Tuesday, February 07, 2006

Russian Natural Gas and Energy Independence

With the Ukrainian natural gas supply disruption still fresh in the minds of many Europeans, a number of countries are scrambling to find alternatives to Russian natural gas:

[B]ear in mind that Russia has alerted its European consumers that their prices will increase by about 50% to $240 per 1,000 cm by the end of 2006, and the Ukrainian crisis provides no confidence that Russia has any intention of seeing its largely state-run energy industry as anything other than a political tool. EU members will have to write cheques to Russia for natural gas in 2006 edging up toward some $30 billion. In that light, coughing up an extra $10 billion to reduce their long-term Russian exposure seems a much more viable — and likely unavoidable — option.
In addition, the article notes, "Roughly 40% of Europe’s natural gas imports come from or through Russia — and 80% of that transits Ukraine. A glance at the map shows that there are not any obvious alternate suppliers."

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