Putin badly miscalculates

By Aussiegirl

What a brilliant plan, Putin's bonehead move has resulted in Europe looking at alternative sources of energy, both conventional and atomic. Nothing like cutting the demand for your own product by showing yourself to be an unpredictable and unreliable supplier. Putin has a lot to learn about living in the modern world.

Bloomberg.com: Europe

European governments, startled by Russia's decision to cut off Ukraine's gas supplies, are seeking ways to make themselves less reliant on energy from their eastern neighbor.

``Dependency on Russia should be reduced,'' said Martin Bartenstein, the economy minister in the Austrian government, which took over the rotating presidency of the 25-nation European Union Jan. 1. ``The diversification of energy supplies is a common project for the whole of Europe,'' he told a press conference in Vienna yesterday.

Europeans are now considering whether they can get more gas from other suppliers, such as Algeria and Libya in North Africa. The clash between Russia and Ukraine may also lead the U.K. and other governments to weigh the construction of more nuclear plants and keep existing ones running longer, and is also stimulating more discussion of solar and wind power.

Europe gets about a quarter of its gas from Russia, the world's largest producer, and about 90 percent of that flows through a single pipeline crossing Ukraine. OAO Gazprom, Russia's state-run gas monopoly, cut off natural-gas supplies to Ukraine Jan. 1 after the Ukrainian government refused to accept a fourfold increase in prices.

German, Italian and Hungarian customers suffered shortages after the incident, with Gazprom and Ukraine blaming each other. While supplies returned to normal yesterday, the incident is a reminder that ``nobody wants to have all their eggs in one basket,'' said Christopher Granville, a strategist at the Moscow- based United Financial Group. ``They will have to have more suppliers. The commonsense way forward is more pipelines.''

Questions for Putin

Russian President Vladimir Putin, who took over as chairman of the Group of Eight leading industrialized nations Jan. 1 and has put the security of energy supplies at the center of the group's agenda, may face questions on the issue when German Chancellor Angela Merkel visits Moscow on Jan. 16.

``Russia just assumed the G-8 chair and can't be allowed to act this way,'' said Elmar Brok, the German chairman of the European Parliament's foreign-affairs committee, in a telephone interview from Strasbourg, France. ``Russia's demands appear undue and excessive. We need greater diversity of gas pipelines.''

``The latest developments show how important it is to draw on a balanced, broad energy mix,'' German Economy Minister Michael Glos said in a statement Jan. 2. Glos favors extending the lifespan of German nuclear plants, after the previous government of Gerhard Schroeder agreed to phase out nuclear power by 2021.