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LOOKING AHEAD
09.01.2009

January 7, 2009 (the date of publication in Russian)

Maxim Kalashnikov

GET YOUR HEAD OUT OF SAND!

The irresponsibility of "orange" Ukrainian government is the main energy security threat for the EU

Andris Piebalgs, European commissioner for energy, cast doubt on the future possibilities of Ukraine in the role of provider of pure gas transmission from the Russian Federation to Europe. The reason for this lies in the extremely worn-out pipeline system, which was inherited from the USSR, and also in too small volumes of the "blue fuel" pumped into underground storehouses.

We shouldn't think that the European commissioner, who had been looking for all possible "alternative ways" to avoid the RF, decided to play into Russia's hands. He simply establishes the fact: in transit of Russian gas, Europe is dependent on the situation in the absolutely unstable state, which now is swiftly falling into Third World. And the outage of Ukrainian pipeline system is only the question of time.

The facts are that after the USSR collapsed, Ukraine got 14,000 kilometers of transit "strings" of a big diameter (and the whole extension of all the gas-mains of Ukrainian SSR made up 36,000 km). They are extremely worn out, and some experts warn about dangerous condition of 20% of pipelines. According to other judgments 50% of transit "strings" are already at a dangerous line. The maximum that can be assigned by Ukrainian Naftogaz and Ukrtransgaz to repair and renovate the whole system is $150 million per year (1.2-1.3 billion hryvnias). Anyway they're unable to give more: the government of poor de-industrialized country will withdraw the lion's share of profits trying to fill the gaps in hopelessly deficit budget and support at least some social programs. At the same time, the minimum need in pipeline transport investments is 2.5 billion euros. In other words, it's six or seven times more than what is invested now. (For your information: the common income which Ukraine gets from the transit of gas to Europe is only $2.16 billion in 2008) It all, plus insolvency of Ukrainian economy (eternal grows of debts for gas supply) predetermines the collapse of gas-transport system (GTS) within next 15 years.

The very condition of pipes with their numerous welds causes apprehension. It's hard to find as qualified welders over the territory of modern Ukraine, as there were in the USSR during 1980s. According to an old USSR tradition, if a gap in a weld appears, the responsibility for this will lie on the one who has made the very weld. That's why people do that job unwillingly and rather prefer calm and profitable welding of grave monuments and cemetery fences.

And that's actually why 1020-1420 mm diameter pipes are the most vulnerable and propone to deterioration parts of Ukrainian GTS. The situation with 79 gas-pumping stations is better – they can be changed comparatively easily.

The EU should have stopped hiding its head into sand long time ago and admit obvious things. Sovereign Ukraine had turned into "stably unstable" poor country; and the instability has both economical and political natures. In present state Ukraine is incapable "looser-country", which can't save inherited Soviet techno-sphere. At the same time, the EU has no means to make Ukraine its dependant.

The EU must stop its dirty game: demanding regular gas supply and keeping silence about irresponsible actions of Kiev, which elementarily steals gas, doesn't pay for it and brings GTS out of commission. Up to now, the EU has been acting according to the scenario: "give us the gas you promised and solve your problems with Ukraine yourselves". Supporting Ukrainian nationalism, opposing it to "authoritarian Moscow", approving "Ukrainian democracy" with its urging towards "Euro-Atlantic world" has been profitable for the EU up to now. Moscow was to pay for these enthusiasms, delivering gas to Ukraine at prices, which were lower than market, and putting up with Russophobe Kravchuk-Kuchma-Yushchenko policies.

But now this performance comes to an end. The EU must take control over Ukrainian GTS together with Moscow and Kiev, so after that combined Russian-European investments into pipelines will become possible.

Europe has to understand one simple thing for that: in its present condition Ukrainian state is nonviable, so its collapse is unavoidable even in case of Moscow trying to slow the process down. And mutual Moscow and Brussels administrating of present Ukrainian GTS will guarantee the reliability of gas-providing even when, for example, West Ukraine will become a separate state. There already were precedents of the external administration of important infrastructural systems. This way in the past Western powers administrated railways both in imperial China and ottoman Turkey.

However, if the deal about the creation of consortium with Russia's and the EU collaboration fails, Europe will have to make efforts to hasten the construction of Nord Stream and South Stream pipelines, which means overcoming the sabotage of supporters of "energy war" with Russia. It's useful to understand that these projects are to curtail the transit of gas through Ukraine from 110 billion cubic meter per year to 60 billion. Thus the EU will feel twice more secure than now.

In any case, it's obvious that putting energy security into dependence from the unstable country, which is balancing on the line of splitting, is absolutely unreasonable.


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