Hay, Did You Know Russia Likes Playing with Ukraine’s Gas Supply?

by Joshua Foust on 1/1/2009 · 2 comments

Nathan Hodge notices OMG UKRAINE AND RUSSIA DON’T SHARE GAS. This is a years-old story, which he kind of says but doesn’t really get around to it. Rather than exclaiming how Ukraine has a seasonal dispute with Russia over gas prices and oh yeah they’re kinda isolated thanks to unpopular foreign policy choices (thanks, Bloomberg!), Hodge could have dipped into his own magazine’s archives to find plenty of writing there over the past two years offering a reasonable amount of context. Or maybe his own archives, from when Hodge was a staff writer for the Kyiv Post.

Megan McArdle, on the other hand, has an interesting post about the woes national gas companies face, particularly when energy prices crash.

One often hears that government planning lets companies invest for the very long term, unlike the psychotic short-termism of the stock market. But at least in the case of oil, this often seems to be reversed. The government’s priority is maximizing the size of the benefits available for its politicians to distribute now, not ten years ago when they’ll be dead or out of office. The private oil companies planned for the strong possibility that the price of oil would drop dramatically. Meanwhile, other state-owned companies let the money run out as fast as it came in.

There are obvious exceptions, but the point is well taken. Meanwhile, here are Registan.net, we’ve been covering Russia’s use of energy reserves as a tool of foreign policy for years—a phenomenon that is not at all limited only to the winter months.

It’s not hard to pull together these sorts of things, especially when you’ve been covering this topic and region for so many years. In fact, Hodge has done really damned good work on this kind of stuff before. So, Nathan, what gives?

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– author of 1848 posts on 17_PersonNotFound.

Joshua Foust is a Fellow at the American Security Project and the author of Afghanistan Journal: Selections from Registan.net. His research focuses primarily on Central and South Asia. Joshua is a correspondent for The Atlantic and a columnist for PBS Need to Know. Joshua appears regularly on the BBC World News, Aljazeera, and international public radio. Joshua's writing has appeared in the Columbia Journalism Review, Foreign Policy’s AfPak Channel, the New York Times, Reuters, and the Christian Science Monitor. Follow him on twitter: @joshuafoust

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Oldschool Boy January 3, 2009 at 5:39 am

It is getting ridiculous!
The story repeats every year, so I started thinking that it is really Ukrainian Government’s incompetence and irresponsibility to blame. Why would somebody start negotiating a contract when he is already out of the supplies. Why did not they do it a month or two in advanse?
Why should Russians sell gas to Ukrain for $200 if they buy it from Kazakhstan, Uzbekistan and Turkmenistan for $250?

Oldschool Boy January 4, 2009 at 11:28 pm

Actually I was wrong. Russians offer gas to Ukraine for $450

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