Energy: Experts Ponder Future 'Gas Wars'

Ukrainian nationalists protesting in front of the Russian Embassy in Kyiv during the December 2005 gas war (epa) PRAGUE, October 24, 2006 (RFE/RL) -- International energy experts at the Prague Energy Forum have been pondering where and under what conditions the next "gas war" could occur.

Former U.S. ambassador to Ukraine Steve Pifer set the framework for the debate at the Prague forum, which was organized by RFE/RL in partnership with the Warsaw-based Institute for Eastern Studies and held on October 23-24. In his conference presentation, Pifer envisaged three scenarios for disputes involving countries that supply, transport, or consume natural gas.

Eyes On Georgia

Pifer listed first the possibility of further political trouble between Georgia and Russia. He noted the steeply rising tensions between the two countries in recent months.

The latest incidents are Georgia's brief arrest of four Russian military officers as spies, which led Russia to round up and summarily expel hundreds of Georgian nationals and to cut off mail and transportation links between the two countries.

Pifer noted that nearly all Georgian natural-gas supplies come from Russia. This could make a tempting target for cuts if Russia wants to ratchet up the pressure on Georgia, which is becoming too friendly to NATO and the West for Moscow's comfort.

A Warmer Winter For Ukraine?

The second scenario envisages another clash between Ukraine and Russia, which last winter argued about pricing, leading Russia to cut off gas supplies. This led to a reduction in gas volume reaching Western Europe, igniting controversy in Europe about how far one can trust Russia.

Former Ambassador Steve Pifer (Ukrinform file photo)

Pifer said he personally finds another "gas war" in this part of the world rather unlikely.

"As the gas price in Ukraine moves toward global levels, I think that reduced the prospect for another Russian-Ukrainian gas war, but when you look at the problems you have in the current gas market, namely the lack of full transparency, the questions of whether the Kremlin sees energy as a political tool, there is always that prospect," Pifer told the conference.

Fellow conference participant David Preiher, of the National Institute for International Security Problems in Ukraine, says Russia does not hold all the cards. Ukraine is a major transit country for Russian gas, and thus is in a position to exert leverage on Moscow.

Preiher also noted Ukraine has vast gas-storage facilities, which could supply Europe with gas all winter without being refilled. This gives Kyiv a bit more breathing space in the event of an attempt by Russia to close the gas taps.

Mykhailo Gonchar, deputy chairman of the board of Ukraine's Ukrtransnafta, said last year's dispute with Ukraine was enormously costly to Russia in terms of loss of client confidence, and Moscow will not repeat it.

Focusing Attention On Central Asia

The third possible scenario is for conflict between Russia and Central Asia, or between Central Asian states. Pifer sees the most likely disagreement as being between Russia and Turkmenistan.

"I do think there is a question, for instance, in Turkmenistan, about how much of the profit from selling gas to Europe should be divided between [Russia's] Gazprom and Turkmenistan," Pifer said. "And you already saw the pressure from Turkmenistan to raise its price from $65 per 1,000 cubic meters to $100; now, if Turkmenistan pushes higher, it could lead to a commercial conflict between Turkmenistan and Gazprom."

Gonchar added to the debate by referring to what he called Russia's "unstable production dynamics."

He said Russian gas output figures are uncertain. It's known that Western Siberia's production levels are dropping, and it's not clear whether Russia can deliver all the gas it is promising in its contracts with other countries.