Tuesday, January 6, 2009

Looking for the Golden Gas Route

The cold seeping into the house can put your mind to work if you imagine what it would be like to have no heat, no gas, and a low alcohol supply. The New Year seems to bring with it not just its seasonal cold but the Russian/Ukraine gas dispute. What is known this is not a new dispute (good article and worth a read). But what I think is new this year is the emphasis in the media about a 'reliable' supply route that avoids the Ukraine.

For Russia to make the claim that both the North Stream and South Stream need to progress in order to have secure gas supplies misses European understandings. In Europe the current conflict, whether an annual event or not, underscores the need to diversify away from Russia. There is no doubt that the Ukraine is not an innocent victim here, but will a gas network that goes around the Ukraine really make a difference?

Recently, there has been greater impetus given to the Nabucco project from the EU Commission, it remains to be seen whether this will be enough to move along this gorilla of a project. If all options are considered, then Nabucco can help the EU diversify its supply, which simply translates into greater security of supply.

When you have the Russian President being the CEO of Gazprom, is there a better symbol of cooperation between a country's politics and economic spheres? Gas is an economic weapon, the only question is whether the EU (and in particular CEE countries) want to reduce the damage such a weapon can do.