Sunday, January 01, 2006

Is Putin Crazy?

Russia starts cutting off gas to Ukraine

By Christian Lowe 16 minutes ago

MOSCOW (Reuters) - Russia began cutting off gas to Ukraine in a dispute that could hit deliveries to a wintry Europe on the very day that Moscow began its first term as chairman of the Group of Eight industrialized nations.

The Russian state-owned supplier, Gazprom, said it had begun reducing pressure in the pipeline supplying Ukraine on Sunday after Kiev refused to pay the increased price Moscow was demanding.

"In this situation, which is the fault of the Ukrainian side, we have been forced to start reducing pressure in the pipeline to Ukraine," Gazprom spokesman Sergei Kupriyanov told a news briefing.

Gazprom supplies 25 percent of western Europe's gas -- most via Ukraine. It insisted deliveries to western Europe would not be affected but Italy's gas importer said Gazprom had warned it that disruption was possible.

Though Russia says it is purely a business dispute, the gas cut-off has fed concern from Washington to Berlin that the Kremlin is prepared to use its control over its massive energy resources as a political weapon.

Ukraine's Western-leaning president, Viktor Yushchenko, has irked many in Moscow by trying to take his ex-Soviet state on Russia's western border into NATO and the European Union.

That, say Ukrainian officials, is why the Kremlin is punishing Ukraine with such a huge price increase while letting more Moscow-friendly ex-Soviet states such as Belarus go on paying far less for Russian gas.
Apparently, Putin has been taking notes on the Bush administration, punishing allies and even dependent countries to keep them in line with his policies. What's more, like Bush, Putin doesn't seem to mind that he will endanger (or at least inconvenience) other European allies, including G8 members.

Which ought to scare us all. Part of the dynamic behind the Cold War was the palpable hubris of the United States and Soviet Unions, a dynamic that included fear, statism, and a form of economic terrorism on both sides. As oil becomes more dear and supplies begin to dwindle, if the world has not been given an alternative energy source that can replace oil, Russia will gain enormous power in the world, far exceeding OPEC, as Russia has the military might to dictate terms. It would not surprise me to see Russia take a lead with OPEC in dictating terms of oil production and distribution, thus ultimately winning the Cold War.