Gas crisis

Talks aimed at restarting gas shipments to Europe hung in the balance Friday 1-9-9, with Russia and Ukraine still at odds over the terms of deploying a European Union-led monitoring mission to track flows of Russian gas through Ukrainian pipelines.

"Our goal is to show who is to blame for stealing gas," President Dmitri Medvedev of Russia said. "Such thievery can't be left unaccountable."

Senior officials from the Czech Republic, which holds the rotating EU presidency, said late Friday 1-9-9 that Ukraine had agreed to the deployment of the EU monitoring mission on Ukrainian soil, including the Russian demand that Russian monitors be included.
An impasse developed when Russia insisted on the right to have its own experts on Ukrainian soil, which Kiev flatly refused.

Short-term measures including increasing production in Norway, the Netherlands, Britain, Romania and Poland as a way of compensating for the loss of Russian gas.

Both Gazprom and Naftogaz, the Ukrainian energy company, issued sharp statements Friday, blaming the other's intransigence for prolonging the crisis.

"So far, our negotiations have been fruitless," Oleh Dubyna, chief executive of Naftogaz, said in a statement. "The Russian delegation looks unprepared to continue the negotiating process."
Gazprom, in turn, issued a statement saying that "the latest step by Ukraine is aimed at escalating the crisis situation with transit of Russian gas to Europe."

EU officials said Topolanek was engaged in tireless diplomacy, along with Vaclav Bartuska, the Czech roving ambassador for energy issues, and Alexandr Vondra, the deputy prime minister, who have been in regular contact in the past few days with senior officials from both Gazprom and Naftogaz.

People close to the negotiations said Chancellor Angela Merkel of Germany, who grew up in East Germany during the Cold War, was playing a crucial role, using her close working relationship with Putin, with whom she regularly converses in fluent Russian, to try to overcome the impasse.

Merkel's close relationship with Topolanek is also helping the EU to develop a coordinated stance with Russia, EU officials said; Merkel worked as a scientist in Prague during the Communist era, and both she and Topolanek are economic liberals who are eager to put Europe's strained relations with Russia back on course.

Topolanek gained knowledge of the energy sector as a young mining engineer.

Putin blamed Ukraine's leaders for the shutoff and suggested they were unwilling to cut out a middleman company, RosUkrEnergo, owned by a business ally of the Ukrainian president, Viktor Yushchenko.
http://www.iht.com/articles/2009/01/09/europe/gazprom.php?page=1

Gas crisis escalation, incresing confrontation Russia - West

Gazprom, the Russian gas monopoly, halted nearly its entire export of natural gas to Europe on Tuesday in a sharp escalation of a dispute over prices with neighboring Ukraine that also underscored Russia's increasingly confrontational stance toward the West.

Ukraine has angered Russia by seeking membership in the North Atlantic Treaty Organization, as has Georgia, a country Russia fought a brief war against in August.

Oil and gas exports make up about 60 percent of the Russia budget. Oil prices, meanwhile, have fallen by about two-thirds since their peak last summer 08 of around $150.

Gazprom is seeking to raise the price Ukraine pays for gas from $179.50 last year to $450, and to collect what it says are fines for late payments on previous shipments.
Ukraine, in exchange, wants to raise tariffs for gas shipped across its territory.

http://www.iht.com/articles/2009/01/06/europe/gazprom.php

I guess this is better than the open war.