While the human politics of the crisis in Ukraine garner all the headlines, it is the gas politics that in many ways lies at the heart of the conflict.
Indeed, the energy issue has not only framed much of the economic
dimensions of the crisis, it has revealed the deep divides that
exist among the political and business elite of Europe who,
despite their bluff and bluster about Russia’s actions in Ukraine
and the expansion of sanctions, understand quite clearly that
Russia is an integral part of Europe’s economic future.
However, that hasn’t stopped the West and its proxies and clients
in Eastern Europe from attempting to undermine Russia’s strategic
economic position through a variety of means. From derailing
negotiations over pipeline construction to using puppet
governments as a wedge between Moscow and Europe, the US and its
allies have attempted to undermine Russia’s economic and
strategic position vis-à-vis gas delivery infrastructure, while
simultaneously strengthening their own.
Ukraine and the threat to Russia and Europe
Lost amid the horror stories of Kiev’s military assault on the
people of Donbas, the vicious attacks by Right Sector Nazis, and
the general state of chaos in Ukraine’s political institutions,
is the fact that one of the central aspects of the Ukraine-Russia
conflict is gas. Specifically, it centers on the Russian energy
delivery infrastructure (pipelines, refineries, etc.) in Ukraine
and its vital importance to Russia’s continued energy exports to
Europe.
Also, Kiev and the Russian energy giant Gazprom have been busy
trying to negotiate terms of payment for the massive bill (at least $4
billion, though likely more) Ukraine owes, which undoubtedly
raises the stakes for both sides as billions of dollars are on
the line. Were the conflict only financial, then undoubtedly a
resolution could be reached. However, in recent weeks there have
been dangerous developments and accusations, which have cast the
issue in a new light; it is no longer merely about profits, it’s
about security.
In mid-June, a major gas pipeline carrying Russian gas through
Ukraine was blown up in the Poltava region of the
country. Though Ukrainian authorities have claimed that the gas
supply to Europe was not interrupted, the incident signals a
dangerous development in the ongoing crisis, specifically the
targeting of key pipelines by terrorists bent on attacking
Russian economic interests. Many experts, including the eminent
historian and scholar Dr. Stephen Cohen, have accused right wing
ultranationalist extremist groups of carrying out this terrorist
action, as well as others including the shameful and violent
“protest” outside the Russian embassy in Kiev.
In fact, this week saw yet another attack by Right Sector
terrorists on critical gas infrastructure. A
large contingent of militants from the fascist group seized the
Dolynsky Oil refinery in Kirovograd in Central Ukraine. The
attack on the facility, owned by a friend and business associate
of the deposed former President Yanukovich, is yet another
assault on key elements in the Russian energy supply network.
While the Right Sector militants justify their actions as being
part of a campaign against “terrorists in Donetsk,” it
is hard to view these developments as anything other than a
direct attack upon Russian economic interests.
Naturally, Kiev has not been exactly diligent in its attempts to
investigate these and other incidents implicating Right Sector
and other fascist groups, which have been legally sanctioned,
including with the moniker “National Guard,” by
authorities in Kiev. Lack of a thorough investigation
notwithstanding, the attack on the pipeline represents a
significant escalation of the conflict, as it now threatens not
only Russian revenues, but the European energy supply.
As many commentators have noted, Russia provides upwards of one
third of Europe’s gas imports, with 60-80 percent of that supply
traveling through pipelines on the territory of Ukraine. An
escalation of attacks on this critical infrastructure threatens
the stability of the European economy, and has led many business
leaders in Europe and the US to question not just Washington’s and Brussels’
policies toward the Ukraine issue, but the general hostility
toward Russia that has come to dominate ruling class circles in
the West. It would seem then that the political will to further
exacerbate the conflict is at odds with good business sense –
precisely what many in Russia and around the world have been
saying since the chaos in Ukraine began.
Pipelines and economic proxy war
Beyond Ukraine, there have been a number of attempts by the US
and its partners to derail Russian pipeline development, and, as
a corollary, to continue to promote projects that undermine
Russia’s position in the energy market of Europe.
One of the more well-known projects that Moscow has embarked on
in recent years is the highly ambitious South
Stream pipeline, a project that would bring Russian gas under
the Black Sea and into Central Europe via Bulgaria and Serbia.
Seen by most experts as Russia’s attempt to diversify its
delivery infrastructure away from Ukraine, the project has been a
major sore point with the US, which has attempted to decrease
European reliance on Russian energy. And so, negotiations among
the relevant transit countries have taken on added significance
with the advent of the crisis in Ukraine. It is against this
backdrop that the latest news from Bulgaria is worrying for the
Kremlin.
Earlier this month, the government of Bulgaria yielded to
pressure from the EU and halted construction of the South Stream.
A number of analysts both in Bulgaria and around the world have
noted that this development is a direct consequence of threats
and arm-twisting from the West which is desperately trying to
prevent Russia from further solidifying its position in the
European energy market.
As one prominent Bulgarian political analyst, who asked not to be
named, told the German news agency Deutsche Welle, “The EU has no money to support
Ukraine in the gas dispute with Russia... So in order to
blackmail Moscow and compel it to continue transporting gas via
Ukraine, Brussels wants to put a halt to the South Stream
project. Bulgarians are the ultimate victims. And the project
might still be completed, potentially via Turkey, which does not
bow to the [sic] pressure from the EU.”
