As the temperatures cool and the leaves fall, it is again time to think about the implications of dependence on Russian natural gas for home and commercial heating. On October 21, 2006, the BBC published a story titled Russia-EU’s ‘gas tag-of-war’ that paints a picture that makes me believe it is time for Europeans to invest in alternatives to Russian natural gas. Here are the components of that holistic interpretation of the article:
- Russia (Gazprom) is not investing enough in new fields
- Existing Siberian gas fields are in decline
- New off-shore fields are being developed without any external capital
- Gazprom is seeking more freedom to invest in distribution outside Russia
- Putin is quite aware of the power implied by sitting on 25% of the world’s gas reserves
Natural gas is almost as difficult to store as electricity. A gas customer is essentially powerless in a dispute over supplies if he has no alternative energy. He will pay almost any tariff in order to keep the gas flowing – at least until he is able to arrange for a different energy source. The time to begin that process is before the gas flow is actually threatened in order to allow for a more fair bargaining position.
As you all know, my definition of alternatives to fossil fuels like coal, gas and oil certainly includes uranium, thorium and even plutonium. It would help in the negotiating position if those fuels had a different supplier than the gas that is at issue.