For consumers of Russian fossil fuels, such as Western Europe, there is little threat that oil prices will dramatically increase because of a "leaky" Russian pipeline -- the continent can easily obtain oil from other countries. But whether orchestrated by Mr. Putin or caused by inadequate infrastructure, a slowdown in the production or transportation of Russian natural gas would be much harder for Western Europe to rectify and could seriously undermine Western economies.
Both the oil pipeline's leak and the way Russia has taken advantage of it should serve as a warning to countries dependent on Russian natural gas. Countries in Western Europe in particular should invest in more liquefied natural gas terminals to accommodate tankers from other countries that produce natural gas. The West relies on Russian energy supplies at its peril.
Saturday, August 26, 2006
The Energy Bully
Discussing Russia's recently-imposed oil blockade of neighbouring Lithuania, the Washington Post looks at the implications for the rest of Europe: