The key thing that Russia should do is to reduce its own dependence on oil and gas. Fossil Fuels are finite and the peak production of oil has probably already been reached with gas to follow in a few years.
As internal comsumption is increasing and production is declining there will be less and less for export.
Russia should increase fuel costs over say 4 years to European levels to improve efficiency. The last thing it needs is to try and emulate the failed US with lots of inefficient SUVs driving huge miles.
After the exposure of Bush's activities in Georgia by giving the Georgians licence to slaughter innocent people and Peace Keepers (mandated by the UN, by the way), Russia needs to show Bush's cattle who is supplying who with gas and oil. Russia must demand payment in advance - no payment, no gas/oil. Russia needs to limit supplies to all of Europe but especially the old Soviet countries broken away from Russia. In particular Georgia.
It's only a question of time before the west departs from high oil based economy. Once the west departs, from oil they'll also begin to depart form natural gas. The weakness of European countries to to take long term approach to solving their dependency on gas supply from other countries will continue to politically and economically hirt them for years to come. France has taken a step with nuclear power station. The UK should be next!
Someone comments - Compared to US, Japan, Australia and other European states, we use our power like it was 19th century. There is no balance of power, there is just Russia, Iran, Sudan, Zimbabwe, Belarus, Venezuela and less and less China, which oppose the ever larger free world. Nice allies.!!
Is this guy for real? Or is it a fake Russian? Or is this the 'other' Russia?
What he means is that all that Russia holds dear should be surrendered for the sake of a few countries' approval? Whose?Why? Are these countries 'THAT IMPORTANT".?
Why.? Because they have inflated budgets, based on Trillion dollar budget financing? Because of their massive natural resorces, which are basically 'non-existent'!!
Mr. Mikhail, see the world, not its mirror image. See the future and anticipate it, not fear and abhor it.!
Russia has nothing, totally nothing to bargain with the capitalist-democratic world. When it comes to rising energy dependency, the free world will easily be able to supply its citizens with economic, political and social freedoms no matter Russian 'embargoes'. Riots just show that they have freedom of expression . Embargo-threats just show how far from reality the leaders in mother Russia live. Will our next generation of leaders use their brain and soul instead of their fallos?
Oil and gas embargoes would harm only the dependent countries in Russian neighbourhood, which will turn against Russia in short and in long term. Neighbouring countries dislike us, for evident reasons. In short term they are eager to get as far from us as they can ever get. While France, Italy and Germany remain friendly (with difficulty due to our stupid little 'Cold War' political games with disgusting regimes like Iran, and supporting ethnic cleaners like Karadcic), the small countries will turn their head in the long run. We are more and more a threat to them and to the world peace. Compared to US, Japan, Australia and other European states, we use our power like it was 19th century. There is no balance of power, there is just Russia, Iran, Sudan, Zimbabwe, Belarus, Venezuela and less and less China, which oppose the ever larger free world. Nice allies, with Chino's and Muslims being the only growing populations on our homeland. WE are moving out, because WE are too corrupted and WE are unwilling to live in our country.
When it comes to military, we have only one thing, which is Nukes. Our military is poorly even capable of even securing our borders. Even then, we were likely to be paid too little and some even willing to become as corrupted as possible as soon as possible. The combined military budgets of the US and Europe overweight ours 17 to 1. And it is because they keep up the world peace, carry the weight and responsibility against the poorly governed and warhungry regimes. And what are we doing? Encouraging them? You really think that capitalism with liberal democratic checks and balances is that bad? Before 2003 I thought that ideology has already died. Then it seemed that finally we were united and back in what we should be. The leadership just didn't realize when its time to stop. We have gone too far.
In my opinion Russia should do a lot more to quarantee stability by lowering the possibility of conflict on energy. People will make profit out of the energy anyway. It is just stupid if it has to lead our Russia to conflicts which we cannot take. Joining some of the European treaties would finally convince the western brothers of our good intensions and we would have power to manouver the whole continent together with them.
Really Gazprom as a company is not very big, just a three or four times smaller than Exxon or BP.
As the Fortune 500 ranking demonstrates Gazprom, like most Russian companies, is relatively small.
In fact, in the oil field more consolidation is needed.
I don´t think political interference is important as the pipeline to Germany by the USSR during the Cold War and both sides have the same interest in the success of supply.
And if Russians want a fair price for their gas it is something logical because Ukrainians are not paying according to the international market price of gas.
The Ukrainian Government could ask the USA for subsidied gas, haha, because what they are doing is really ridiculous. Ukraine should pay the market price, not less and not more.
"Fear in the other parts of Europe is that the monopoly position of the Gazprom will lead to continuing exploitation of energy as a political weapon."
You hypocrites. Fear in other parts of the world is to be punished with economic embargos by the USA and EU, if they are not ready to be their lackeys. I hope Russia will soon impose such an embargo against the USA, as some Russian officials already hinted to.
