The Oil Drum: Europe

137 comments on Using NATO to fight peak gas

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Jerome a Paris on January 4, 2007 - 6:20am

Indeed.

But even in the narrow world of our "deciders", there would be less confrontational ways to deal with Russia: for instance, by finding ways to help them improve the efficiency of their gas plants (which hovers, as far as I can remember, in the 20s) - something which would free up a lot of gas considering how much they use for electricity. Even if there are no commercial ways to do this, plain subsidies to di it would be good all around.

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Chris Vernon on January 4, 2007 - 6:41am

It’s a great article, I totally agree with your “increasingly confrontational” and “demonize others” points. The details of the various situations from gas to Sakhalin just don’t justify the media’s response.

I think one of the smartest things Europe could do regarding energy security would be to gift Russia a few tens of GW of modern CCGT plant in exchange for like-for-like decommission of inefficient gas plant and some kind of long term contract for Russia to supply the liberated balance of gas. Everyone's a winner, Russia gets new plant and some 'spare' gas to export whilst Europe gets an increased volume of gas than would otherwise be the case. No idea how the economics stack up but I suspect the 'costs' of physical gas shortages in a few years time are greater than the cost of CCGT construction.

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Engineer-Poet on January 6, 2007 - 10:15pm

Your characterization of Russia appears to omit some things mentioned in the US and web media, as well as being inconsistent:

Russia didn't merely renegotiate Ukraine's gas price, it wanted the contract re-opened while it had some time left to run.
If Yuschenko was Moscow's boy, is it really true that Putin switched his preference just because the USA liked the same guy? That means Putin was the one looking for confrontation. One would expect this to extend beyond the issue of the Ukraine.

Very good all in all, but you show a little tendentiousness as if Russia can do no wrong.

FWIW, Britain has a pipeline built for exporting North Sea gas to its neighbors. Presumably it sold it at market rates. Now that the supply is suddenly falling off, why shouldn't Britain demand to import gas at market rates also? Fair's fair.

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Jerome a Paris on January 7, 2007 - 4:24pm

1. Actually, it's the other way round: it's the Ukrainians who pushed for reopening the contract despite it having several years to run. As I explain in one of the diaries linked near the top of my story, that's linked to in-fighting between Ukrainian factions vying to be in control of that "private" (and highly profitable) deal to deliver not-Gazprom gas to Ukraine;

2. Yuschenko never was "Moscow's boy", but he was seen as more pragmatic and less opposed to Russian business interests that Yanukovich (who was clearly the top guy of the Ukrainian industrialists of the East of the country, a group wary of their bigger Russian competitors). Why Putin suddenly decided to drop his neutrality toward Yuschenko to back Yanukovich is a mystery to me - and probably was a mistake.

Note that I am not particularly pro-Russia, just really annoyed at some of the arguments used to bash Russia today, which are highly hypocritical. I am comfortable saying this because I've been criticizing Putin for years, and I had no illusions about his peculiar form of "democracy" before, and i'm not suddenly raising the topic today because I'm unhappy about his hardball, but perfectly legitimate, negotiating stance on gas, like the people I criticize today.

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PhilRelig on January 7, 2007 - 11:02pm

Not only that, but why is it that the Russians have any obligation whatsoever to do anything other than what they wish with their own natural resources? They are a sovereign nation, after all. As such, all decisions over how to dispose over their natural resources ought to be considered completely unilateral from an international law standpoint - and, for those who wish to honor international law in a non-hypocritical standpoint, also from a moral standpoint. (This doesn't apply to treaties or contracts that the Russians may have negotiated qua sovereign country; these need to be honored in order that THEY maintain moral and legal consistency with international law.)