Europe gets the majority of its natural gas from Russia. This, of course, can be problematic if Russia ever decides to force its hand and use the natural gas supply as a bargaining tool.
Which it just did.
Russia made the decision to cut its gas supply after it could not settle a dispute with Ukraine. Here's some of the AP story:
"Russia stopped all gas shipments to Ukraine on Jan. 1 after the two countries failed to agree on prices and transit fees for 2009. Gazprom [Russia's gas monopoly] also insists that Naftogaz [Ukraine's gas company] still owes $600 million for 2008.
"In 2008, Russia charged Ukraine about half what it charged its European customers for gas. The subsidy is a legacy of the Soviet era, when both countries were part of the Soviet Union.
"Gazprom has long sought to charge Ukraine European-level prices. Ukraine says that if it pays more for natural gas, Russia should pay more for shipping that gas through Ukraine."
If this was just a situation between Ukraine and Russia, that would be one thing. However, the decision to stop the gas supply affects a lot of other European countries, particularly Bulgaria. As of last night, Varna and another Black Sea town had no natural gas supplies. That means no heat for thousands of Bulgarians.
For the full story from the AP, click here: http://www.msnbc.msn.com/id/28515983
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