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Tit For Tat: Ukraine Blocks Crimea Water Supply With Russia Set To Halt Ukraine Gas
With a diplomatic solution to the Ukraine crisis now officially out of the window as an option to de-escalate the second Cold War, and yet with both sides still leery of engaging in an overt military campaign, there is one last trump card both sides can play - natural resources. Specifically, gas for Russia, and water for Ukraine. Not surprisingly both are in play now.
Moments ago, Russia casually hinted that Ukraine should use part of the IMF aid (which has been promised in virtually all increments between $1 billion up to $18 billion, but at last check not one penny has been wired) to repay Gazprom's debt, which is anywhere between the $2.2 billion Gazprom has said Ukraine is delinquent on for 2014 gas supplies, and an additional $11.4 billion which is what Gazprom said Ukraine's state-owned energy firm Naftogaz owes for unused take-or-pay arrangements in 2013.
And here Russia has laid a rather unpleasant, for the interim Kiev government, covenant-trapping Easter egg. As the WSJ explained previously, the additional cash demand adds pressure on Ukraine's already battered economy and finances, "because its ballooning debt gives Moscow the right to demand an early repayment of a loan. That could theoretically cause a domino effect on about $20 billion of Ukraine sovereign and quasi-sovereign debt."
Specifically, Moscow provided Ukraine with a $3 billion loan in late December when it bought the country's Eurobonds. The bond prospectus stated that the volume of total state debt and state-guaranteed debt should not at any time exceed 60% of Ukraine's annual nominal gross domestic product.
If Ukraine fails to meet this condition, Moscow may demand an early redemption. So far the ratio is below the 60% threshold, but Russia's finance ministry said it is monitoring the figures closely. The latest figures from Ukraine put state debt at 804 billion hryvnia ($70 billion), or 52.7% of the GDP. However, if Gazprom's demand is met, the ratio would rise above the 60% threshold.
At that point Russia will clearly demand early payment or else hold Ukraine in default, which in turn will force the IMF to scramble to provide even more funding (more than just promises - actual wire transfers), pushing public opinion in IMF countries which certainly have expansive needs for domestic use of taxpayer funding (think Detroit) away from Ukraine and in Russia's corner.
In keeping with this vein, Russia’s energy minister Alexander Novak, Gazprom CEO Alexei Miller held talks in Moscow on gas transit via Ukraine with officials from Moldova, Bosnia- Herzegovina, Macedonia, Russian ministry’s spokeswoman Olga Golant says via text message. Golant said that participants “expressed concern” over Ukraine’s growing debt to Gazprom for natgas supplies, possible problems with filling Ukrainian underground gas storage facilities before heating season, which may lead to disruptions of gas shipments to Europe.
Which as we reported previously, is a very loud hint to Europe, that if Ukraine doesn't pay its debt to Russia, and if the IMF doesn provide enough funding to allow the broke country to pay its debt, then Europe gas will, so very sorry, be shut off.
Sure enough, Bloomberg reported that Russia 'hopes' EU will soon take measures to extend financial assistance to Ukraine, including for Russian gas payments to avoid “unsanctioned gas pumping from transit volumes to Ukraine and assist in further enhancing the European energy security."
Again - hint, hint.
So what does a desperate Ukraine do, realizing that all of its leverage is gone, and that its western "allies" are about to let it hang? It used the nuclear option (not very nuclear but it really doesn't have much if any leverage), and stopped the flow of the bulk of water to now Russian Crimea.
Ukraine had closed sluices of the North Crimean Canal, halting water supply from the Dnieper River to the peninsula, Ukraine's UNIAN news agency reported on Saturday.
Crimea received 85% of fresh water through the canal, which was built in 1961-1971. It streches from the Khakhovka Reservoir to Kerch.
