Europe's natural gas

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LISA MULLINS: I'm Lisa Mullins, and this is The World, a co-production of the BBC World Service, PRI, and WGBH in Boston. Many Europeans woke up to quite a chill today. A cold front has pulled temperatures well below freezing across much of the continent, but that's not the only problem. Russia supplies about a quarter of the natural gas used in Europe, and most of that gas flows through pipelines in Ukraine. Well, today the flow through Ukraine stopped altogether. Russia and Ukraine are in the midst of a price war over natural gas, and now they're accusing each other of turning off the tap. Europe doesn't much care who is to blame; it just wants the gas turned back on, as The World's Gerry Hadden reports.

GERRY HADDEN: A typical January cold snap has Europeans bundled up on the streets, but in some places, people might soon have to keep their coats on inside. Bulgaria is one example. Today, officials there said they'd likely have to close schools in the coming days to save on gas consumption. Many businesses are already shut. Galina Tschoeva is Bulgaria's Deputy Energy Minister.

GALINA TSCHOEVA: We have lost 100 percent of the gas supply coming through the route from Ukraine. We have gas storage, but the quantities cover not more than 30, 35 percent of the daily demand in the country. We hope that we will not reach the point of using everything and not having any further supplies.

HADDEN: At least 10 other European countries that import Russian gas through Ukraine say such supplies have been completely cut. Most of those countries are in the east, close to Ukraine. But Germany and Italy have seen dramatic drops in Russian gas imports since this morning. Alexander Medvedev is Chairman of Russia's state-run gas company, Gazprom. He says the only reason Russian gas isn't reaching Europe is because Ukraine has shut down the transit pipes.

ALEXANDER MEDVEDEV: From today's morning, we don't have any physical, stress physical possibility to bring any gas to European customers due to complete shutdown of the export pipelines going through Ukrainian territory.

HADDEN: Mededev says Ukraine shut off the flow to Europe to keep the gas for itself. Ukraine officials deny that, and the European Union remains skeptical about the Russian claims. Javier Solana is the EU's Foreign Affairs Chief. When Russia cut off gas to Ukraine in 2006 in a similar pricing dispute, Solana warned Russia not to play politics with fuel, especially in winter. He did so again today. He said, ?Oil and gas must not be used as a political weapon. We have to find professional, businesslike solutions which don't suffer the ups and downs of politics.? Analysts say it's difficult to know who is to blame for the latest gas cut off, because there are no independent monitors in Ukraine or Russia. But energy analyst Pierre Noel, with the European Council on Foreign Relations, says one thing is clear: Europe as a whole did not react fast enough following the gas crisis of 2006. He says Western countries diversified their gas sources a bit and they increased gas storage for just such emergencies. But travel east, he says, and the story changes.

PIERRE NOEL: Countries in Central and Eastern Europe have drastically under-invested in gas security measures. They have very little storage capacity that would allow them to cope with these kind of supply disruptions. And you know they tend to turn to the EU, to big EU countries and say, ?You must be in solidarity with us.?

HADDEN: To which, he says, big countries like Germany or France reply, ?Fine, but Eastern Europe should invest some of its own money to fix the problem.? Despite divisions, Europe hopes it can break the Ukraine-Russia deadlock in talks tomorrow in Moscow. Russia they say risks losing clients in the long run by interrupting energy supplies. But Russia doesn't have much maneuvering room; its fuel exports account for more than half of its GDP. As gas and oil prices have plummeted, Russia itself is feeling the pinch. For The World, I'm Gerry Hadden.