The Kremlin and the world energy war

Asia Times Online ^ | Jan 10, 2006 | W Joseph Stroupe

[Iris7]

Russia's Gazprom, the world's largest gas-producing company, has become locked in a commercial battle with Ukraine over the price of the fuel, but it is widely and correctly understood that the Kremlin's hand is behind what is quickly being recognized as the final ascent to the summit of a struggle between "East" and "West" for global power, even for dominance, by virtue of control over strategic energy resources.

Why can it accurately be said that such a monumental struggle of global proportions is now heating up? What evidence exists to support the insinuation that the world order is polarizing again into two rival blocs, "East" and "West"? Are the Kremlin moves a blunder, or are they brilliant? What about the recent moves of the West in general, and the US in particular, in attempting to spread democratic revolutions within Russia's sphere of influence and in invading and occupying oil-rich Iraq?

Is the West blundering into strategic mishap, inadvertently increasing Russia's global energy importance and opening the door to an obligatory greater reliance on resource-rich Russia? What will be the outcome of ongoing developments?

Global polarization The US can now be expected to intensify its efforts at "regime change" in Russia's sphere and inside Russia itself. The elections in Belarus and Ukraine in March will provide opportunities. But Russia is displaying a determination to push back hard against all such efforts, and the weapons in its arsenal are irresistible. Europe's complicity with the US will come back to haunt it as it pays the price for endangering Russia's legitimate interests. Everywhere, the involvement of the US hand equals pointedly increased instability and economic harm. Europe will have no choice but to side with Russia against the US when push soon comes to shove.

[Iris7]

Most interesting article. I also believe as the author does. We are coming into interesting times.

A great many foolish myths are punctured here, and other even more foolish myths reinforced. This issue is too important for emotional reaction. I suggest analysis instead of hysteria.

Asia Times is an important view into the Southern Chinese Cantonese speaking "new class". These people control the Asia Times mostly but with a kowtow toward Peking. This group is amassing very considerable power at the expense of the North (particularly at the Red Army's expense).

This excerpt is for educational fair use only.

[Iris7]

"The global order is re-dividing into roughly two de facto blocs - one has the US at its core and the other has Russia-China at its core. Energy is the major dividing line between the two blocs, and as desperation for control of strategic energy resources increases rapidly, so will the sharpness of the dividing line between the two blocs. With energy thus serving as a primary catalyst, the resource-rich Eurasian bloc is attaining significantly more gravitational pull than the American bloc."

The section "Global polarization The US can now be expected" did not format as I expected. The simplest way to read this is to delete "Global polarization" mentally.

[GarySpFc]

The Ukraine was getting a great price on gas at $50, and a very low one at $95. Russian families pay $60. In the US we pay $431.

[Iris7]

I think a ping list for those interested in energy geopolitics is in order. I hope this post will be widely read and such a ping list can be started.

[Iris7]

I believe you are correct, Colonel. Although I have sympathy for innocent Ukrainians (certainly not Yulia Tymoshenko or the apparently massively naive Yuschenko).

[GarySpFc]

This is a great article from Peter Laville, which shows the undercurrent.

Ukraine: The oligarchs strike back!
By Peter Lavelle :: Daily Comment
On the back of mounting discount with the way the authorities solved the gas dispute with Russia’s Gazprom led by President Viktor Yushchenko’s former ally Yulia Tymoshchenko, the Verkhovna Rada voted to fire the Cabinet of Prime Minister Yurii Yekhanurov on Tuesday. This is not a political crisis - it is about who got the short end of the stick in the gas deal.

The motion passed with 250 votes, 24 more than the 226 required. The Yulia Tymoshenko Block, Party of Regions, Communists, Socialists and Lytvyn Block all voted overwhelmingly in favor of the motion. What happens now?

* While Ukraine changed into a parliamentary-presidential republic on January 1, only President Yushchenko has the legal right to form the new government until after the March 26th elections.

* The president’s current government will stay in power until then unless Yushchenko decides to put forward a new candidate as Prime Minister. The possibility of this happening is very small, as the Rada, knowing it is soon to assume power, would most assuredly block any of Yushchenko’s nominees.

* The government will began its winter recess on Monday and will not reconvene until February 7, and even in the best of circumstances the appointment of a new prime minister can take about a month.

* The Rada’s move is a slap in the face for the Yushchenko politically; in fact it will probably not affect the day to day work of the current government.

What is of interest?

* Tymoshenko’s alliance with Viktor Yanukovych and the Party of Regions. Recall that the BYT was initially against the appointment of Yekhanurov, but was careful not to connect itself with Regions when they blocked his nomination in the first vote – though at the time it appeared that Yushchenko’s power base had reached out to Yanukovych.

* BYT appears to have changed course approaching the elections: from parallel with Our Ukraine to head-on collision.

