In Which We Learn New Things About Russia

The Russians are apparently unhappy with their performance in Georgia, and are embarking on a modernization campaign. They claim to want to build six aircraft carriers. I have a hard time seeing that they still retain those capabilities, but in a few years, maybe.

I hear that Condi Rice's comments that Putin's actions were reminiscent of Stalin's didn't go over too well in Georgia. Apparently, many Georgians afford Joseph Vissarionovich the sort of admiration you only give to the local boy who made good. Had she been some sort of a Soviet Era Eastern Bloc scholar, she might have known that.

Hmm.

I always thought she was the brightest bulb in a patch full of dimwits. I see now that the bar was pretty low.

CW began airing the Western adaptation of the Russian totally runaway cult cartoon series, Smeshariki. The native website is here.

Unfortunately, the English translation and voice acting are very bad.

Speaking of Stalin. I visited Georgia on several occasions in 80's, including Tbilisi (the capital), Gori (Stalin's birthplace), and Sukhumi (the capital of breakaway Abkhazia).

On my first visit, I was AMAZED by the number of Stalin's portraits in rural areas -- in the stores, in residential houses, and especially in cabins of the trucks, affixed to the inner side of the windshield. The cult is alive and well there.

Specifically on the subject of the trucks, I was told that the drivers use images of Stalin as the talisman to keep them safe on the winding mountain roads. Georgia is formally a Christian country, but their Apostolic Christianity is densely intervowen with the ancient nature- and ancestor-worshipping beliefs (similar to Korea).

About Russia, partly.

Russia, which suffered a humiliating economic collapse in the 1990s after the fall of communism, recaptured some of its former standing in the world. It began rebuilding its military, wrested control of oil and gas pipelines and pushed back against Western encroachment in the former Soviet empire.

But such ambitions are harder to finance when oil is at $74.25 a barrel, its closing price Monday in New York, than when it is at $147, its price as recently as three months ago.

That is not to say that any of the countries is facing immediate economic disaster or will abandon long-held political goals. And the price of oil, still double what was considered high just a few years ago, could always shoot back up.

Still, Russia, Iran and Venezuela have all based their spending on oil prices they thought were conservative but are now close to the market level. Significant further drops could tip the three countries into deficit spending or at least force them to choose among priorities. A worldwide recession, which many economists say is likely, would worsen matters, dampening energy demand and holding down prices.

It is not clear whether the new pressures could create opportunities for the United States to ease tensions, or whether the three countries’ leaders will rely more on angry words even if they cannot afford provocative actions. Mr. Chávez has continued his overtures to Russia. He, Prime Minister Vladimir V. Putin of Russia and President Mahmoud Ahmadinejad of Iran may now see the United States, hobbled by financial crisis, as even more vulnerable.

Daniel Yergin, chairman of Cambridge Energy Research Associates, a consulting firm in Cambridge, Mass., said oil states were facing something of a reckoning. Originally, he said, they saw the economic crisis as a problem mainly for the United States — but then oil prices went into free fall.

“Now, the producers are experiencing a reverse oil shock,” Mr. Yergin said. “As revenue went up, government spending went up and expectations of a continuing windfall led to greater and greater ambitions. Now they are finding how integrated they are into this globalized world.”

This isn't technically a news story, I just had to share it.

Japan <3 Putin

Dear God Russia, give us a day or two, will you?

MOSCOW — In a wide-ranging attack on the United States as it elected a new president, the Russian leader Dmitri A. Medvedev warned on Wednesday that Moscow might deploy short-range missiles in the Baltic region to counter a perceived threat from a proposed American missile defense shield in eastern Europe.

Mr. Medvedev also proposed to extend the constitutional term of the presidency from four years to six — a move that could enable future Russian presidents to serve 12 years in two consecutive terms. His remarks, in his first state of the nation address since assuming the presidency in May, was delivered within hours of the election of Barack Obama and offered a chill glimpse into the potential issues and tensions confronting the new American leader when he takes office in January. His comments also seemed at odds with the broader groundswell of support for the American president-elect from many governments across the globe.

