25 January 2009

The Gas Post

No,I didn't wait until the crisis was resolved...I knew it already that it would "somehow" be solved with Ukrainians and Russians signing an agreement to deter the gas deadlock for a year (when it gets cold in Kiev again)

So let me summarize what this is all about as short as I can.

A few decades ago Ukraine and Russia as we know today belonged to a single country, a federation that we knew (and feared) as Soviet Union. (Sorry for repeating this trivia all along since I still get email questions about if Ukraine is a region in Russia) Soviet Union critically relied on the massive supplies of oil and gas to sell abroad to patch its massive budget deficits to carry on. The major buyer was (and still is) Europe and the shortest path to lay pipes from the sources in Siberia and Central Asia was via Ukrainin Soviet Socialist Republic. Nearly all pipeline network and other technical infrastructure was built in that region of Soviet Union. Everybody was happy in Moscow that they were selling the natural gas from the fields in the forgotten realms of frozen Siberia to the European industry.

The already crumbling economy of the country couldn't be patched anymore by energy based funds because the hardline communist politics urged the decision makers to send paychecks to every communist-wannabe guerilla team of 3 or more armed barefoot militia around the world (when the soviet citizens themselves were waiting in queues for bread). The country collapsed and every soviet republic tailored its own flag and carried on to independence (Boring Information: Only Belarus' new flag is almost the same as its soviet era design (minus the hammer and sickle)).

At first, the bosses in Moscow (who were actually the same cadre but now rebranded as democratic and liberal) were sighing for relief as their Ukrainian counterparts paid their homage to them and ruled Ukraine not very different than The Chuvash Republic (a republic inside Russia). The pipeline of money to Europe was safe as long as the valves inside the Ukrainian borders were in reliable hands.

The patrons to those valves in question were to change dramatically as USA and Europe pumped hard cash to Ukraine to break it apart from the virtual union with its slavic cousins and fabricate a chronic headache maker for the up and coming Russia. Nobody wanted a Cold War Episode 2 in the West and Ukraine was the closest and easiest t0 deploy weapon they had to Russia and Ukraine had a lot of revolutionary wannabes inside for collaboration.

Here are the sides of this deal:


So what does Ukraine want out of their annual showdown with Russia?

Simple...use the only logical weapon they have against the Big Bear, who discreetly want a big chunk out of Ukraine (the Eastern Ukraine) or a reliable puppet government as loyal as their soviet viceroys decades ago. Shut off the valves and the Mother Russia will go broke...

What are they expecting out of this deal?

Urging the gas-struck Europe to retaliate with a vengeance to Russia and get the most out of that catfight (in cash and political support)

Can they win?

No. If Ukraine doesn't ant to be razed for the third time between the disputes between Europeans and Russians, it must side with Russians for good (to get plenty of cheap gas, fuel and Russian tourists to Black Sea resorts)


What do they want out of the deal?

They want the gas flowing cheap and without Ukraine sipping their share out of it. From foundries in german steelworks to gourmet kitchens in french cafes, they need that gas...badly

What can they do to achieve that?

They can get in a serious row with Russia to force him pour in more gas to the pipeline while still acknowledging that Ukraine will be pirating or get an allied effort with Russia to build an alternative pipeline through a less disputed land which is preferably not governed by a group of people that is not even fit to govern a south american banana republic.


What does Mother Russia want?

Sell its gas (even the Turkmen gas) to Europe and continue buying overpriced drinks in Moscow posh clubs.

How can they do that?

Urge Europe to create a new pipeline. Since building new things, especially a pipeline, costs a lot of hard earned Euros which Europeans are too frugal to pay, some events must force the European public opinion from sick cockroaches in Indonesian jungles to the actual reality that they don't have any gas left to heat their TV dinners to watch documentaries about cockroaches. So shut off the valve, let Ukrainians shiver a bit and then siphon the European share of the gas in the pipeline.

They are acting according this script for a couple of years and I guess the Europeans have already started laying a pipeline across the Baltic Sea (as possibly away from any Ukrainian as possible). Guess who is supervising this project: Gerhard Schröder, the ex-chancellor of Germany, the prime buyer of Russian gas.

Let's wait a bit and see the Ukrainians turn their lonely eyes to Europeans when their gas is shut off for good from the Russian side...that time Europeans will not share their endless pity with them (just like they didn't during the Holodomor)


Internation Musing said...

Ever hear about Slochteren, that fine little place in the Netherlands, which made Olanda rich, because we have GAZ.))

Sean Jeating said...

Yesterday, dropping by via Hans at Internation Musing, I chuckled about the 'juice', today I am smiling about this summery and thus thought I shouldn't leave without at least a short com(pli)ment: Chapeau!