Russia uses natural gas as 'trump card'

  • Article by: KIT GILLET , McClatchy Foreign Staff
  • Updated: March 16, 2014 - 9:34 PM

With pipelines running through Ukraine, European countries fear their supply could get cut short.

 

 

– With the Crimea crisis souring relations between Russia and the European Union, many European nations are increasingly concerned about their heavy reliance on Russia for natural gas.

Many European countries get a significant amount — in some cases all — of their natural gas from Russia, and they fear that as relations deteriorate over Ukraine, it could be just a matter of time before the supply is affected — either through disruptions to the supply routes that run through Ukraine or, as is considered more likely, the result of political moves from Moscow.

The E.U. and the United States are expected to announce the first round of sanctions against Russia on Monday.

According to the German newspaper Bild, the E.U. already has drawn up a list of high-level Russians who could be hit with travel bans and asset freezes. That list includes the chief executives of Russia’s largest energy companies.

The fear is that Russia will respond by disrupting the flow of natural gas to its clients in Europe.

European leaders have been warning of their vulnerability for weeks. Last week, Poland’s prime minister, Donald Tusk, said the dependence on Russian gas supplies would seriously hamper Europe’s ability to respond if Russia moved beyond Crimea.

“We will not be able to efficiently fend off potential aggressive steps by Russia in the future, if so many European countries are dependent on Russian gas deliveries or wade into such dependence,” he said.

Bulgaria’s prime minister told his Parliament earlier this month that his country had enough natural gas for the next two months, but that natural gas use must be carefully managed in case of disruptions to their supply lines.

“Russia uses natural gas as one of its main trump cards in its foreign policy tool kit,” said Amanda Paul, a foreign-policy analyst at the European Policy Centre, a Brussels-based independent think tank. “It is able to raise or drop prices as it feels like it, depending on its foreign policy needs, or cut out supplies altogether.”

Earlier this month, the ambassadors of Slovakia, Poland, Hungary and the Czech Republic sent a letter to the U.S. Congress urging the United States to do more to permit the export of liquefied natural gas (LNG) to Europe. Each of the four countries buys between 70 percent and 100 percent of its gas from Russia.

“Energy security is not only a day-to-day issue for millions of citizens in our region, but it is one of the most important security challenges that America’s allies face in central and Eastern Europe today,” the ambassadors wrote.

But congressional action would be of little value in the current standoff. The United States is not expected to be capable of shipping substantial amounts of LNG for at least two years.

There is precedent for Russia using natural gas exports to get its way. Five years ago it halted gas supplies to Ukraine in a dispute over pricing. That led to a domino effect on economies that relied on gas piped through Ukraine. In 2006, a similar dispute led to gas shortages in several E.U. countries.

While some nations have been able to diversify their imports, many European countries still consider themselves far too reliant on Russian energy.

“For gas we have total dependence on Russia,” said Zilvinas Silenas, president of the Lithuanian Free Market Institute, an independent think tank based in Vilnius.

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