Europe feeling natural gas pinch

VIENNA, Austria – The impact of Russia’s dispute with Ukraine over natural gas spread west, with European countries reporting delivery shortfalls as high as 50 percent. Moscow, facing angry customers and sharp criticism, promised to increase gas shipments to the continent by today.

As Russia and Ukraine traded accusations on who was to blame for European clients left short by lowered pressure in the pipelines, officials throughout Europe warned a prolonged standoff could mean higher heating bills for consumers. At least one country, Serbia, introduced rationing, and some industries said they were switching to oil.

Moscow was in a particularly sensitive position. It took over the rotating presidency of the Group of Eight most wealthy nations on Sunday, with President Vladimir Putin looking to convert his country’s energy wealth into added political influence.

“You have to be pretty naive not to recognize this … for what it is – pure blackmail,” wrote Germany’s daily General-Anzeiger, reflecting Europe’s disenchantment with Moscow’s use of the energy weapon.

With Ukraine also keen to avoid alienating the European Union it seeks to join, analysts predicted both sides would likely work to resolve differences quickly – or at least minimize the fallout for the rest of Europe.

“I don’t think either side wants a fight with Europe,” said John Hall, of the John Hall Associates energy consultancy in London.

Still, with the European Union receiving a quarter of its natural gas from Russia, the dispute reflected the continent’s energy dependency on its giant neighbor.

The crisis began Sunday when Russian natural gas monopoly OAO Gazprom halted daily delivery of 120 million cubic meters of gas destined for Ukrainian customers because Kiev had refused to meet its demands for a fourfold price increase. Gazprom said after the cutoff to Ukraine that it would continue shipping full supplies to its European customers, about 80 percent of which goes through pipelines crossing Ukraine.

Despite that promise, within hours of the reduction of gas going into the pipes, other countries began reporting pressure falloffs. Russia said Ukraine was stealing gas; Ukraine denied the charge and blamed the low pressure on the reduced amount of gas in the pipes.

On Monday, Russia promised to boost the amount of gas it ships to European customers through Ukraine by 95 million cubic meters per day to compensate for gas it said Ukraine was siphoning off.

“We have taken all necessary measures for Europe to receive gas in the full quantity. By tomorrow evening full connections with Europe will be restored,” Gazprom deputy chairman Alexander Medvedev said, according to Russian news agencies.

East European countries – many with decades of energy dependency on Moscow established during a half century of Soviet domination – were the most hurt Monday. Moldova, which like Ukraine is a former Soviet republic now at odds with Moscow, said it had not received Russian gas supplies for two days after prices doubled, making renewing a contract with Gazprom prohibitively expensive.

Hungary reported gas supplies down by 40 percent. Russian gas amounts to about 80 percent of the country’s needs.

Serbia, which depends on transshipments through Hungary, said it was receiving 50 percent less gas than normal. Supplies to Slovenia and Croatia were down 30 percent.

In Austria, the OMV energy conglomerate said natural gas imports from Russia via Ukraine were down by a third.