How Not To Do It

Let me see if I can shed a little light onto the situation in the Ukraine and Russia...

It seems that there the previous administration in the Ukraine was very friendly to Russia, and the whims of The Kremlin. Viktor Yushchenko (the current president who was poisoned under suspicious circumstances during the election) defeated Viktor Yanukovych, who was pro-Kremlin, in the 2004 presidential election. (Enough Viktor's for you?)

Yushchenko looks to Western Europe for its salvation, leaving Russia - its old benefactor - standing on the sidelines. This doesn't sit well with Vladimir Putin, former Old School KGB Colonel and current CEO of The Kremlin, Inc.. "Dance with the one that brung ya" is Putin's mantra...which is not shared with Yushchenko.

Yushchenko is positively modern by Soviet Era standards. He is looking to Western Europe, the EU and beyond for help in transforming Ukraine into a bustling economy. Dare I say it, but he is positively Capitalistic!

January 2nd, in the middle of the winter, GAZPROM, the Russian national energy provider takes its cue from Putin and as a political slap on the wrist, turns off the supply of natural gas to the Ukraine - literally. Of course, the Ukraine happens to be where GAZPROM's pipelines to Western Europe cross from Russia to points in Austria, Germany, and the rest of Europe.

The GAZPROM guys slammed Ukraine not only for not letting the gas flow freely across the Ukraine, but siphoning and stockpiling gas meant for Europe. Imagine that... "You can't have it, but we still want you to pass this to our higher paying customers." Umm...no.

But, how does this affect you and me, here in the West? Seems like a little squabbling between former Soviet allies, right? Well, when you think that those pipelines feed Western European countries, it makes you wonder what...say... Germany would do if forced to face the prospect of a winter in Berlin without heat? That would tend to make them cranky.

Of course, that would only be the short term effects. Long term, Russia controls some of the largest energy producing areas of the world. Siberia (remember Siberia?) happens to have oil and gas deposits that make the Middle East look like East Texas. If western nations were allowed to fully exploit those reserves, we would limit our exposure the winds of change in places like Saudi Arabia and Yemen. Proving that the former Soviet Union is still unstable is not the way to instill confidence in Western companies to invest in those areas.

So, for the foreseeable future, plan to put that Middle Eastern gas in the SUV...and pay, pay, pay... in more ways than one.