Friday, January 9, 2009

Gas Dispute Solution 0.5

The agreement to have European representatives monitor the flow of gas through Ukraine seems a step in the right direction.  If nothing else it sets up a means to create greater transparency in the gas trade which is the key to weakening the dynamics that allow this crisis to recur.  Although in as much these representatives will only be present as long as the negotiations over gas transfer fees Ukraine will receive from Gasprom and the price charged Ukraine for its gas, so if Gasprom succeeds in keeping RosUkrEnergo alive that transparency will disappear quickly. 

Still, even if the European delegation is only temporary it could at last help pin down some of the holes in the network that local officials have carved out to benefit themselves and their local business long ago during the corruption of the Brezhnev era.  My own small insight into that problem comes from my first apartment in Lviv, which was heated by gas, but had no meter to measure gas usage.   Thus, while I think Yushchenko and Tymoshenko are being sincere when they say that Ukraine is not stealing gas, at least systematically, I suspect they are likely to be embarrassed by issuing such blanket denials.  Of course, I think it is just as likely that the folks at Gasprom are also going to have to finally acknowledge the holes in the gas pipelines within Russia.

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