Monday, October 12, 2009

Shades of squeezes to come

New gas pipelines bypassing Eastern Europe

You don't have to know too much about Russian history to see how two new gas pipelines will give Russia leverage over their Eastern European neighbors... or wonder if they'll use it. In the coming era of increasing resource scarcity, we're bound to see more of that around the world. Maybe the new shale technology that's expected to increase natural gas reserves will blunt the impact, however.

Currently, Russian gas has to be piped through Eastern Europe to reach Western Europe. If Russia shuts off the gas to pressure a neighbor in the east, it is felt in the more powerful, wealthier countries to the west, where it touches off loud protests.

The new Nord Stream pipeline will change that equation. By traveling more than 750 miles underwater, from Vyborg, Russia, to Greifswald, Germany, bypassing the former Soviet and satellite states, it will give Russia a separate supply line to the west.

As a result, many security experts and Eastern European officials say, Russia will be more likely to play pipeline politics with its neighbors.

“Yesterday tanks, today oil,” said Zbigniew Siemiatkowski, a former head of Poland’s security service....

Such tactics are hardly without precedent. A Swedish Defense Ministry-affiliated research organization has identified 55 politically linked disruptions in the energy supply of Eastern Europe since the breakup of the Soviet Union.

Until now, Russia’s use of natural gas as a foreign policy tool has been limited to short embargoes, at least in part, analysts say, because it is so blunt a club.

Last January, for example, Russia shut down a pipeline that crossed Ukraine, ostensibly over a dispute with Ukraine on pricing and tariff fees.

The shutoff left hundreds of thousands of homes in southeastern Europe without heat and shuttered hundreds of factories for three weeks.

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