Alas, this plan to put Russians in Crimea in an untenable position, may have already failed. Voice of Russia reports that "Crimea will be supplied with water according to a fallback plan, there is currently no lack of fresh water in the region, the interim head of the Republic of Crimea Sergei Aksyonov wrote in his Twitter account Saturday. "Crimea will not be left without water! We have fallback plans. There are no problems with fresh water. Agricultural producers will receive compensations for the losses," Aksyonov wrote.
Earlier the Chairman of Crimean Standing Commission of the State Council in the economic, fiscal and investment policies Vitaly Nahlupin said that republic's authorities had offered payment in advance for the water from Dnepr, but Kiev sabotaged negotiations and only five per cent of the necessary amount of water currently comes through the North-Crimean channel. Crimea, formerly a part of Ukraine, held a referendum on reunification with Russia on March 16 in reaction to dangerous nationalist rhetoric from the new leadership in Kiev.
The Crimean authorities transfer rivers of the peninsula to the North Crimean Canal bed after Ukraine ceased completely Dnieper water supplies to Crimea, Crimean First Deputy Prime Minister Rustam Temirgaliyev said. Water supplies to Crimea via the North Crimean Canal have been stopped completely, Ukrainian mass media outlets reported on Saturday. In the past weeks the volume of water coming to Crimea via the canal was decreased significantly.
If Ukraine is hoping this move will soften Russia's stance on gas, it is wrong - all it will do is force Russia to accelerate the implementation of infrastructure improvements in Crimea which will make it even less dependent on Ukraine. It will, however, assure that Russian exports of gas to Kiev are finished.
The only question is how much "collateral damage" Europe proper, such as Germany, suffers as a result. Ironically, such "damage" may just be the exogenous deflationary factor the ECB needs to unleash the much talked about, if very much unwanted contrary to all the jawboning, QE. After all it will be "Putin's fault" Draghi is forced to monetize debt, in order to offset a deflationary recession that would "surely result" if and when Putin pulls the plug on European gas deliveries.
Yes - in yet another New Normal paradox, Gazpromia halting gas to Europe may be one of the most "bullish" developments (only for stocks, of course) to hit Europe in a long time.
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Sherman was a war criminal.
I'm guessing that pipeline that runs just south of Chernobyl is off limits? </sarc>
http://www.bloomberg.com/quicktake/unrest-in-ukraine/
Poppa-poppa-oooh-mow-mow!
Why doesn't Ukraine invoice Vlad for the Crimean territory he stole? I'm guessing it's worth at least $1 million per acre.
10,000 square miles = 6.4 million acres.
6.4 million acres x $1 million = $6.4 trillion.
Pay up faggot.
Wouldn't be unprecedented. Colombia sued the US for sponsoring a rebellion in Panama and eventually won a cash award (though they probably would rather have had Panama).
Then Vlad can invoice the jew bolshevik descendants, the new bolshevik terrorists that hijacked Kiev, for the trillion or so they plundered during their reign of terror.
and the Donbas area was stolen from Russia, so being about twice the size of Crimea, thats 12.8 trillion owed to Russia.
Free Konigsberg
That just reeks of being another flashpoint down the road.
It's all fun and games until your water brakes (sic)
You know, I think that this is pretty close to brilliant! But then again that's MY assessment...
Thanks Seer, I've always enjoyed word play and the current whirled farce is a prime target for ridicule.
The ghost of the USSR will haunt the modern political systems in Eastern Europe. When Ukraine was a Soviet Socialist Republic, arrangements for gas , oil and water were all national. Now that it is all splitting up, those USSR arrangements will fall apart. Ukraine makes no move without Washington and NATO's approval, so todays water cuts off and armed attacks on checkpoints are part of the pressure. Next move is Russia's and Eastern Ukrainian's. Whatever it is, NATO will howl like scalded dogs! They seem to protest a bit too much, over the top sort of thing. It all makes you wonder what end game they have in mind.
Avoiding both capitulation and war.
In other words: maintaining the status quo of hegemony.
"It all makes you wonder what end game they have in mind."
Plan A: incorporate Ukraine into Nato & EU - profit!
Plan B: there is no plan B because no one anticipated the failure of plan A.
