Video: Russia raises gas prices 80% for Ukraine

posted at 10:41 am on April 4, 2014 by Ed Morrissey

As CNN says, Ukraine “should have seen this one coming,” and they almost certainly did anticipate that the next phase of the war would be economic. In fact, the new government in Kyiv may have assumed that raising prices on Russian energy imports would be the first phase of the conflict, not the seizure and annexation of Crimea. Over the last few days, though, Gazprom has raised gas prices by 80% to Ukraine as Russian troops still gather on their common border:

Prime Minister Arseniy Yatsenyuk affirmed that Kyiv expected this all along:

Russia raised the gas price for Ukraine on Thursday for the second time this week, almost doubling it in three days and piling pressure on a neighbor on the brink of bankruptcy in the crisis over Crimea.

The increase, announced in Moscow by Russian natural gas producer Gazprom, means Ukraine will pay 80 percent more for its gas than before the initial increase on Monday.

Prime Minister Arseny Yatseniuk said the latest move, two weeks after Moscow annexed Ukraine’s Crimea region, was unacceptable and warned that he expected Russia to increase pressure on Kiev by limiting supply to his country.

“There is no reason why Russia would raise the gas price for Ukraine … other than one – politics,” Yatseniuk told Reuters in an interview in the Ukrainian capital Kiev.

“We expect Russia to go further in terms of pressure on the gas front, including limiting gas supplies to Ukraine.”

This isn’t just a message to Kyiv, though. It’s a message to eastern Europe as well, especially NATO partners who have begun to mobilize their own forces in response to a newly-acquisitive Russian state. Vladimir Putin wants to play hardball on economics at the least, and insists on assigning a price to a refusal to accept his new hegemony in the region.

Ukraine will start looking elsewhere for its energy — and its coal deposits are one obvious choice:

Energy Minister Yuriy Prodan called Russia’s new price “political” and vowed to explore solutions that included a heavier reliance on coal — a polluting source of energy whose consumption has imperilled the air quality of nations such as China.

“We are now reviewing our electricity and fuel balance for 2014 with a view of using as much domestic coal as possible at the expense of natural gas,” Prodan told a cabinet meeting in comments posted on the government website.

Ukraine has relied on coal throughout much of the past century despite efforts by global institutions such as the World Bank to help Kiev phase out its use following independence from Moscow.

The International Energy Agency estimates that coal accounts for about 30 percent of Ukraine’s total energy supply compared to the 40 percent of the balance assumed by natural gas.

That will no doubt alarm environmentalists, and again not just because of Ukraine. This same choice faces all of Europe, which had relied on cheap Russian imports rather than extract their own natural gas and even coal. Those days may be gone, and Europe will have to take another look at tracking to stand off the Russians at their own game of economic war. The US can help with exports of liquid natural gas (LNG), but that would take years to accomplish, and it still leaves Europe dependent on outside resources rather than their own.

Putin’s latest move shows once again just how badly the West calculated his intentions. They assumed that the Russian energy trade would bring Moscow into tighter integration, but Putin saw it as a lever for geopolitical power. Bloomberg asked Chuck Hagel whether the Obama administration miscalculated on Putin, which Hagel denies … and almost in the same breath admits that they don’t understand his motives:

Hagel cites the invasion of Georgia in 2008 as an example of how the Obama administration didn’t misjudge Putin, but what was the Obama administration’s response to it? They undid the Bush administration’s diplomatic policies in response to that, complete with the ludicrous “reset button” from Hillary Clinton that declared all of the US-Russian difficulties the fault of Barack Obama’s predecessor. They then dismantled the missile-shield system and pledged more “flexibility” to Putin after the 2012 elections on that point. The response from Putin has been to seize on that show of weakness. What’s not to understand?


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Frack that!

rhombus on April 4, 2014 at 10:44 AM

As Bishop was fond of noting, “Sure would be nice to have a robust US energy export capability to help our allies.”

hawkdriver on April 4, 2014 at 10:45 AM

Bishop was fond? What happened to Bishop?

