Pipeline politics in Ukraine
UKRAINE and Russia are at odds again over the price of natural gas and how it is delivered. This latest dispute underlines the need for President-elect Barack Obama to eliminate avoidable causes of friction in the West's relationship with Russia.
The state-owned Russian company Gazprom is threatening to halt deliveries to Ukraine unless a new contract is signed at more than double the current price. This month's confrontation presents less of a risk than one in January 2006, when Russia cut supplies to Ukraine, and deliveries to Europe were interrupted. Unlike the situation then, Ukraine and Germany both have ample reserves to get through the winter heating season. So even if Gazprom carries out its threat, consumers in Ukraine and elsewhere in Europe should not go cold.
Europe receives about a fourth of its natural gas from Russia, nearly all of which is transported by pipeline across Ukraine. Accordingly, Russian officials have been saying that if supplies to Europe are reduced, the Europeans should blame Ukraine, not Russia. The Russian insinuation is that Ukraine will siphon off gas meant for Western Europe.
With energy prices plummeting, Russia has no market motive to double the price of its gas. Rather, the Kremlin wants to show that steps toward NATO membership for Ukraine will incur Russia's displeasure and then could affect energy supplies for Europe.
However Russia and Ukraine resolve this latest quarrel, the Obama administration should set out to completely recast relations with Russia. Once the Kremlin no longer fears the Bush administration's attempt to absorb Ukraine into NATO, Russian leaders will have no excuse for using energy supplies to apply geopolitical pressure. 