Mr. Medvedev did not specifically congratulate Mr. Obama on his victory, saying only that he hoped that “our partners — the new U.S. administration — will make a choice in favor of full-fledged relationship with Russia.”

At the same time, however, he spoke of a “new configuration for the military forces of our country” that would include abandoning plans to dismantle some missile regiments and the stationing of missiles in Russia’s Baltic enclave of Kaliningrad.

“We earlier planned to take three missile regiments within the missile division stationed in Kozelsk off combat duty and discontinue the division itself by 2010. I have decided to refrain from these plans,” Mr. Medvedev said.

“The Iskander missile system will be deployed in Kaliningrad region to neutralize, when necessary, the missile shield,” Medvedev said.

They're doing it now precisely because they're hoping it gets drowned out in the media blitz about Obama.

Russian and Ukraine in a new natural gas pipeline dispute. According to the article, Russia is demanding that the Ukraine pay more than twice what it did last year for gas. Meanwhile, parts of western Europe are being cut off from the supplies they need to function.

On the other hand, Ukraine will get a much better deal once it's back in the fold...

Meanwhile, parts of western Europe are being cut off from the supplies they need to function.

A crucial part of being a "West-oriented democracy" is to know how to handle the Western press.

Russia is withholding the amount of gas that supposed to go to Ukraine's own consumption from the overall flow in the transit pipeline. Ukraine, naturally, continues to nicely siphon whatever it needs, and leaves the European consumers downstream with the shortages. It's Ukraine who is taking gas away from Europe at the moment, not Russia.

The $410 vs $250 hike is a punitive result of Russia hiking the price because Ukraine was in huge arrears which they failed to pay by the 2008's end, as per contract.

Gorilla.800.lbs wrote:
Meanwhile, parts of western Europe are being cut off from the supplies they need to function.

A crucial part of being a "West-oriented democracy" is to know how to handle the Western press.

Russia is withholding the amount of gas that supposed to go to Ukraine's own consumption from the overall flow in the transit pipeline. Ukraine, naturally, continues to nicely siphon whatever it needs, and leaves the European consumers downstream with the shortages. It's Ukraine who is taking gas away from Europe at the moment, not Russia.

The $410 vs $250 hike is a punitive result of Russia hiking the price because Ukraine was in huge arrears which they failed to pay by the 2008's end, as per contract.

Western-oriented democracies don't have to pay Slavic despots. It's part of the Orange Revolutionary Handbook.

Gorilla.800.lbs wrote:

It's Ukraine who is taking gas away from Europe at the moment, not Russia.

Russia is not supplying to demand and is trying to put pressure on the Ukraine via customer shortages. This is no different than the Viacom/Time Warner dispute a week ago. Doubling the price of gas at a time when gas prices are falling strikes me as an odd response. A normal commercial response would be to demand some form of escrow prior to shipment, or to continue supply while the parties seek out international arbitration.

Funkenpants wrote:
Gorilla.800.lbs wrote:

It's Ukraine who is taking gas away from Europe at the moment, not Russia.

Russia is not supplying to demand and is trying to put pressure on the Ukraine via customer shortages. This is no different than the Viacom/Time Warner dispute a week ago. Doubling the price of gas at a time when gas prices are falling strikes me as an odd response. A normal commercial response would be to demand some form of escrow prior to shipment, or to continue supply while the parties seek out international arbitration.

When folks fail to pay their utility bills, they generally get cut off notices.

Ukraine routinely fails to pay their bills.

Paleocon wrote:

When folks fail to pay their utility bills, they generally get cut off notices.

Russia isn't a government regulated utility, and the Ukraine isn't a consumer sitting at the end of a wire. That doesn't seem like a workable analogy.