Akzed on April 4, 2014 at 10:47 AM

Bishop was fond? What happened to Bishop?

Akzed on April 4, 2014 at 10:47 AM

Key word there is “was”.

nobar on April 4, 2014 at 10:48 AM

I know genius, I asked why the was?

Akzed on April 4, 2014 at 10:49 AM

I know genius, I asked why the was?

Akzed on April 4, 2014 at 10:49 AM

Parse pages 1+2 of last nights QOTD. Relevant links there.

nobar on April 4, 2014 at 10:50 AM

And that pompous ass Kerry said we couldn’t use energy as a weapon.

jmtham156 on April 4, 2014 at 10:52 AM

*4/2/14 QOTD. My mistake.

nobar on April 4, 2014 at 10:52 AM

I wonder how Hagel feels knowing Sarah Palin is smarter than him.

Dongemaharu on April 4, 2014 at 10:53 AM

I know genius, I asked why the was?

Akzed on April 4, 2014 at 10:49 AM

Parse pages 1+2 of last nights QOTD. Relevant links there.

nobar on April 4, 2014 at 10:50 AM

Hey! He just called you a genius! ;-)

Lanceman on April 4, 2014 at 10:56 AM

I see Barry has lowered his mom jeans to his ankles and is now bending over.

roflmmfao

donabernathy on April 4, 2014 at 10:56 AM

What happened to Bishop?

Akzed on April 4, 2014 at 10:47 AM

To be honest, I sent him an ill-advised email last month when I should have taken the time to be a lot nicer. You can blame me for the walkabout. I’ve just sent him an apology; hope he will return soon.

Ed Morrissey on April 4, 2014 at 11:01 AM

Happy thought, the Ukrainians can pay them with the extra IMF money they received.

rob verdi on April 4, 2014 at 11:02 AM

Wow, I’m sorry to hear that Ed. I hope he comes back.

And I hope that Ukraine can get out of the jam they are in. Maybe look to Finland and the Winter War for inspiration?

Vanceone on April 4, 2014 at 11:05 AM

To be honest, I sent him an ill-advised email last month when I should have taken the time to be a lot nicer. You can blame me for the walkabout. I’ve just sent him an apology; hope he will return soon.

Ed Morrissey on April 4, 2014 at 11:01 AM

SAY WHAT?!

Back to the topic, how long until the Baltic states are offered up?

nobar on April 4, 2014 at 11:07 AM

Hagel: We didn’t misjudge Putin … but we’re not clear on his motivations. I like Turtles!!! And we had a fruit cup for lunch. You sure are purdy lady.

….”I pooped my pants”??

Top Men.

BigWyo on April 4, 2014 at 11:07 AM

*4/2/14 QOTD. My mistake.

nobar on April 4, 2014 at 10:52 AM

For some reason, that post seems to be un-findable, either in ‘vault’, ‘archive’, or ‘older posts’.

Midas on April 4, 2014 at 11:08 AM

Bishop was fond? What happened to Bishop?

Akzed on April 4, 2014 at 10:47 AM

Look for ‘Frank Lib’…..

If that ain’t him, it’s his twin brother.

BigWyo on April 4, 2014 at 11:09 AM

I wonder how Hagel feels knowing Sarah Palin is smarter than him.

Dongemaharu on April 4, 2014 at 10:53 AM

Oh please . . . a better comparison would be Hagel and a rock.

rplat on April 4, 2014 at 11:10 AM

The greenies want higher gas prices here that will force us to use renewable energy sources. They should be happy the gas prices are rising for the EU. No gas, no heating, no problem.

LeftCoastRight on April 4, 2014 at 11:10 AM

For some reason, that post seems to be un-findable, either in ‘vault’, ‘archive’, or ‘older posts’.

Midas on April 4, 2014 at 11:08 AM

Here’s my post from last night’s QOTD –

I asked the same question a few nights ago …

He first teases it here:
http://hotair.com/archives/2014/03/12/scarborough-fl-13-upset-shows-2014-will-be-historic-dem-loss/comment-page-1/#comments

His final comment is here (@ 10:49 PM):
http://hotair.com/archives/2014/03/12/quotes-of-the-day-1670/comment-page-1/#comments

ShainS on April 4, 2014 at 11:11 AM

What’s not to understand?

