Wednesday, January 04, 2006

Letter from America No 1

It's not that I am particularly incompetent with technology, it's just that it often does not want to do what I expect from it. As a consequence, I have been forced to seek the sanctuary of the world's largest internet cafe in 42nd Street to write this posting.

The big story here is the one about the miners in West Virginia. Trapped after an explosion for a couple of days in a mine that has had safety problems in the past; the opening of it surrounded by scared looking families in pictures we have not seen in Britain for some decades; the miners were on every front page.

Today's big story, however, is that all the newspapers got it wrong. On the basis of the first announcement, every single newspaper reported that 12 miners had been found alive. Alas, that is not true. 12 bodies were found and the 13th alive but in a critical condition.

The New York Times, reduced itself to a freebie today. As I wondered round the Financial District, trying to identify the evil American capitalists among the tourists, paper boys and girls were handing the "newspaper of opinion", whose shares, incidentally, have been sliding, out to all passers by. Strangely, only a few accepted the gift. I was one of them.

The NYT has given good coverage to the ongoing Russia-Ukraine and the gas that may or may not be pumped to Europe in the future. I was interested to see that, having announced a policy of non-inervention, both Chief Foreign Affairs Panjandrum Solana and, even, the German Energy Minister Michael Glos, have been making statements, in the case of the second one, somewhat worried ones:
"Thirty per cent of our gas comes from Russia. That should be increased but it can only be increased if we know that deliveries from the east are dependable."
Of course, Herr Glos, some of us, notably this blog, have been warning about that for some time.

Andrei Illarionov, President Putin's last liberal adviser, who resigned, as we reported, at the end of last year, explained the problem in a radio interview to the station Ekho Moskvy.

The price of $50 per 1,000 cu.meters had been set in 2004 in order to help the pro-Moscow presidential candidate, Yunkevich. Since he did not win, Gazprom, although it maintains that it is a completely independent company, motivated purely by economic considerations, has decided that Ukraine needs to be pressurized into paying what it says are market prices. (Gazprom charges different market prices to different countries.)

As the New York Times commentators pointed out the ensuing crisis, which seems to have included Ukrainians siphoning off gas that they says came from Turkmenistan and they had paid for, was completely unnecessary and has tarnished the name of both Gazprom and Russia as it takes up the presidency of G8.

Incidentally, there seems to be some disagreement about the gas from Turkmenistan. The Ukrainian government insists it has paid for a steady supply. Russia maintains that Gazprom has bought all the gas of the first three months. Turkmen President Saparmurat Niyazov has confirmed Ukrainian payment but has not so far clarified the discrepancy.

In the meantime, Solana, as is his wont, has been wringing his hands and pleading with all to go back to the negotiating table, something they will surely have to do.

What of the long-term repercussions? President Putin has once again overplayed his hand and put up more hackles than is strictly necessary even for Russia. Presumably, that will not last long and Angela Merkel, who is going to Moscow this month is not going to break up the policy of energy collaboration that had been started by Helmut Kohl, though it is really Gerhard Schroeder who has been particularly active and who has benefited from it personally.

Nevertheless, the absence of Putin's best friend Gerhard has been keenly felt. Germany seems to have become a little more worried about dependance on Russian gas. The events of the last few days may strengthen Merkel's hand, should she wish to overcome her coalition partners' opposition to the continuation of nuclear power stations.

Other voices are being raised that more attention should be paid to renewable energy sources. Ironically, at least for Russia, Ukraine, with its rich soil and low population density has the biggest potential of all European countries as the provider of biomass.


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