Did Fracking in the U.S. Cause the Ukraine Conflict? Possibly

by Greg Pollowitz

From today’s Washington Post:

Shifting energy trends blunt Russia’s natural-gas weapon

While Russia flexes its military might at its Black Sea naval base in Crimea, Moscow has another weapon that it has wielded against Ukraine in the past: natural gas supplies.

Russia provides more than half of Ukraine’s natural-gas needs and since 2006 has twice curtailed supplies in disputes over politics, price and late payments. Those supply cuts rattled countries across Europe that depend on the Russian pipelines that run through Ukraine.

But changes in the global trade in natural gas have blunted Moscow’s weapon, forcing the Russian pipeline monopoly Gazprom to cut prices worldwide and giving Ukraine slightly more bargaining power.

The boom in U.S. shale gas has left gas-exporting countries shopping for other customers. Europe, as it adds terminals to handle liquefied natural gas, will be able to offset its own declining production with supplies from countries such as Qatar. And in 2012, Norway’s Statoil sold more gas to other European nations than Russia’s Gazprom.

“Since the Russian supply cuts in 2006 and 2009, the tables have totally turned,” said Anders Aslund, a fellow at the Peterson Institute of International Economics who has advised Russia, Ukraine and Kyrgyzstan. Aslund said Ukraine once rivaled Germany as Gazprom’s biggest customer. Now, he said, “Gazprom’s challenge is to stay in the Ukrainian market.”

The rest here.

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