When you’re blinded by ideology, consider your allies to be enemies and your enemies to be stupid, then understanding is not your biggest problem.

Fenris on April 4, 2014 at 11:12 AM

Damn censors

For some reason, that post seems to be un-findable, either in ‘vault’, ‘archive’, or ‘older posts’.

Midas on April 4, 2014 at 11:08 AM

I was wrong, it was last nights QOTD, page 3. Blame the V1codin.

nobar on April 4, 2014 at 11:12 AM

I wonder how Hagel feels knowing Sarah Palin my doorstop is smarter than him.

Dongemaharu on April 4, 2014 at 10:53 AM

Fixed for accuracy.

bigmacdaddy on April 4, 2014 at 11:13 AM

Russia raises gas prices 80% for Ukraine

…sounds like what JugEars…is doing to us!
.
.
.

Ed Morrissey on April 4, 2014 at 11:01 AM

OT/…respect!…just grows for you…I don’t care WHO…we are!

KOOLAID2 on April 4, 2014 at 11:16 AM

Europe needs more windmills!

/s

MJBrutus on April 4, 2014 at 11:21 AM

To be honest, I sent him an ill-advised email last month when I should have taken the time to be a lot nicer. You can blame me for the walkabout. I’ve just sent him an apology; hope he will return soon.

Ed Morrissey on April 4, 2014 at 11:01 AM

That was very cool of you Ed.

VegasRick on April 4, 2014 at 11:23 AM

I suppose I can live with Kyiv, but I sure wish you had just stayed with Kiev, for which there is ample justification.

http://www.businessinsider.com/kiev-or-kyiv-2014-1

bobs1196 on April 4, 2014 at 11:24 AM

That was very cool of you Ed.

VegasRick on April 4, 2014 at 11:23 AM

Thank you … but it would have been cooler if I hadn’t made it necessary in the first place. :-/

Ed Morrissey on April 4, 2014 at 11:25 AM

Hey! He just called you a genius! ;-)
Lanceman on April 4, 2014 at 10:56 AM

Well he is pretty smart.

Akzed on April 4, 2014 at 11:27 AM

Hagel says he doesn’t understand Putin’s motives, Obama says he doesn’t care about Putin’s motives, these guys are like the Keystone cops and they’re playing with the fate of the world.

“I’m less interested in motivation,” Obama said Monday in The Hague, “and more interested in the facts and the principles that not only the United States but the entire international community are looking to uphold.”

http://www.nationaljournal.com/white-house/how-putin-bullies-obama-20140326

Long Legged MacDaddy on April 4, 2014 at 11:29 AM

Thank you … but it would have been cooler if I hadn’t made it necessary in the first place. :-/

Ed Morrissey on April 4, 2014 at 11:25 AM

You do a great job here at HA. I’m sure that Bishop understands that stuff happens.

VegasRick on April 4, 2014 at 11:30 AM

Biiiisssshhhhop!

Akzed on April 4, 2014 at 11:30 AM

This guy certainly doesn’t need to apply for membership in Mensa!

Pardonme on April 4, 2014 at 11:30 AM

When you’re blinded by ideology, consider your allies to be enemies and your enemies to be stupid, then understanding is not your biggest problem.

Fenris on April 4, 2014 at 11:12 AM

Yep, the children are in charge of the bar and they have the car keys. This aint going to end well.

VegasRick on April 4, 2014 at 11:32 AM

If they have large amounts of coal, I would recommend them building Nuclear power plants near them in order to kick start their nuclear weapons program and turn the coal into liquified fuel, I am sure they can also turn coal into some natural gas alternative. The fuel has a long shelf life, perfect for stock piling for military needs.

astonerii on April 4, 2014 at 11:41 AM

As Bishop was fond of noting, “Sure would be nice to have a robust US energy export capability to help our allies.”

hawkdriver on April 4, 2014 at 10:45 AM

I do not see how exporting our energy supplies is a good thing.

astonerii on April 4, 2014 at 11:42 AM

Ukraine can retaliate and shut down Russia’s transmission lines through their country.

