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Energy Insecurity Puts Focus on Efficiency

gaspipelinemap071808.gifI have recently been in touch with the blogger Vitaliy Voznyak of The 8th Circle – although I haven’t yet had the chance to peruse more than a half a dozen entries, I recommend that readers check it out. For example, there is an interesting piece on this blog about Gazprom’s pipeline bullying actually producing a push for greater energy efficiency and transparency in the Ukraine. I wonder if this debate would even be occurring without the price disputes with Russia….

Faced with an unstable energy supplier ought to prompt Ukraine into action. While it should continue replacing and updating its nuclear infrastructure and securing new oil and gas contracts, Ukraine needs to increase its energy efficiency and further develop its own renewable energy potential. (…) The demand side hides an even larger problem with Ukraine’s current state of affairs – its inefficiency. To measure an economy’s fuel-and-energy efficiency, statisticians use primary energy consumption to GDP ratio or GDP energy content. Staggeringly this indicator for Ukraine is 2.6 times higher than the global average. Whereas Poland’s ratio is at 0.34, Ukraine’s is at 0.89 (“ESU: General Provisions” pg. 9). This inefficiency is driven by at least two factors discussed in the next section: below market prices, and lack of transparency in the energy market.