Three years ago, the Europeans were jolted when a gas-pricing scuffle between Russia and Ukraine briefly cut gas supplies to Europe. That led to a lot of talk about the need for a unified European Union stance toward Russia - and a rush by a few members to cut separate deals with Moscow. Now that it's happening again, and with far greater disruptions, the only surprise is that anyone's surprised.
Surely this time around the Europeans and their U.S. allies must realize that dealing with two chronically unreliable and corrupt state monopolies requires serious cooperation and coordination among all European consumers of Russian gas.
It's a moot question which is chiefly responsible for Tuesday's sharp and unexpected cut in Russian gas flowing through Ukraine.
Russia is feeling the pain of falling oil and gas prices, and anxious to get something closer to the market price from Ukraine. Prime Minister Vladimir Putin also has no compunctions about using energy as a political tool for his imperial yearnings. Russian television showed him personally ordering Gazprom, the giant Russian gas monopoly, to cut gas to Europe.
Ukraine is also not the innocent victim. Its president and prime minister are locked in a fierce power struggle, and its energy industry is mired in shady political and business interests, of which the most infamous is RosUkrEnergo, a murky company jointly owned by Gazprom and a Ukrainian oligarch that is the exclusive intermediary for Russian gas sales to Ukraine.
All this was known in 2006. Yet there has been no effort by Russia or Ukraine to stabilize their gas trade, and not much real pressure from Europe or the United States to do so. The Bush administration deemed it far more important to campaign to get Ukraine into NATO than to push Kiev into real energy reforms. Germany, France and other European states have competed in currying favor with Putin, while the EU has played the aloof bystander. Even as the current crisis was gathering steam, the EU dismissed it as a "commercial dispute" between Gazprom and Ukraine. It was not until south Europeans began to shiver that an EU spokesman declared, "This situation is completely unacceptable."
The problem with gas is that it is delivered largely through long, expensive pipelines, which makes it hard to switch providers and saddles all dealings with a heavy load of politics. Control over pipelines has been a major factor in Russia's spats with Ukraine and Belarus, and Moscow is pushing hard for the Nord Stream and South Stream pipeline projects that would bypass its neighbors. For the same reason, the EU and the U.S. have been pushing the Nabucco pipeline, which would deliver Central Asian gas around Russia. None of these projects, however, could ever replace the 100 billion cubic meters of gas that now flows through Ukraine - roughly 40 percent of the EU's gas imports, and two-thirds of Gazprom's revenues - especially as European demand can only grow.
That does not mean that Europe or Washington is without leverage. Gazprom badly needs investment capital, and Russia needs the income. Ukraine wants closer ties to the West.
Wielding these levers, however, requires Europe to speak to Russia with one stern voice, and not to scatter as soon as Putin says "Boo!" The EU must press Ukraine and Russia to produce open and fair contracts, even if that means gas prices for Ukraine closer to those paid by Europe. Above all, Germany and the other states that cut their private deals with Russia must understand that this also leaves them vulnerable to Moscow's whims. Their best interests lie in joining with other EU states to build more storage facilities and internal networks to better withstand prolonged drops in supplies.