David Charter in Brussels and Robin Pagnamenta
Download 'Too Hot', an exclusive Specials track from iTunes
Outside, the temperature plummeted to minus 12. Inside, the gas stopped flowing to homes in some of Europe's eastern cities in the dead of night and stayed off all day while the thermometer stayed below zero.
Tens of thousands living on the shores of the Black Sea were the first to feel the bitter impact of Russia's dispute with Ukraine over gas payments on the coldest day of the year.
With even icier conditions forecast for this week, the gas flow from Russia dried up during the day to nine countries, leading Bulgaria and Slovakia to consider declaring states of emergency and others to warn that just a few days' reserves remained.
In Britain there were increasing concerns that families could be forced to pay more than expected for their gas and electricity. The “big six” energy suppliers — British Gas, ScottishPower, Scottish and Southern Energy, EDF Energy, npower and E.ON — had been widely expected to cut their retail gas and electricity prices over the next few weeks by about 10 per cent, reflecting a marked drop in the wholesale price of gas last autumn.
British wholesale prices leapt sharply yesterday, though, as Russia's decision to withhold gas from Ukraine over unpaid bills and an unsigned contract for 2009 grew into dire shortages farther down the pipelines that take 36 hours to pump gas across the vast former Soviet country. Italy reported a 90 per cent cut in its Russian gas, France a reduction of 70per cent and two importers in Germany said that they had serious shortfalls.
Most countries have stockpiled several weeks' supplies after two mild winters and experience of a similar dispute between Moscow and Kiev in 2006. That row lasted three days but the latest disagreement, which started on New Year's Day, seems to be far from over. There was one glimmer of hope when the head of Ukraine's gas company agreed to go to Moscow for talks tomorrow with Gazprom, the Russian state-controlled monopoly gas supplier.
With the Russian gas supply cut entirely yesterday to Bosnia, Bulgaria, Croatia, Greece, Hungary, Macedonia, Romania, Serbia and Turkey, the EU broke from its diplomatic approach to demand a resolution to the crisis. “Without prior warning and in clear contradiction with the reassurances given by the highest Russian and Ukrainian authorities to the European Union, gas supplies to some EU member states have been substantially cut,” the EU said.
“This is completely unacceptable. The Czech EU presidency and the European Commission demand that gas supplies be immediately restored to the EU and that the two parties [Russia and Ukraine] resume at once negotiations with a view to a definitive settlement of their bilateral commercial dispute.”
Around Europe, both Russia and Ukraine are being blamed for the worsening situation. In Bulgaria, which relies almost completely on Russia for gas and where households in the cities of Varna and Dobrich are already without gas, the Prime Minister said that there was only one week's supply left in reserves and appealed for industry to cut usage. The President even proposed that an ancient nuclear power plant, closed as a condition of Bulgaria joining the EU because it was deemed too dangerous, should be switched back on.
Turkey was seeking gas from Iran and Croatia introduced rations for industrial users to maintain domestic supplies. Austria, which lost 90 per cent of its normal supplies, said that it had three months' reserves but called an emergency meeting at its Economy Ministry. Slovakia, which is entirely dependent on Russia for gas, was considering a state of emergency after deliveries fell by 70 per cent.
Russia and Ukraine continued to blame each other for Europe's shortfalls, with no independent verification possible. Ukraine turned off three pipelines because it said that Russian supplies had halved, while Russia said that it was withholding the amount that Kiev was allegedly stealing.
Gazprom has demanded a large price increase for 2009 and says that payment for November and December has not been fully received. It said that it supplied 65 million cubic metres (mcm) to Europe yesterday through Ukraine, a fall of 78 per cent from the 300 mcm that it had been supplying since the dispute started.
The Department for Energy and Climate Change at Whitehall called for Moscow and Kiev to urgently work to resolve the dispute. “We back the European Union's call for gas supplies to be restored immediately and that both parties restart negotiations with a view to a speedy resolution of this commercial dispute,” a statement said. The department said that less than 2per cent of gas was imported from Russia and that it did not expect British supplies to be affected. Around 40 per cent of the gas used in Britain will be imported this year, up from 27 per cent in 2007.
That proportion is expected to rise to 75 per cent by 2015. Most of these imports come via pipelines from Norway and Holland. Britain is also able to import liquefied natural gas via ships to terminals at the Isle of Grain in Kent and Milford Haven in Wales.