Background noise:

* Dissatisfaction with the gas deal with Russia is a front (if not excuse) to attack Yushchenko. What certainly is behind the dissatisfaction with the deal is probably how some powerful members of Ukraine’s “energy-criminal-oligarchy” have been shut out of the new agreement with Gazprom.

* All of Ukraine’s parties have oligarch masters in the background (even foreground!) and Yushchenko’s “unilateral” recasting of the country’s favorite (illegal) cash cow has raffled a lot of feathers. (My comment-siphoning off Russian gas)

What about Russia?

* It is my hope that the Kremlin sits this whole thing out and simply demands a market mechanism to deal with gas supplies to and through the Ukraine. Sticking to this position speaks sense to its ultimate end-user: Western Europe.

* If the Kremlin can be a passive onlooker, just maybe the West will see the real Ukraine: unable to break the back of the oligarchs, satisfied with being the most energy wasteful country in the world (getting energy for free from Russia + making illegal profits), and a country that always asks for help from others, while others are blamed for all its problems.

[marron]

There is an interesting mindset in this article.

Russia is discovering what the US has always known; it is much more powerful as a commercial force than it ever was as a military force. It has enormous influence at its disposal if it just focuses on doing business, and those countries who "fall under its power" may do so willingly, with no loss of sovereignty. Thats business.

Still, there is a certain weird paranoia implicit in this writer's analysis. Its not only him, you'll see a similar mentality in some Russian news analysis. If Europeans resist some Russian move they are labeled as being "US patsies". If they decide to go along with some Russian move, they are aligning themselves in the Russian camp.

Thats a bit of a strange way to see the world. Governments that are not completely under Russia's thumb are labeled "troublesome". Troublesome, how? It doesn't say.

The writer points out that Ukraine lost its argument with Russia, and this is supposedly a humiliation for the US. How? Yuschenko is a socialist who doesn't completely understand how business works. Russians didn't, but they are learning. They are learning that if you produce, and invest your earnings, you wind up owning half the world. We've always known that, they are learning it.

The writer sees the activities of American companies in Central Asia as some kind of threat to Russia. Again, strange. They are just doing business. There is no existential threat to Russia or anyone else, at least not directly.

The writer gloats that oil has become a political tool despite predictions that it would lose importance. This is an odd thing to gloat over, however. If barriers are lifted, oil becomes just a commodity, and it loses political importance.

This does not represent the victory of a US empire, it represents the absense of empire. The use of barriers and monopoly power, the effort to turn oil into a political weapon is imperialist. The breaking down of barriers, the de-politicization of commerce, is anti-imperialist; it creates not an empire but an absense of empire.

The writer sees the world coalescing around two empires, the Russian/Chinese, versus the US, and says that the US is losing. Its odd that he sees this as a positive thing.

If there really is a nascent Russian/Chinese empire, are the countries struggling to stay outside of it really American patsies, or are they just trying to remain free? Is Russia's newfound prosperity and consequent well-earned influence really imperialistic? Is normal competition between Russia and America really an existential struggle, or is that just wishful thinking on the part of this writer?

They say that nature abhors a vacuum; it can be said that some people abhor the absense of empire in the world.

[marron]

I meant to ping you to #7...

[GarySpFc]

You assume far too much. Peter Laville is an American writer living in Moscow.

[marron]

I noticed that the writer was not Russian. I have seen similar analysis coming from Russian writers (obviously left-leaning) but I have seen similar prose coming from other Americans, for that matter. This is not a Russian thing, obviously, whether it comes from a Russian or a non-Russian it is a leftist thing. 'Imperialism is bad if it is American imperialism; even anti-imperialism is bad if its American-inspired or American-protected. Imperialism is good if it serves to weaken American anti-imperialism.'

I don't believe any of the writer's assumptions. While no doubt Russians are inclined to use a competitive edge, and I still see some mercantilist tendencies, this is not per se empire. While we favor an independent Ukraine, this does not mean that Yuschenko is an economic genius, and if he gets his hat handed to him on some commercial issue or other, this is not a humiliation of the American empire.

There is no American empire, and as long as Americans are free to operate commercially where ever they choose, and so far they do, then there is not yet any Russian empire either. Americans are still crawling all over Central Asia and Russia itself looking for business opportunities. Some people accuse die-hard Cold Warriors of still living in the fifties; I would agree but it seems the Cold Warriors are on the left. An American presence in Baku is not a threat to Moscow, and Moscow knows it; beating Yuschenko in a commercial deal is not a humiliation of the US; we're partnered with the Russians in any number of things, which means while its not perfection, its also not Cold War.

Don't get me started on China... (and don't get me started on Russia's dealings with Iran), but there is a difference between normal competition and empire building in any evil sense of the term.

[Iris7]

"If barriers are lifted, oil becomes just a commodity, and it loses political importance."

The current perception amongst those interested in such things (including myself!) is that our current technological "culture" is and has been based on fossil fuels.