Russian deliveries to the current EU region have been cut for 57 times after the collapse of Soviet Union. According to a Swedish survey on baltic sea pipeline, around 40 of these have had political connotations. These incidents have accumulated and were expressed strongly after Ukraine 2006. The change in European Council and Commission papers from a positive attitude towards Russia in 2003, to seeing Gazprom as a security threat is clear through their papers reliesed in 2006 and 2007.
Fear in the other parts of Europe is that the monopoly position of the Gazprom will lead to continuing exploitation of energy as a political weapon. The use of energy as such is well described by the honorable prime minister putin in his master thesis, where he reveals how Russia would be able to use the energy as an international bargaining tool.
There is a way to ease the fear and secure continued peace and predictability on the continent. It is signing contracts, treaties and aggreements, which can then be regarded as binding.
The best way for Russia to convince the energy importers on the continent for predictability of their energy supply is the ratification of the Energy Charter Treaty. It is a tool to lower political risks related to energy trade. Russia has signed the Treaty, but has been incapable to pass it in the Duma.
The European countries have answered to the threat presented by current monopolistic behaviour of Gazprom (which seems to be overly appreciated even on this page) by reaching other sources of energy. However, the reform in the European energy market structure goes even further, as mentioned by 'lobbyist'. The reciprocity clause, introduced by the Commission on 'third package' in 2007 is genial and will do its job, because it is in interest of EVERY company, EVERY citizen and EVERY goverment in the region, except Gazprom and other monopolies in Europe.
Russia should get rid of Gazprom, liberalize its markets, ratify the Energy Charter Treaty and start taking reasonable tariffs for Central Asian gas and oil deliveries to Europe. It would ease the political tensions and make profit for everyone: Producers, transit countries and consumers.
There would be great benefits in following the 'Norwegian way', especially for economic situation of normal people outside St.Petersburg and Moscow.
Yes, Enrique. The "third energy package" of the EU, coming out later this year clearly states that if a company wants to operate on EU markets, it has to comply on EU energy directives and competition legislation. This means simply that if Gazprom wants to operate in EU markets it has to choose one of these: the operation of gas pipelines, the business of providing gas or generating power. Not only inside the European markets, but also where it comes from. If Gazprom desides not to operate inside EU and sell its products on EU borders (which will happen, because of domestic politics of subsidizing energy and getting votes), they can continue as vertically integrated firm, but stay in Russia.
There is no 'hypocrisy' in it. As capitalism (the EU aims on gas market liberalisation) doesn't work if there is only one supplier, it is necessary to first have multiple suppliers and only then do the liberalisation. this is the problem of the third package. No competition on supply side, no free market.
Gazproducers everywhere in the world have to unbundle too if they wish to start operating inside the EU borders. normally they don't operate, however. That will be the law, otherwise liberalisation would be pointless. It is not an exception that big firms trying to control whole value chain are kept in check through legislation, like seen in the case of microsoft.
Most of the monopolies in EU are state monopolies acting in specific countries. Now the Commission is breaking them apart, very much against the will of these monopolies. It will not lower the prices for customers, especially in the short term, but instead, create private firms which do not operate to get votes in the next presidential election. Subsidizing energy prices will finally come to an end in the EU countries. Higher prices bring more money to companies, more investments on infrastructure and consumers will have an option to choose between different producers.
Russians paying less than market price. there is no 'market price' in gas as there is no global market yet. More liquefied natural gas, more pipelines to the Algeria, Libya, Qatar and Turkmenistan will allow more competitive markets and lower the eastern European dependence on only one supplier, Gazprom.And for Russians, state monopoly doesn't mean only lower prices. It means incredible amounts of wasted energy through inefficient use, natural disasters, inflation, suffering of the industries, because of increased production costs and continued dependence on sales to the EU markets.
There is no combination of infrastructure and big markets anywhere else and why would a monopoly do something else than try to strengthen its position on its only customer?
Third package will keep the Gazprom outside the EU markets or force it to unbundle, but it has nothing to do with Russian customers. The more EU diversifies its sources for gas, the more is left for russians, which gazprom can then sell in lower prices if it wishes! Meanwhile, the Russian customers will suffer when the government takes extra tax through inflation caused by energy sales.
In the EU 'one supplier' problem remains. There can be no liberalisation of the markets until there is multiple sources and decent infrastructure for gas trade. Only true sources are Russia, Turkmenistan, Iran, Qatar and Mediterranean countries. While Iran keeps acting overly politically and Russia suffers from its mistake in Ukraine, the EU seeks alternative resources from the south, Central Asia and LNG markets.
Apart from oil, gas and electricity in the future a main Russian export could be FRESH WATER to China and Western Europe as our reserves are being wiped out as much as other natural resources.
Foreign companies like Agbar (Barcelona Waters) could undertake joint ventures with Russian companies to develop water pipelines.