Funkenpants wrote:
Paleocon wrote:

When folks fail to pay their utility bills, they generally get cut off notices.

Russia isn't a government regulated utility, and the Ukraine isn't a consumer sitting at the end of a wire. That doesn't seem like a workable analogy.

This analogy is imperfect, but it's the closest one that can be made in this situation.

It's all complicated there. There was some arbitration involved in the run-up to Jan 31, and the resolution was basically, "pay up". Ukraine argued that they possibly can't and negotiated a smaller sum which they would pay "in good faith" and... still hasn't paid.

The price hike is a punitive tit-for-tat. Facing Russian pressure to pay up, Ukraine said that if Russia keeps going like that, they (Ukraine) will begin charging more in transit fees -- for allowing the gas to reach Western Europe consumers through Ukraine-owned part of the pipeline infrastructure. Same as 2006, only not reported in Western press AT ALL this time. In response, Russia sez "we'll then start charging you more for the gas itself".

BOTH counter-parties are sleazy enough. But the desire of West is to present the situation in "good guy vs bad guy" light, where the "good guy", as if by a chance, also happens to be "our guy".

Gorilla.800.lbs wrote:

BOTH counter-parties are sleazy enough. But the desire of West is to present the situation in "good guy vs bad guy" light, where the "good guy", as if by a chance, also happens to be "our guy".

I suspect that there is a bias from the west because of our status as energy importers rather than energy exporters. We don't like the idea of someone cutting off supplies over disputes, much as business owners look on unions and their strike tactics with horror. Within Europe, some of the energy-rich countries are probably more sympathetic to Russia.

One scenario that's easy to imagine: Gazprom doesn't ship enough gas, blames Ukraine for stealing it, and Russia uses the pretext to invade.

Malor wrote:

One scenario that's easy to imagine: Gazprom doesn't ship enough gas, blames Ukraine for stealing it, and Russia uses the pretext to invade.

Unlike Georgians, Ukrainians can actually fight, and are numerous.

Russia's current stand is a risky one. EU will realize through it how much it depends on Russia's gas and will move to diversify. In the end, it will mean that Russia will get less money from EU, thus moving them even deeper into their own sh*t. I mean, the worst scenario in the Russian state 2009 budget was that oil would cost 65 USD per barrel, now it's much lower, effectively driving Russia into state debt. They are getting nervous. Also, the price of gas varies according to how much pro-Russian the countries are. Belarus is getting theirs at 100 USD per thousand cubic meters, a far cry from the demanded Ukraine prices.

I just hope this is resolved soon. My country (Slovakia) is now without gas supply and running on reserves. Some of the industrial gas hogs are shutting down operations, as the gas supply is under strict regulation to businesses now. If the cuts remain in place until the rest of the week, it may well happen that our part of the capital city will be without heating.

Again, regardless of who out of Russia or Ukraine is the culprit, huge blame lies on the European governments that considered Russia a good business partner and disregarded the need to diversify the supply of gas.

I mean, the worst scenario in the Russian state 2009 budget was that oil would cost 65 USD per barrel, now it's much lower, effectively driving Russia into state debt. They are getting nervous. Also, the price of gas varies according to how much pro-Russian the countries are. Belarus is getting theirs at 100 USD per thousand cubic meters, a far cry from the demanded Ukraine prices.

Russia is in a tough position here. Gas prices typically lag behind oil prices on the market by about 6 months, which means that they will be nosediving soon. I think Russia is trying to lock in the current high price for 2009 (or for as long as they can) with Ukraine in a desperate attempt to stave off fiscal disaster. Of course, it's in everyone else's best interest to drag their heels as long as they can.

The biggest loser in all of this may be Georgia - if they'd had a patient leader, the ideal time to strike would be fast approaching.

wanderingtaoist wrote:

Russia's current stand is a risky one. EU will realize through it how much it depends on Russia's gas and will move to diversify. ... Again, regardless of who out of Russia or Ukraine is the culprit, huge blame lies on the European governments that considered Russia a good business partner and disregarded the need to diversify the supply of gas.

