Post by Bozur on Jan 13, 2006 2:03:20 GMT -5
Gas Halt May Produce Big Ripples in European Policy
By MARK LANDLER
Published: January 4, 2006
FRANKFURT, Jan. 3 - Russia's shutdown of natural gas lines to Ukraine lasted less than 48 hours, but the repercussions could last far longer in Western Europe, which also relies heavily on Russian gas.
Even as the flow of gas to Germany, France and other countries resumed at normal levels by Tuesday evening, public officials and energy experts called on the Continent to rethink its energy policy.
Russia's standoff with Ukraine has exposed a deep European dependence on Russia, the officials and experts said. To reduce that vulnerability, they said, Europe should seek out other gas suppliers and develop alternative fuels, like clean-burning coal, nuclear power and renewable energy.
"If Russia is prepared to run the risk of cutting off supplies to its neighbors if they have a disagreement, how reliable are they as a supplier?" said William Ramsay, deputy executive director of the International Energy Agency, which advises 26 industrialized nations. "You have to ask the question."
Russia is virtually the sole supplier of gas to large swaths of Central and Eastern Europe, and to close neighbors like Finland. France and Italy buy between a quarter and a third of their imported gas from Russia.
In Germany, which is by far Russia's largest customer and has made energy the cornerstone of a broad economic alliance with Moscow, some experts said the standoff might even have political implications.
"Germany's alliance with Russia was not just conceived as a commercial deal, but as a way to integrate Russia into Europe," said Alexander Rahr, a Russia expert at the German Council on Foreign Relations in Berlin. "This could be in jeopardy if the gas dispute continues."
The European Union, he said, is likely to rush to Ukraine's defense in its dispute with Russia over gas prices, giving Germany little choice but to fall in line. And Russia can no longer count on the friendship between President Vladimir V. Putin and Gerhard Schröder, who stepped down as German chancellor in November.
Mr. Schröder's successor, Angela Merkel, has not commented publicly on the dispute between Moscow and Kiev. But her economics minister, Michael Glos, said Monday that Germany would increase its Russian gas purchases only if Moscow proved itself to be a dependable supplier.
Mr. Glos also rekindled a debate over Germany's larger energy policy, saying the new government ought to reconsider the Schröder government's plan to phase out nuclear power by 2021.
Mrs. Merkel supports extending the life of Germany's nuclear plants. But during negotiations to form a government, she was unable to persuade the Social Democrats with whom she shares power to shelve the planned phase-out, which had been championed by Mr. Schröder's coalition partner, the Green Party.
"The latest developments show how important it is to draw on a balanced, broad energy mix," Mr. Glos said in a statement on Monday. In a radio interview, he added, "The German nuclear power plants were doomed by the Red-Green coalition to be switched off only for political reasons."
Some experts predicted that Russia's recent actions would strengthen Mrs. Merkel's hand. Germany imports more than 40 percent of its gas from Russia, and within hours of the shutdown, the largest German supplier, E.ON Ruhrgas, said it was not getting its normal amounts of gas.
"We understand that Russia cannot continue to subsidize Ukraine with very cheap gas, given rising market prices," the company's chairman, Burckhard Bergmann, said in a statement. "But it is also important to raise prices to the international market level in steps that Ukraine can cope with."
Mr. Bergmann's careful tone is not surprising, given his company's complex ties with Russia. Ruhrgas owns a stake in Gazprom, Russia's gas monopoly, in addition to being one of its main customers. It is also a partner with Gazprom in a $4.7 billion project to build a pipeline from Russia, under the Baltic Sea, to Germany and other parts of Western Europe.
Mr. Schröder brokered that deal with Mr. Putin shortly before he left office. He later accepted a job as the chairman of the board of a Russian-German consortium that is building the pipeline - a decision that drew withering criticism from across the political spectrum here.
Experts note that the energy alliance between Germany and Russia originated under Helmut Kohl, Mrs. Merkel's political mentor, not Mr. Schröder - a fact the chancellor is sure to recall when she visits Moscow this month. She is unlikely to derail an arrangement that has profited both nations.
"She might tell them when she goes there about the mess one can make by using energy as a political tool," said Mr. Rahr. "But she will do nothing to question the energy alliance between Germany and Russia."
Other experts argue that the European Union should negotiate an agreement with Russia that guarantees fair prices to all its members. Otherwise, there will be further disputes like this one.
While many here said they welcomed a debate over energy policy, some worried that it would be limited to perennial topics like nuclear power rather than forward-looking issues, like renewable energy.
Ukraine, for example, has the most potential of any European country to generate energy from crops, grasses and trees, often referred to as biomass, because of its rich soil and low population density, according to Hermann Scheer, president of the European Association for Renewable Energy.