Win a luxury weekend to Newcastle and its neighbour Gateshead, find out more here
Risk, resilience and embracing new technology
Industry sectors news at a glance. Interactive heatmap, video and podcast
Discover the power of collective thinking. Submit a solution and be in with a chance to win a Media Hub Home Entertainment System
The inside track on current trends in the charity, not for profit and social enterprise sectors
Everything the Business Traveller needs to know to make a better trip
Make the most of the summer and enter our fabulous photographic competition, you could win a £5000 holiday
Corsica is an island of beauty and contrast, an ideal holiday destination
Enjoy further reading from Travel to Fashion, Business to Sport, discover more
Shortcuts to help you find sections and articles
The clever way to lease a new car is with Car leasing made simple™
2009
per month on 36-month
Personal Contract Hire (PCH)
2008
42850
Car Insurance
£24,250 - £30,346
MI5
London
£60,000
The Environment Agency
Bristol
Up to £90K
Boots
Midlands
OTE £85k
Credit Protection Association
Nationwide Opportunities
Completely London
Luxury Condo's in Manhattan with NYC views
The best new homes in Wimbledon?
Nationwide
Fabulous Cruise And Cruise & Stay Offers Including Virgin Atlantic Flights Prices Start From Only £699pp!
Last Minute Cruise And Cruise & Stay Offers. Med From £499pp, Caribbean From £699pp!
5 star quality at a 3 star price.
8 fabulous Canadian cities ...you won’t find cheaper
Contact our advertising team for advertising and sponsorship in Times Online, The Times and The Sunday Times, or place your advertisement.
Times Online Services: Dating | Jobs | Property Search | Used Cars | Holidays | Births, Marriages, Deaths | Subscriptions | E-paper
News International associated websites: Globrix Property Search | Property Finder | Milkround
Copyright 2009 Times Newspapers Ltd.
This service is provided on Times Newspapers' standard Terms and Conditions. Please read our Privacy Policy.To inquire about a licence to reproduce material from Times Online, The Times or The Sunday Times, click here.This website is published by a member of the News International Group. News International Limited, 1 Virginia St, London E98 1XY, is the holding company for the News International group and is registered in England No 81701. VAT number GB 243 8054 69.
Thats why I love those Canucks! They always keep my house nice and toasty!
Ray, Saint Paul MN, USA
For info: Russia buys Turkmenian gas for re-export for something like $300+ for 1,000m3, then mixes it with its own, transports and sells to EU at $418. Ukrain rejected offer of $250. Keep in mind that transit of gas through Ukrain is fixed in the separate agreement and paid separately too.
Dmitriy, N.Ireland, UK
Hello John S. from London : Just because one American doesn't know natural gas from petrol, don't label us all as ignorant of the rest of the world. We need to learn from this, too, and not be so dependant on overseas gasoline.
steve, Fremont, USA
No doubt the Energy Suppliers in the UK will be quick to raise household bills to match the rise in wholesale prices.
What a shame the so-called 'price-lag' only seems to exist when prices are falling!
Such profiteering in what ought to be a nationalised industry is nothing short of criminal!
A Mark, Birmingham,
European must be absolutely mad to put so many energy eggs in the Russian basket!
Andre, New York, USA
Nordstream across Baltic would be one of the solutions - unfortunately, this still leaves Russia in equation, and would have to overcome a number of objections from Baltic states.
Nabucco, to which Russia, is understandably opposed, would provide a meaningful alternative
Danylo H, etobicoke, canada
Hey Terry from Jonesville, they are talking about natural gas not gasoline. we dont get any natural gas from the middle east. we get natural gas from our own wells and most comes from canada.
Don, Bettendorf, USA
Hm. Why not to send EU representatives to Russian compressor stations to check how much of gas is pumped into system and then compare it with output in EU side? It will clearly show who are the bad guys in this situation.
Alex, Moscow, Russia
Terry - "gas" in the UK means just that, a vaporous substance used mostly for heating and cooking, not the liquid gasoline you get from the Middle East for your car. Maybe the US needs to learn a bit more about the rest of the world before expecting it to bend to America's every need.
John Stitch, London,
@ Terry: you do realize that the "gas" in question here is natural gas (like on your stove) not "gasoline" that you put into your car..
Buffie , Windsor, UK
Can we not produce our own gas? I read that we can produce methane gas from waste, why can't we produce our own gas supply this way? Let Russia and Putin go to hell and release ourselves from their grasp.
