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	CIAO Focus, January 2006: Natural Gas and European Energy Security
	The recent standoff between Russia and Ukraine underscores the growing importance of natural gas as a global energy commodity. When the Russian gas monopoly Gazprom cut supplies to Ukraine following the latter's refusal to meet a fivefold price increase, Ukrainian consumers were not the only ones affected. Many European Union member states, including Austria, France, Germany, Italy, and Poland also suffered a temporary shortage of Russian gas. The EU currently buys 25 percent of its gas from Russia, 80 percent of which is transported westward across the Ukraine via pipeline. Following the gas cutoff, both Germany and the U.S. sharply criticized Russia for reneging on its pledge as new head of the influential Group of Eight (G-8) to promote global energy security. Russia claimed it was trying to end subsidies to Ukraine by charging market prices for gas while Ukraine accused Russia of using the price hike to punish President Yushchenko who wants to limit Moscow's influence on his country by applying for membership to both NATO and the EU. In the end a deal was reached between the two nations and gas shipments were resumed. But the incident has stoked European fears of being too dependent on Russia for natural gas. The eastern portion of the Caspian Sea basin offers tremendous potential as an alternative source of natural gas for Europe. Most of these reserves are located in Kazakhstan, Turkmenistan and Azerbaijan. However, the difficult geography of this region, its remoteness from European markets and the lack of an infrastructure to deliver the gas have hindered development efforts there. From CIAO's database: Energy Resources of the Caspian Region and the Significanceof Turkey for Europe's Energy Security Pipeline Politics in the Caspian Sea Basin The United States, Europe, and Russia: Toward a Global Energy Security Policy Geopolitics of Oil and Natural Gas Shaping an EU Energy Strategy Has Become More Urgent Caspian-Black Sea Security Challenges and the RegionalSecurity Structures Outside Links*: The European Energy Charter http://www.encharter.org/index.jsp?psk=02&ptp=tDetail.jsp&pci=265&pti=12 Caspian Sea Region: Natural Gas Export Options (Energy Information Administration) http://www.eia.doe.gov/emeu/cabs/caspgase.html East European Gas Analysis http://www.eegas.com/index.htm The internal energy market: Improving the security of energy supplies (European Commission) http://europa.eu.int/comm/energy/gas/internal_market/oil_gaz/doc/memo2002_en.pdf Proposal for a Directive of the European Parliament and the Council Concerning Measures to Safeguard Security of Natural Gas Supply http://europa.eu.int/comm/energy/gas/internal_market/oil_gaz/doc/directive_gas_en.pdf * Outside links are not maintained. For broken outside links, CIAO recommends the Way Back Machine [http://www.archive.org/].