the crisis.
Putin denies that the forces with no national insignia that are surrounding Ukrainian troops in their bases are under Moscow's command, although their vehicles have Russian military plates. The West has ridiculed his assertion.
The most serious east-west confrontation since the end of the Cold War - resulting from the overthrow last month of President Viktor Yanukovich after violent protests in Kiev - escalated on Thursday when Crimea's parliament, dominated by ethnic Russians, voted to join Russia. The region's government set a referendum for March 16 - in just nine days' time.
European Union leaders and Obama denounced the referendum as illegitimate, saying it would violate Ukraine's constitution.
The head of Russia's upper house of parliament said after meeting visiting Crimean lawmakers on Friday that Crimea had a right to self-determination, and ruled out any risk of war between "the two brotherly nations".
Obama announced the first sanctions against Russia on Thursday since the start of the crisis, ordering visa bans and asset freezes against so far unidentified people deemed responsible for threatening Ukraine's sovereignty. Russia warned that it would retaliate against any sanctions.
Japan endorsed the Western position that the actions of Russia, whose forces have seized control of the Crimean peninsula, constitute "a threat to international peace and security", after Obama spoke to Prime Minister Shinzo Abe.
China, often a Russian ally in blocking Western moves in the U.N. Security Council, was more cautious, saying that economic sanctions were not the best way to solve the crisis and avoiding comment on the legality of a Crimean referendum on secession.
GUERRILLA WAR?
The EU, Russia's biggest economic partner and energy customer, adopted a three-stage plan to try to force a negotiated solution but stopped short of immediate sanctions.
The Russian Foreign Ministry responded angrily on Friday, calling the EU decision to freeze talks on visa-free travel and on a broad new pact governing Russia-EU ties "extremely unconstructive".
Senior Ukrainian opposition politician Yulia Tymoshenko, freed from prison after Yanukovich's ouster, met German Chancellor Angela Merkel in Dublin and appealed for immediate EU sanctions against Russia, warning that Crimea might otherwise slide into a guerrilla war.
Brussels and Washington rushed to strengthen the new authorities in economically shattered Ukraine, announcing both political and financial assistance. The regional director of the International Monetary Fund said talks with Kiev on a loan agreement were going well and praised the new government's openness to economic reform and transparency.
The European Commission has said Ukraine could receive up to 11 billion euros ($15 billion) in the next couple of years provided it reaches agreement with the IMF, which requires painful economic reforms like ending gas subsidies.
Promises of billions of dollars in Western aid for the Kiev government, and the perception that Russian troops are not likely to go beyond Crimea into other parts of Ukraine, have helped reverse a rout in the local hryvnia currency.
In the past two days it has traded above 9.0 to the dollar for the first time since the Crimea crisis began last week. Local dealers said emergency currency restrictions imposed last week were also supporting the hryvnia.
Russian gas monopoly Gazprom said Ukraine had not paid its $440 million gas bill for February, bringing its arrears to $1.89 billion and hinted it could turn off the taps as it did in 2009, when a halt in Russian deliveries to Ukraine reduced supplies to Europe during a cold snap.In Moscow, a huge crowd gathered near the Kremlin at a government-sanctioned rally and concert billed as being "in support of the Crimean people".
Pop stars took to the stage and demonstrators held signs with slogans such as "Crimea is Russian land", "We don't trade our people for money" and "We believe in Putin".
IMPORTANT DIFFERENCES
Ukrainian Prime Minister Arseny Yatseniuk said no one in the civilized world would recognize the result of the "so-called referendum" in Crimea.
He repeated Kiev's willingness to negotiate with Russia if Moscow pulls its additional troops out of Crimea and said he had requested a telephone call with Russian Prime Minister Dmitry Medvedev.
But Putin's spokesman Dmitry Peskov ridiculed calls for Russia to join an international "contact group" with Ukraine proposed by the West to negotiate an end to the crisis, saying they "make us smile", Russian news agencies reported.
Despite the Kremlin's tough words, demonstrators who have remained encamped in Kiev's central Independence Square to defend the revolution that ousted Yanukovich said they did not believe Crimea would be allowed to secede.
Alexander Zaporozhets, 40, from central Ukraine's Kirovograd region, put his faith in international pressure.
"I don't think the Russians will be allowed to take Crimea from us: you can't behave like that to an independent state. We have the support of the whole world. But I think we are losing time. While the Russians are preparing, we are just talking."
Unarmed military observers from the pan-European Organisation for Security and Cooperation in Europe were blocked from entering Crimea for a second day in a row on Friday, the OSCE said on Twitter.
A U.N. special envoy who traveled to the regional capital Simferopol was surrounded by pro-Russian protesters and forced to leave on Wednesday. The United Nations said it had sent its assistant secretary-general for human rights, Ivan Simonovic, to Kiev to conduct a preliminary humans rights assessment.
Ukrainian television was switched off in Crimea on Thursday and replaced with Russian state channels. The streets largely belong to people who support Moscow's rule, some of whom have become increasingly aggressive in the past week, harassing journalists and occasional pro-Kiev protesters.
Part of the Crimea's 2 million population opposes Moscow's rule, including members of the region's ethnic Russian majority. The last time Crimeans were asked, in 1991, they voted narrowly for independence along with the rest of Ukraine.
"This announcement that we are already part of Russia provokes nothing but tears," said Tatyana, 41, an ethnic Russian. "With all these soldiers here, it is like we are living in a zoo. Everyone fully understands this is an occupation."
(Additional reporting by Steve Gutterman in Moscow, Luke Baker and Martin Santa in Brussels, Steve Holland and Jeff Mason in Washington, Lina Kushch in Donetsk and Pavel Polityuk in Kiev; Writing by Paul Taylor; Editing by Giles Elgood and Philippa Fletcher)
Related Images on Ukraine Crisis;
*Link for This article compiled by K. V. Seth from reliable sources Reuters*Speaking Image - Creation of DTN News ~ Defense Technology News *Photograph: IPF (International Pool of Friends) + DTN News / otherwise source stated*This article is being posted from Toronto, Canada By DTN News ~ Defense-Technology News Contact:dtnnews@ymail.com ©COPYRIGHT (C) DTN NEWS DEFENSE-TECHNOLOGY NEWS