The main cause of the present high price of energy is not demand of China and India but the permanent THREAT to attack Iran, as it would mean a supply crisis.
That´s the reason why "speculators" pay a price so high for the barrel of oil: they are sure there will be a supply crisis sooner or later as a consequence of an American or Israeli attack against Iran.
Iranian authorities will react not just in the Gulf but also in Iraq where they have guaranteed lately an stable situation.
At the same time, that threat to Mideast energy supply incrases the price of Russian Energy which is much more secure, much more reliable for Europe, no matter what the idiot anti-Europeans like Kazinsky and Klaus say.
For the European Union Russian supply is a guarantee that we will not reject as any Prime Minister of Germany understands.
Russia is much more secure and realiable than any Mideast supply so it is logical the market pays a higher price for this security.
The stupid Governments of Ukraine and the Czech Republic should understand that they cannot undermine European security and the European economy.
"By the way, the new EU legislation will force to break down the monopoly of Gazprom if it likes to operate in the European markets. Unbundle also in Russia. I don't know if it is fair, but it is a good example what has happened because we are in no way building trust with other European nations!!!"
No, the breaking down of Gazprom´s monopoly today would be typical western hypocrisy and Russia will never accept this. You have to understand, that the european energy market has a private oligopolitstic market structure and such steps would make sense in Europe. In Russia the situation is the opposite, there is a state monopoly which does not exploit the poeple but in the opposite, they are selling the products cheaper. Therefore, if Russia would allow more competition, then the prices would increase and not decrease. But I agree, when Russians are paying the world market price, then one should think about market liberalisation. Until then, it is simply a hypocritic western attempt to increase their profits on the back of russian consumers (as they are used to do in their western home markets).
If a companyis owned by the State as happens to Norway´s Statoil or to Algeria´s Sonatrach or to Saudi Arabia´s Aramco or to Venezuela´s PDVSA.the European Union just cannot do anything.
But if it is a private company intervention is possible as happened to Microsoft.
Anyway, the Russian Federation can follow a system similar to South Korea, with competition among national firms and with important conglomerates (chaebols) which led South Korea to the highest economic perfomance in all the World.
Nircoin. Russia will never be accepted in Europe , have you asked if Europe wants this continent called Russia to be part of the European union ,.second for Russia to be accepted as part of the EU it has to give up her sovereignty as many of her powers will be given to Brussels, i don't think the Russian people will ever accept that,. And Russia will never be let into NATO because that means Russia will have the right to veto anything that NATO doze which may run contrary to her interest,.you demand to be part of the west but you never asked if the west wanted you and under what terms , All Russia is doing is demanding market prices for its resources that all ,.i leave in Canada but i come from a European country and we never had problems with Russian Gaz and oil,. you know why?, because the country i come from pays market prices, maybe the other problem countries should learn to do the same think,. You talk about the timber issue with Finland, what do you want Russia to do? continue cutting her trees down and then shipping them to Finland? Russia has to process her wood in Russia ,from cutting the tree to the finish product should be done in Russia , Russia has to diversify and find new routes for her gaz and oil and not only to Europe but to Asia to.
Russia is doing extremely well with its gas deliveries to the EU customers. The problems that have arisen are caused by the problems with transit countries. However, what we have done incorrectly has its roots far beyond the Gazprom.
The problem is the unwelcome nationalism which is blossoming everywhere. Because of that we are losing all our friendly neighbours! Turn of the gasflows off to Ukraine without discussion with Germany and Italy was totally ignorant towards the European trading partners and has launched an epidemy not to trust to our supplies! Threatening to use energy as a political weapon is also a ridiculous idea. Currently EU has adopted a stategy to diversify its supplies and is turning its back on Russia.
Again some hypocrat slavophils in the government think that West is the enemy. For some reason, the blame from our disaster in 1990s Yeltsin era is put on the shoulders of Europe, even EU. During that time they were trying to reconstruct the economy of half of the continent because of our second error, the communism.
How the nationalism is related to this? Every other nation is fast developing international cooperation to secure the peace on the Eurasian continent by cooperating with other countries through common European institutions, promoting prosperity through industrialization by adopting gradually EU market legislation, which has seen to be a great model for development, and increasing democracy in their countries, while we are opposing democracy in Ukraine and Georgia by Organisation for Security and cooperation in Europe (OSCE).
It's cruel that they have chosen a different model, but it is because they don't have energy to sell like we do. They need economic reforms, while we can lay back and get our energy revenues. We should help the countries in reforming their economy, joining the European acquis and slowly Nato. Europe is not an enemy, it is a friend.For the first time Russia has problems with Finland, because of timber customs, which are caused by total ignorance towards interests of good neighbourly relations.
Medvedev is bringing us the change and I really hope we are going back to Europe, where we should be!
