Russia’s energy empire, built upon its vast oil and natural gas reserves, may be collapsing under its own weight. Radio Free Europe’s daily podcast claims Russia is running “out of energy.”
“Miles of unused gas pipes worth $1.8 billion euros lay stranded on the Black Sea coast,” according to RFE’s podcast. “Ukraine has announced that it will not need to buy any Russian gas this winter, and Moscow is struggling to get the lights turned back on in Crimea.”
“So much for that energy superpower thing we used to hear all about,” according to RFE, a U.S. government-backed news service that broadcasts to the former Soviet Union and the Middle East.
Russia’s economy has been hampered by low oil prices and new natural gas discoveries all over the world. The U.S. has become a natural gas powerhouse in recent years because of hydraulic fracturing and horizontal drilling, and other countries are looking to follow suit — further threatening Russia’s energy hold on Europe.
European leaders have been pushing to diversify their energy portfolios away from Russian natural gas in the wake of President Vladimir Putin’s bid to annex Crimea and destabilize Ukraine. That, combined with the bottom falling out on oil prices, is complicating Putin’s ambitions.
Two Russian gas pipelines have been derailed by political tensions with Turkey and the West, and Ukraine has said it won’t need any Russian gas this winter.
“In a buyer’s market with energy prices falling and with Moscow’s customers diversifying their supplies, energy has suddenly become Russia’s Achilles heel,” RFE reports.
“Moscow’s fortunes tend to rise and fall with its ability to harness energy resources for political gain,” the news outlet warns. “If this pattern holds, hard times are coming, and Vladimir Putin’s famous luck is about to run out.”
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