The Worldwide Price of Energy

DB2: The Worldwide Price of Energy

Chamisi Pastor

Liberty University

BUSI 613

October 5, 2014

Background Information

In the recent past, Ukraine and Russia have been in a heated political turmoil over the Crimea province in Ukraine. Due to this political turmoil, there has been continued conflict between the two countries for many months. Ukraine has been accusing Russia of supporting a separatist revolution in the province and also accusing it of funding and supplying weapons to the revolution in order to aid in the downfall of the nation and the government. However, Moscow has continually denied the accusation over supporting or having any interest in the eastern region insurgency. Due to the continued confrontation, there has been fighting all throughout the region. The area has suffered explosions and the destruction of several infrastructures, including the explosion of the oil and natural gas pipeline. This recent pipeline explosion occurred on Urengoi-Pomary-Uzhgorob gas pipeline in the Lokhvytsia district of the Poltava region of Ukraine. The affected pipeline carries the gas meant for both Ukraine and Europe. Most of the European countries depend on the Russian rich gas energy sources. The continuous turmoil between the countries runs the risk of alienating the western countries; which could lead to sanctions over Russia. This will most likely occur if the persistent disputes continue to affect the smooth and planned flow of the gas to Western Europe. Critics argue that Moscow is in a move to destabilize Ukraine and other soviet nations through energy control (Kesselman, Krieger and Joseph, 2012). They also argue that it might be a way of separating the country from the central and Western Europe nations.

Potential Consequences

Since Russia is the energy powerhouse, providing a third of oil and over thirty percent of natural gas to Europe, it is possible that the...