Best way to do that is to help EU diversify its energy supplies and then build direct North Stream and South Stream pipelines. They will secure our reach to Germany and Italy, but doing them current 'Gazprom-Monopoly' style will just get Europe scared and increase tensions, which never existed before Ukrainian crisis.
By the way, the new EU legislation will force to break down the monopoly of Gazprom if it likes to operate in the European markets. Unbundle also in Russia. I don't know if it is fair, but it is a good example what has happened because we are in no way building trust with other European nations!!!
Quintin, when I say unbiased media, I mean media that's not propagandizing views of a certain faction, or a group of factions, i.e. not propaganda. Russian viewpoint, American viewpoint, French viewpoint - that's fine. United Russia's Viewpoint, Republican Viewpoint, Sarkozy's Viewpoint, that's biased.
Sevodnya: if Ukraine thinks that entering NATO, or threatening to enter NATO will not get them higher gas prices, even the above-market rate, then they are politically ignorant. Your government should at least know the polices of the nations with whom you have a large amount of trade and share a border - duh!
I like to ask why Russia never has a problem with Finland or Turkey with gaz and oil, very simple, it sells to them directly there are no middle countries, everything is done on market principal , Ukraine uses the fact that 80% of the gaz passes through Ukraine to black-mail Russia to get cheap gaz. Russia has to continue with patients building alternative gaz transportation routes "Nord Stream" and "South Stream" are good examples, it also in the future going to need a route to the pacific to feed the hungry and growing Asian market, Lithuania refused to sell the Mažeiki? refinery to a Russian company in an effort to avoid the refinery and infrastructure being bought out by Russian interest, In my opinion there is no reason for Russia to ship her oil there any more, Russian oil should be shipped at Russia's oil refineries and then out to seas from Russian ports, it will mean more jobs for Russians. Russia should be guided by what is in her strategic interest,.any country that don't like it is free to go else were and get it, there are plenty of countries out there that sell it (oil)
as for the media.the more choices we get the better.
Sevodnya_Net, I just wanted to thank you for an intelligent response. There are many things I missed in my post that you pointed out that I want to look into further. I think I just wanted to paint broadly to the point you made - that "The Ukraine/Russia gas dispute is a lot more complicated than." This is exactly correct however, I think the media that I receive is not delving into the "complications" of the situation. Unfortunately, it is portrayed as the big bad Russian Bear pushing the newly formed underdog of Ukraine around while holding Europe hostage - very bleak indeed.
I knew there was another side to the story because it seemed Russia was getting a disproportionate amount of blame. Perhaps no one is completely free of mishandeling the situation but a different perspective is needed.
As far as RT. I agree completely. Let's be honest, RT is a biased network though that's not necessarily a bad thing. When one looks at the Western networks and then to RT for the same story one could deduce that the truth lies somewhere in the middle. RT compliments my news consumption for that very fact. Let me elaborate on what I meant for Russian media to do. Aljizeera is a perfect example. Aljizeera started out as an extremely biased network. Then they realized there was a market that wanted to look beyond the patriotic zeal of the "War on Terror" to report on a very influential part of the world from a different perspective. Honestly, Aljizeera has reigned in their bias quite a bit (with their English channel)however, it is much more subtle now and this allows them to slightly slant a story - this will convey a certain point of view. One example of the subtle slant is the use of the word "martyr". When reporting on a suicide attack this is the word that is used. In the U.S. it's described as "suicide terrorist." Perhaps, this was not such a fantastic example because of the emotions both of these phrases evokes but, it is clear that the same story can be told from two or more perspectives depending on the agenda.
RT could create a network similiar, and use subtlety to convey a reasonable perspective - not propoganda. A perfect example is this forum right here. Just the very question is biased. "Is Russia doing enough to secure energy supplies to Europe?" - well from the question we can assume that Russia is doing something to secure energy to Europe, and we can assume from the question that Russia wants to do more - we can conclude that Russia is with Europe when it comes to energy. If the question were posed differently "Should Russia do more to secure energy supplies to Europe?" would convey a different point of view.
My point is this: these subtle differences tell the same story from different perspectives, and right or wrong, this is how the most of the world plays the game. I wish it wasn't like this but, I don't believe in unbiased reporting anymore. Russia needs to get on board in order to shape world opinion in its favor. This is not propaganda; this is just a different perspective, and this is not a bad thing in fact, it is necessary.
Russia in pictures
27 August, 2008, 03:45
Russia should use its Oil and Gas to blackmail the West and former Soviet states which are anti-Russian to do whatever
21 August, 2008, 11:43
The key thing that Russia should do is to reduce its own dependence on oil and gas. Fossil Fuels are finite and the peak production of oil has probably already been reached with gas to follow in a few years.
As internal comsumption is increasing and production is declining there will be less and less for export.