So, on one side of the "fence" the people can point up and say, "Look!, up in the sky, rain is falling!" And on the other, "Look!, up in the sky, gas is falling!"
Keep in mind the BIG leverage point- the pipeline form which the Ukrainians obtain their gas FEEDS Europe. Further, it's not like the Ukrainians can stockpile the water or find other markets for it. ADVANTAGE: Russia.
this just in...
"Unknown assailants landed in helicopters and attacked a checkpoint in Soledar city in eastern Ukraine’s Donetsk region, a militia source told RIA Novosti adding that there is a fight going on.
There is no information on the number of casualties.
Soledar is located about 30 kilometers south east of Slavyansk.
The people’s governor of Donbass region Denis Pushilin confirmed to RT that there is fighting in Soledar.
As the unknown men attacked the checkpoint, the militia was forced to retreat, the source told RIA.
The second checkpoint is preparing for attack he said, adding that there are about 50 activists, many without weapons.
“We cannot send reinforcements from Slavyansk as all [forces] are defending the city," the source stressed.
The militia has blocked the entrances to warehouses storing arms to prevent the National guard forces from confiscationg the weapons, a militia source told RIA.
He added that the warehouses were left over from Soviet times and have in storage only outdated weaponry, such as Mauser, Colts, Degtyarev machine guns, submachine PCA guns but in great amounts."
so the question is who launched the attack? the right sector SS, Blackwater? I think they would have recognized Ukrainian military...
stay tuned.
If the militia controlled the weapons depots,
they erred in not distributing the guns (however 'outdated') to the citizenry.
I agree, and outdated guns did a fine job of pushing back and breaking the finest army the world had known in WW2, the German army. So makes no sense, I would rather be armed with those fine guns. Like hell the are outdated.
Does anyone now doubt what really lies beneath all friction points? PHYSICAL RESOURCES.
When we hear one side saying, "well, we're going to stop our flow of technology" and the other side responding "oh, no! not That! we'll do ANYTHING you tell us to!" that's when I'll start listening to the "techonolgy will save us" crowd/argument.
same as it ever was... Paging Laws of Physics. While I'm at it, where's AKAK?
"While I'm at it, where's AKAK?"
This is begining to feel just like real life, where folks around you, as you age, start dropping like flies...
a minor inconvenience I imagine. As far as Mother Russia is concerned, Crimea is the favourite son who's just returned from a very long spell in Stalag Luft Ukraine.
Crimea is surrounded by frikkin water, check the map. Not sure if the Black Sea is any good to drink. But the same could be said about drinking the Dnieper, downstream from Chernobyl.
tastes salty, kills plants.
Tastes salty, yes. Kills plants... well, not all:
https://www.google.com/search?q=salt+water+plants&tbm=isch&tbo=u&source=...
Sea water requires desalination before it can be used as fresh water. Desalination is expensive, and I do not know if any such plants were built in Crimea, probably there aren't any.
Kiev gets most of its water from the Dniepr river. Yes, its downstream from Chernobyl, but I guess that most of the radioactive matter has been already flushed away. BTW, explosion happened on this day, 28 years ago.
Think Sea of Azov, right next to Crimea has the lowest salinity of any sea in the world, it is essentially a huge lake fed by the Don River
http://www.encyclopediaofukraine.com/display.asp?linkpath=pages\A\Z\AzovSeaof.htm
It is exactly western and southern parts of the Sea of Azov that Crimea would take water from, not the north-eastern part, where the water is almost fresh due to fresh water inflow from the Don river, so, in the end, I guess desalination would still be required.
Other option would be building a huge pipeline over the Strait of Kerch, pumping fresh water from Kuban river.
It's got what plants crave, electrolytes. Duh!
https://www.youtube.com/watch?v=-Vw2CrY9Igs
One fact remains, and that's that the bulk of humanity has always centered around bodies of water (more so of the thawed kind). Even bodies of salt water can help progress toward providing fresh water: marshes expand outward and that moisture helps create various vegetation that further establishes growth that collects rainfall.
