Russia Restores Natural Gas Flow to Europe

From the Guardian (U.K.):

Russia's image as a reliable international energy supplier became increasingly tarnished yesterday as a stand-off with Ukraine over gas prices disrupted supplies to Europe.

The Russian energy group Gazprom accused Ukraine of stealing about $25m (£14.5m) worth of natural gas from transit supplies destined for other European countries, but most EU members blamed President Vladimir Putin for the crisis. Last night Gazprom appeared to bow to international pressure by increasing transit supplies flowing through Ukraine by the amount allegedly siphoned off.

Germany's economy minister, Michael Glos, called on Moscow to compromise in its feud with Ukraine. "Russia has the presidency of the G8 and therefore has to act responsibly," he said.

As we mentioned on Sunday night, to follow the conversation in the Blogosphere, click here.

UPDATE: More from the Associated Press.

ANOTHER UPDATE: Another blogger makes the connection between natural gas and nuclear energy. And here's a pertinent passage from the Brussels Journal:

It is very dangerous to be dependent on a single energy supplier. This is illustrated by the case of Belgium, which is dependent on French state-controlled companies for 90% of its electricity. This has turned Belgium into a vassal of France and Brussels into a mouthpiece of Paris. If Europe similarly allows the itself to become dependent on Russia, the EU will in a decade from now be the mouthpiece of the Kremlin. To prevent this Europe must diversify its energy resources and seriously consider rebuilding its nuclear power plants. France is 80% nuclear already, which shows that at least Paris wants to be able to confront Moscow on an equal basis. Germany, however, has closed down its nuclear plants.

One more time: Three of the largest suppliers of natural gas going forward are going to be Russia, Iran and Algeria. Plan accordingly. Thanks to TKS for the pointers.

UPDATE: More on the situation in Germany from Deutsche Welle. The Belgravia Dispatch is also looking at the situation.

UPDATE: From yesterday's Financial Times:

According to the EU, two-thirds of its total energy requirements – and three-quarters of its gas – will be imported by 2020. Much of that will be provided by Russia’s state-controlled gas monopoly, Gazprom. A study commissioned by the EU last year warned that, with the arrival of the new eastern European members, EU reliance on Russian gas would increase further.

“The vulnerability of the EU to a disruption of gas supplies is growing, partly because of the increased gas imports in general and partly because of the high dependence on a single source, Russia, of the new member states,” the study found.

“The ability to diversify...is limited due to the fixed infrastructure and the organisation structure of the gas industry in Russia.”

Russia has become increasingly explicit about its intention to use its energy reserves as a foreign policy tool. The question now is whether Europe should work harder to reduce its reliance on imported energy.

One of the few options available to European countries would be to build more nuclear power stations. After the oil shocks of the 1970s, France embarked on a massive nuclear programme, and today, more than three-quarters of its electricity comes from nuclear power.

By contrast, around 20 per cent of Britain’s power is generated with nuclear power and that proportion is set to fall sharply. Unless new nuclear plants are built, Britain says it will rely on gas to generate 70 per cent of its electricity by 2020 – with the vast majority coming from Russia.

FINAL UPDATE: The White House issues a statement.

Technorati tags: Energy, Electricity, Home Heating, Natural Gas, Russia, Ukraine, EU, Vladimir Putin, Electricity, G8

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