As the Oil Drum correctly points out. Our first problem of the year is an energy one. From the NY Times.
Russia cut the flow of natural gas to Ukraine today as talks over pricing and transit terms unraveled into a bald political conflict that carried consequences for Ukraine’s recovering economy and possibly gas supplies to Western Europe.
Effects were starting to be felt in Europe tonight. The Hungarian natural gas wholesaler MOL said that deliveries from the affected pipeline were down more than 25 percent, according to Reuters. The news agency added that in Poland, supplies dwindled 14 percent.
Polish officials said reserves were adequate for now, and the Hungarian company asked big gas consumers to switch to oil where possible.
The dispute comes a year after the Orange Revolution brought a pro-Western government to power in Ukraine, and ends a decade of post-Soviet subsidies in the form of cheap energy that allowed Moscow to retain some influence over the former Soviet republics.
At the heart of the conflict is a jump in Moscow’s utility bill for Ukraine: Russia is now asking for $220 to $230 per 1,000 cubic meters of natural gas, up from $50 now. Ukraine’s economy has depended on buying cheap energy from Russia.
Portents of things to come. The political and policy implications of a world finally having to pay the real cost of progress will no doubt unleash all kinds of interesting hobgoblins.
Elsewhere. A Saint who’s blogging at the Dossing Times has a longer and more complete post on the political implications of Russian actions.
It certainly is an interest case. Be interesting how this effects the rest of the Eu and Russia. I have my views on my blog here. http://dossing.blogspot.com/2006/01/russian-gas-influence-part-1-ukraine.html
Good read there saint.
”and the opposition is in taters.” Looks like we should invest in Russian potato futures?
(Sorry, couldn’t help that–an Irish non-political person would be confused on that typo)
More seriously, how Russia deals with the Iranian nuclear question will I believe be the red hot for-pol issue of 2006. Otherwise tit for tat on the Orange revolution.
So, the moral of story is if you don’t suck up to Putin he’ll cut off your oil and gas supplies. Nice friends. No wonder Soviet “union” broke up.
I love human behaviour! When oil was $25 pb everyone was quiet. We hit $57 pb and we are in peak oil.
Who was it that said there was a sucker born every minute?
In the UK gas prices are going through the roof.
In Australia oil price vulnerability in the cities may soon become a problem.
I think you”re right. Energy will be a big issue for voters
The geo-politics of all of this are horribly fascinating. As the neo-con pundits trumpeted the end of history and the perpetual eminence of Pax Americana, the vision has gone from gleaming to grimy in about four years.
Although it would be impossible to describe US foreign policy as subtle, humanitarian or even disciplined, it has usually achieved the required benefits for US industry. At whatever the cost. But in the last four years, the current US regime has seen fit to pursue a poorly planned military adventure which may yet fail to achieve an outcome of US hegemony over Middle Eastern oil fields. And all the time completely failing to engage with the economic behemoth of China, & its increasingly global interventions. And all the time, failing to dance the waltz of strategic eminence against the re-emerging Russian empire.
Access to resources will be the key to economic dominance over the next twenty years or so, & Pax Americana is currently positioning itself as nothing more than the shopping trolley of the world. The logic of latter-day capitalism would suggest that the effort put into gaining access to the Alaskan oil fields (of limited output at ridiculous exploration & extraction costs) would have been much better spent developing functioning strategic economic & political alliances with the hideous regimes of Central Asia whose known reserves are at least double what is available on American home soil.
The political elites in China & Russia wont be any nicer to their citizens than any other master state, the US included. As things start to slide out of control for the Cheneys of the world, its far too easy to imagine their methods of “citizen remodelling” becoming more and more questionable. The Russian actions against Ukraine should give us all a clear indicator as to what these master states will be willing to do to maintain market share for their ruling elites, either to the “other” or their “own”.
And you can’t help but feel that Howard & his bunch of merry men have hitched us up to a wagon loaded with an FTA, military co-operation agreements, outmoded economic models and strategic alliances like so much sweating nitro, pulled by the steeds of the Four Horsemen (who now drive Porsches, holiday in Aspen and are eyeing off Macquarie Bank as an excellent cover for their ongoing work). A wagon where Howard can’t reach the brake.
Of course, Putin’s justification is interesting - if Ukraine wants to move closer to the West it has to play by market rules.
In Australia, vulnerability to oil price rises may become a voter issue in the future.
http://bloggers.laborfirst.com.au/bloggers/blog.asp?entryId=67197
Apologies for repeating myself. I tried several times to comment but it didn’t stick - caught in a spam detector apparently. Oh Well!
I laughed when I read this opener:
THE United States says Russia’s halting of gas supplies to Ukraine raises questions about the use of energy as a political weapon . . .
http://www.theage.com.au/news/world/russia-gas-row-hurts-europe/2006/01/02/1136050393227.html
And I thought youse were all about the free market – you dumb, foundering Yankees.
Under America’s (unofficial) Iraq-invasion logic, an energy-anxious Ukraine (and Europe?) would now seem to be entitled to invade and pacify energy-rich rogue Russia. Congratulations on setting such a fine precedent for international law, America.