Russian Turns Off Gas to Europe

[farmers_son]

While this may at first not seem related to cattle the truth of the matter is Canada is the United States number one supplier of gas and oil while at the same time the U.S. hammers Canadian cattle producers with illegal protectionist non tariff trade barriers (COOL). It seems you really can turn off the taps, and if the U.S. thought we would there would be no COOL.

Enjoy the paste, it is a nice thought anyway.

http://www.cbc.ca/world/story/2009/01/06/gazprom-cuts.html

Russia's state gas company halted natural gas supplies to several European states Tuesday and severely cut back flows to other nations amid its price dispute with Ukraine, officials in those countries said.

Pipelines to Bulgaria, Turkey, Greece and Macedonia were shut off at about 3 a.m., a Bulgarian government official said. Another official, with the Bulgarian state gas company Bulgargaz, told the Reuters news agency that "the flow has dropped very significantly" and that her country was preparing emergency measures.

Ukraine's gas company Naftogaz said Gazprom had cut natural gas supplies to Europe by two-thirds.

Naftogaz spokesman Valentyn Zemlyansky said Gazprom sent only 92 million cubic metres of gas for European consumers Tuesday, down from 221 million Monday or about 300 million during previous days. The drop in supplies could not be immediately confirmed.

Gazprom said late Monday it would cut the amount of gas it ships to Europe through Ukraine by 65.3 million cubic metres.

"That is all they are sending, in several hours Europe will feel it," Zemlyansky said.

The situation bodes ill for European consumers. Some European countries are already experiencing supply problems after Russia cut off supplies to its neighbour on Jan. 1 over pricing disagreements and outstanding debt.

Europe relies on Russia for a quarter of its natural gas, and 80 per cent of it goes through pipelines that cross Ukraine.

In the latest round of negotiations between Russia and Ukraine, Gazprom toughened its stance Sunday, saying it wants to charge Ukraine as much as $450 per 1,000 cubic metres in January, up from its offer before the cutoff of $250, which Kiev turned down.

Russia's latest reductions appear aimed at putting pressure on Ukraine, which is refusing to pay $600 million Gazprom claims it is owed.

Kiev denies allegations it is stealing gas, saying Russia is to blame for the disruption because it refuses to supply the gas needed to run its pipelines, including the compressor stations that pump gas west.

Each side says the other is responsible for supplying the gas to run the pipeline network, but there is no way to sort out the conflicting claims because details of the transit contract are secret.

Ukraine, one of the largest consumers of gas in the world, says it has enough gas reserves to last for weeks.

Some Western analysts have suggested Russia is using the current crisis to weaken Ukraine's government. But Gazprom insists the dispute is purely a commercial matter. Both nations have been hit hard by the global economic slowdown.

Gazprom last cut off supplies to Ukraine and much of Europe in 2006 in a previous dispute. That prompted many Western European countries to build up large strategic reserves of natural gas that could be tapped in the following days if shortages ensue.

Meanwhile, Iran has said it may be able to increase its natural gas supplies to Turkey if a shortfall is created by the cut-off of Russian gas supplies, an Iranian Embassy source told Reuters on Tuesday.

[grassfarmer]

Would the key difference be contained in the first sentence? "Russia's state gas company halted natural gas supplies...."
Canadian oil and gas exports are controlled by independent corporations not the state.

[coppertop]

good point grassfarmer, it isn't as simple as it sounds to just turn off the tap. For one thing, we are a peaceful nation, and thankfully don't have Russia's track record of suppressing our neighbours !
I do think we have leverage that we haven't used to our advantage when it comes to dealing with the US, but shutting off the tap isn't an option.

[Kathy]

IF the oil and gas companies here were not getting paid for their gas (sent into the USA), would they keep sending it down the pipe?

We get (in english) Russia Today television on our free to air satellite. The cbc story is not giving the details in full.

Eurpean representatives have stated they have gas reserves to last many weeks. The Ukraine gov. is syphining gas off their international lines which ship gas through their country. Pressures in lines going through Belarus, to Europe, from Russia (last I heard) were being increased to compensate for the decreased flow rate through Ukraine.

Should Alberta/Canada governments cancel all royalties received from the private O/G companies if their customers are significantly in default of their payments?

[farmers_son]

If I am correct, according to NAFTA rules, each country can turn off the "taps" under certain circumstances.

However the real point is how much we have lost and how weak and impotent Canada is. Canada should be an economic superpower because of our oil and gas reserves. Instead we are the victim of whatever is the American protectionist movement of the day and we have been taking it in the pocketbook since 2003.

Canada is indeed a peaceful nation (don't tell that to the people of Afghanistan) and the U.S. is very fortunate to have Canada on its northern borders. In fact the only thing separating Russian and the U.S. is Canada. During the Cold War that was a factor but now it is the oil wars.