I'm curious to see what will happen after this conflict. EU claimed for the longest time to have a unified energy plan, designed to benefit the entire union. But when the going got tough, leaders of the EU suddenly dropped any pretense of solidarity. Suddenly everyone forgot that Gazprom reduced its supply to Europe, not just to the Balkans, by two thirds; and Angela Merkel only worried about how to help Germany through the crisis, not how to help Bulgaria or Greece.

But so it is with the EU; you only need to lean on it a little bit, for the cracks to start showing along national lines. Because of this, I don't think this lesson will cause the Union itself to come together to diversify its supply. Rather, I expect it will cause the individual governments to each lay down their own plans for energy independence. Goodness knows Germany at least is already doing it.

doihaveto wrote:

EU claimed for the longest time to have a unified energy plan, designed to benefit the entire union.

The EU doesn't have unified energy plan. That is the problem. Anyone informing you otherwise is stretching the truth. Countries will therefore spilt down national lines because that is what countries will do when there is no agreement. Everything is working as it should.

As for Russia, they need the EU far more than we need them. Also I'd be very curious where you get the notion that Germany are acting on their own. The EU and Russian Presidents have hammered out a deal and the EU member were more than happy to be represented that way.

Good to see its Topolanek acting as President and not that twat Klaus. Hopefully he will be bound and gagged for the duration.

Axon wrote:

As for Russia, they need the EU far more than we need them. Also I'd be very curious where you get the notion that Germany are acting on their own. The EU and Russian Presidents have hammered out a deal and the EU member were more than happy to be represented that way.

Oh sure, Merkel had conversations with both Moscow and Kiev, and urged them to resolve things and play nice, as did pretty much everybody else. But none of these conversations are doing anything, just like they didn't for Tbilisi. Moscow wants a pro-Russian government in Ukraine, and they're not going to let up their pressure if they can cause lasting damage to the orange revolution government. To the EU's detriment, of course.

In the meantime, Germany is definitely securing their own energy independence. Nord Stream Pipeline, anyone?

Germany can do as they please, there is nothing wrong with that as long as they follow the rules of the EU. However, Germany don't have complete control of the pipeline. Sweden and Finland both have their cut so to colour this and a purely German-Russian operation isn't quite right.

Thing is, I'll think you find most of Germany's neighbours are happy they and the Scandinavians are controlling the pipeline than the Ukrainians. Germany was happy to help out other countries during the crisis while the Ukrainians are a bunch of clowns.

As for Merkel, the media tends to focus on what the larger nation's leaders say. You'll, for example, hear far more from Brown, Sarkozy and Merkel than from other smaller nation's leaders. We are fine with that and also realise the political realities. I don't see the problem here. Germany hasn't acted totally in isolation or unilaterally and were happy to let the current EU President, a Czech, deal with the Russians.

Also to play down how the EU helped sort out as mess in Georgia, which the US helped to create, as nothing is a little unfair. I might add that Georgia is far from being an EU member so I failed to see how it impacts on the EU. As for the Ukrainians, they are happily creating the mess all themselves and they aren't EU members either and other countries are far closer to membership than they are. The EU isn't some babysitter and if they want to go down the toilet, well, let them.

Just to make myself clear, the EU has its problems. CAP is the biggest one. Projection of its influence isn't one of them. What America has singularly failed to do in Latin America, the EU has succeeded in doing in Eastern Europe. I think there is a clear lesson in there.

A keyword "siphoning" has finally started appearing in the coverage of the issue.

Russia-Ukraine deal on gas for Europe hits trouble

MOSCOW/KIEV (Reuters) – A deal to restore Russian gas supplies via Ukraine to Europe appeared on the verge of collapse after Moscow rejected additions by Kiev as a 'mockery of common sense'.
...

