Tuesday, December 8, 2015

Russians Bypassing Ukraine with Pipeline

Ukraine called for the EU to stop the underwater natural gas pipeline (Nord Stream II) from Russia to Germany [see map].  The Russians have long wanted to avoid transiting the Ukraine with their natural gas and have shut it off a few times to make life miserable for people living there.  They did it once in January, just to make a point during a national election.  If the Nord II pipeline continues, they will be in a position to cut off the Ukraine again and not affect their biggest clients in the European Union.  That will not be good for Ukraine.

The problem is the EU gets the majority of its natural gas from Russia.  We would think they would want to get other sources for it, to reduce the dependence on a country that has repeatedly used energy as a weapon of political persuasion.  The Russians continue to pressure Ukraine with the debt for unpaid gas bills brought about when their hand-picked leader had to run away from a mess he created.  The negotiated debt for natural gas was reduced by Russia just prior to his departure, but after he left, the debt rose dramatically when Gazprom, the Russian energy company, recalculated the amount of the debt.  Only a fool would think the Russians won't manipulate the EU with pricing and availability.  In some circles, this is called economic extortion.  The Russians don't mind playing that game;  they are just not very subtle about it.


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