It’s a complex and highly technical industry, involving a large funnel attached to a pipe pointed at the Irish coast. [link]

I really don’t think we disagree.

“Ordinarily I wouldn’t bother responding to a blogpost I found unintelligible”

Well lucky you did this time, since if you hadn’t bothered we wouldn’t have had this exchange, which I think has clarified things.

“The role of machiavellian French lobbyists can only be guessed at..”

Yes, and moving from fact to fiction, wouldn’t this make a great novel. If only I had the time and the talent!

I even have a title if anyone wants it:

French Dis-connection II.

In the end I am more than happy if the French get back technical leadership in the nuclear reactor business. I think this will be good for all of us in Europe. But first I think I would like to see a debate about nuclear power as an alternative, so we are all a bit better informed before taking any important decisions.

At present I am getting interested in the European Pressurised Water Reactor (or EPR). There is an interesting link here:

http://www.uic.com.au/nip16.htm

And I’m sure the Russian electoral timetable plays a big role. (I’d be less confident about the degree of calculation involved in any link between the Gazprom decision and the Ukrainian elections, if only because of the same logic you follow above: who is most likely to benefit?)

Fundamentally I think we can agree that the ramifications for the nuclear debate in Western Europe are unintended consequences of the decision, rather than the visible fruit of a hidden pattern of interest and influence. The role of machiavellian French lobbyists can only be guessed at, but even they are several stages removed from the people turning the gas taps. We know that states and corporations play it shady and devious in the energy sector, but the dots don’t connect A to B in this case.

Sorry for overreading.
Are you sure that Mr. Putin has lost credibility in his own eyes? After all he has solved the crisis very quickly. That he created it in the first place is not necessarily a view held in Russia.

Incidentally I would point out that I am not suggesting corruption here, or anything like it. Just that in a game play, if one side can be expected to respond stupidly, and the referee doesn’t pull the yellow card at the first infringement, then the ‘hard nut’ team can be expected to continue playing hard-nut, until such time as the referee (in this case Solana), either out of frustration or as a result of a prior decision finally pulls the red one.

Lobbying is, in a democracy, a perfectly legitimate activity, so if lobbyists from the French nuclear industry gave Putin’s advisers the idea that the red card wouldn’t be played (after all you only want market prices etc), and if the advisers were silly enough to swallow this, well then……

I’m not exactly saying this Oliver. I am saying that Russia has just lost a lot of credibility for its modus operandi. It is irrelevant who really is the more guilty party here, Ukraine or Russia. When you see two people brawling in the street, neither side comes off particularly well.

This credibility is important to Russia, since energy is a very sensitive area, and it doesn’t matter whether the issue is gas or nuclear, no-one wants to rely on an unreliable partner.

Interesting to note your Stoiber detail though.

“Russia believes that the EU would put itself in that much a dependency”

Well it’s hard to know what those who rule Russia believe these days, especially since most of the things they do seem truly ‘unbelieveable’.

“In any case, Russia, too, has a nuclear industry.”

Oh yes, and this is going to be very important, as we can see in the cases of Iran and Pakistan. This is another reason we may want to rethink our nuclear attitudes in the EU.

But this may or may not be incidental to the decision. In any case, Russia, too, has a nuclear industry. When you say that not substituting gas for nuclear power in the EU would hurt Russia, you are making three assumptions. Russia could deliver that much gas, Russia believes that the EU would put itself in that much a dependency and that the EU would import the gas from Russia. I guess to Mr. Putin putting his own country into a position where it had no secure electricty supply is unthinkable, making him assume the same about the EU.

Let me try to spell it out then. This is definitely not in Russia or Gazprom’s interest, short or long term. Short term it isn’t because they have to back-off immediately (and hence lose face and credibility, just as Putin is about to try and ‘up’ his profile), and long term for the reasons Jerome spells out. From the Russian point of view this has been a big mistake.

The decision was, however, in the best interests of the French nuclear industry and of all those in the EU who want to advance the nuclear cause. For them now is definitely the time to move.

If I had a mechanism which could explain how the best interests of the French nuclear industry could make their presence felt in Gazprom I’d be home and dry, but of course I don’t.

The interesting question is who was egging Putin on. There are those inside Russia who have been pushing for some time now for retaliation against Ukraine, but why would the supposedly level-headed executives of Gazprom pay them such heed, or why would Putin, about to take over G8 presidency, allow them to follow such an ill-advised path.

Now I am not the only one to advance an ‘electoral timetable’ view. Radio Free Europe has this:

Russia’s dispute with Ukraine and subsequent gas cutoff has been seen by many analysts as Moscow’s attempt to pressure Ukraine in the runup to its 26 March parliamentary elections.

This undoubtedly was motivating some people, but not necessarily the ones who actually took the decision. Also Ukraine’s response was pretty predicatble:

“Some Ukrainian officials are occasionally hinting that they might again resort to siphoning Russian gas from the transit pipelines, if Gazprom imposes unfair prices on Ukraine. That practice can inflict losses on Gazprom in the short term……Moscow is complaining preemptively in Brussels and elsewhere in Western Europe against Ukraine’s alleged siphoning intentions. Gazeport (Gazprom’s export arm) General-Director Alexander Medvedev warned, “The international community will not permit Ukraine to revert to siphoning gas illicitly.Ukraine notoriously used that practice during the mid- and late 1990s, initially at Gazprom’s expense;”

Ironiically it was the arrival of Viktor Yushchenko and Yulia Tymoshenko in the prime ministers office in 2001 which put a stop to this.

Putin is also facing elections in 2007, and he has personally taken an active part in animating the Gazprom decision:

“Authorized by President Vladimir Putin, Gazprom halted deliveries of Russian gas to Ukraine as of 10 am Moscow time on January 1. To maximize the political impact in Ukraine, Russia’s state-controlled television channels showed Putin, his close aide and Gazprom chairman Dmitry Medvedev, and other top officials authorizing the halt in supplies to Ukraine. The channels also showed overdramatized scenes from Russian compressor stations near the Ukrainian border shutting off the supply valves to that country.”

“Putin personally gave Ukraine a 24-hour ultimatum on December 30, demanding that Kyiv sign by the next evening a supply contract for Russian gas in 2006 on terms demanded by Russia, or else have the supplies halted on January 1.

Putin is under pressure form the extreme-nationalist right and of course ‘gestures’ like the Ukraine move can be read in many ways.

At the end of the day I am not suggesting that we should put all this down to the ‘hidden hand of opus dei’, I am simply saying that when you dig a bit deeper there is more going on here than meets the eye. Collisions of opposing forces normally produce unforseeable outcomes, and I hate conspiracy theories, but still, I also think that when something strange happens it is often interesting to also look at who the principal beneficiary of that strange thing is, and work back from there.

If I was an investigative journalist, I would say there was plenty of material to dig-around in here, but I am, as you indicate, a mere humble blogger :).

Many thanks for the link to Jerome’s stuff on this, however. I’m sure I’d have missed it otherwise.

Secondly, what does this do to prices? Has he created a fear surcharge which he will pocket?