But that’s probably the excuse Czar Putin is looking for to roll the tanks across the eastern border…

ConstantineXI on April 4, 2014 at 11:46 AM

wasnt it just the other day that the SCOAMF was telling europe how much gas we had and we could take up the slack and some such?

chasdal on April 4, 2014 at 11:46 AM

hawkdriver on April 4, 2014 at 10:45 AM

I do not see how exporting our energy supplies is a good thing.

astonerii on April 4, 2014 at 11:42 AM

I know. You’ve said that before. Have a nice day.

hawkdriver on April 4, 2014 at 11:46 AM

Well he is pretty smart.

Akzed on April 4, 2014 at 11:27 AM

:D

Lanceman on April 4, 2014 at 11:49 AM

ShainS on April 4, 2014 at 11:11 AM

Huh. So Bishop banned himself and Schad was temp-banned?

Sheesh.

Akzed on April 4, 2014 at 11:50 AM

Video: Russia raises gas prices 80% for Ukraine

“Under my plan … gas rates for the Ukraine would necessarily skyrocket.” — Vladimir Hussein Putinbama

ThePrimordialOrderedPair on April 4, 2014 at 11:50 AM

The administration needs to immediately approve all natural gas export requests.

Sven on April 4, 2014 at 11:54 AM

The administration needs to immediately approve all natural gas export requests.

Sven on April 4, 2014 at 11:54 AM

BWAHAHAHAHAAAAAA! And get its foot off the neck of the rest of America too, right? You kill me, Large Sven! :D

Lanceman on April 4, 2014 at 12:03 PM

The reason this US-inspired coup in Ukraine will fail at its ultimate purpose is because the people here at home in the US really don’t care about the Cold War anymore.

The point of gadding about the world punching people in the nose is to give the American Aristocracy the distraction it needs, because the people who live under them are starting to notice that we are being ruled by a bunch of parasites. A nice war would achieve the aim of keeping them in power and making more people poor.

You see, this word greed has two meanings. The first meaning is rather benign; it means someone wants to work toward something for themselves, and this form of of the word is actually a propaganda definition foisted on us by collectivists to damn the free market system.

The second form of greed is when a person doesn’t want anything more for themselves, they just want everyone else to have less. This is the Type 2 Greed exhibited by evil lizards like George Soros and that ilk. This is a very European response to scarcity, as well.

What we have in America is an attempt to entrench an aristocracy in our lives. A small group of people dominate both parties, and keep the rest of us peasants away from the levers of power.

As long as people refrain from taking over the Democrat and Republican parties, and allow their betters to control them, this country will never grow again.

Another Libertarian on April 4, 2014 at 12:09 PM

People who don’t understand the value of energy exports generally think of energy supplies as a zero-sum game, which they most certainly are not. (ie, the Malthusian view)

At the current time, it is probably easiest to explain this in terms of natural gas supplies: right now, I (and everyone else who has even the slightest connection to the domestic oil and gas biz) personally know of thousands of nat gas prospects that could be drilled and produced but which are lying idle because the economics are too shaky to make them worth the risk. And what I mean by “too shaky” isn’t that the gas isn’t there, it is; rather, the great industry wide fear (borne out by harsh experience over the last 30 years) is that a wide wave of new gas production will collapse the domestic price below the level at which even producing wells are economic, ruining the business model for everyone. (that happened in ’88 and ’97 off the top of my head, and those weren’t the only years – so it’s not an irrational fear)

BUT if there were a large international market capable of eating up the surplus supply, then it would be safe for domestic producers to initiate drilling programs, because they wouldn’t be facing bankruptcy if they collectively miscalculated and produced a little bit too much. That’s how the oil market is these days – thanks to problems in Libya, Venezuela, and many other traditional suppliers, it is no longer possible for the US to produce “too much” oil and this it is safe for the oil drilling programs to go all out. (which is happening in the states which are allowing it to happen, like Texas and North Dakota)

If we allowed nat gas exports, and put the infrastructure in place to support that (that will take about 5 years, btw), then this county could easily and quickly double and even triple our current nat gas production – we have the resources, and we know exactly where they are. (Alaska alone has massive reserves sitting unproduced, for lack of a market) And the benefits of increased supply are ALWAYS lower prices – most producing countries allow their international resource sales to subsidize their domestic usage to a certain extent, and there’s no reason we couldn’t do the same.

