Dog Day

Rusty takes it in.

So I am with Paolo Scaroni the other night - Scaroni the CEO of Eni, Italy's largest industrial company with multinational operations in oil and gas and a market cap of €65bn as of this writing.  He is also on the Board of Overseers of Columbia Business School.

Scaroni is direct about sovereignty - without energy independence, a nation cannot rule its destiny. Europe, for instance, imports 30% of its energy needs in Russian gas but some European countries require 90%.  For Ukraine, who lost coastal reserves perhaps greater than the North Sea last month, gas is life-or-death as temperatures reach -30 in the winter.

Ukraine owes Russia about $3bn on last winter's deliveries and Russia is threatening to go pre-pay for gas while raising prices. Since Ukraine broke, Europe (me, the taxpayer) will have to foot the bill of €8bn, give or take. And this is the best-case scenario. Should Ukraine (Europe) refuse to pre-pay and Russia turns off the gas, the Ukrainians would surely tap the Russian pipelines and Russia would plug the spigot at the source. Since those very same pipelines go to Europe, Europe would be crippled.

This is why the West's hands are tied when responding to Russian aggression. Putin's deal, announced today, to supply China gas for the next 30 years valued at €400bn, strengthens Russia's position further. Ruthless, cunning.