Ukraine, austerity and gas

Coverage of Ukraine's newly inked deal with the International Monetary Fund is like the proverbial blind men and the elephant. Russia Today's headline is "Ukraine parliament passes austerity bill required by IMF," whereas the EU-aligned EurActiv put it: "IMF extends generous assistance to Ukraine." Forbes smarmily goes one better with "Ukraine Welcomes IMF Austerity Regime." RT tells us: "It is ordinary Ukrainians who will suffer the most under the new austerity measures as the floating national currency is likely to push up inflation, while spike in domestic gas prices will impact every household." But Reuters fleshes out the context for this a bit: "Moscow will not make it easy and Ukraine is already feeling some consequences from its break with Russia. Prime Minister Arseny Yatseniuk said…the price the country would pay for Russian gas, which accounts for over half of Ukrainian gas imports, would soar by almost 80 percent from April 1 as the seizure of Crimea had rendered a cheaper gas deal obsolete." So it seems that Russia as well as the IMF is imposing privation on Ukrainians, and is especially responsible for the spike in gas prices.

Global petro-oligarchs are clearly hoping to reap a windfall from the Ukraine crisis. Reuters reported Nov. 13 that Ukraine signed a $10 billion shale gas production-sharing agreement with Chevron, "another step in a drive for more energy independence from Russia." Ukraine's deal to develop its western Olesska field followed a similar shale gas agreement with Royal Dutch Shell earlier last year.

Since the recent escalation, the Ukraine crisis is even being used to expand fracking within the US. House Speaker John Boehner is putting pressure on President Obama to to speed permits for natural gas export terminals to "help the Europeans reduce their dependence on Vladimir Putin." (The Hill, WP, March 25) The Obama administration is considering sending fracked gas overseas in what the New York Times openly described as a "lever against Russia." See more at Food & Water Watch.