A disagreement between Russia and Ukraine over the price of natural gas left millions of Europeans without heat for about two weeks. The gas disruption came right in the middle of winter, after the two countries failed to renew a contract that expired on January 1.
The European Union buys about 25% of its natural gas from Russia, and 80% of that goes through pipelines that run through Ukraine. When the contract ran out, Russia shut down the gas flow to Ukraine, which meant that the gas meant for the other European countries could not get through either. Almost 20 countries were affected by the shutdown.
By January 20, Russia and Ukraine had come to an agreement for the new gas contract, and the gas was turned back on. The new contract will last for ten years, but some analysts fear that Ukraine’s fragile economy will not be able to afford the new price. The rest of Europe has taken the disagreement and temporary shut-off as a sign that Russian gas is unreliable. Many countries are looking for other sources to buy their natural gas, so that they will not be left in the cold if Russia decides to shut the gas off again.
Related Links
- Russian Gas Reaches Europe Again Via Ukraine
Article from Reuters covering the dispute and resolution between Russia and Ukraine, as well as Europe’s reaction.
(Source: Reuters, January 20, 2009) - Russia Opens Gas Taps to Europe
BBC story on the contract disagreement, how it was settled, and Ukraine’s disappointment with the new contract.
(Source: BBC, January 20, 2009) - FACTBOX: Russia and Ukraine Sign 10-Year Gas Supply Deal
Bulleted list that breaks down the issues surrounding the contract between Russia and Ukraine, and the solutions that were agreed upon for the new contract.
(Source: Reuters, January 20, 2009) - Map of European Natural Gas Pipelines Fed by Russia
Map from the BBC shows the countries that receive their gas from Russia, and shows the routes that the pipelines take through Ukraine.
(Source: BBC, January 20, 2009)
Other Issues in the Region
Regional Conflict
When the Soviet Union broke up in 1991, fifteen republics gained independence. Meanwhile, regions within some of the republics have broken off to form independent governments. Two key examples are the Abkhazia region in Georgia and the Chechnya region in Russia. Despite declaring independence in 1999, Abkhazia has not been recognized as an independent nation, and Georgia continues to try to bring it back into the fold. Since April 2008, however, tensions have risen as Russia has shown support for Abkhazia’s separatist movement, shooting down a Georgian spy plane and bringing troops into the region.p>
- Russia and Georgia Meet To Ease Caucasus Tensions
The governments of Russia and neighboring Georgia met to discuss ways to ease tension in the region and reduce the risk of violence. These were the first talks between the two nations since their brief war in August over the breakaway regions of South Ossetia and Abkhazia. Representatives from both of those regions were present at the talks.
(Source: Reuters, November 19, 2008)
Soviet Union’s Nuclear Legacy
Fifteen years ago, the end of the Cold War seemed to halt the nuclear showdown between the United States and the Soviet Union. In the years since, the biggest concern about Russia’s and the former Soviet Republics’ nuclear weapons was that they would fall into the hands of terrorists or rogue nations. The fear is not only that terrorists might detonate a nuclear bomb, but that they could also buy or steal radioactive material from Russian nuclear sites and use it to make a “dirty bomb.” The idea of such a bomb would be to use conventional, or regular explosives to spread deadly radiation over a small area.
- EU Voices “Strong Concern” Over Russian Missiles
Russian President Dmitry Medvedev announced on November 5 that Russia would place nuclear missiles in the city of Kaliningrad in response to U.S. plans for an anti-missile defense shield in Poland. The European Union protested that these plans go against the “climate of trust” that Europe is trying to foster.
(Source: Reuters, November 7, 2008)
Economic Reform
Russia’s transition from a command economy to a market economy has been a difficult one. When the Soviet Union collapsed in December 1991, the economy collapsed with it. Everything changed, from the laws and the currency of the republics, to the availability and distribution of goods. The years since have been tricky as Russia has moved from communism to capitalism. Shortages and rationing were the order of the day. A government-sponsored liberalization and privatization plan benefited mainly the rich and powerful, leaving average people to suffer.
- Putin Vows to Prevent “Collapse”
Prime Minister Vladimir Putin promised that the Russian government will do everything possible to prevent the Russian economy from collapsing during the global financial crisis. He said that Russia’s financial reserves from oil and natural gas revenue would keep the country from experiencing high inflation.
(BBC, November 20, 2008)