GAZPROM

Dry Facts:

GAZPROM

GAZPROM is a Russian natural gas company. It is the largest extractor of natural gas in the world.

It was formed in 1989 when the soviet ministry of gas transformed itself into a corporation but maintained all it's current assets.



As you can see it's reach spans the Entire European continent.

Any given year Gazprom produces 17% of the worlds total gas production, and about 10% of the Russian economy.


In Laymans Terms:

Pay up or Vladimir Putin will turn off the heat.

He has once already.

This dynamic brings a whole new meaning to the term "Cold War."


The United States is not the only nation with an issue regarding dependency upon foreign imported fossil fuels.

Essentially Russia can blackmail Eastern Europe. They can do this with price demands. Theoretically they can also suffer a "supply shortage" or "transportation issues" if western European foreign policy takes a turn they don't like.

Russia Ukraine Gas Dispute of 2006

This conflict started in March 2005 over the natural gas and transit prices.

On 1 January 2006 Russia cut gas supplies to the Ukraine. 80% of Russian Gas supplied to Eastern Europe flows through the Ukraine. SO RUSSIA CUT THE GAS SUPPLIES ESSENTIALLY TO MANY EU NATIONS IN THE DEAD OF WINTER.

Supply reductions were known to be occurring. The Ukraine may have been siphoning off gas, or Russia was under supplying and falsely accusing Ukraine of siphoning. Either way the gas had to start flowing, and the Russians were in full control of the situation.

"Europe's Strategic Dependence on Russian Energy" (2007) by Ariel Cohen states:

* Locking in Demand - Moscow is attempting to use long-term contracts with European countries to lock in demand. By dealing separately with countries rather than as a group, Moscow can discriminate countries on prices.
* Locking in Supply - Moscow attempts to consolidate its control of strategic energy infrastructure throughout Europe and Eurasia, including supply, sale, and distribution of natural gas as well as as pipelines, refineries, electric grids, and ports.
*External Consolidation - Moscow is consolidating control of supply outside Russia, particularly by signing long-term exploration and supply agreements with Turkmenistan, Uzbekistan, and Kazakhstan.
* Internal Consolidation - Moscow is consolidating Russia's oil and gas sector in the hands of state-controlled entities. Major international entities are pushed out of Russia.
* A Gas OPEC - Russia is "stealthily and steadily" developing a "gas OPEC" cartel to control the output and price of gas. The cartel would include major producers, including Argentina, Bolivia, Venezuela, Iran, and Qatar.[9]

The Communist Soviet Union has passed but a new power, but Russia has rebuilt extremely strong relationships forming a kind of new unofficial capitalist federation consisting of former members of the Soviet Union.