Firing the first shot in the resource wars?

Russia decided to kick off 2006 by cutting off natural gas supplies to the Ukraine after a protracted fight over prices. (MSM coverage here and here for starters.) But lest you think that this was a simple economic struggle, it seems to clearly have had political undertones. For example, the price they charge for 1,000 cubic meters of natural gas to docile, compliant Belarus, is 47 dollars. The proposed new price for the Ukraine was $220. This, of course, has the Ukrainians in a panic.

In these peak oil days, as we slowly march towards the unavoidable event horizon when the fossil fuels finally run out, this conflict is an interesting potential reversal of the "resource wars" which many experts have predicted. The usual scenario involves cases where large, powerful countries with limited internal fuel supplies (such as China and the United States) find themselves being held hostage by smaller, fuel-rich countries with limited military power. (e.g. Venezuela and the OPEC nations.) In cases such as those, it's easy to imagine the larger countries suddenly remembering that "bullets are cheaper than oil now" and going to war.

Russia is fairly rich in fuel - both natural gas and oil reserves. As supplies diminish and prices rise, I suppose it was inevitable that larger supply side nations would use this as a tool for political ends. Ukraine has been leaning heavily towards westernization and has caused no end of trouble for the Russian government. Threatening them with a lack of fuel, particularly at the start of winter like this, might be an effective blackmail tool.

It's got Europe nervous also, as most of the natural gas shipped from Russia to Europe passes through the Ukraine. This means that they still have access, even if they're not paying for it.

There are fears that Ukraine, which receives about one-third of its gas from Russia, could siphon off supplies intended for customers farther west and trigger energy crises in other countries.

"From the very beginning, the Ukrainian authorities had plans to begin to use gas without permission from January 1," [Gazprom spokesman Sergei] Kupriyanov said. "To be more precise, they planned to start to steal gas -- steal it from European consumers."

That looks like a fairly effective way to drive a wedge between Ukraine and her potential western allies in Europe. The resource wars may be starting sooner than expected, peak oil fans. Hang on to your hats. 2006 may be a very interesting year in more ways than we had expected or predicted. And I mean "interesting" in the sense of the old Chinese curse, "May you live in interesting times."