It is really quite interesting that Canadians are so willing to take a licking at the hands of the Americans. We are the Timex people, take a lickig and keep on ticking. Saudi Arabia does not take any abuse from the U.S. but Canadians are treated like the Venezuela of the North.

Maybe it is our gutless governments, maybe it in not an election issue or maybe the U.S. carefully targets industries that are not politically important in this country but bottom line the cattle industry is reeling from yet another protectionist non tariff barrier called COOL that the U.S. has erected.

The reality is we can turn off the taps but no one gives a damn about cattle producers anyway. If I understand Coppertop has family that work in the oil patch. If it comes down to an oil patch job or one fewer cattle producer we know what the choice will be.

Another WTO challenge? Come on people just turn off the taps and our calf prices will improve $200 a head in a week. Or wait for the WTO ruling which the Yanks will ignore anyway and it will just be something else after that. They won't quit until the Canadian cattle industry is ruined just like the Americans did to softwood lumber.

Canada is the U.S number one supplier of oil and gas. Canada is a crucial ally in Afghanistan and over 100 our our bravest men and women have died in defense of American freedom. And when the Yanks decide to gut our cattle industry like they did softwood lumber we sit back and let them do it.

[mcfarms]

Though if every rancher took a dedicated predetermined day to blockade the access to the gas wells on their land to send a message it might get heard...nice peaceful protest.

[farmers_son]

What the U.S. is doing to the Canadian cattle industry is exactly what the U.S. did to our steel industry. They put up protectionist trade barriers until they broke Stelco then U.S. Steel came in and bought our industry up. And our government let it happen.

Oil and gas is not just another commodity that gets traded across international borders. It is a political and economic tool that other countries use to the advantage of their own economies. Canada could too. Obama has said he wants to reopen NAFTA, we should beat him to the punch and reopen it first. On the balance, when you consider the obstacles the U.S. has put in place to restrict trade in Canadian cattle and beef, steel and softwood lumber too, NAFTA has not worked. They took our oil and gas and the protectionism on our other resource industries actually got much worse with NAFTA. We gave away our economic power.

We do not need to be a punching bag for Americans. There is an election coming up no doubt this year, possibly in March. Are any of the parties willing to use the energy reserves under Canadian soil to leverage a fair deal for Canadian industries?

[kato]

I agree.

I think we're so taken for granted in the U.S. that it's ridiculous. They see us as being polite and kind people, but to a country like the U.S. which values and respects aggressive business attitudes that also means they see these attributes as weakness. American society in general admires those who go out and get what they want by whatever means. Survival of the fittest is a foundation of their identity. The American dream and all that. Being nice to people if it's going to cut into your profits is not part of the equation. That would be considered weak in such a society.

My Dad once went to a supper where J.R. Simplot was speaking. One of the things that still sticks in his mind was a comment by J.R. on his philosophy in life. It was, "Love thy neighbour. If you can't love thy neighbour, then tolerate him. If you can't tolerate him, then buy him out." That pretty much sums it up.

We are loved by the Americans when we send our young men to die in their wars. We are tolerated (or ignored) the rest of the time, and when they see an opportunity for profit, we are bought out.

The best case scenario I can see for the WTO challenge is that it gets the attention of Washington before it's too late. It's nothing more than a reminder that "Hey! There are other people in the world who are affected by this!." We all know it won't change anything in the long run because they will just ignore the ruling. Like they always do.

We're told over and over that we need to find more export markets. That's a nice idea too, but guess what would happen if we displaced American beef in another country? Yup. Some kind of hammer would come down on our heads. They are not afraid to use leverage on us, so it's time we learned to use leverage on them. After all it's the "American way". LOL.

Sad to say, I think our Mr. Harper is a wanna be American. I don't see him ever standing up to the States over anything, especially cattle. What it's going to take to wake Ottawa up to the selling out of Canada is anyone's guess, but it sure needs to happen sooner than later.

You can only get kicked in the head so many times and you either give up or get mad. Personally I think it's time to get mad. And a good place to start would be if an election happens after Parliament reconvenes. Make the politicians accountable for their actions, or inactions as the case may be. Make them all state in public what they are willing to do to keep our sovereignty, and how far they will go to defend the citizens of Canada. (Not like the last election where the Conservative candidates were all basically muzzled,and they got elected without ever revealing their platform, or if they even had one.)

If it means shutting off taps, then so be it. If it means renegotiating NAFTA, then so be it. America's signature on that document doesn't mean anything now anyway. They only pick and choose which parts they will honour now, so what difference would it make to us? They live up to the parts that are beneficial to them, and violate the parts that are beneficial to us.