The cutoff of supplies of natural gas from Russia to Europe through pipelines in Ukraine may have been resolved for the time being with an agreement to deploy international monitors to make sure Ukraine isn’t siphoning off natural gas intended for countries farther west.
But this dispute is about more than what price Ukraine will pay for natural gas. It has political implications that are worth being aware of, since they impinge peripherally on the United States.
The roots of the dispute between Ukraine and Russia are deep. In the bad old Soviet days, Ukraine was incorporated into the Soviet Union and received Russian natural gas at a heavily subsidized price. This arrangement was continued after the Soviet Union was broken up, and Ukraine became an independent country.
As Ukraine tilted toward the west, however, and especially after the “Orange Revolution,” which installed the nominally pro-western Viktor Yushchenko as president, Russia decided this subsidy was unjustified.
Three years ago, you may remember, Russia cut off gas to the Ukraine for 48 hours to pressure the Ukrainians to agree to a higher price, a step that affected Western European countries mildly and alarmed them. The impasse was resolved through an agreement to double the price Ukraine was charged for natural gas, though the price was still about half of the world market price.
Three years on, Ukraine has become less stable and possibly more corrupt, with Yushchenko squabbling with his former ally, Prime Minister Yulia Tymoshenko. Russia charges that Ukraine is some $2 billion behind in paying its gas bills. Ukraine charges that the price Russia pays for shipping gas to Western Europe through Ukraine — which accounts for about 40 percent of Western European natural gas supplies — is too low. So on Jan. 1 Russia again cut off supplies to Ukraine, then later cut off all gas through Ukrainian pipelines.
As a result, in an especially chilly period this winter, Bulgaria is already closing schools and factories, Austria, Hungary, Romania, Slovakia, Croatia and Bosnia have experienced shortages and Western Europe feared deeper impacts. Thus the deal.
Beyond price disputes, however, the dispute has a geopolitical aspect. Having gained strength after the 1990s (though the current global financial crisis is having a deleterious impact), Russia has resumed its traditional concern about the “near abroad.” Both Napoleon and Hitler invaded Russia, and Russians are keenly aware that there are no natural geographical barriers to invasion. It may be silly for Russians to worry about invasion now but they do. When Ukraine flirts with the West, and especially when the U.S. talks about wanting to admit Ukraine into NATO, Russians worry and think about countermeasures.
The United States would do well to cease pushing to get Ukraine into NATO, which most European countries now oppose and which doesn’t make strategic sense, anyway. That won’t eliminate the chance of future disputes over natural gas, but it will eliminate one significant irritant.