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December 11, 2005
Gas and Politics - Germany and Russia
By: Rowan Wolf
Back in April 2005, Germany signed a huge contract with Gazprom of Russia to construct a gas pipeline. The agreement marks the first time that a foreign nation has been allowed to share in the development of a Russian oil or gas field. In this case, it is the Yuzhnorusskoye gas project in western Siberia. Now, former German Chancellor Gerhard Schroeder will be the chairman of the consortium created in April.
The pipeline project, which broke ground on Friday, will send gas to Germany and western Europe will bypass eastern European countries such as the Ukraine and Poland. This is a situation which gives Germany a large advantage in an age of declining oil, and leaves the Baltic region high and dry. This will not ease already existing tensions in the EU between richer nations, and the less popular ones. The pipeline will run under the Baltic Sea to Germany, and Poland and the Ukraine (both who need Russian oil and gas) fear they will lose that supply.
History never dies, and Poland has had bad experience with both Germany and Russia. A deal between the two nations raises both concerns and suspicion in Poland. It does not help that Poland may lose its access to below market gas from Russia - a deal that's been in place because Poland allows Russia to transport gas through their nation. The pipeline will diminish, if not kill, that route. The result, higher gas prices for Poland at a time when gas is already skyrocketing
At conflict with the Schroeder appointment is the stink of a payback situation. The Gazprom deal was finalized in September - just before Schroeder left office. His appointment to the top post does not look good.
Posted by Rowan at December 11, 2005 6:33 PM Category: Peak Oil