Ukraine, Russia, Natural Gas: Ideology or Hypothermia?

January 5, 2006 0800 PST (FTW) - In 2004, both the U.S. and Ukraine had Presidential Elections with artificial results. In the country whose WMD arsenal dwarfs that of the entire outside world, the fraudulent victory stood unchallenged. But in the agricultural backwater of a long-fallen imperial power (I mean Kiev, not Ohio), the suspect result was negated and a new election held. This time the Viktor was Yushenko, a former Prime Minister who seems to embody the desire of non-Russian Slavs to avoid reabsorption into the Soviet relationship with Russian power. He may not be Lech Walesa or Vaclav Havel, but Yushenko is no friend of Mr. Putin.

The current “cold” war over gas is pure realpolitik; there’s nothing ideological about it. Putin is punishing Ukraine for its political resistance to Russian power. He’s not doing this by imposing a high price and inflicting it on the Ukrainians; he’s removing a Soviet-era subsidy and offering the gas at what he calls an international market value. But other former Soviet Republics and satellites are still receiving the cheap Russian energy that Cuba and North Korea – and now Ukraine – have lost.

The Americans, for their part, “support a move toward market pricing for energy, but believe that such a change should be introduced over time rather than suddenly and unilaterally.” But that is not what the Russians have chosen to do, and the Ukrainian economy cannot afford the 400% price hike – so Ukraine wants from Russia what Caribbean clients get from Hugo Chavez: the opportunity to barter for energy. They would do it by tapping a percentage of the Russian gas that crosses through Ukranian pipelines, in exchange for the transit costs. But Chavez is a genuine leftist, whereas the Putin Presidency represents a total break with the Soviet era in every respect except its imperial ambitions. No energy company could be more different from Citgo than is Gazprom, who greeted the barter idea this way:

"The price of 150 cubic meters of gas is not the same as the transit cost for this volume of gas… Ukraine refuses to understand that." Nonsense. Ukraine never asked to tap 100% of the gas; it claimed “the legal right to take 150 cubic meters of gas from every 1,000 as a transit fee.” These articles are good, but they cast the conflict as a struggle for power in which energy is being used as a leveraging device. On FTW’s map, the energy is the power.