Russia should increase fuel costs over say 4 years to European levels to improve efficiency. The last thing it needs is to try and emulate the failed US with lots of inefficient SUVs driving huge miles.
20 August, 2008, 20:20
After the exposure of Bush's activities in Georgia by giving the Georgians licence to slaughter innocent people and Peace Keepers (mandated by the UN, by the way), Russia needs to show Bush's cattle who is supplying who with gas and oil.
Russia must demand payment in advance - no payment, no gas/oil.
Russia needs to limit supplies to all of Europe but especially the old Soviet countries broken away from Russia. In particular Georgia.
18 August, 2008, 15:20
It's only a question of time before the west departs from high oil based economy. Once the west departs, from oil they'll also begin to depart form natural gas. The weakness of European countries to to take long term approach to solving their dependency on gas supply from other countries will continue to politically and economically hirt them for years to come. France has taken a step with nuclear power station. The UK should be next!
05 August, 2008, 10:13
Someone comments -
Compared to US, Japan, Australia and other European states, we use our power like it was 19th century. There is no balance of power, there is just Russia, Iran, Sudan, Zimbabwe, Belarus, Venezuela and less and less China, which oppose the ever larger free world. Nice allies.!!
Is this guy for real?
Or is it a fake Russian?
Or is this the 'other' Russia?
What he means is that all that Russia holds dear should be surrendered for the sake of a few countries' approval?
Whose?Why? Are these countries 'THAT IMPORTANT".?
Why.?
Because they have inflated budgets, based on Trillion dollar budget financing?
Because of their massive natural resorces, which are basically 'non-existent'!!
Mr. Mikhail, see the world, not its mirror image.
See the future and anticipate it, not fear and abhor it.!
31 July, 2008, 18:32
Dear 'gas',
Russia has nothing, totally nothing to bargain with the capitalist-democratic world. When it comes to rising energy dependency, the free world will easily be able to supply its citizens with economic, political and social freedoms no matter Russian 'embargoes'. Riots just show that they have freedom of expression . Embargo-threats just show how far from reality the leaders in mother Russia live. Will our next generation of leaders use their brain and soul instead of their fallos?
Oil and gas embargoes would harm only the dependent countries in Russian neighbourhood, which will turn against Russia in short and in long term. Neighbouring countries dislike us, for evident reasons. In short term they are eager to get as far from us as they can ever get. While France, Italy and Germany remain friendly (with difficulty due to our stupid little 'Cold War' political games with disgusting regimes like Iran, and supporting ethnic cleaners like Karadcic), the small countries will turn their head in the long run. We are more and more a threat to them and to the world peace. Compared to US, Japan, Australia and other European states, we use our power like it was 19th century. There is no balance of power, there is just Russia, Iran, Sudan, Zimbabwe, Belarus, Venezuela and less and less China, which oppose the ever larger free world. Nice allies, with Chino's and Muslims being the only growing populations on our homeland. WE are moving out, because WE are too corrupted and WE are unwilling to live in our country.
When it comes to military, we have only one thing, which is Nukes. Our military is poorly even capable of even securing our borders. Even then, we were likely to be paid too little and some even willing to become as corrupted as possible as soon as possible. The combined military budgets of the US and Europe overweight ours 17 to 1. And it is because they keep up the world peace, carry the weight and responsibility against the poorly governed and warhungry regimes. And what are we doing? Encouraging them? You really think that capitalism with liberal democratic checks and balances is that bad? Before 2003 I thought that ideology has already died. Then it seemed that finally we were united and back in what we should be. The leadership just didn't realize when its time to stop. We have gone too far.
In my opinion Russia should do a lot more to quarantee stability by lowering the possibility of conflict on energy. People will make profit out of the energy anyway. It is just stupid if it has to lead our Russia to conflicts which we cannot take. Joining some of the European treaties would finally convince the western brothers of our good intensions and we would have power to manouver the whole continent together with them.
31 July, 2008, 07:01
Really Gazprom as a company is not very big, just a three or four times smaller than Exxon or BP.
As the Fortune 500 ranking demonstrates Gazprom, like most Russian companies, is relatively small.
In fact, in the oil field more consolidation is needed.
I don´t think political interference is important as the pipeline to Germany by the USSR during the Cold War and both sides have the same interest in the success of supply.
And if Russians want a fair price for their gas it is something logical because Ukrainians are not paying according to the international market price of gas.
The Ukrainian Government could ask the USA for subsidied gas, haha, because what they are doing is really ridiculous. Ukraine should pay the market price, not less and not more.
Just the market price.
30 July, 2008, 22:50
"Fear in the other parts of Europe is that the monopoly position of the Gazprom will lead to continuing exploitation of energy as a political weapon."
You hypocrites. Fear in other parts of the world is to be punished with economic embargos by the USA and EU, if they are not ready to be their lackeys. I hope Russia will soon impose such an embargo against the USA, as some Russian officials already hinted to.