The bulk of humanity has coalesced around water for trade Seer. Remember salt-water isn't palatable for human things.
"Remember salt-water isn't palatable for human things."
I didn't state that it was. What I was trying to convey is that it helps attract other water, fresh water: I know about these things firsthand (as well as water shipping/travel).
Salt water, not too tasty...
"Crimea is surrounded by frikkin water"
There are about 2M people in Crimea. Supplying them with energy and water in the short run is not that formidable. In the long run, should it be necessary (and I doubt that it will), water can come from desalination, with the energy to run it from a Russian power plant across the straits of Kerch.
Now that Crimea is again part of Russia, exactly what obstacle to major capital investment do you foresee, considering that it is the home of the Russian Black Sea fleet?
All the variables, please - not just one or two.
The Black Sea is SALT WATER.
The water flow into the northern canal was actually shut down over 1 week ago. This water is used almost exclusively for agriculture.There is NO problem right now, since southern Ukraine and Crimea have received a lot of rain recently. However, the water shortage may become acute in northern Crimea come July and August. (The agriculture of southern Crimea is primarily GRAPES - for fantastic wines !!! - and they get their water from light rains created by the sea air lofting over the southern mountains.)
Simferopol, Sevastopol and other Crimean cities get their water from RIVERS flowing from the mountains in southern Crimea (flowing south to north) - so they have all the water they need stored up in reservoirs, which are replenished all year round. (When the moist air off the Black Sea hits the mountains of southern Crimea, it RAINS AT LOT !!!! Drinking water in Crimea has NEVER been a problem. The water from the Dnieper River is solely for agriculture in northern Crimea.)
Should the water issue (for agriculture) remain unresolved for a long time, the Kerch Strait (between eastern Crimea and Russia) is only 5km wide and a pipeline could be laid ito bring water to northern Crimea. (Of note: a BRIDGE for cars and a railroad is being built between Russia and Kerch (eastern Crimea), so pipelines could easily be added to the plans.)
People are tough - up to a point.
You can cut off their water and they will survive.
You can cut off their gas and they will shrug.
You can cut off their electricity and they will party.
But, if you cut off their Twitter they will explode.
So..lemmy guess... "It's on" again?..
Yawn.
To me this being all out on public stage can only mean it's part of the show that your being allowed to watch. Just enjoy the show..when it is really on..youll know it. And itl probably be long before anyone reads anything about it.
Jmo..of course.
;)
Notice they war during trading hours? I'm officially convinced this is all shit for show and trading.
you sound like an up to date guy. anything we should know?
Don't you know that the media takes weekends off?
What a friggin' mess. Does anybody see a good end to this? Could just end up being a festering sore for years. Obviously the Ukrainian army is no match for the Russians, but it could also devolve into a guerilla war. There is a history of Ukrainians doing that during the Russian Bolshevik takeover period. It took the Russians a few years to quell the resistance and the Ukrainian anarchists.
The Bolsheviks were not Russians....
amazing how many ignorants can't get that fact yet...
What were they? Oh yeah, jews....
So, this move by Kiev means that either they have accepted the fact that Crimea is now Russia and are engaging in a campaign to punish Russian civilians, or, if they still maintain that Crimea is Ukraine, they are punishing their own citizens. Either way this makes the US puppets in Kiev look like complete fools.
The US gov needs to rethink its habbits of accepting lowest bidder personnel for their puppet regime job vacancies.
In a nutshell...
If you took he supposed Ukranian president out of his suit and put him in jeans and black boots, what does he remind you off? would love to get a look at his tats.
How much of Ukraine's food comes from Crimea? lol
The only infrastructure investments Russia will be making in Ukraine will be in lead.
Put all the armor in one place to make salvage easier.
This is all a fake by Putin to raise the offer on Ukraine farmland, unfortunately the Chernoble contamination depth exceeds the topsoil depth by about 200,000 years.
Control of water is an old power that is getting a new face.
