15.01.14 - Russia is Losing Control Over the European Gas Market
Summary: The energy exporter is losing its dominance over the European gas market.
 
 
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Oil isn't Russia's only problem. The energy exporter is losing its dominance over the European gas market.

Two factors used to keep Russia as the major gas powerhouse: European policies and cold winters. But both of those things have changed — and Russia is starting to explore non-Western countries.

Back in 2009 the European Union passed the Third Energy Package, which said Russia could not both own and control pipelines on the EU territory. (Russia filed a lawsuit with the World Trade Organization against the EU over this in April, after the first rounds of Western sanctions.)

Additionally, the EU has been putting taxpayers' money into new inter-connectors, so if Russia decides to cut off supplies, the affected countries can still get gas from somewhere else, according to The Economist.

This is a major move because in the past Russia punished countries by cutting off gas.

Ukraine's gas was shut off for six months in 2014, as well as at times in 2006 and in 2009, and Latvia and Lithuania were punished by Moscow "for their alleged mistreatment of Russian minorities or for awarding refinery or construction contracts to European rather than Russian companies."

The Economist also cites the following changes in Europe:

  • Lithuania started importing liquefied natural gas from Norway.
  • Ukraine is importing more gas from the West.
  • The EU has brokered a deal on debts and prices between Ukraine and Russia, which will keep gas going to Ukraine at least for the first quarter of 2015.

    • To cap things off, in December lack of funds forced Russia to cancel the South Stream pipeline to supply gas to Europe without crossing Ukraine.

    Read the original news story here:
    Russia Is Losing Control Over The European Gas Market

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