30 July, 2008, 18:37
Russian deliveries to the current EU region have been cut for 57 times after the collapse of Soviet Union. According to a Swedish survey on baltic sea pipeline, around 40 of these have had political connotations. These incidents have accumulated and were expressed strongly after Ukraine 2006. The change in European Council and Commission papers from a positive attitude towards Russia in 2003, to seeing Gazprom as a security threat is clear through their papers reliesed in 2006 and 2007.
Fear in the other parts of Europe is that the monopoly position of the Gazprom will lead to continuing exploitation of energy as a political weapon. The use of energy as such is well described by the honorable prime minister putin in his master thesis, where he reveals how Russia would be able to use the energy as an international bargaining tool.
There is a way to ease the fear and secure continued peace and predictability on the continent. It is signing contracts, treaties and aggreements, which can then be regarded as binding.
The best way for Russia to convince the energy importers on the continent for predictability of their energy supply is the ratification of the Energy Charter Treaty. It is a tool to lower political risks related to energy trade. Russia has signed the Treaty, but has been incapable to pass it in the Duma.
The European countries have answered to the threat presented by current monopolistic behaviour of Gazprom (which seems to be overly appreciated even on this page) by reaching other sources of energy. However, the reform in the European energy market structure goes even further, as mentioned by 'lobbyist'. The reciprocity clause, introduced by the Commission on 'third package' in 2007 is genial and will do its job, because it is in interest of EVERY company, EVERY citizen and EVERY goverment in the region, except Gazprom and other monopolies in Europe.
Russia should get rid of Gazprom, liberalize its markets, ratify the Energy Charter Treaty and start taking reasonable tariffs for Central Asian gas and oil deliveries to Europe. It would ease the political tensions and make profit for everyone: Producers, transit countries and consumers.
There would be great benefits in following the 'Norwegian way', especially for economic situation of normal people outside St.Petersburg and Moscow.
11 July, 2008, 01:47
Yes, Enrique. The "third energy package" of the EU, coming out later this year clearly states that if a company wants to operate on EU markets, it has to comply on EU energy directives and competition legislation. This means simply that if Gazprom wants to operate in EU markets it has to choose one of these: the operation of gas pipelines, the business of providing gas or generating power. Not only inside the European markets, but also where it comes from. If Gazprom desides not to operate inside EU and sell its products on EU borders (which will happen, because of domestic politics of subsidizing energy and getting votes), they can continue as vertically integrated firm, but stay in Russia.
There is no 'hypocrisy' in it. As capitalism (the EU aims on gas market liberalisation) doesn't work if there is only one supplier, it is necessary to first have multiple suppliers and only then do the liberalisation. this is the problem of the third package. No competition on supply side, no free market.
Gazproducers everywhere in the world have to unbundle too if they wish to start operating inside the EU borders. normally they don't operate, however. That will be the law, otherwise liberalisation would be pointless. It is not an exception that big firms trying to control whole value chain are kept in check through legislation, like seen in the case of microsoft.
Most of the monopolies in EU are state monopolies acting in specific countries. Now the Commission is breaking them apart, very much against the will of these monopolies. It will not lower the prices for customers, especially in the short term, but instead, create private firms which do not operate to get votes in the next presidential election. Subsidizing energy prices will finally come to an end in the EU countries. Higher prices bring more money to companies, more investments on infrastructure and consumers will have an option to choose between different producers.
Russians paying less than market price. there is no 'market price' in gas as there is no global market yet. More liquefied natural gas, more pipelines to the Algeria, Libya, Qatar and Turkmenistan will allow more competitive markets and lower the eastern European dependence on only one supplier, Gazprom.And for Russians, state monopoly doesn't mean only lower prices. It means incredible amounts of wasted energy through inefficient use, natural disasters, inflation, suffering of the industries, because of increased production costs and continued dependence on sales to the EU markets.
There is no combination of infrastructure and big markets anywhere else and why would a monopoly do something else than try to strengthen its position on its only customer?
Third package will keep the Gazprom outside the EU markets or force it to unbundle, but it has nothing to do with Russian customers. The more EU diversifies its sources for gas, the more is left for russians, which gazprom can then sell in lower prices if it wishes! Meanwhile, the Russian customers will suffer when the government takes extra tax through inflation caused by energy sales.
In the EU 'one supplier' problem remains. There can be no liberalisation of the markets until there is multiple sources and decent infrastructure for gas trade. Only true sources are Russia, Turkmenistan, Iran, Qatar and Mediterranean countries. While Iran keeps acting overly politically and Russia suffers from its mistake in Ukraine, the EU seeks alternative resources from the south, Central Asia and LNG markets.
09 July, 2008, 04:17
If we take into account the FORTUNE 500 it is obvious there is much room for consolidation of Russian companies.
