Did Europe threaten to cut off purchases of Russian gas?

What else can explain the apparent reversal of Russia’s nationally popular conquest of Georgia? France, Germany, Italy and other key European nations may have threatened to cancel their contracts for Russia’s natural gas and oil.

Imagine that, an OPEC in reverse. Fearing the loss of very big customers, Russia is leaving Georgia.

French President Nicolas Sarkozy, also current president of the European Union, warned Russia of “serious consequences” from the EU if Russia did not back down rapidly. Exactly what were those consequences to be?

Supply and demand. It’s quite possible that, faced with Russia’s impending murder of Georgia and sick of Vladimir Putin’s global intimidation, the European Union found just enough of a backbone to tell Putin, OK, you take Georgia, you keep your gas.

Without customers in Europe, Russia suddenly would discover how cheap natural gas is. Sure, Russia would have customers, but in a buyer’s market, China and India would bid the price down. That wouldn’t do for Putin’s criminal enterprise, which Russians tolerate only because Putin can buy their love.

This Georgia drama hasn’t played out yet, but when it’s over, examine the cause of Russia’s mysterious, if only temporary, retreat. Follow the money.

Frank Warner

* * *

NOTE: There is still no report that the Europeans actually made such a threat to Putin. But considering Russia’s track record of cutting off oil and gas, the Europeans are well aware that, in standing up to Russian aggression, they have risked those energy supplies.

On June 24, 2007, Putin claimed at the Balkan Energy Cooperative Summit:

“For four decades now, despite the serious and truly global changes in the world, Russia has never broken a single one of its contractual commitments.”

But in a new book, “Petrostate: Putin, Power and the New Russia,” Marshall I. Goldman, a Wellesley College economics professor, says Putin wasn’t quite telling the truth:

“Such assertions ... overlook the fact that the Soviet Union in its day and Russia after 1991 have frequently terminated the shipment of energy supplies when a customer chose to oppose Soviet or Russian political or economic objectives. Yugoslavia under Tito, Israel in 1956, Finland in 1958, China in 1959, Latvia in 1990, Lithuania in 1999 and 2006, and Estonia in 2007 had their petroleum deliveries cut off. Later, Putin’s regime halted or reduced the flow of natural gas supplies to Ukraine, Belarus, Georgia, Moldova, and even Bosnia.”

I guess, other than those 13 huge exceptions, Russia has honored its energy contracts through thick and thin. Europe knows this history. In this dangerous game over Georgia’s democracy, oil and gas supplies are on the table.

FFW

UPDATE: Europe is considering closer ties to Algeria, for oil and natural gas. But there again, the politics is volatile. Free people can't expect fascists to keep their houses warm.

* * *

See: Investors flee Russia.

See: J.K. Rowling: Imagine what goes on in totalitarian states.

See: Hegemony or Survival: Noam Chomsky is alive, but he is one sick man.

See: The Single Backpack Theory: Proof archaeologists owe the U.S. an apology for their accusations over the Iraq National Museum looting.

See: Safe cash: $5 reward for proof Saddam ended his repression.

See: In the ‘South Pacific’ musical, why doesn’t the Navy know they’re fighting for freedom?

Comments

[Whitehall]

What burns me is that California is planning on importing large amounts of Russian liquefied natural gas (LNG) to fuel our electric plants.

The alternative for Europe is either coal or nuclear, neither being "politically correct" but attitudes can change. Neither option is short-term.

[tim maguire]

But where would they get their natural gas and how would switching suppliers create the glut that would threaten Russia's profits?

[O'Rourke]

The USA waged war on Serbia, which threatened no other nation, stole Kosovo, a province of Serbia for 1000 years, and gave it away to ethnic Albanian Muslims. Bush now has recognized this backwater province, with a population less than 20% that of Los Angeles County, as an "independent nation".

How is that different from Russia's action against Georgia?

Condemn them both or condemn neither.

Otherwise you have no integrity.

[Eric]

Last I looked, it did not appear the Russians are leaving anything. They signed an agreement saying they would, but actual evidence is missing. I am sure Putin's promise is enough for most of the Europeans, so they will conveniently ignore the Russian's (in)action, keep buying gas, and ignore Georgia's cries from under the bus.

http://news.yahoo.com/s/ap/20080818/ap_on_re_eu/georgia_russia;_ylc=X3oDMTI1NzZyc3Q3BFJfYWlkAwRSX2RtbgN5YWhvby5jb20EUl9maWQDYmRhMGMzMzU0NTFiYmY2YjY0Y2Q0MWRlYjBiYWRlNDYEUl9sdHADMQ--

"GORI, Georgia - Russian tanks and troops roamed freely around Gori on Monday and made forays toward the Georgian capital, keeping control of the highway that slices through Georgia's midsection despite Russia's announcement that a withdrawal had begun."