Mark, Venice, Italy
I am surprised everybody is blaming Russia for this. How can EU ignore the fact that Ukraine is refusing to honour its WRITTEN CONTRACTS, as a transit country? Or is it another a case of favoritism, when one "difficult child" is allowed to misbehave while the other is guilty be definition?
Peter, Toronto, Canada
So what muppets decided to sell our gas cheap because we had no means to store it apparantly it would have been too expensive to build storage containers!
May-be a bit more expensive now?
We should not on any account be dependant on any other country for energy. Time to open the coal mines.
Caroline, East Sussex, England
The problem does not lie with all the people of countries, it simply is the heads of the country becoming greedy. The economy of the world is faltering and its resources becoming scarce. The flexing of power by russia can only worsen it in a time when we can not afford it.
Jon Doe, springfeild, USA
No, no, wouldn't want to rely on Russia for anything. Not trusting. (Not the that the Arab nations are either) In the dead of winter, is it really okay for them to take to this action? No, I live in NW Minnesota (very cold) and electric/gas companies cannot do this in winter. It's not humane.
Joyce, Thief River FAlls, USA
Now it is so evident that we all need both the North and the South Streams. After 2013 such a situation when a transitter is blackmailing the whole Continent will be unreal. But right now best if the West forget for a while it's traditional Rusofobia and acts rationally.
Rote Kapelle, Moscow, Russia
We have all kinds of gas in Alaska. Exxon has been holding it hostage for 20 years. We are finally in the process of trying to take it back, and finding other companies that are willing to build a pipeline across Canada. Alaskans prefer an all Alaska line and liquefying it for transport.
Mike McKinnon, Anchorage, USA
North Sea is largely oil-producing. Also, I don't think diversifying our gas supplies between Middle Eastern and Russian supplies makes much sense, as Russia experiences frequent disputes with its customers and has shown itself as less reliable than the Middle East.
Brad, Houston, Texas
@ Terry Graham
Do you think that Russia is exhibiting the type of stability and actions that you would hope to find in a would be business partner(especially of a resource such as natural gas)? Russia continues to use scare tactics and make moves of dubious justification to achieve its own ends
Kansai, Oita, Japan
We know what happened to the North sea supply we sold it on cheaply. So we could buy it back at twice the price. We're so clever-not.
Our so called Government have'nt the faintest idea!
Trouble is who do we vote for?
C O'Brien, Robertsbridge, England
Most of EU leadership has bought into the "carbon bad--causes global warming" hysteria. EU penalizes its own citizens and its own economy to cut carbon emissions. With much of the gas supply cut off, that should curtail a chunk of the carbon emissions. Are EU leaders secretly gleeful about this?
Terry L. Walker, Ladson, SC / USA
Your North Sea supplies have been drying up Len. It's called being a finite resource, as in there is not an infinite supply of natural gas under the North Sea, and lately the production has been going into irreversible decline.
Those are reasons for your higher prices, not excuses.
Peter, Chicago, USA
Yes, North Sea sources seem to be the logical route to insure less dependency in the future. If alternative power generation can be on line by 2025 - all the better. Same reasoning applies for U.S.energy expansion & conversion. May god have mercy on our energy dependent souls.
Maxx Stryker, Dearborn, US
Ivan will always get you in the winter...
Matt, Baltimore, USA
Your North Sea supplies go to China for a big profit. lol
steve, London, UK
I don't know who is really to blame - Ukraine and Russia for causing the supplies shortage, or our own government who has failed to develop alternative energy system accross Bulgaria. What I know is that my less than 2 yearold nephew sleeps now in a sleeping bag, so he wouldn't get cold.
Dafar, Sofia, Bulgaria
If Russia can supply gas to so many countries, why not the USA? I'm tired of relying on the Arab nations for our gas. Perhaps the middle east countries need to see that the USA does not have to purchase from them and therefore create a more equitable market for the consumer.
Terry Graham, Jonesville, USA
In 1982, the U.S. argued that Western involvement in the Soviet gas link would make W. Europe too dependent upon the U.S.S.R. (now Russia) for much of its energy supplies. This seems to have come to pass.
Andrew, Cincinnati, USA
Excuses by our government and greedy energy companies to put our prices up again, Russian gas? What about our north sea supplies?
Len, Oban, UK