Russia cuts European oil supply

[Bounty]

Nuclear is costly, has hideous lead times, a bad public image and would require overhauling the grid to allow for extra heating from electric induction given gas pipes and their boilers/fires are so much simpler and more efficient. You're really talking about converting a whole continent's energy supply, which is no easier than getting off oil right now.

Slovenia or Slovakia (can anyone tells those apart?) is rolling back its nuclear deactivation program, and I'm hoping my country will do too. Starting nuclear power from scratch might not be in the cards for many countries but keeping the existing plants running - insofar as they were being shut down for political rather than technical reasons - seems viable now.

[folti78]

I guess concession has to be made on Russia side, given that Russia is the one losing customers.

Currently it's not Gazprom who's losing customers, it's customers can't lose russian gas...
At the moment, most of Central and Eastern Europe's gas requirement's can't be supplied from any other source properly. That's why the EU got really twitchy in 2006 and accelerated the construction talks of the Nabucco and the planned expansion of the Blue Stream pipelines, both of them bypassing Ukraine.

[folti78]

Slovenia or Slovakia (can anyone tells those apart?)

Yes , one's on our south-western border and usually don't cause much problem, the other one is our nationalist northern neighbour with a sizeable hungarian minority and a ruling party who either fears evil hungarian invasion or wants to get back as much land of the Great Moravian Empire from Hungary as possible

is rolling back its nuclear deactivation program, and I'm hoping my country will do too.

Slovakia made some noises about restarting their power-plant, but due to EU opposition they delayed the action.

[Illuminatus Primus]

Why is the EU have a grudge against their nuclear program? Eurogreens?

[Bounty]

Why is the EU have a grudge against their nuclear program? Eurogreens?

Mostly. Remember Chernobyl! and all that. The general sentiment is turning back towards nuclear power now that it's becoming a necessity, but it's a slow turn.

[CJvR]

Why is the EU have a grudge against their nuclear program?

I suspect it is mostly because the reactor is an old Soviet design. You don't have to be against nuclear power to be against those plants.

[folti78]

Why is the EU have a grudge against their nuclear program? Eurogreens?

Mostly. Remember Chernobyl! and all that.

Especially if the NPP in question uses soviet built reactors. Those are all Chernobyl's waiting to happen... Just ignore the little fact that no RBMK reactor has been built outside of the SU and VVER reactors are incapable to go Chernobyl. As far as i remember, this sentiment is stronger in Austria and Germany.

In case of the Slovak reactors in the Bohunice V-1 plant it was the EU's safety concerns that pegged Slovakia's acceptance into the EU to the shutdown of the plant. The Bohunice V-2 plant are not affected in the debacle and the Mochovice plant got western safety upgrades during its construction in the 90s.

The general sentiment is turning back towards nuclear power now that it's becoming a necessity, but it's a slow turn.

Just like anything in the EU

[Tiriol]

From BBC: EU warns of possible legal actions.

EU warns of legal action over gas

The European Commission has warned Russian and Ukrainian gas companies of legal action over a dispute which has left many Europeans without heat.

Commission president Jose Manuel Barroso said he would advise EU energy companies to sue unless Gazprom and Naftogaz move fast to restore supplies.

Diplomatic pressure is growing, with Bulgarian, Slovak and Moldovan PMs holding talks in Moscow and Kiev.

Supplies remain cut off because of a payment row between Russia and Ukraine.


'Matter of urgency'

Mr Barroso told the European Parliament the dispute between Ukraine and Russia was "most unacceptable and incredible".

He said if agreements, sponsored by the European Union, are not observed "as a matter of urgency", he would advise energy companies that have deals with Gazprom and Naftogaz, to file lawsuits against them.

"If the agreement is not honoured, it means that Russia and Ukraine can no longer be regarded as reliable," he said.

MEPs are due to debate the situation later on Wednesday.

Moscow says gas is flowing from Russia to Ukraine for export, but Kiev says it is technically unable to pass it on to its neighbours.

Despite optimism on Tuesday that the dispute was nearing an end, there is increasingly antagonistic rhetoric from both sides.

Eighteen other European countries have been affected by the gas supply row.

Hundreds of thousands of people are still without heating in eastern and south-eastern Europe after Moscow stopped supplies routed through Ukraine last week.

Bulgaria has had to close schools and other public buildings, due to the cuts.

In Kiev, Slovakia's prime minister told his Ukrainian counterpart Yuliya Tymoshenko his country had 11 days of gas reserves left.

Robert Fico said: "After 12 days, we will be obliged to resort to measures never seen in our history. "

He added: "We are not interested in your bilateral relations with Russia, we are interested in the transit of Russian gas through your territory.

"We ask you to start bilateral talks between the Russian and Ukrainian prime ministers."

Mr Fico then moved to Moscow, to join the prime ministers of Bulgaria and Moldova for a meeting with the Russian prime minister Vladimir Putin.

Slovakia and the Baltic states are entirely dependent on gas from Russia.

Meanwhile, Polish president Lech Kaczynski, whose country also relies entirely on Russia for its gas, will meet his Ukrainian counterpart Viktor Yushchenko.


Technical arguments

An agreement, brokered late on Monday by the Czech prime minister, to allow international experts to monitor the flow of gas through Ukraine, was designed to overcome the deep feeling of mistrust between the two former Soviet neighbours.

