Shortage of Gas, Not Oil

While discussion in 2005 was about imminent oil shortages – often under the title ‘peak oil’ – interesting the first significant energy crisis in 2006 is all about gas. How difficult the future is to predict.

A good summary of the situation in Europe, where Russia was blocking supply to the Ukraine, is perhaps at Germany newspaper Deutsche Welle, it begins:

European editorial writers are keeping an eye on the gas dispute between Russia and Ukraine, which has been likened to an energy policy earthquake, the effects of which are being felt across Europe.

Rome’s La Repubblica called the dispute a “threat to the entire region.” “The gas dispute has already moved beyond the borders of Russia and Ukraine,” the paper wrote, adding that it will spread to wealthy western European countries and then to poorer nations as well. The paper doesn’t regard Moscow’s promise to guarantee gas delivery to the EU as stable, writing: “Moscow caved in to the pressure from the European Union, but warned that it won’t be able to continue covering for theft by the Ukrainians.”

The Independent, from London, asked why Ukraine has been singled out by Russia for a price hike in natural gas when other former Soviet states also pay less than the going market rates. The paper concluded that it was a political decision. “Vladimir Putin intends to destabilize Russia’s western neighbor in the hope of unseating its leader, Viktor Yushchenko,” the Independent wrote. “The Ukrainian president has been a thorn in the Kremlin’s side since he was swept to power amid mass demonstrations against Russian influence. With elections looming in Ukraine, President Putin regards this as the right time to exert pressure.” The paper said that the crisis has made it clear that Europe is urgently in need of a common energy policy.”

I gather Britain had been moving to increase its reliance on Russia for energy from gas. Perhaps Russia blocking supply to the Ukrainian will make a second generation of nuclear power plants that much more likely for Britain- a tough call for Tony Blair?