Friday, January 9, 2009

Russia gets the short end of the pipeline

With the natural gas shortage still not resolved, editorials across Europe and the US are bashing Russia for cutting off supplies – hauling out the usual accusations that the stoppage shows Russia is again trying to bully its neighbors and that it’s proof that Russia is not a reliable business partner.

Frankly these editorials miss a few important facts, not the least of which is the $2 billion in back payments owed to Russia’s Gazprom by the government of Ukraine. Then there’s the charge made by Russia that Ukraine has been stealing natural gas being shipped across their country for points further west in Europe (a claim that Russian Prime Minister Vladimir Putin says he has proof to back up), the reason why Russia says it finally turned cut the gas to the pipelines on Wednesday (Russia increased the amount of gas flowing through other pipelines that do not pass through Ukraine and promised to replace any gas their customers had to use from their national reserves).

But apparently, according to the editorialists, Russia should have either let Ukraine continue to run up their gas debt, or they should have looked the other way while the Ukrainians stole gas headed for Western Europe (and, apparently, made up the shortfall so the countries further west didn’t suffer).

You have to wonder why Russia is being cast as the bad guy in this affair. If anything I think the crisis shows Ukraine, not Russia, as the unreliable partner since they are the ones who ran up an enormous debt, didn’t make a good-faith effort at negotiating a payment plan, and then when they were finally cut off, stole what they needed from someone else. These are hardly the actions of a reliable business partner, yet there continues to be a strong push to fast-track Ukraine’s membership into both NATO and the European Union (where membership was once held out as the reward for countries adopting democratic, free market and good governance principles).

Call it a Cold War hangover, but Russia always seems to get the blame during an international crisis, whether it deserves it or not. The last time Ukraine and Russia squabbled over gas prices back in 2006, Russia was again accused of using natural gas as a weapon, even though the gas price fight came after years of Europe demanding that Russia start charging fair-market prices for gas it sold to the countries of the former Soviet Union, rather than continuing the Soviet-era policy of selling it at well below market rates.

Ukraine doesn’t pay for gas it uses and takes gas that’s not theirs, yet Russia gets the blame, somehow that just doesn’t seem fair.
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