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EU to Weigh Ukraine Sanctions, Russia Spurns Diplomacy

European Union leaders will consider repercussions for Russia at an emergency meeting today on the Ukraine crisis, after Russia’s foreign minister fended off a U.S. effort to ease tensions in the Crimean peninsula. German Chancellor Angela Merkel and U.K. Prime Minister David Cameron will participate in today’s meeting in Brussels, a day after the 28-nation bloc offered 1.6 billion euros ($2.2 billion) in emergency aid to help the new Ukrainian government avert a default. The government is prepared to immediately sign the EU association agreement that ousted President Viktor Yanukovych rejected, precipitating the crisis, premier Arseniy Yatsenyuk said in an interview with newspaper Rzeczpospolita. Western nations including the U.S. are threatening Russia with sanctions over its military intervention in Crimea while pursuing diplomacy in an effort to defuse the crisis. Russia has accused the West of supporting a coup against Yanukovych and rejected EU proposals to broker a settlement. […]

Posted On : Published By : Tom Whipple
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Europe Relies Less on Russian Gas Than Before

FRANKFURT—The Crimea conflict highlights anew Europe’s reliance on Russian gas, but compared with disputes of the past decade that cut fuel supplies, European countries are now better prepared to weather a showdown. Russia, which over the weekend sparked Western ire by occupying the Crimea region of Ukraine, supplies about 30% of the European Union’s gas by volume, according to Gazprom , the Russian state-controlled gas company. About half of Russia’s gas bound for Europe flows through Ukraine. But those flows halted in 2006 and 2009 amid financial disputes between Moscow and Kiev, with each side blaming the other. During that last spat, gas price soared across Europe and many countries faced shortages. Today, Europe is better prepared to withstand any supply disruptions, experts say. The Continent’s weak economy, new gas pipelines and changing energy policies have weakened demand for fuel and diversified supply routes. Europe today is awash with […]

Posted On : Published By : Tom Whipple
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Ukraine to face consequences for unpaid gas debt

Russian Prime Minister Dmitry Medvedev warned Ukraine there would be "adverse consequences" should it not settle its outstanding gas debt. "[Anyone] who fails to pay for the supplied goods should be aware that it is fraught with adverse consequences, including those related to the revocation of previously reached agreements on beneficial terms of supplies," the former Russian president said Tuesday. In 2009, Russian energy company Gazprom cut gas supplies to Ukraine because of contractual disputes. That left European nations without a reliable source of natural gas as most of their supplies from Russia pass through the Soviet-era pipeline network in Ukraine. Ukraine last year secured relief from its debt obligations by way of a discount for purchased volumes. Gazprom Chairman Alexei Miller said the discount will be suspended in April unless Ukraine settles its outstanding debt from 2013. Miller said Ukraine paid "a little […]

Posted On : Published By : Tom Whipple
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U.S. Effort to Broker Russia-Ukraine Diplomacy Fails

An effort by the United States to broker the first face-to-face diplomatic meeting between Russia and Ukraine over the Crimea crisis failed on Wednesday, but Secretary of State John Kerry and his Russian counterpart announced more discussions in the days ahead. Their remarks left open the possibility of progress toward a solution to de-escalate one of the most serious East-West confrontations since the Cold War. But while Mr. Kerry asserted Wednesday night that his deliberations here had yielded creative ideas and that he planned to resume talks with the Russian foreign minister in Rome on Thursday, there were also signs of how acute the crisis remained. Continue reading the main story In Crimea, unidentified armed men threatened the United Nations special envoy, Robert Serry, forcing […]

Posted On : Published By : Tom Whipple
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U.S. Hopes Boom in Natural Gas Can Curb Putin

The crisis in Crimea is heralding the rise of a new era of American energy diplomacy, as the Obama administration tries to deploy the vast new supply of natural gas in the United States as a weapon to undercut the influence of the Russian president, Vladimir V. Putin, over Ukraine and Europe. The crisis has escalated a State Department initiative to use a new boom in American natural gas supplies as a lever against Russia, which supplies 60 percent of Ukraine’s natural gas and has a history of cutting off the supply during conflicts. This week, Gazprom, Russia’s state-run natural gas company, said it would no longer provide gas at a discount rate to Ukraine, […]

Posted On : Published By : Tom Whipple
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Putin putting Europe in its place

