Opinion

The Great Debate

from Breakingviews:

Gazprom/Ukraine dispute is proxy for Putin’s whims

By Pierre Briançon 

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Europe has long been used to the perennial drama of “Ukraine versus Gazprom,” but this year’s version is not your run-of-the-mill gas price dispute. Making good on a longstanding threat, Gazprom has said it will deliver gas to Ukraine only if it has been pre-paid. This comes after the Russian energy group failed to settle a dispute with Naftogaz, its Kiev-backed counterpart, over what it claims are more than $4 billion of overdue bills.

As summer nears, the decision will have limited immediate consequences on Europe’s energy supplies. Gazprom says it will continue to provide gas to the rest of the continent and has the means to bypass Ukraine. The two sides may be headed to international arbitration – by far the best way to settle the dispute. Gazprom has some grounds for feeling that it has been too patient with its Ukrainian client.

But Gazprom is now asking Kiev to pay for arrears amassed by the previous, pro-Russian government. Ukraine, on the other hand, is contesting the 80 percent hike that Gazprom slapped on gas deliveries in the heat of tensions between Russia and Western powers over the annexation of Crimea. Of course, Kiev at some point can – and probably will – raise the question of how many billions it is owed by Moscow after the confiscation of part of its territory.

Gazprom’s toughening comes just after renewed military activities by Russian separatists in the east of Ukraine. Hopes for a normalisation of the situation between Kiev and Moscow are premature at best. The fact that the Ukranian and Russian presidents have started talking at last doesn’t mean that the region’s problems are over. And it is still hard to understand the Kremlin’s strategy – if there is one.

from Breakingviews:

Russia puts gas-hungry China in a bear hug

By Ethan Bilby
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Russia has signed a long-awaited gas pipeline deal with China, and it leaves the People’s Republic in a bear hug. Russia gets a new market outside the increasingly frosty European Union. Oil major PetroChina gets to balance out some losses from low regulated prices at home. But the optics of the deal shred Beijing’s pretensions to political neutrality.

Russia could use a friend. EU countries have been planning to diversify supply away from dependence on Russia, which provides a third of their energy needs – especially after a dispute in 2009 saw gas cut off. Annexing Ukraine’s southern Crimea region has raised the temperature further. New pipelines from places like Azerbaijan are designed to limit Moscow’s leverage.

‘Energy independence’ is a farce

It can be hard to find areas of agreement between the presidential candidates on economic or domestic policy. Tuesday night’s debate, though, revealed one exception: energy policy. Alas, what it also revealed is that both President Obama and Governor Romney are making their policies based on a false premise, and they are pandering to Americans’ ignorance instead of telling them the truth.

The second question in the debate at Hofstra University came from audience member Phillip Tricolla, and was directed to Obama: “Your energy secretary, Steven Chu, has now been on record three times stating it’s not policy of his department to help lower gas prices. Do you agree with Secretary Chu that this is not the job of the Energy Department?” The premise that the Energy Department can lower gas prices is incorrect. But Obama chose not to confront Tricolla with the hard truth — that global economic forces have put gasoline prices on a long-term upwards trajectory, and that trajectory is beyond our government’s control.

“The most important thing we can do is to make sure we control our own energy,” said Obama, neglecting to answer the actual question. He went on to boast that domestic production of oil, coal, natural gas and clean energy has increased, while he has also raised fuel efficiency standards. “And all these things have contributed to us lowering our oil imports to the lowest levels in 16 years,” said Obama. “Now, I want to build on that. And that means, yes, we still continue to open up new areas for drilling.”

from The Great Debate UK:

After 25 years impact of Bhopal leak lingers

Controversy still surrounds one of the world's worst industrial accidents 25 years after an estimated 8,000 people died in the immediate aftermath of a toxic gas leak in Bhopal, India.

At around midnight on December 3, 1984, a leak at a Union Carbide plant of methyl isocyanate gas -- a chemical compound used to make a pesticide marketed as Sevin -- led to about 50,000 people being treated for severe injuries to their eyes, lungs, and kidneys.

An estimated 15,000 to 25,000 may have later died from exposure to the gas.

Union Carbide, now part of Dow Chemical, settled a lawsuit in 1989 by paying $470 million in compensation to the Indian government. In return, the government agreed to drop criminal charges against the company.

Ukraine gas crisis spurs EU energy policy

Paul Taylor Great Debate– Paul Taylor is a Reuters columnist. The opinions expressed are his own –

The gas dispute between Russia and Ukraine that has left hundreds of thousands of Europeans shivering in the winter cold is bound to accelerate plodding European Union efforts to build a common energy policy.

The cut-off of Russian gas supplies to Europe via Ukraine highlighted how little progress the 27-nation EU has made in connecting national energy networks and diversifying supplies since the first such crisis three years ago.

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