Friday, February 02, 2007

On Russian Energy

This entry is my answer on the Economist article "Loveless Brothers ", the biggest lesson is that Russia wants to sell its gas at market prices to all consumers, irrespective of their political relations with Russia. This is a business issue and should not be politicised, for instance by suggesting that Russia is punishing its “former vassals”.

The lessons for east Europeans are: learn to live without Russian subsidies, and don't blackmail Russia with threats of disruption to Russian energy supplies. The best way to stop these threats is to route energy directly from Russia to Europe. For example, Nord Stream will eventually pipe gas from Russia to Germany beneath the Baltic Sea. Projects like this should be supported as they benefit energy stability; eliminating the intermediaries between suppliers and consumers is normal business practice after all.

No comments: