The Natural Gas Card in Ukraine
Within a week of the impeachment of pro-Russian president Viktor Yanukovych following protests and insurrection, Russia approved the use of military force throughout Ukraine. It promptly exercised that power in Crimea, an area with a predominantly ethnic Russian population.
Russia's Natural Gas Leverage
On March 1, as troops were rolling into Crimea, Russian natural gas exporter OAO Gazprom said it would end last year's agreement to sell gas to Ukraine at a discount unless Ukraine paid a $1.55 billion gas bill.
Four months before Russia had persuaded Yanukovych not to sign a trade agreement with the European Union, in part by reminding him of the very large debt Ukraine owes Russia for natural gas.
Ukraine lies at the crossroads of several important pipelines from Russia to Europe, with the country using much of the natural gas that flows across its border. Ukraine gets 80 percent of its natural gas from Russia, and relies heavily on the fuel for residential heating. Half of Russia's natural gas to European markets flows through pipelines in Ukraine.
On Monday, March 3, natural gas rose throughout Europe, up 10 percent in the UK and the Netherlands, and 8 percent in Germany.
The EU's Economic Overture towards Ukraine
The European Union had been working for five years to bring Ukraine and other eastern European countries into is Eastern Partnership trade agreement in competition with Moscow's initiative to establish a Customs Union that included Ukraine. Moscow had been very open and vocal about the leverage it had over Ukraine in its push to keep the large country of 46 million within its economic sphere.
In November, the Ukraine government said it would not accept the EU offer, which included 600 billion Euros in aid. Yanukovych, in an interview on Ukrainian television, dismissed the offer as "candy in a pretty wrapper," noting that Ukraine owed Russia 12.5 billion Euros. Pro-European demonstrations began in Ukraine's capital city of Kiev.
Ukrainian Citizens Rise in Protest, then Revolt
On Nov. 29 Yanukovych announced at a EU trade summit in Vilnius, Lithuania, that he was declining to sign the trade agreement under the terms presented, and the Kiev protests quickly escalated in numbers and discontent. In the early hours of Saturday, Nov. 30, Ukrainian police conducted a bloody eviction of the protesters from Independence Square in Kiev.
Within hours a failed negotiation, due in very large part to natural gas trade, had transformed into a political action by protester and then the first in a long line of street battles that have resulted in a military confrontation with Russia.
Ukraine's Energy Mix
As the International Energy Agency's chart above right shows, the amount of natural gas that Ukraine imports rivals that amount of coal that the country produces.
Switching to other sources would be extremely difficult, even in prosperous, peaceful times under good weather. Instead Ukraine is negotiating with the IMF (which is looking for austere fiscal actions), caught on the brink of heightened fighting and still has weeks of winter left.
Ukraine was home to the tragic 1986 Chernobyl nuclear accident, depriving the area of a source of electricity as well as causing a public and environmental health disaster. Even if it were to decide to reinvest in nuclear energy, a technology that has been frowned on in Europe in many quarters, it would be years before any reactors produced the first watt of power.
But one element of Ukraine's energy mix is tucked away at the bottom of the EIA chart above. Power losses from power plants, the inefficient leakage of energy and heat from equipment and smokestacks, are almost equal to either the natural gas imports or the domestic coal production, respectively. Every million BTUs of energy that Ukraine could divert from these losses into productive channels would be a million BTUs of natural gas it would not have to buy from Russia.
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Links for the search term: Ukraine
United Nation's page on Maritime Boundaries
The page describes UN conventions regarding the delimitation of sovereign territorial waters, and includes country pages with tables giving the latitudes and longitudes of territorial water boundaries. Ukraine is included.
Ukraine's Energy Balance, from the International Energy Agency
The graphic shows the sources and uses of Ukraine's energy mix, including energy losses from its power generation and other processes. In Ukraine, these losses are roughly equal to the amount of energy Ukraine gets from its Russian natural gas imports.
Ukraine Crisis Timeline2013
Ukraine government said it would not sign EU agreement and would work for closer ties with Russia. Protests against the government begin.
European Council statement about Ukraine withdrawal includes criticism about Russia's efforts to influence Ukraine away from the EU's Eastern Partnership trade agreement.
Ukraine President Viktor Yanukovych tells Ukraine television that the EU has been offering candy in a nice wrapper if they would sign an IMF deal
Eastern Partnership summit begins in Vilnius, Lithuania. European Parliament President Martin Schultz says Yanukovych should listen to his people. Thousands of Ukrainians continue to demonstrate for closer ties to Europe.
Ukraine declines to sign EU Eastern Partnership trade agreement at Vilnius summit ends.
In the early morning hours police chase thousands of protesters from Independence Square in Kiev. But later in the day, thousands more protesters took to the streets throughout Kiev to denounce Yanukovych's refusal to sign the EU agreement.
About 100,000 protesters chased police out of Independence Square in Kiev. Police allowed a peaceful demonstration there, but when some protesters tried to break into a government building with a front-end loader police responded with tear gas.
Police attack barricades of protesters in Kiev's Independence Square.
The EU said it was suspending its attempt to revive the Eastern Partnership deal with Ukraine and at least 200,000 protesters merged on Independence Square.
Journalist Tetyana Chornovol was forced from her car and beaten. Her beating added to a list of violent incidents against protesters and journalists.
Yanukovych visits Putin in Moscow. Russia agrees to buy $15 billion worth of Ukraine government bonds and cut natural gas prices by one-third.
About 100,000 protesters at Independence Square call for the ouster of Yanukovych's government.
Arseny Yatsenyuk, the leader of the opposition Batkivshchyna (Fatherland) party told protesters his party was looking to win the 2015 presidential elections.
Ukraine parliament passes laws aimed at stopping public demostrations.
Large protests turn violent in response to anti-demonstration legislation.
Anti-government protests have spread to other parts of Ukraine, with opposition groups seizing government buildings.
Prime Minister Mykola Azarov and his government resign.
Protesters march on Parliament asking that the country's constitution be restored to the form it held before Yanuikovych took power.
Tatyana Yermakova, leader of pro-Russian group in Crimea, sends appeal to Moscow for protection from demonstrators.
Interior Ministry gives orders to use live ammunition and armed street fighting begins
Russia suspends its economic aid to Ukraine.
Protesters take control of Kiev and Yanukovych flees the city. The parliament votes 328-0 to impeach Yanukovych. Arseny Yatsenyuk named acting prime minister. Yulia Tymoshenko released from prison. Pro-Russian factions in eastern and southern Ukraine hold a congress.
Armed, pro-Russian militants seize the provincial parliament building in Simferopol, Crimea.
Russian troops fly to Crimea.
The Russian Parliament gives Putin authority to deploy Russian troops in the Ukraine. Russian troops are effectively in control of Crimea. OAO Gazprom, Russia's gas exporter, says it will end a discount deal on natural gas unless Ukraine pays a $1.55 billion natural gas bill.
Ukraine calls up its military reserves and acting Yatsenyuk, speaking about Russian troop movements in Crimea, “This is a declaration of war to my country.” US Secretary of State John Kerry, who is planning a visit to the region, said that Russia could be expelled from the G-8.
International condemnation of Russia's troops movements in Crimea mounts as the UK foreign secretary William Hague visits Kiev.
US Secretary of State John Kerry visits Kiev and offers $1 billion in loan guarantees to Ukraine along with offers of technical assistance. Russian President Vladimir Putin called the regime change in Ukraine an "unconstitutional coup." He said Russia would reserve the right to use force in Ukraine.
The European Union offered Ukraine a $15 billion (11 billion Euro) in aid over the next two years.
Russia troops take control of a natural gas terminal near the east Crimean village of Strilkove.
Crimean voters in a referendum approve a measure to secede from Ukraine and join Russia. The vote is declared invalid by Western governments.
Russian Vladimir Putin signs a treaty annexing Crimea two days after a referendum in the region called for its succession from Ukraine.
Igor Sechin, head of Russian energy firm Rosneft, turned his attention to Asian markets by visiting a Japanese investment forum while that country imposed mild sanctions for the Crimean action. Sechin called for more integrated energy investment and tighter energy contracts between the two countries.
Ukrainian Energy Minister Yuriy Prodan met with with EU energy commissioner Gunther Oettinger and asked for help from Europe for his country's energy sector. Meanwhile US President Obama added more Russia officials to the list of people under sanctions resulting from the Crimean crisis.
Ukraine signs a trade deal with the European Union that former Ukraine President Viktor Yanukovich had rejected in November. The EU is extending 500 million Euros worth of trade credits to Ukraine now. After presidential elections are held May 25, Ukraine can enter into a free-trade agreement with the EU.
Russian Prime Minister Dmitry Medvedev says that Russia is considering running an electricity transmission line from the Russian mainland to Crimea and building a natural gas electricity generating plant on the peninsula. Reports said that electricity service had beens seriously curtailed due to mishaps in the electric transmission system from mainland Ukraine.
The IMF announced an agreement with Ukraine in which it pledged at least $14 billion of aid to Ukraine. One provision would have Ukraine ending energy subsidies.
Gazprom raised its price of natural gas to Ukraine 44 percent, from $268 per 1,000 cubic meters to $385. Gazprom said it was ending a discount to Ukraine due to unpaid bills for natural gas shipped in the past.