How the situation in Ukraine may appear if viewed through the Russian leader’s eyes European leaders meet on Thursday to discuss their response to Russia’s effective invasion of Crimea . Vladimir Putin ’s closest allies were last night looking for a face-saving gesture that would allow Europe to end its preoccupation with Ukraine before the situation descends into violent gesture politics. The Russian leader is said to be deeply concerned at the sluggish and divided response of EU leaders and is now looking for ways to “de-escalate” the tension and allow them to back down while looking less hideously impotent than they currently do. Emissaries of the president are understood to be carrying a secret memo from him to Angela Merkel, David Cameron and François Hollande setting out some initiatives Mr Putin could accept in retaliation for his action: “First, I wish to apologise for any difficulty caused to […]

Posted On : Published By : Tom Whipple
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Energy Risks of the Ukraine Crisis

Russia’s intervention in the Crimean Peninsula poses few risks to Europe’s energy supplies, but escalation or Western sanctions could change that assessment. If the crisis expanded to mainland Ukraine, the integrity of that country’s pipelines and the natural gas they carry to EU members would be the most immediate energy concern. Although Ukraine’s energy assets don’t appear to be a major focus of Russia’s occupation of the Crimean peninsula, any escalation of the crisis could have serious energy consequences, regionally and globally. The initial reaction of energy markets has been cautious, with Monday’s jump of around  2% for Brent crude and nearly 10% for European gas futures largely erased in Tuesday’s trading . While some of Russia’s oil exports to Europe transit through Ukraine, the latter’s natural gas pipelines are the bigger worry, especially in light of Russia’s past use of the "gas weapon." It’s always dicey commenting on […]

Posted On : Published By : Tom Whipple
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U.S. LNG can contain Russia, Upton says

Getting more U.S. natural gas to the international market will reduce Russia’s influence in Eastern Europe, U.S. Rep. Fred Upton, R-Mich., said. Upton, chairmen of the Natural Resources Committee, has described the natural gas sector as the "bright spot" in the U.S. economy. Now it’s time to use that advantage for international gain, he said, through more exports of liquefied natural gas. "Expanding U.S. LNG exports is an opportunity to combat Russian influence and power, and we have an energy diplomacy responsibility to act quickly," he said in a statement Monday. European consumers get about 20 percent of their natural gas from Russia, though most of that runs through a Soviet-era pipeline network in Ukraine. Washington has expressed concern about Moscow’s reaction to the February ouster of Ukrainian President Viktor Yanukovych , a Kremlin ally. Upton said bureaucracy at the U.S. Energy Department meant […]

Posted On : Published By : Tom Whipple
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IHS CERAWeek: Russia, West will have to cooperate to resolve Ukraine issues

Russia’s Energy Minister Alexander Novak cancelled his Mar. 4 appearance at IHS CERAWeek given rising tensions between Russia and the Ukraine, and conference panelists discussed the emerging geopolitical situation and what it might mean for energy. Thane Gustafson, IHS senior director of Russian and Caspian energy, said an interim government is going to have to maintain order in Ukraine and to find candidates for an upcoming presidential election. “Ukraine needs fixing,” Gustafson said, adding that he believes “Moscow and the Western countries have to work together” toward a peaceful resolution. Angela Stent, Georgetown University professor in Washington, DC, and an author on US-Russian relations, said, “This isn’t the Cold War…but it has the feel of a Cold War.”  She noted “a huge difference” between Russia and the defunct Soviet Union. “This is the worse time in relations between Russia and the West since the collapse of the Soviet Union,” […]

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U.S. Does Have Weapon vs. Putin: Energy

Is it true that the U.S. has few real options to pressure Vladimir Putin to get out of Ukraine? How about a straight business statement from Washington like this: "We are delighted to announce that the U.S. is accelerating its plans to export natural gas and will soon reverse our virtual ban on oil exports. We have such abundant, new supplies of gas and oil in America that we look forward to becoming a major supplier to world markets. And the first customers we aim to serve are our good friends in Europe." These are friends, we’re again reminded by events this week, who are currently hostage to energy supplied by Russia. To date, America’s debate over what to do with its sudden wealth of energy has been about business, economics and the environment—not about securing U.S. interests abroad. Companies like Exxon Mobil , ConocoPhillips and Royal Dutch Shell […]

Posted On : Published By : Tom Whipple