Indeed, it seems that Europe, and by extension the US, is
attempting to leverage their political clout in Eastern Europe to
block Russian development and, simultaneously, keep those
countries subservient to the West. As many have noted, the
pipeline will bring tremendous benefits to Bulgaria, and all
countries through which it transits, as those countries will then
be recipients of generous gas discounts, not to mention jobs and
other major benefits for the economically struggling countries of
the former Soviet space.
And this is precisely the issue, namely the question of whether
countries like Bulgaria are allowed to pursue their own,
independent economic development, or whether they must be
subjected to European and American bullying. As renowned
Bulgarian political and energy analyst, and professor of
International Relations, Dr. Nina Dyulgerova explained in a
recent interview:
“Judging by the fact that we [Bulgaria] are the first country
in the EU route of South Stream, we can conclude that has to do
with politics. Europe is subjected to a growing Russian-American
confrontation in the field of energy. The Ukraine crisis, for
instance, was a geostrategical object of impact from the US side
which led...to an increased US participation in the most
important element of Washington's interest in the field of
energy, namely - the gas transportation system of Ukraine.
Coincidentally [Hunter Biden], the son of US Vice President Joe
Biden, is a member of the board of directors at the Ukrainian gas
company [Burisma]. The fact that a process of buying up parts of
Ukraine's energy system by American firms, and European ones
close to them, also increases the pressure on the construction of
South Stream, because it would mitigate or put an end to this
complicated game.”
As Dr. Dyulgerova correctly notes, part of the US strategy in
Ukraine is to strip the assets of the Ukrainian state, mostly but
not exclusively in the energy sector, and sell them off to
Western interests. Naturally, Russia’s counter-measure is to
accelerate the development of South Stream, to which the West has
responded with the most recent round of intimidation and
meddling. In fact, this goes far beyond simply making crony
capitalist deals with Western companies.
Just before Bulgarian Prime Minister Plamen Oresharski made the
announcement that his country would be freezing construction of
South Stream, he had extensive consultations with prominent
US Senators, including John McCain (R-AZ) and
Ron Johnson (R-WI), both of whom have extensive ties to the oil
and gas industry. Immediately following these meetings, the
announcement was made, with the connection of course not being
mere coincidence. Obviously, the political establishment, in the
service of its corporate patrons, has committed its energies and
resources into being the tip of the spear against Russian
economic development and its attempts to solidify its relations
with European countries.
While countries like Bulgaria have been cowed by US and European
pressure, others have not. In the wake of the announcement by
Bulgaria’s Prime Minister, Serbian Prime Minister Aleksandar
Vucic reiterated his country’s desire to participate in the
project and maintain its traditionally close ties to Russia.
Additionally, leaders in Slovenia and Austria, have continued to
express their support for South Stream, rejecting calls from
Washington and Brussels to turn away from the project. In fact,
Russian President Putin and Austrian President Fischer came
together this week to mark the signing of the cooperation
deal between Austria’s OMV and Russia’s
Gazprom. In a characteristically undiplomatic and unfriendly
subtle threat directed at Austria, the US embassy released a
statement saying that Austrians “should consider carefully
whether today’s events contribute to the effort [to maintain
trans-Atlantic unity and discourage further Russian
aggression].”
Essentially then, South Stream has become one of the primary
battlegrounds in the economic war that the West is waging against
Russia. The sanctions are merely the window-dressing to the much
more sinister attempt to stifle the independent economic
development of all countries seeking to do business with Russia
and increase their own prosperity.
Moreover, the attacks on South Stream signal a US-EU policy in
Ukraine, and in the region, which is in many ways at odds with
powerful business interests. In this way, some of the divides
within the establishment have become clearer. In addition, with
the recent signing of the Sino-Russian gas deal, which itself
will lead to the completion of two more critical pipelines,
Moscow seems to have developed a comprehensive counter-strategy.
While the US and its partners have attempted to restart projects
like the Trans-Caspian Pipeline – a Western-sponsored alternative
to the South Stream, which is still in the early stages and has
encountered a number of major hurdles in recent years – Russia
continues to steadily build up and refurbish its pipeline
infrastructure.
The 19th Century saw the advent of the “Great Game” –
competition between the Russian and British empires for control
over the remnants of the Ottoman Empire in the Black Sea, Central
Asia, and elsewhere – which persisted throughout that century,
leading to at least two major Russian wars. The 20th Century was
characterized by world wars and the Cold War which saw the
Anglo-American empire, even when allied with the Soviet Union
during the wars, in constant competition with Russia. In the 21st
Century, an era when such animosities were supposed to have been
buried with previous generations, we are seeing a renewal of the
Great Game and Cold War, with the US and Europe playing foil to
Russia’s rising economic power.
The new Great Game is one for energy, pipelines, and access to
markets. But, ultimately, it is about power, and the US has yet
to recognize that the power it once wielded, the power to
influence outcomes to its own benefit whenever it suits, has
rapidly declined. Washington has yet to recognize that the entire
world is no longer its imperial backyard. Hopefully, for the sake
of peace and progress, they will recognize this reality, sooner
rather than later.
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