"But there were also few signs of a withdrawal in western Georgia, where Russian troops continued to occupy a military base in the town of Senaki and convoys of trucks and armored vehicles moved in and out of the base throughout the day."

[dave]

O'R you are either a drunken stooge or utterly unaware of the facts. To draw that parallel one must be woefully ignorant, or have no integrity. Which is it?

[Frank Warner]

Tim, you're right the Europeans would be in a bind, but at least it's summer. (This tells the Russians to pull the next Georgia invasion in February.)

Once the Europeans call Russia's bluff, Putin has to make a choice. Either join the civilized world that plays by the rules and protects human rights, or go back to the criminal enterprise. For the moment, he's chosen some semblance of honoring the law.

If Europe ever does cut itself off from Russian natural gas, what is Russia going to do with that gas? Those western pipelines would be useless, and the other means of transporting natural gas would make other energy sources more competitive.

Right now, Europe and the U.S. should be starting a major expansion of their own nuclear energy and natural gas supplies. Free people can't expect fascists to keep their houses warm.

[Amphipolis]

This is idle speculation - there is no reason to believe that Europe did any such thing. I was hoping for some sort of link to some sort of backup.

What else can explain it is not an explanation, it is an invitation to more speculation - Russia meeting their strategic objective, US threats, diplomatic problems, etc. These explanations are also speculative, but at least they have a shred of evidence to back them up.

[Ken]

Interesting. We have of course evidence that Bush did something, and no evidence that the Europenas did. But that's inconvenient, so with no factual or logical basis we conclude ... a secret boycott did it. Bush's response had zippo to do with it!

[michael]

Any reference for this claim or are you just speculating?

[Bruce]

"We have of course evidence that Bush did something"

And Clinton. Did you forget him? Kosovo. Remember now?

[Brian G.]

Tim shows us what we already know. There is nothing that happens on this planet that cannot be blamed on Bush, or compared to something Bush did, with Bush always having dome something far worse.

Putin knows there is no shortage of useful idiots like Tim to carry his water.

[Frank Warner]

Amphi and Michael, yes, this is pure speculation. If Putin backs down from annexing Georgia this year, the question will be, why? Did he suddenly learn to care about encouraging new democracies?

Certainly, the Europeans know what they stand to lose by standing up to Putin. Did they put it all on the table?

[jj mollo]

I really don't think the governments of Europe have the internal political capital to enforce a gas boycott. Not enough fear. Not enough anger. Not enough capacity to enforce unpopular decisions. Not enough military to frighten the bad guys. Not enough pride to provide for their own defense. I'm sure Putin knows that they couldn't even make the threat of a boycott in any forum where their own citizens might hear it.

Actually, I'm not sure we could do it either. The circumstances that would force us into energy independence would have to be dire indeed.

[Frank Warner]

In Georgia, Poland and Ukraine, the Dire-O-Meter is in the "Danger" range. They're taking prudent steps today that they wouldn't take just two weeks ago.

There's no point in acting foolishly out of fear, but I have the feeling the rest of Europe and democratic west Asia will soon act much more realistically and urgently to guarantee their independence and liberty.

[JERRY]

DO YOU REALLY THINK THAT RUSSIA IS AFRAID OF NOT SELLING THEIR GAS.
THEY COULD RAISE THE PRICE AND STILL HAVE MORE CUSTOMERS.
THE EUROPEANS ARE NO DIFFERENT THEN US.

[Frank Warner]

Assuming what you say (SHOUT) to be true, JERRY, then Europe and the U.S. should be doing everything they can to build up their own energy supplies to make themselves totally independent of Russia.

Once that happens, the price of Russia's oil and gas will drop as fast as a democrat standing in front of a Russian tank.

[JERRY]

LETS QUIT WASTING TIME AND BECOME ENERGY INEPENDENT LETS DRILL OIL WELLS ON THE SEA SHORE AND ALL OVER THE GULF OF MEXICO. LETS SHOW THOSE COSACKS.

[Frank Warner]

YEP. And let's find our lower case!

[JERRy]

ENGLISH TEACHER THINK !