Ramadesikan Gandarvakottai's blog

Russia and Gas

So it is the time of the year when Russian pipeline technicians stop the flow gas into Ukraine. As a nation which has gone to war two times to secure energy supply (11991, 2003) US citizens are infuriated by the audacity of a ramshakle country for denying their friend Ukraine gas.

There are many aspects to it, Ukraine acts like an independent nation with market orientation, it has to pay what the seller demands or find new seller. It can't find a new seller because for the curreent asking price of $250 dollars for 1000 cubic meters is ridiculosly cheap. I pay 100 times more for my gas here in US.

US has set a wrong example, acccording to US foreign policy any country possesing energy has to be invaded (IRAQ), ridiculed (VENEZULA) or divide and conquered (BULK of the ISLAMIC MID EAST). US shows more deference to countries which supply inconsequential things to Wal Mart.This attitude has rubbed on so called friends of US who want to treat Russia badly and then turn to US when things turn worse. Let it be clear Russia is not a banana republic it can easily assert itself in its sphere of influence ANYBODY WHO FORGETS IT WILL DO IT AT THEIR OWN PERIL. Anybody who wants to buy gas from Russia should negotiate as they are negotiating with a peer state like many countries of "OLD EUROPE", the new European states may well learn from them.

After spending 8 yrs and Billions of Dollars to lay a pipeline to by pass Russia, considerable length of pipeline is in South Ossestia the breakaway region of Georgia.

Conclusions that can be drawn are, energy is suppliers' market which we haven't realized till date, Russia is in a strong position to thwart any challenge to its dominance of the energy market in the Caucus, and Russia expects to be treated like a equal partner in the energy business.

Last but not the least the EU depends on Russia for 50% of its gas any disruption will worsen the EU economy and worsen the global recession