A copy of the monitoring agreement, seen by Reuters, has the handwritten words "with declaration attached" next to the signature of the Ukrainian government's representative.

The declaration, a copy of which has also been seen by Reuters, stated that Ukraine had not siphoned off any transit gas and that it had no outstanding debts to Russian export monopoly Gazprom -- a central bone of contention between the two countries.

It said Russia must supply volumes of "technical" gas, at no cost, to Ukraine to maintain pressure in the pipeline system -- a demand Gazprom described as "an attempt to legalize the theft of gas."

Gazprom said Ukraine was demanding 21 million cubic meters of technical gas per day -- enough to meet the daily needs of a country like Austria.

Yuschenko must have been taking "Signing Statements 101" lessons from Bush.

Gorilla.800.lbs wrote:

A keyword "siphoning" has finally started appearing in the coverage of the issue.

Russia-Ukraine deal on gas for Europe hits trouble

MOSCOW/KIEV (Reuters) – A deal to restore Russian gas supplies via Ukraine to Europe appeared on the verge of collapse after Moscow rejected additions by Kiev as a 'mockery of common sense'.
...

A copy of the monitoring agreement, seen by Reuters, has the handwritten words "with declaration attached" next to the signature of the Ukrainian government's representative.

The declaration, a copy of which has also been seen by Reuters, stated that Ukraine had not siphoned off any transit gas and that it had no outstanding debts to Russian export monopoly Gazprom -- a central bone of contention between the two countries.

It said Russia must supply volumes of "technical" gas, at no cost, to Ukraine to maintain pressure in the pipeline system -- a demand Gazprom described as "an attempt to legalize the theft of gas."

Gazprom said Ukraine was demanding 21 million cubic meters of technical gas per day -- enough to meet the daily needs of a country like Austria.

Yuschenko must have been taking "Signing Statements 101" lessons from Bush.

Wow. I didn't realize vig was a Ukrainian word.

I don't get this pressurization argument. What does it matter whether or not they have pressure? And why would the pipes lose pressure on their own? Once pressurized, they should stay filled for a good long while, no? Definitely sounds scammy.

If they really do need 21 million cubic meters a day to pressurize their pipes, seems like that would mean that their pipes suck, which can hardly be blamed on Gazprom.

This is farcical.

However, in a deal reached on Monday, Russia agreed to resume supplies if Russian and EU observers were allowed to monitor their transit through Ukraine.

The move was designed to calm Russian fears that Ukraine was siphoning off gas for its own use.

Russia said gas started flowing from the Russian pumping station at Sudzha at 1030 local time (0730 GMT) on Tuesday.

This was later confirmed by EU monitors, although the amount of gas, they said, was "very limited".

Mr Medvedev said Gazprom had informed the European Commission it was unable to supply gas through Ukraine because Kiev had not opened any export pipelines.

"Ukraine didn't open the route for gas transit...," he said.

"If the system is closed, we can't provide gas. The Ukrainian side cynically informed us that the gas transport system had been reoriented to domestic consumers.

"We don't know what to do at the moment."

After the gas was switched on at Sudzha, Ukrainian gas company Naftogaz demanded "the immediate resumption of even supply of gas along all transit routes", saying the amount and direction of the gas had not been agreed by the two sides.

If it wasn't so serious you'd have to laugh. Faceplam.jpg would be applicable here.

Axon, you see, Ukrainians are cut from the same cloth as Russians -- only to make matters even worse, they have a little bit of Poles in them as well (no offense to *doihaveto*, UHRC and others)

Putin Paints!

the curtains, which, perhaps embarrassingly given the current conflict, are decorated with a red Ukrainian pattern. The leaders of Russia and Ukraine are barely on speaking terms over the dispute.

Embarrassingly? If it were anyone else I might agree, but from Putin I'd say it's a message that it's going to be *cold* in Ukraine once they shut the gas off, especially after he destroys the window with a judo chop and sends in his pet tiger.