Just blow the dam up, problem solved, no problem anymore, must have been those pesky freedom fighters responsible.
if
There are no problems with fresh water.
why
Agricultural producers will receive compensations
propaganda at all side... ...
if
There are no problems with fresh water.
why
Agricultural producers will receive compensations
propaganda at all side... ...
Looks like Norway could sell at a premium then.
It seems Zerohedge is increasingly being used as a mouthpiece for Russian propaganda .. what a shame ..
As an American living in Ukraine since 2009, I think the reports on ZeroHedge are among the most accurate on the internet. The most accurate reports - by far - have been on Dr. Paul Craig Roberts' web site ( www.PaulCraigRoberts.org )
Right now I am ASHAMED to be an American!
-- Jack
I'm living in Germany, pal, and feel the same way. And yes, I am working on getting my German citizenship (though the German government is only slightly less sold out than the US), and plan to renounce within the next year or so.
Also agree with and love PCR. He's been right on just about every issue he's ever expounded upon, from Free Trade to Ukraine.
1.By this move Kiev hunta de-facto recognized that Crimea is no longer part of Ukraine.
2. Dniepr starts in Russia. Would not be logical for Putin to build hydro-electrical power station there and to half the water flow of the river?
We just returned to Odessa from Simferopol (Crimea) this morning. Fantastic weather !!!
The water flow into the northern canal was actually shut down over 1 week ago. This water is used almost exclusively for agriculture.There is NO problem right now, since southern Ukraine and Crimea have received a lot of rain recently. However, the water shortage may become acute in northern Crimea come July and August. (The agriculture of southern Crimea is primarily GRAPES - for fantastic wines !!! - and they get their water from light rains created by the sea air lofting over the southern mountains.)
Simferopol, Sevastopol and other Crimean cities get their water from RIVERS flowing from the mountains in southern Crimea (flowing south to north) - so they have all the water they need stored up in reservoirs.
Should the water issue remain unresolved for a long time, the Kerch Strait (between eastern Crimea and Russia) is only 5km wide and a pipeline could be laid ito bring water to northern Crimea. (Of note: a BRIDGE for cars and a railroad is being built between Russia and Kerch (eastern Crimea), so pipelines could easily be added to the plans.)
I envy you, Jack. I really wantdd to move to Sevastopol 15 years ago, but it just wasn't in the cards . . .
Spent quite a bit of time in Yalta, Simferopol and Sevastopol teaching computer courses for a software vendor and loved it and the folks. Salt of the earth.
I don't know about your aquaintences, but most of mine (from Zaparozha to Tiraspol) stand solidly behind President Putin, and believe the new Ukrainian "government" is just an illiegitimate west-backed group (and a small one) of rabble-rousers.
well, without water or heat this winter-there will be a "Regime Change" in the Ukraine....again....by the common people....to throw the Nazi party out
The idea of America getting involved or jumping into a war in Ukraine would have been hard to imagine a few years ago. As I write this we are engaged in a war of words but the potential for this to escalate into a shooting war is real. Allowing events to deteriorate into a major war or possibly into what some see as World War III is becoming a reality.
As insane as it appears this could become the final outcome. The location of this as a military confrontation is right in Putin's backyard and this is a strong advantage for Russia. It is silly to think Putin and Russia will back down. This means poking the bear is not a smart move. It cannot be emphasized enough this government was not elected by the people and that the military of Ukraine is divided and extremely weak. More about this subject in the article below.
http://brucewilds.blogspot.com/2014/04/war-in-ukraine-bad-idea_26.html
It's especially idiotic to poke a peacefully resting bear. They wake up fast and angry.
Hoo-hoo! Maybe they'll restart our Nuke plants in Germany!!!
You don't even want to see my fucking electric bill rates for 2014. Oh shit! I heat my water and home with gas. Thank God winter is over.
Fucking Merkel, Obama, EU, McCain, etc. etc. I'm going to fucking move to Russia. At least President Putin actually GIVES A SHIT about his own folk.