Ring in the New Year

A dispute between Russia and the Ukraine over gas prices has expanded to involve Western Europe. After the two countries failed to agree on a new contract, Russia cut off supplies to the Ukraine, and the Ukraine passed on the cuts, causing shortfalls in Western Europeans energy supplies. The Independent describes the standoff which started in the New Year.

On New Year’s Eve, the deadline expired for Russia and Ukraine to agree a new contract for 2009 gas supplies. Moscow had wanted to raise its prices and charge Kiev $250 per 1,000 cubic metres, up from $179.5 last year. The Ukrainians thought that excessive and refused to pay a cent more than $201. Russia promptly put its price up to $450. Then at 10am on New Year’s Day Russia’s Gazprom halted supplies of all gas meant for domestic use in Ukraine. …

It wasn’t quite as simple as Moscow turning off the Ukraine gas tap. The EU gets about a fifth of its gas from Russia via the same pipes that pass through Ukraine. Russia cut the total volume of gas it was pumping by the amount Ukraine imports. But Russia says Ukraine stole some gas intended for Europe, and has cut deliveries by the same amount that was siphoned off.

Consumer gas prices are already rising despite the falling economies as the supplies fell even faster. Although reserves are available, the situation can’t continue indefinitely. The Europeans appear to trust neither side completely and have nominated themselves to monitor the gas flows between the Ukraine and Russia to prevent cheating. But with the physical pipelines in the hands of the disputants, it will be interesting to see how the referee enforces its decisions.

Neutral monitoring should allow the restoration of supplies to the EU, Barroso said at a news conference in Prague. He added, however, that technical details still needed to be agreed upon at a meeting Thursday in Brussels …

“If both Russia and Ukraine behave as they say they are behaving, there should be no problem,” Barroso said. “So we hope that the Russians put the gas into the Ukrainian network and that the Ukrainians do not interrupt the gas from Russia to the EU.” …

However, the EU warned that if the monitoring initiative failed, it might have consequences for both Moscow and Kiev. It would, Barroso said, “raise serious doubts about the reliability of Russia as a supplier through Ukraine.” …

Barroso said that the existing “solidarity” mechanism was insufficient and that the European Commission, the EU’s executive body, wanted it to be expanded. However, he conceded that the EU lacked energy interconnections between key countries, and appealed to member states to agree to back his proposals to spend billions of euros on improving energy infrastructure.

When Joe Biden predicted that BHO would face a challenge to his mettle upon assuming office, many imagined it might be a latter day Cuban Missile Crisis, a dramatic moment that would provide a moment’s thrill before the sun broke through the clouds. But what if the challenges come in the plural? What if the pent-up problems of decades begin to feed each other, like a patient whose long standing health problems begin to cause multiple organ failure. The problem with each new succeeding crisis isn’t the event itself, but its contribution to the total system load. It’s not Pakistan, Afghanistan, Iran, Gaza, the economic crisis, the squabbling among politcians or even the gas dispute that’s worrisome; it’s what happens if all these spreading blots begin to run together. Or maybe they already have.