A Cold Winter, From Bulgaria to Boston

Citgo, Venezuela's Texas-based oil subsidiary, has suspended its scheme to provide cheap heating oil to thousands of low-income families in the US.  The programme is being halted because of falling world oil prices.

BBC January 6, 2009

Several European countries say their supplies of Russian gas have been cut sharply amid an energy price dispute between Moscow and Ukraine.  The EU depends on Russia for about a quarter of its total gas supplies, some 80% of which is pumped through Ukraine.

BBC January 6, 2009

Since the heat and hot water in our building in Brussels is heated by (probably Russian) gas, I have a personal interest in these stories.  My only connection with the Venezuelan story is that I used to have a Citgo credit card.

Hugo Chavez's generosity is bumping up against real world limits, which is the latest example of how philanthropy bites the dust when the going gets tough.  All around the world, as formerly wealthy donors check their net worth, charity starts to look like it needs to stay home.

Chavez of course originally had political motives to dispense his oil largess in the United States, a nice way of thumbing his nose at the Yanqui Bush, whose oil friends had no such programs of their own.  Even after the Citgo suspension, Joseph Kennedy of Citizens' Energy had a hard time finding fault with the Venezuelans: "I don't get one barrel from one US company. Not one."

As uncomfortable as it is for the 200,000 American families who have benefited from the Citgo program, it's nothing compared to the pain that millions of European homes and industries could face if Russian gas is turned off mid-winter (Western Europe is currently shivering under a sub-zero cold spell, blowing down, appropriately enough, from Siberia).

Last August, during the Russian-Georgian war over South Ossetia, Europeans were reminded of their dependence on Russian energy supplies.  What better time than in the depths of winter to show its customers that Russia knows how to play Energy Monopoly?

The Venezuelan and Russian hands on the oil and gas valves should serve to remind us - as we were warned a generation ago by President Jimmy Carter - that dependence on strongmen for oil is a fool's game.  Chavez, Putin/Medvedev, Ahmadinejad - the West needs to bail itself out from this crowd.

When it gets cold in Bulgaria, Brussels, and Boston, the strategic sense of energy diversification becomes more and more evident.  Instead of using the world financial (now economic) crisis to find excuses to renege on energy/climate goals, now is the time to spur efforts to play Energy Autarky.