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April 23, 2006

Weapons of Gas Destruction

By: Silvio

It is necessary to note that attempts to limit Gazprom's activities in the European market and politicize questions of gas supply, which in fact are of an entirely economic nature, will not lead to good results.
This is what Alexei Miller, Gazprom’s chief executive, said a couple of days ago: I didn't hear much noise about such a bold announce in the mainstream media - and I'm quite worried about both sides of this situation, the statement and the silence.

But first let's see how we got here: Gazprom, the biggest natural gas extractor in the world and the supplier of a quarter of the EU’s gas, is planning to expand its business (it had $31 billions in sales in 2004, so I guess it must have a lot of money to invest) and has strong ambitions to move into the downstream markets: thus the plan of acquiring Centrica, Britain’s biggest gas supplier with 11m customers in the UK.

As an answer to this "interest" by Gazprom, the very open-market and strongly liberal U.K. government is considering changing merger rules to block the potential takeover (at least, this is what the Financial Times says) - but wasn't corporate nationalism just a French habit?!?)

Apart from the fundamental hypocrisy that Western governments are showing all around the world (when the going gets though, the fascists get going), I'll try to explain the two reasons why this situation is quite worrisome - at least to me.

First of all, for the first time in recent history one of the main suppliers of gas (a very very very important commodity, especially in these times of peaking oil and freezing winters) to Europe is explicitly using it as a political and economical weapon, basically saying: "let us do what we want, or we'll sell our gas to somebody else, as eager as you to buy it but less protectionist and closed (read: China)".
This is an enormous shift of power, since the strong and powerful Europe, in the long run, cannot do anything about it: it's Russia who has the gas, and in a world of scarcity it's the owner who sets the (political and economical) price. And our world is becoming scarcer and scarcer, everywhere you look.

Beside this, what worries me maybe even more is the silence on this matter by the media. These kind of events should be the occasion for newspapers and televisions to start talking seriously about the incoming energy crisis, or at least about the fact that we (Europe and North America) depend more and more on "foreign" commodities, whose flow could be one day "diverted" to other places in the world, leaving us with our butts frozen and our cars empty.
Instead we only talk about Russian (or Venezuelan, or Iranian, or who knows) disruptions in gas or oil supplies when they occur, as if they happened because those governments and people are just plain evil and envy us so much that they don't want to give us our (!!!) energy anymore.

I guess everybody can agree with me that this is a quite childish approach, right?
Well, unfortunately this is the exact reaction that happened in Italy and Germany when Russia cut gas supplies to Ukraine at the beginning of the year (don't say we were not warned!), or that is happening every single day in the U.S. regarding Venezuelan oil and Chavez "attitude".

Well, you know what's the scariest thing, to me?

When people are childish, they are more open to fear. And when a child is scared, he looks for a big and protecting father.

Last time we had "big" and "protecting" fathers it was in Europe, about 60 years ago. And we almost blew the world apart.

Posted by Silvio at April 23, 2006 9:36 AM Category: Resource Depletion