Like many conflicts before it, the current battle brewing between Russia and Ukraine has a strong energy component.
Russia has a history of using its energy supplies as a control mechanism—such as the 2006 and 2009 gas wars when it cut natural gas supplies in the midst of winter and left many European nations, which rely on Russian natural gas that is shipped through Ukraine, without energy. The supply disruptions were due to “disputes over politics, price, and late payments,” says the Washington Post. Back in November, before the current conflict erupted, Reuters reported: “Ukraine has for years been a politically troubled buffer state between Russia and the European Union, and has used its status as a gas transit corridor to play Moscow off against Brussels.”
Russia supplies virtually all of Ukraine’s natural gas and Ukraine serves as a critical transit route for sending Russian natural gas via pipeline into Europe.
Aware of its reliance on Russia, and seeking energy independence, Ukraine has taken several steps to move away from the grip Moscow holds over its energy supplies—a move that has not gone unnoticed by Russia. In addition to reducing its use, Ukraine is seeking supplies from other sources and has signed deals to develop its own resources that are thought to be “significant” and “similar to those that unlocked a boom in U.S. energy production,” reports the Christian Science Monitor (CSM).
A 2011 announcement in LNGIndustry.comstates: “Ukraine is going to officially put out a tender for a company to perform a feasibility study for an LNG importation terminal on its Black Sea coastline.” It cites Vladyslav Kaskiv, the head of the state agency for national projects management (Ukrnatsproekt), who said: “construction on the terminal and regasification of liquefied gas will help diversify sources of energy carriers and strengthen the country’s energy security while improving the investment climate in Ukraine.”
NEW TIME Today, at 9:30 AM PT: Get the Market Movements in Advance; Williams Edge Webinar for November 26th, 2014 | John Ransom