Those who are advocating for no exports are unwittingly advocating for diminished supply, less jobs, and higher prices. Those seeking increased exports know that the benefits will be INCREASED supply, MORE jobs, and lower prices overall. Th

Tom Servo on April 4, 2014 at 12:28 PM

Ukraine has relied on coal throughout much of the past century despite efforts by global institutions such as the World Bank to help Kiev phase out its use following independence from Moscow.

Leave it to the World Bank to mess things up for Ukraine. If Ukraine had ramped up its use of coal for electricity, it wouldn’t have needed Russia’s gas so much. But the World Bank greenies were worried about stopping the Black Sea from rising, or something like that.

Actually, that wouldn’t be a bad idea–it might flood the Russians out of Crimea!

Steve Z on April 4, 2014 at 1:22 PM

Ed Morrissey on April 4, 2014 at 11:01 AM

You’re a fair and forgiving person, Ed. I wouldn’t worry about it. I’ve gotten fed up with folks here now and then, walked about, but keep coming back regardless.

John the Libertarian on April 4, 2014 at 1:57 PM

I suggest the environmental groups may want to invest their funds in wind power for Ukraine. Put your money where your mouth is instead of trying to force me and others to provide the funds.

If it is a viable alternative to the more expensive gas, then you lower greenhouse gas emissions, prevent more coal usage, and make a profit on the electric power production to boot!

It would be a great plan, except for the fact that those wind turbines are enormously expensive to construct and maintain, that they kill thousands of birds every year, including endangered species, and are a really annoying source of noise pollution to anyone near them. All those off-shore turbines are probably killing whales and dolphins and other marine life due to the high-frequency vibrations produced, and the on-shore ones just kill other forms of life, or make life unbearable for anyone near them.

It seem that maybe the only viable fix is to cut electricity usage by 99% or more. Perhaps forcing that to happen is the real goal. Getting rid of 99% of world population is the most likely way to achieve that. A world with around 80 million people would be much less subject to anthropogenic climate change than one with 8 billion after all. And the nuclear winter after the global thermonuclear war that got rid of the 99% would more than compensate for any recent warming trends.

So, is it a vast conspiracy by the Greens to trigger WW III from these Eastern European squabbles? Probably not in reality, since many of them have children and family they don’t want to lose among the 99%. Nevertheless, the upcoming months may be rather interesting (in the old Chinese proverb sense). I may spend the next few evenings digging a fallout shelter in my back yard. I need the exercise anyway, and the extra muscle tone and mass will be helpful for fending off the zombies.

s1im on April 4, 2014 at 2:09 PM

Back to the topic, how long until the Baltic states are offered up?

nobar on April 4, 2014 at 11:07 AM

It depends: when will they have violent fascist coups and install viciously anti-Russian juntas that threaten local Russian minorities with loss of rights, and commit to anti-Russian policies in general?

Because that’s what Russia is reacting to in Ukraine.

David Blue on April 4, 2014 at 2:21 PM

Ukraine can retaliate and shut down Russia’s transmission lines through their country.

ConstantineXI on April 4, 2014 at 11:46 AM

And this would be a reasonable reaction to Russia no longer giving them massively subsidized gas?

Because that’s what’s happening. As an anti-Russian state run by a lawless junta of corrupt oligarchs, Ukraine is being kicked off its welfare.