09 July, 2008, 02:50
Apart from oil, gas and electricity in the future a main Russian export could be FRESH WATER to China and Western Europe as our reserves are being wiped out as much as other natural resources.
Foreign companies like Agbar (Barcelona Waters) could undertake joint ventures with Russian companies to develop water pipelines.
08 July, 2008, 11:44
The main cause of the present high price of energy is not demand of China and India but the permanent THREAT to attack Iran, as it would mean a supply crisis.
That´s the reason why "speculators" pay a price so high for the barrel of oil: they are sure there will be a supply crisis sooner or later as a consequence of an American or Israeli attack against Iran.
Iranian authorities will react not just in the Gulf but also in Iraq where they have guaranteed lately an stable situation.
At the same time, that threat to Mideast energy supply incrases the price of Russian Energy which is much more secure, much more reliable for Europe, no matter what the idiot anti-Europeans like Kazinsky and Klaus say.
For the European Union Russian supply is a guarantee that we will not reject as any Prime Minister of Germany understands.
Russia is much more secure and realiable than any Mideast supply so it is logical the market pays a higher price for this security.
The stupid Governments of Ukraine and the Czech Republic should understand that they cannot undermine European security and the European economy.
04 July, 2008, 09:36
"By the way, the new EU legislation will force to break down the monopoly of Gazprom if it likes to operate in the European markets. Unbundle also in Russia. I don't know if it is fair, but it is a good example what has happened because we are in no way building trust with other European nations!!!"
No, the breaking down of Gazprom´s monopoly today would be typical western hypocrisy and Russia will never accept this. You have to understand, that the european energy market has a private oligopolitstic market structure and such steps would make sense in Europe. In Russia the situation is the opposite, there is a state monopoly which does not exploit the poeple but in the opposite, they are selling the products cheaper. Therefore, if Russia would allow more competition, then the prices would increase and not decrease. But I agree, when Russians are paying the world market price, then one should think about market liberalisation. Until then, it is simply a hypocritic western attempt to increase their profits on the back of russian consumers (as they are used to do in their western home markets).
04 July, 2008, 01:43
Nicoin,
If a companyis owned by the State as happens to Norway´s Statoil or to Algeria´s Sonatrach or to Saudi Arabia´s Aramco or to Venezuela´s PDVSA.the European Union just cannot do anything.
But if it is a private company intervention is possible as happened to Microsoft.
Anyway, the Russian Federation can follow a system similar to South Korea, with competition among national firms and with important conglomerates (chaebols) which led South Korea to the highest economic perfomance in all the World.
04 July, 2008, 01:37
Nircoin. Russia will never be accepted in Europe , have you asked if Europe wants this continent called Russia to be part of the European union ,.second for Russia to be accepted as part of the EU it has to give up her sovereignty as many of her powers will be given to Brussels, i don't think the Russian people will ever accept that,.
And Russia will never be let into NATO because that means Russia will have the right to veto anything that NATO doze which may run contrary to her interest,.you demand to be part of the west but you never asked if the west wanted you and under what terms ,
All Russia is doing is demanding market prices for its resources that all ,.i leave in Canada but i come from a European country and we never had problems with Russian Gaz and oil,. you know why?, because the country i come from pays market prices, maybe the other problem countries should learn to do the same think,.
You talk about the timber issue with Finland, what do you want Russia to do? continue cutting her trees down and then shipping them to Finland? Russia has to process her wood in Russia ,from cutting the tree to the finish product should be done in Russia ,
Russia has to diversify and find new routes for her gaz and oil and not only to Europe but to Asia to.
02 July, 2008, 18:11
Russia is doing extremely well with its gas deliveries to the EU customers. The problems that have arisen are caused by the problems with transit countries. However, what we have done incorrectly has its roots far beyond the Gazprom.
The problem is the unwelcome nationalism which is blossoming everywhere. Because of that we are losing all our friendly neighbours! Turn of the gasflows off to Ukraine without discussion with Germany and Italy was totally ignorant towards the European trading partners and has launched an epidemy not to trust to our supplies! Threatening to use energy as a political weapon is also a ridiculous idea. Currently EU has adopted a stategy to diversify its supplies and is turning its back on Russia.
Again some hypocrat slavophils in the government think that West is the enemy. For some reason, the blame from our disaster in 1990s Yeltsin era is put on the shoulders of Europe, even EU. During that time they were trying to reconstruct the economy of half of the continent because of our second error, the communism.
How the nationalism is related to this? Every other nation is fast developing international cooperation to secure the peace on the Eurasian continent by cooperating with other countries through common European institutions, promoting prosperity through industrialization by adopting gradually EU market legislation, which has seen to be a great model for development, and increasing democracy in their countries, while we are opposing democracy in Ukraine and Georgia by Organisation for Security and cooperation in Europe (OSCE).