Russian switched on the gas supply to Ukraine at the Sudzha pumping station on Tuesday morning in what Moscow officials described as a test delivery.

But Ukraine said it could not physically pump the gas to Europe in the volumes Russia was currently providing, or along the pipeline route Moscow wanted it to take.

Russian energy giant Gazprom dismissed that claim. It says the taps are open on the Russian side.

The arguments are hugely technical, but the fact is they cannot both be right, says the BBC's Gabriel Gatehouse in Kiev.

[Thanas]

So the Ukrainians, who fail to do any kind of maintenance and repairs to the transit network at all have now complained that they cannot pass on any gas to Europe.

Go on, Ukraine, proudly annoy all your neighbours. What a smart move, especially considering the Ukraine needs the EU for political and economic survival.

[folti78]

Another deal has been reached in Moscow:

Russia, Ukraine PMs say reach gas deal
Sun Jan 18, 2009 4:06am EST

By Oleg Shchedrov

MOSCOW (Reuters) - The prime ministers of Ukraine and Russia said on Sunday they had reached an outline deal to restore gas supplies to European consumers after marathon talks which dragged on into the small hours of the morning.

"Gas transit, the Ukrainian side assured us, will be restored very soon," Russian state channel Vesti-24 showed Russian Prime Minister Vladimir Putin saying in a brief statement after the drawn-out talks.

Putin, standing next to his Ukrainian counterpart Yulia Tymoshenko, said Moscow had agreed to make a 20-percent discount for Kiev from a price European consumers pay, "on condition Kiev keeps preferential tariffs for Russian gas transit to Europe across Ukraine in 2009 at last year's level."

"We also agreed that starting January 1, 2010 we will fully move to gas prices and transit tariffs in line with European levels without any reductions and discounts," Putin said.

Tymoshenko said: "We ordered the heads of Naftogaz and Gazprom to prepare by Monday the whole package of documents and formulate them the way it was agreed during today's talks."

"Once all the documents on gas transit and gas purchases have been signed, gas transit to Europe will be fully restored."

Gazprom spokesman Sergei Kupriyanov told local channels Russia's gas export monopoly and Ukraine's Naftogaz "are now drawing up an agreement on gas supplies to Ukrainian consumers and gas transits." Naftogaz offered no comment.

Putin and Tymoshenko were under intense pressure from the European Union to resolve the dispute, which has cut gas supplies to much of eastern Europe since January 7 and damaged both countries' reputations as reliable energy partners.

While Putin, Russia's paramount leader, had full authority to seal an agreement, it remained unclear whether Tymoshenko's domestic political rival Viktor Yushchenko would respect the deal reached in Moscow.

Last October, Tymoshenko and Putin clinched a deal calling for a three-year transition period after which Ukraine would pay market prices.

President Yushchenko had no objections to that deal and said repeatedly Ukraine must be prepared to pay market prices, while saying a formula had to be found to determine the price.

Yushchenko and Tymoshenko had disagreed on some negotiating tactics in the final run-up to the deal, notably on whether a deal for Ukraine and transit to Europe should be separate.

The frantic all-night talks followed a summit in Moscow of gas-consuming nations at the Kremlin on Saturday afternoon which failed to resolve the dispute.

Russia cut off supplies to Ukraine on January 1 because it would not pay higher prices for its gas. Six days later, export flows to eastern Europe through Ukraine ceased amid Russian accusations that Kiev was "stealing" gas intended for export.

After the Kremlin meeting, Medvedev reiterated Moscow's position on the issue at the heart of the dispute, saying that Kiev had to pay European prices for gas supplies, more than double current levels.

"There is nothing damaging about that. It's the money our other partners pay and Ukraine is in a position to pay it," Medvedev told a news conference.

Kiev, whose crisis-gripped economy is forecast to contract by up to 5 percent this year, says it cannot afford such high prices and wants Russia to pay higher transit fees for gas it exports through Ukraine.

MANDATE

Russian officials had earlier questioned if Tymoshenko, a former gas trader, had the necessary mandate to discuss a solution.

In Kiev, a source in Yushchenko's office said there were no divergences between the president and the prime minister. "The prime minister has a full mandate at the talks. Otherwise, she would not be taking part in them," the source said.

Russia invited heads of government of all countries buying or transporting its gas to its "Moscow International Conference on Ensuring Delivery of Russian Gas Supplies" on Saturday, but most stayed away.

The Czech Republic urged EU member states not to attend so that Brussels could speak with one voice. Slovakia was the only EU member to come, apart from the Czechs. Most other attendees were Russia's allies in the Balkans and eastern Europe.

A key hurdle to ending the dispute appeared to have been overcome when a consortium of European gas companies said they had agreed to supply enough gas to fill the empty pipeline and restore pressure so that exports could resume.

But the key sticking point remained the price Ukraine must pay for its own supplies this year. Yushchenko insisted there could be no question of exports resuming to Europe until Ukraine had settled its own prices with Moscow.

Gazprom wanted Ukraine to pay European-level prices of $450 per 1,000 cubic meters (tcm) of gas for 2009, up from $179.5 per tcm in 2008. But Ukraine, heading into its worst recession for a decade, had said it can afford only $201.

The row has focused minds in Europe about the need to find new routes for gas but experts say any solution would take years to build and Gazprom says EU dependency on Russian gas is forecast to increase over the coming years.