As the nation approaches the local elections, the opposition demonstrates an unwillingness to collaborate, while Western energy companies lobby government to lessen the restrictions on future energy production in Ukraine. Meanwhile, Western companies ask the government to review the framework of future energy production.
Energy companies want in
Multi-national energy corporations Shell, ExxonMobil and Total have expressed their interest in developing Ukrainian reserves of shale gas and coal bed methane. However, in order for these companies to begin activity in Ukraine, they are proposing that the government change the current rules for shale gas and coal gas methane production, including an extension of license terms and the introduction of tax benefits. Currently, the approximate estimates of shale gas reserves in Ukraine are 2 trillion cubic metres. By contrast, Ukraine’s annual gas consumption totals 50 billion cubic meters, the annual total of Russian gas transported through Ukraine is around 100 billion cubic metres.
The Ministry of Fuel and Energy expects that the annual volume of extraction of shale and coal bed methane combined will reach 7-10 billion cubic meters in the next few years. The ministry has announced a willingness to initiate the proposals of the Western energy companies. At the same time, the current approach by Ukrainian and Russian authorities, whose interests are tied to Gazprom, are seeking to push back the issue of extracting shale gas deposits in Ukraine into the far distant future.
A factor that might accelerate the process of shale gas and coal bed methane development in Ukraine could be a rapid rise in gas prices to the level of $300-350 per thousand cubic meters, with the cost of extracting shale gas remaining at around $150-$200 per thousand cubic meters. However, it is the opinion of the Ukrainian scientific community that the real shale gas production will start (in western Ukraine) in 7 to 8 years, at the annual level of 15-20 billion cubic meters a year.
People First comments: One has to ask the question why in a country so rich in natural gas is so little done to extract it and so much of Ukrainian independence subjugated to Russia in return for their exports. According to Ukrainian and international energy industry experts Ukraine is sitting on top of between 2 to 30 trillion cubic meters of shale gas, up to 13 trillion cubic meters of coal bed methane, 1.98 trillion cubic metres of natural gas and inestimable trillions of cubic metres of gas from the Black Sea shelf.
Simply doing the math, Ukraine could be sitting on between 17 and 45 trillion cubic meters of gas deposits and that’s without the possible reserves in the Black Sea. Ukraine currently uses around 50 billion cubic meters a year. So, on a worst-case scenario, Ukraine has enough gas for the next 340 years without importing any gas from abroad. Harnessing this power would not only create literally thousands of new jobs, it could also reduce the cost of gas in Ukraine by up to 50 percent, making Ukrainian industry much more cost efficient and guaranteeing no more winter blackouts for Ukraine or the European Union.
It is estimated that the savings could be as high as $7.5 billion a year and that would repay the World Bank, the International Monetary Fund and clear the entire national debt in around five years. So why have successive governments demonstrated such a lack of transparency in this area and stalled virtually all development of the Ukrainian gas fields? It cannot be lack of cash, as the Western energy companies are lining up to invest in such rich opportunities. Perhaps now we have the answer as to why Gazprom is offering the hand of marriage to Cinderella Naftogaz. Clearly, competition would not be in Gazprom’s interests.
Opposition fails to unite
With preparations for the Oct. 31 local elections in full swing, most opposition parties and their leaders have demonstrated an unwillingness to unite or even cooperate in achieving common interests. Despite appeals from opposition forces for joint action, Batkivshchyna of ex-Prime Minister Yulia Tymoshenko, the Front of Changes of ex-parliament speaker Arseniy Yatsenyuk, Citizen’s Position of ex-Defense Minister Anatoliy Grytsenko and others are not even ready to coordinate possible candidates in the majority constituencies. There is a possibility also, that the Strong Ukraine party of Deputy Prime Minister Sergiy Tigipko will join the opposition after his anticipated resignation, following the rejection of his draft of the new tax code by the president and prime minister.
The Ukrainian opposition is now fragmented and suffers a lack of strategy for further political action. The opposition government is currently viewed as too passive.
People First comments: This is precisely what happens when ego-politics overrides issues-politics. The problem with the opposition parties in Ukraine is that they all want to be top dog, they all want to be the leader… the question is the leader of what? We are now six months into the new presidency and not one of the political parties has published any sort of alternative manifesto. Tymoshenko seems to have gone from firebrand to yesterday’s campfire.
Yatsenyuk and Gritsenko are conspicuous by their silence and Tigipko appears to be advertising himself to the empty summer streets of Kyiv. No doubt as the local election season approaches, all this will change and once again Ukrainians will be subjected to the visual detritus of yet another barrage of empty slogans and re-touched pictures. When will Ukrainian politicians learn that the people of this great country want effective policies not empty promises? You cannot expect to win an election in Ukraine today without having something concrete to offer, pretty faces and advertising slogans just don’t cut it anymore.
Yanukovych promises judicial independence
Yanukovych used the swearing-in ceremony of the new generation of Ukrainian judges as a platform to announce the launch of large-scale judicial reforms, and appealed to the judges to resist external influence. According to the president of Ukraine, a law to eradicate pressure and interference in judicial institutions took effect on July 30.
The new law legislates for the creation of a Higher Specialized Court of Ukraine for investigating civil and criminal cases, the reduction of the number of judges in the Ukrainian Supreme Court and a refinement of its functions. In additions to these changes, each court of general jurisdiction will now have separate budgetary financing. According to European experts, the new law contains significant improvements. However, despite statements from the authorities to reform justice and raise standards to meet those of the Council of Europe, the country has yet to tackle or even admit the current extent of corruption and bribery in the courts.
People First comments: Judges more than politicians are singularly the most important public servants in any democracy. If they betray the people through greed or corruption, then they betray every man, woman and child in this country. Judges should be pillars of society, pinnacles of respect and therefore incorruptible. This lofty idea, however, is sadly far from reality in Ukraine today. Judges, particularly at a senior level are such important figures in democratic society that they should be paid in accordance with the importance of their position and at the same time be subject to regular and scrupulous financial examination to remove any doubt over their impartiality. Only in this way can Ukrainians rebuild their trust and respect in the law.
Authorities investigate ex-officials
The authorities continue to investigate the actions of former government officials from Tymoshenko’s team. According to the deputy chairman of the governing Party of Regions, Volodymyr Rybak, the government is only attempting to establish order, not engaged in political persecution. Noteworthy arrests also included former state ucstoms head Anatoly Makarenko, charged with negligence, for a customs clearance in 2009 of 11 billion cubic meters of gas belonging to RosUkrEnergo, the half-Gazprom, 45 percent Dmitry Firtash-owned intermediary. Also featured was the arrest of ex-Naftogaz official Ihor Didenko. Also recently, the former minister of the economy, Bohdan Danylyshyn, was placed on a most-wanted list and his private bank safe was investigated.
People First comments: At last, somebody in power is seeking to enforce the law. For too long, the law has been systematically ignored to ensure that some in power are able to abuse their position at public expense. At last, this process of plunder appears to be coming to an end and, rightly so, as the damage to the national economy has been spectacular. However it would appear that to date all the accused come from the former government. If, however, these [investigations] turn out to be an attempt at repression then the international repercussions will be extensive. Political show trials hold no place in a civilized democracy.
Viktor Tkachuk is chief executive officer of the People First Foundation, which seeks to strengthen Ukrainian democracy. The organization’s website is: www.peoplefirst.org.ua and the e-mail address is: [email protected]