It's cruel that they have chosen a different model, but it is because they don't have energy to sell like we do. They need economic reforms, while we can lay back and get our energy revenues. We should help the countries in reforming their economy, joining the European acquis and slowly Nato. Europe is not an enemy, it is a friend.For the first time Russia has problems with Finland, because of timber customs, which are caused by total ignorance towards interests of good neighbourly relations.
Medvedev is bringing us the change and I really hope we are going back to Europe, where we should be!
Best way to do that is to help EU diversify its energy supplies and then build direct North Stream and South Stream pipelines. They will secure our reach to Germany and Italy, but doing them current 'Gazprom-Monopoly' style will just get Europe scared and increase tensions, which never existed before Ukrainian crisis.
By the way, the new EU legislation will force to break down the monopoly of Gazprom if it likes to operate in the European markets. Unbundle also in Russia. I don't know if it is fair, but it is a good example what has happened because we are in no way building trust with other European nations!!!
24 June, 2008, 04:19
Quintin, when I say unbiased media, I mean media that's not propagandizing views of a certain faction, or a group of factions, i.e. not propaganda. Russian viewpoint, American viewpoint, French viewpoint - that's fine. United Russia's Viewpoint, Republican Viewpoint, Sarkozy's Viewpoint, that's biased.
Sevodnya: if Ukraine thinks that entering NATO, or threatening to enter NATO will not get them higher gas prices, even the above-market rate, then they are politically ignorant. Your government should at least know the polices of the nations with whom you have a large amount of trade and share a border - duh!
23 June, 2008, 14:18
I like to ask why Russia never has a problem with Finland or Turkey with gaz and oil, very simple, it sells to them directly there are no middle countries, everything is done on market principal , Ukraine uses the fact that 80% of the gaz passes through Ukraine to black-mail Russia to get cheap gaz.
Russia has to continue with patients building alternative gaz transportation routes "Nord Stream" and "South Stream" are good examples, it also in the future going to need a route to the pacific to feed the hungry and growing Asian market,
Lithuania refused to sell the Mažeiki? refinery to a Russian company in an effort to avoid the refinery and infrastructure being bought out by Russian interest, In my opinion there is no reason for Russia to ship her oil there any more, Russian oil should be shipped at Russia's oil refineries and then out to seas from Russian ports, it will mean more jobs for Russians.
Russia should be guided by what is in her strategic interest,.any country that don't like it is free to go else were and get it, there are plenty of countries out there that sell it (oil)
as for the media.the more choices we get the better.
22 June, 2008, 20:08
Sevodnya_Net, I just wanted to thank you for an intelligent response. There are many things I missed in my post that you pointed out that I want to look into further. I think I just wanted to paint broadly to the point you made - that "The Ukraine/Russia gas dispute is a lot more complicated than." This is exactly correct however, I think the media that I receive is not delving into the "complications" of the situation. Unfortunately, it is portrayed as the big bad Russian Bear pushing the newly formed underdog of Ukraine around while holding Europe hostage - very bleak indeed.
I knew there was another side to the story because it seemed Russia was getting a disproportionate amount of blame. Perhaps no one is completely free of mishandeling the situation but a different perspective is needed.
As far as RT. I agree completely. Let's be honest, RT is a biased network though that's not necessarily a bad thing. When one looks at the Western networks and then to RT for the same story one could deduce that the truth lies somewhere in the middle. RT compliments my news consumption for that very fact. Let me elaborate on what I meant for Russian media to do. Aljizeera is a perfect example. Aljizeera started out as an extremely biased network. Then they realized there was a market that wanted to look beyond the patriotic zeal of the "War on Terror" to report on a very influential part of the world from a different perspective. Honestly, Aljizeera has reigned in their bias quite a bit (with their English channel)however, it is much more subtle now and this allows them to slightly slant a story - this will convey a certain point of view. One example of the subtle slant is the use of the word "martyr". When reporting on a suicide attack this is the word that is used. In the U.S. it's described as "suicide terrorist." Perhaps, this was not such a fantastic example because of the emotions both of these phrases evokes but, it is clear that the same story can be told from two or more perspectives depending on the agenda.
RT could create a network similiar, and use subtlety to convey a reasonable perspective - not propoganda. A perfect example is this forum right here. Just the very question is biased. "Is Russia doing enough to secure energy supplies to Europe?" - well from the question we can assume that Russia is doing something to secure energy to Europe, and we can assume from the question that Russia wants to do more - we can conclude that Russia is with Europe when it comes to energy. If the question were posed differently "Should Russia do more to secure energy supplies to Europe?" would convey a different point of view.
My point is this: these subtle differences tell the same story from different perspectives, and right or wrong, this is how the most of the world plays the game. I wish it wasn't like this but, I don't believe in unbiased reporting anymore. Russia needs to get on board in order to shape world opinion in its favor. This is not propaganda; this is just a different perspective, and this is not a bad thing in fact, it is necessary.
Post comment