Russia Uses Gas Supply as Weapon again, This Time Blackmailing Georgia

Remember last winters row between Russia and Ukraine over the gas? An incident that threatened the very supply of Europe itself. This winter Georgia seems to be the victim having to chose whether to freeze or accept a 110% prize increase of its main energy source: imported Russian gas. The gas from the vast fields of Siberia makes Russia the worlds leading producer. Gazprom, the giant state-controlled gas monopoly, the former Soviet ministry of gas, is now seeking European partnerships to develop the fields situated in some of the harshest enviroments on earth. The ungoing row took its outset when Georgia arrested four Russian officers, allegedly for spying. Countermeasures so far has been embargoes on goods from the Black Sea nation, as well as various blocades. The real motive behind the row, is believed to be Georgian rapprochements to NATO, as well as its support to uprisings in the neighbouring Russian breakaway territories of Abkhazia and South Ossetia.



A project in development, agreed on in September 2005, is to build an underwater pipeline from Russia to Germany. Being not only political controversial, some enviromentalist claim it to be a disaster for the fragile Baltic Sea, which it is to run in all its length.


The allusion to Poland in the snippet is the outcry the deal has caused in that nation. But the intensions are clear enough, cut out the middlemen. A band of unstable states lies between Germany and Russia. The meddling with the flow of gas, last years Ukrainian row shoved evidence of, is to be eliminated.

What I fear is a future scenario, where Russia can blackmail Europe. To anticipate events, no matter if Europe should get its own EU defense force, a military solution the American way will never be mentioned. Not even Napoleon could beat the Russian bear.

None ever has.

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[edit on 3-11-2006 by khunmoon]

see it is about this stupid oil all over the world. this black gold. the oil companies buy out companies so that they cannot sell their products due to it will cripple the oil buisness. i say put a noose on oil companies and let these companies like: teslamotors.com to sell cars that do not take gas. this way our earth can heal itself. i hate big oil, they always ripp you off everywhere and blackmail our go'vt and other gov'ts so we only buy oil. i say more power to the technologies that help give people a way of better energy resources. put a large noose on oil.

I fully agre with you littlebird, 100%, and those alternative technologies ARE invented and in place. But they are being suppressed, obstructed, liquidated by hostile take overs of the firms who try to promote them.

A lot of controversies and conspiracies goes on in the business of automotion.

What can we do about it?

You got it backwards, they were giving away natural gas like candy after 1991, suc conditions don't last forever, do they?

edit: news.yahoo.com... - price reference

for the record: $230 per 1k m^3 means $6.51 per 1000 cubic feet, now let's take a look at a random pricing table i found on the web

tonto.eia.doe.gov...

PS: UKRAINE tapped gas flowing into EU countries after they had refused to pay market prices, with predictable consequences, which is the main reason why Russia and Germany are rushing to bridge the gap via the Baltic Sea instead, so they are no longer subjected to this kind of blackmail & slander attacks.

Just for the record, the Orange Revolution preceded these events last year, but just a few months and the media got into their blame-russia-always-and-without-remorse routine, as usual. of course, that's just a coincidence, just like the rest of history

[edit on 5-11-2006 by Long Lance]

I know natural gas up until relative lately was a biproduct from extracting oil, nothing more than to be flared at the site. Not before the 70's technics started develope to put it into commercial use. Only for the last 25 years it has been a commodity, and with the scarcity and rise in price of oil lately seen, it is becoming a valued one.

So no wonder, and no blame on Russia wanting to get the marketprice.

As a footnote I will mention the Danish history of energy resources. Back it the early sixties, as geologic survey showed the possibility of oil in the North Sea, Denmark in 1962 sold the right to extract it to the Danish shipping consortium of Maersk - for 1 DKR equal 0.16 USD - a symbolic sum as no one expected anything to be there. The company is now ranking number150 on the Forbes list thanks to the oil - and gas from the Danish North Sea fields.

To further add to the misfortunes of Danish energy policies, in 1963 a Danish foreign secretary negociated with the Norwegians about the dividing of the continental socket on which both countries rest. The legend goes he was so drunk, that he ended up giving the Ekofisk field, a disputed area, completely to the Norwegians. Nothing there anyway, most thought. It turned out to be the biggest producer of all the sea fields. Still believed to hold oil for another 30 years it adds to the wealth of Norway, topranking the list of world's richest nations.

Concerning Russia, I fear EU to become dependt on their supplies, and thus liable to be used as a tool to suit Russian foreign policies. Thereby an object of future crises.

Oh come now, Europeans are a bit smarter than that. There are plenty of energy opportunities in Europe, like umm... ohh geez.......

well, perhap the citizens should relocate and we could turn Europe into the worlds farmlands

Originally posted by khunmoon
What I fear is a future scenario, where Russia can blackmail Europe.

Blackmail? Tell me what school did you go to and learn about free market economics in?

Marxist economics subsidized oil and natgas for their Soviet era satellites, so do you expect the new Russia to keep selling at less than half the market value to Georgia? Why should their citizens squander away their natural resources and give discounts to the opposition.

Freedom doesn't come free

Don't want to pay full price, then they shouldn't expect any gas and there's plenty others who will pay market price. If no one wants to pay the market price or make concessions, then the price falls or they don't sell any...simple as that. Don't want to be dependent on other nations for natural resources? Then it's time to hit the books, beat some feet on the street, and find a way out.



Currrent Natgas spot value is: $7.66/mmBtu

1 mmBTU = 26.8 m³ natgas
37.3 mmbtu = 1000 m³ natgas

$230/1000 m³ natgas is still below market price and Georgia is lucky Gazprom didn't hit them for a contract, when it was $11.5/mmbtu in August.



[edit on 6-11-2006 by Regenmacher]