David Blue on April 4, 2014 at 2:27 PM

If I were living in Eastern Europe or the Baltic States right now, not to mention Finland, I’d be really, really nervous. This has every indication of spinning out of control, just like the start of World War I did. It’s incredibly ironic that this year is the 100th anniversary of the start of World War I. Someone once said that, “History doesn’t repeat itself, but it sure does rhyme a lot.”

Putin is now showing how history rhymes, and the west is falling for it.

Libertyship46 on April 4, 2014 at 2:45 PM

-Budapest Memorandum 1994, Bill Clinton tells Ukraine to give up her nukes in exchange for security assurances. (unfortunately written on toilet paper) Ukraine is now practically without any defense. Russkies can now jack up oil and gas prices and even shut off the source entirely. There is nothing to fear.

-Europe and Ukraine became addicted to cheap Russian gas and oil. Ronald Reagan said that this would be a big mistake. (He was right), but Angela Merkel and allies do not want to make Russian bear mad.

-Gerhard Schröder, former Chancellor of Germany, sits on board of directors of Gazprom (Also personal pals with Vlad Putin, interesting.

-Saudis hate the Syrian ophthalmologist in Damascus. Obie visits Saudi King Fahd. Wants Obie to somehow have Assad thrown out. Saudi king needs pipe lines and terminals in Syria for his oil exports. He tells Obie war in Syria is very bad for business. Send Stingers to Syrian rebels or something like that says the king. (If Obie were smart, he would urge Fahd to increase oil production. Obie however would need balls to drill for oil here as well and export gas to Europe and Ukraine in order to make the plan work even better. Market price of oil and gas drops and Putin sees his support erode).

-Reagan was able to successfully do this in the 80’s by nudging the Saudis to crank up oil production. Saudis flood the market with cheap oil. Price of a barrel of oil dropped three fold and Gorby’s Evil Empire collapsed as Russkies could not get much money for their oil.

Putin’s Russian economy is solely based on OIL. That is their Achilles heel. Wake up Obie!

Krupnikas on April 4, 2014 at 3:02 PM

I need to write this…….hagel is a fracken troll I hope he goes to jail.

There, I feel better.

losarkos on April 4, 2014 at 3:27 PM

What’s not to understand?

For Liberals, reality is not to be understood.

Theophile on April 4, 2014 at 3:50 PM

Hagel is a big buffoon…No doubt that was a big reason why Obama made him secretary of defense

sadsushi on April 4, 2014 at 3:54 PM

All of Obama’s choices have been crooked and all to follow will not deviate from the crooked path he so methodically follows. All of this bodes ill for the US and so our allies.

Putin is in for a very good ride all the way wherever he wants to go.

Sherman1864 on April 4, 2014 at 5:39 PM

Wow. Looks like you’re gonna need those (existent?) kids sooner than you thought.

WryTrvllr on April 4, 2014 at 7:15 PM

Putin is in for a very good ride all the way wherever he wants to go.

Sherman1864 on April 4, 2014 at 5:39 PM

I’m sure he’ll go the smart way, which is this.

Russian armed forces are reasonably strong, but American Armed forces are much stronger; however the Gods of the Copybook Headings are the strongest of all. So Putin will let them do his fighting for him.

The Ukraine junta is now signed up with America, and it will follow the American Way, which in its modern version, as exemplified by Obama, means socially destructive policies (pro-mass-immigration, pro-gay and so on) plus endlessly spiraling debts.

Only debts can’t spiral endlessly. Leaders like Barack Obama may act like bills will never fall due, but they will.

Have you seen the YouTube video of Aleksandr Muzychko, a thug who was part of the junta, threatening, humiliating and pushing around a public prosecutor? The victim didn’t do anything but stand up for himself – and as for revenge, why bother, because a while later Muzychko was dead anyway, a victim of his treacherous allies and his own stupidity.

For Putin, that would be perfect: just do the normal things one country does when it is on very bad terms with another country, and let the junta reach an unsustainable position through its own efforts.

David Blue on April 4, 2014 at 11:29 PM

Three examples of critical analysis by Chuck Hagel:
1. “Huh?”
2. “What th’?”
3. “Beats me.”

tpitman on April 5, 2014 at 7:45 AM