"Those who prolong the current energy system are simply provoking things like the gas dispute," he said.
By MARK LANDLER
Published: January 4, 2006
FRANKFURT, Jan. 3 - Russia's shutdown of natural gas lines to Ukraine lasted less than 48 hours, but the repercussions could last far longer in Western Europe, which also relies heavily on Russian gas.
Even as the flow of gas to Germany, France and other countries resumed at normal levels by Tuesday evening, public officials and energy experts called on the Continent to rethink its energy policy.
Russia's standoff with Ukraine has exposed a deep European dependence on Russia, the officials and experts said. To reduce that vulnerability, they said, Europe should seek out other gas suppliers and develop alternative fuels, like clean-burning coal, nuclear power and renewable energy.
"If Russia is prepared to run the risk of cutting off supplies to its neighbors if they have a disagreement, how reliable are they as a supplier?" said William Ramsay, deputy executive director of the International Energy Agency, which advises 26 industrialized nations. "You have to ask the question."
Russia is virtually the sole supplier of gas to large swaths of Central and Eastern Europe, and to close neighbors like Finland. France and Italy buy between a quarter and a third of their imported gas from Russia.
In Germany, which is by far Russia's largest customer and has made energy the cornerstone of a broad economic alliance with Moscow, some experts said the standoff might even have political implications.
"Germany's alliance with Russia was not just conceived as a commercial deal, but as a way to integrate Russia into Europe," said Alexander Rahr, a Russia expert at the German Council on Foreign Relations in Berlin. "This could be in jeopardy if the gas dispute continues."
The European Union, he said, is likely to rush to Ukraine's defense in its dispute with Russia over gas prices, giving Germany little choice but to fall in line. And Russia can no longer count on the friendship between President Vladimir V. Putin and Gerhard Schröder, who stepped down as German chancellor in November.
Mr. Schröder's successor, Angela Merkel, has not commented publicly on the dispute between Moscow and Kiev. But her economics minister, Michael Glos, said Monday that Germany would increase its Russian gas purchases only if Moscow proved itself to be a dependable supplier.
Mr. Glos also rekindled a debate over Germany's larger energy policy, saying the new government ought to reconsider the Schröder government's plan to phase out nuclear power by 2021.
Mrs. Merkel supports extending the life of Germany's nuclear plants. But during negotiations to form a government, she was unable to persuade the Social Democrats with whom she shares power to shelve the planned phase-out, which had been championed by Mr. Schröder's coalition partner, the Green Party.
"The latest developments show how important it is to draw on a balanced, broad energy mix," Mr. Glos said in a statement on Monday. In a radio interview, he added, "The German nuclear power plants were doomed by the Red-Green coalition to be switched off only for political reasons."
Some experts predicted that Russia's recent actions would strengthen Mrs. Merkel's hand. Germany imports more than 40 percent of its gas from Russia, and within hours of the shutdown, the largest German supplier, E.ON Ruhrgas, said it was not getting its normal amounts of gas.
"We understand that Russia cannot continue to subsidize Ukraine with very cheap gas, given rising market prices," the company's chairman, Burckhard Bergmann, said in a statement. "But it is also important to raise prices to the international market level in steps that Ukraine can cope with."
Mr. Bergmann's careful tone is not surprising, given his company's complex ties with Russia. Ruhrgas owns a stake in Gazprom, Russia's gas monopoly, in addition to being one of its main customers. It is also a partner with Gazprom in a $4.7 billion project to build a pipeline from Russia, under the Baltic Sea, to Germany and other parts of Western Europe.
Mr. Schröder brokered that deal with Mr. Putin shortly before he left office. He later accepted a job as the chairman of the board of a Russian-German consortium that is building the pipeline - a decision that drew withering criticism from across the political spectrum here.
Experts note that the energy alliance between Germany and Russia originated under Helmut Kohl, Mrs. Merkel's political mentor, not Mr. Schröder - a fact the chancellor is sure to recall when she visits Moscow this month. She is unlikely to derail an arrangement that has profited both nations.
"She might tell them when she goes there about the mess one can make by using energy as a political tool," said Mr. Rahr. "But she will do nothing to question the energy alliance between Germany and Russia."
Other experts argue that the European Union should negotiate an agreement with Russia that guarantees fair prices to all its members. Otherwise, there will be further disputes like this one.
While many here said they welcomed a debate over energy policy, some worried that it would be limited to perennial topics like nuclear power rather than forward-looking issues, like renewable energy.
Ukraine, for example, has the most potential of any European country to generate energy from crops, grasses and trees, often referred to as biomass, because of its rich soil and low population density, according to Hermann Scheer, president of the European Association for Renewable Energy.
"Those who prolong the current energy system are simply provoking things like the gas dispute," he said.