Wednesday, December 28, 2005

Pipeline profits and politics

"...the economically unclear mechanism for establishing the different prices suggest that while taking measures to increase the profitability of the gas it supplies, Russia wants to continue using gas prices as a tool of political pressure."
This is one interpretation offered by a Polish analyst in an International Herald Tribune story among many possible strategic reasons behind price hikes by the Kremlin-controlled giant gas company Gazprom. There are others: In particular, establishing a reputation for unreliability and political interferrence might seriously damage Russia's commercial reputation as a gas exporter.

If we see ExxonMobil with its own nuclear weapons and Microsoft sitting on the UN Security Council, then I might start believing Monbiot, Klein and the rest, but unlike many people with a preference for free markets, I tend to believe that commerce will be overriden by politics more often than the other way around.

Two things strengthen this conviction in the case of Russian energy: First, I inevitably get to see a mad paranoic glint in th eyes of any Pole or Balt I raise this with.

Second, we've just seen the Russian Duma enact a law that classifies NGOs ranging from the Open Society Institute of George Soros to the smallest donkey welfare society as potential enemies of the state.