Certainly the English dominance over the Dutch since 17th Century could not have occurred without English iron and steel technologies based on coal. Iron and steel dominance allowed the defeat of the Armada (1558). Relatively inexpensive iron and steel provided the Royal Navy with cast iron guns and wooden ships made with steel tools. Perhaps you recollect that the first really obnoxious Crown regulation of the American Colonies was in shipping then followed by outlaw of Colonial iron and steel manufacture.

No substitute for fossil fuels has been found. France has made nuclear power the center of it's economy but nuclear power reliance has led them to centralized authority (an ancient French vice currently rampant). Personally I cannot see nuclear power leading anywhere but overwhelming central governments because people can easily be scared into the loving arms of Mother State with talk of "irresponsible" nuclear technology usage. (Take the present Iran situation for example.)

Since no substitute for fossil fuels exist after intense research and development and since fossil fuels remain the foundation of industrial power (and weapon technology) market forces cannot fully function in the market for oil and gas. There are no substitutes for fuel hydrocarbons.

Fuel hydrocarbons can be synthesized from any carbonaceous fossil deposit of course. These energy supply routes are considerably more expensive in capital and labor than natural gas and petroleum are at present.

[Iris7]

The Yuschenkoist attack on the Tymoshenkoist tendency (I used to read a lot of "propaganda organ" stuff!!!) is most interesting. I find the current Russian viewpoint so concisely stated by Laville more convincing than the "Yuschenko the Saviour of Ukraine Democracy" "Russian Crypto Communism and/or Fascism" line.

Basing speculation on a "motive and opportunity" point of view Tymoshenko had Yuschenko poisoned with dioxin. How possibly could Yuschenko not know this? Either he is a total fool or only seemingly so. I (out of practicality) take the latter view.

[GarySpFc]

Tymoshenko is a very ambitious lady, and it will take more than $11.5 billion to satisfy her. I simply cannot bring myself to believe the FSB would fail in their attempt to kill Yushchenko if that were their goal. No, the only player on the stage is Tymoshenko, but as to if Yushchenko is a total fool or only seemingly so I plead ignorance.

[Iris7]

"There is an interesting mindset in this article."

Personally I find Asia Times often enough interesting that I tediously winnow the grain from the chaff. The "Spengler" essays are quite interesting lately.

Very interesting to watch the shifts in official Chinese thinking over time. When those people suddenly realized that the President was very formidable the shifts in the Line were as funny as the Soviet reaction to the Gang of Four incident.

Perhaps you suspect I think "groupthink" makes one stupid! Actually I believe that "stupid is as stupid does" and that stupidity is a matter of individual and culpable choice.

[Thunder90]

Russia/CIS has never been our friend, neither has China.

[Thunder90]

India is also gravatating towards the block, and India has signed peace treaties with Pakistan and China, spurred on by Russian pressure.

[Lukasz]

I noticed that the writer was not Russian.

Try keyword LAVELLE, he is well known Kremlin’s apologist working for the state owned RIA Novosti.

[RusIvan]

The global order is re-dividing into roughly two de facto blocs - one has the US at its core and the other has Russia-China at its core.==

Look like it is the central idea of this article. I think it is pure imagination.

What Russia seeked from Ukarine it is not thier regime change but just to pay market price on flagship russian product- the energy products.

[RusIvan]

I noticed that the writer was not Russian. I have seen similar analysis coming from Russian writers (obviously left-leaning) but I have seen similar prose coming from other Americans, for that matter. This is not a Russian thing, obviously, whether it comes from a Russian or a non-Russian it is a leftist thing. 'Imperialism is bad if it is American imperialism; even anti-imperialism is bad if its American-inspired or American-protected. Imperialism is good if it serves to weaken American anti-imperialism.' ==

I agree with you here.

[Iris7]

This international "friend" stuff is over rated. I cannot have any feelings about some one I do not even know exists. Countries have no feelings. "Country" is an abstraction.

I went to war in 1965 and would go again now. The boys seem to think I am too cranky. Dang young whippersnappers.

So why did I go? Why would I now? Really, don't know, something not on the rational level.

The MSM in western Europe and clear to Ukraine as well as in the USA and Canada are all screaming Russia is demonic, evil, and Jason on steroids. The MSM say Moslems are our friends who just want to love us. For me this means that Russia is not evil, demonic, monstrous, etc. The MSM always lie or get it wrong at least.

The Communists were pushing BS that was as corrosive anything the Nazis pedaled. Sure, Al Queda type Islam doesn't push Nazi Herrnfolk lies but instead insist that the Faithful are God's chosen warriors on a holy mission of conquest.

The Russians can be our allies. The United States, Britain, and very importantly Russia kicked the living S..t out of Nazi Germany and Hirohito's Japan. If the bad guys whoever they are know that we and our allies will kick their a$$ if they go for it then war will not start. It is important that certain people understand that if they do start a war then we will finish it.

You think I exaggerate about Russians check with any old Third Reich Wehrmacht fellow you can find and ask him. Those old boys know what I say is true.