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  The World from Berlin: Pipe Wars

The World from Berlin Pipe Wars

Gazprom is threatening to cut off gas supplies to Belarus next week when its delivery contract expires. Is the Kremlin using Gazprom to settle political scores with the former Soviet state or is it simply demanding fair market prices for its gas?

After temporarily cutting off gas to Ukraine last year, Moscow and its natural gas juggernaut Gazprom are squaring off against yet another former member of the Soviet Union. Gazprom's contract with Belarus expires on Jan. 1 and the company, which is controlled by the Kremlin, is threatening to shut off the valve to Minsk if it doesn't agree to fork out $105 per 1,000 cubic meters of gas, compared to its current discount price of $47.

Of course, the new price is still far cheaper than current market rates, and observers are split over Moscow's intentions. Some see Moscow blackmailing a former Soviet state in order to flex its muscle with its most powerful weapon, natural resources. But others see Gazprom fairly demanding rates that are closer to the real market value.

Gazprom is already preparing its Western European customers for the worst and has sent them a letter warning that shortages may be inevitable. Germany, for example, gets 34 percent of its natural gas from Russia, with one-fifth of those imports crossing through Belarus on its way to heat homes all across the country.

There is little unity in Germany's editorial pages on Friday other than the suspicion over why Moscow as acting so hastily in its pipe war against Minsk.

The center-left Süddeutsche Zeitung writes:

"Such incidents during winter should give pause to Western governments. If Russia uses its natural resources as a political weapon against its neighbors, then there is a danger that Germany will also be blackmailed one day. The stakes already became apparent last year in Ukraine. The Russians cut off gas to Ukraine for just a short time, but it also led to a reduction in gas supplies delivered through the country to Western Europe -- especially Austria and Italy. Yet again Gazprom is preparing its foreign partners for shortages.

"Every exporter has the right to demand global market prices. And countries like Belarus or Ukraine shouldn't be surprised that the era of super cheap gas has come to an end for them. Why should Russia sell a valuable energy source down the river? At the same time, it's suspect how brutally and spontaneously Russia has proceeded against its neighbor. It appears that the Kremlin, which controls Gazprom, still has political scores with its erstwhile brother republics that it intends to settle by depriving them of its energy sources.

"But (one must also consider the fact that) Russia also has problems supplying its own domestic market. It is unable to extract enough gas to keep its own people warm in winter -- at least not when so much of that gas is demanded abroad. Gazprom recently extended its contract with Germany to provide gas until 2036, but industry experts doubt that Russia will be able to fulfil the contract -- at least not unless it changes its policies. Soon enough, there will be shortages of natural gas in Western Europe."

Looking to the possible greater geopolitical implications of Russia's recent efforts to raise prices in Ukraine, Georgia and Belarus, the Frankfurter Allgemeine Zeitung writes:

"Under the leadership of former Chancellor Gerhard Schröder, Germany was smart to come to an agreement with Russia to build a pipeline under the Baltic Sea straight to Germany that would bypass current Eastern European transit countries. But by doing so Berlin risks complicating Poland's already difficult integration into the European Union. Poland is far more reliant on Russian natural gas than Germany and the rest of the EU -- and most of it comes through the Yamal pipeline that passes through Belarus and Poland. On the other end is Western Europe. Warsaw is calculating that it will never be possible for Russia to cut off its gas supplies because to do so would immediately affect the West. But the construction of the new Baltic Sea pipeline will reduce the importance of Yamal, and Poland fears it will then be more susceptible to threats of Russian political blackmail.

"Meanwhile, Russia is doing all it can to prevent Europe from accessing natural gas supplies in Central Asia in order to perpetuate reliance on its own reserves. Indeed, one of the main thinkers behind Russia's energy policies, Mikhail Delyagin, believes that Russia must gain control of all the pipelines in the post-Soviet countries and prevent the construction of pipelines to gas reserves in Turkmenistan or Uzbekistan. The appropriate response (to this Russian idea) would be a common EU energy policy or even an 'Energy NATO.' Unfortunately, it doesn't look like this is going to happen."

Given the unseasonably warm winter in Germany this year, the country has lots of gas on tap, even if Moscow cuts supplies to Belarus, writes the left-leaning Berliner Zeitung. But it could create problems for other EU countries:

"Germany's 44 natural gas storage facilities are full enough that even if gas supplies were completely cut, there is enough gas here to bridge several weeks without any problem. In Germany, no one need fear getting cold this winter because of a shortage in gas. However, the situation is different in Latvia, Lithuania and Poland, which all rely on the Belarussian pipeline for their gas. If the pipeline is cut off in Minsk, it would have immediate consequences for both gas supplies to the people and for the economy.

"In its political analysis of the gas dispute between Belarus and Gazprom, the German government has been much more reserved than it was last year in the case of Ukraine. That's also good because in the current situation one cannot accuse the Russians of using their natural resources to politically blackmail a country it once held power over. The fact is, the delivery contract between Gazprom and Belarus expires on Jan. 1. Gazprom wants to raise prices from the domestic Russian rate of $47 per 1,000 cubic meters to $105 in Belarus. That's still a lot cheaper than the close to $290 that Western Europeans pay."

-- Daryl Lindsey, 2:45 p.m. CET