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The Chimera of Russia’s Gas Power

Russia began 2006 by cutting off natural gas exports to Ukraine after its government refused to pay a fourfold increase in the subsidized price. The crisis in Ukraine, many of whose Soviet-era industries depend on cheap Russian gas, soon spread to Europe, which consumes 80% of Russian gas exports, when Ukraine began to divert gas from the pipeline that crosses its territory.

Ironically, 2006 is also the year that Russia takes over the chair of the Group of Eight industrialized countries, which is set to meet in Moscow this spring. The improbable theme that Russian President Vladimir Putin chose for the conference is energy security.