Russia signs law ending discounts granted Ukraine in exchange for a basing Russian ships in Crimean ports on the Black Sea. Russia had terminated those agreements, saying that their annexation of Crimea as Russia territory put the bases under Russian sovereignty.
Pro-Russian protestors seized a government office in Donetsk and declared themselves the "Republican People's Soviet of Donetsk." Russian supporters in other eastern cities of Ukraine seized buildings and called for a referendum on the issue of joining Russia.
Gazprom announces that Ukraine had failed to make a $2.2 billion debt payment on its natural gas at the 20:00 GMT deadline the night before. Gazprom has threatened to curtail gas shipments for non-payment; Ukraine has disputed the April 1 44 percent price increase.
Russian President Vladimir Putin warned European leaders that natural gas shipments to and through Ukraine could be halted if Ukraine does not pay its natural gas debts. Europe receives 15% of its natural gas via Russia exports transited through Ukraine.
Outside Slovyansk, about 150 miles from Russia, a Ukrainian Security Service officer was shot and killed by pro-Russian gunmen who fired upon Ukrainian security forces. Pro-Russian militants had seized the police station within that town.
German energy provider RWE reversed the flow of gas to Ukraine under terms of a 2012. RWE could supply up to 10 billion cubic meters of gas a year based on European wholesale prices plus delivery costs.
In Geneva on Thursday, April 17, Ukraine, Russia, the United States and the UE signed an agreement that: called for an end to fighting; the laying down of arms by insurgents and the surrender of occupied buildings; and amnesty for those protesters. It also designated the OSCE to monitor the agreement.
US Vice President Joe Biden unveils energy assistance package to Ukraine. The US would provide technical assistance to reverse the flow of natural gas from Europe, increase efficiency and increase natural gas consumption in Ukraine.
Russia sent Ukraine an $11 billion bill for natural gas as Ukraine prepared for discussions with the EU. Ukraine and the EU are working to reverse the flow of gas to Ukraine. Russia has invited Ukraine to Moscow for meetings next week.
Ukraine launches a major assault in its eastern provinces. Two helicopters are shot down. Putin calls it a violation of the April 17 Geneva agreement.
Separatist groups in Ukraine's eastern provinces stage elections for secession from Ukraine. The elections are considered invalid by the international community and the results are not recognized by the Kiev government.
Petro Poroshenko wins the presidency of Ukraine with 54 percent of the vote. Turnout is low in the eastern provinces.
The battle occurred overnight near the village of Yampil.
The UN Commissioner for Human Rights issued a report describing the increase in internally displaced persons in Ukraine and the tactics of intimidation and fear used by the fighters. The UN also said 356 people, including 257 civilians, have died in Eastern Ukraine since May 7.
A MI-8 Hinde helicopter carrying technicians near Sloviansk was shot down. Nine people were killed.
The European Union signed the economic partnership with Ukraine that had been rejected in November, initiating riots and a change in government. Georgia and Moldova also signed.
Ukrainian forces ended a 10-day ceasefire, retaking a checkpoint from pro-Russian rebels and fighting for other positions in eastern Ukraine.
Ukrainian forces reestablished control over the eastern city of Slovyansk in Donetsk province. Slovyansk had been a rebel bastion for much of the insurgency in eastern Ukraine.
A passenger jet carrying nearly 300 people was shot down north near the village of Torez, north of Donetsk, in east Ukraine.
About 10 Russian tanks, two armored vehicles and trucks entered Ukraine near the Sea of Azov, Ukraine said.
Russian Mi24 helicopters shot at a Ukrainian border post at Krasnatalovka in the Luhansk region of east Ukraine. Ukraine said four guards were killed and three injured.
Russian and Ukrainian Presidents Vladmir Putin and Petro Poroshenko met in Moscow to discuss the fighting in east Ukraine.
Ukraine said Russia troops entered Ukraine at Amvrosiyivka. Ukraine also issued a warning of a Russian natural gas cut-off to Europe. Russia denied both claims.
Pro-Russian fighters entered and quickly took Novoazovsk in southeastern Ukraine. Ukraine had said Russian troops were in the area.
Russian tanks destroyed the eastern city of Novosvitlivka. The European Union is considering sanctions against Russia.
Four Ukrainian soldiers were killed by gunfire in Schastye near Luhansk and two died from a land mine explosion near Mariupol close to the Black Sea.
Ukraine's President Petro O. Poroshenko told a constitutional reform convention that Ukraine should remain a unitary country. Poroshenko said a more decentralized government might be in order, but Russia's suggestion that the country be 'federalized" stretches too far into a break-up of the East European nation.