Ukraine: Follow the Energy?

[don]

March 4, 2014

Scrape away the media sensationalism and geopolitical posturing and it boils down to a simple dynamic: follow the energy. Though many seem to believe that internal politics and geopolitical posturing in Ukraine are definitive dynamics, I tend to think the one that really counts is energy: not only who has it and who needs it, but where the consumers can get it from.

Let's cut to the chase and declare a partition along long-standing linguistic and loyalty lines a done deal. Let's also dispense with any notions that either side can impose a military solution in the other's territory.

Media reports on the weakness of Ukrainian military forces abound (for example, Ukraine Finds Its Forces Are Ill Equipped to Take Crimea Back From Russia), but Russia's ability to project power and hold territory isn't so hot, either.

A knowledgeable correspondent submitted these observations:

RE: Russian Army. Effective draft evasion is running 80%. Morale is low, training is very poor and poorly funded. The Russian army has also gone through 22 years of near continuous contraction. And this standing army has heavy commitments in the Caucasus and Far East Siberia. Moreover, at least half of these Russian ground troops are short term 12 month conscripts. I don't think these kids will produce many usable and motivated troops. The low morale recently seen in the Ukrainian Berkut and other police will be multiplied by at least 10x.

Russian speaking Ukrainian bands are rumored to already be crossing the borders into Russia territory. They're to be ready to sabotage bridges and infrastructure and generally retaliate. Fluent Russian speakers with many years experience of living in Russia. Who can say for sure if this has already happened or is just being threatened? We can say this is a very real danger. These people look just like "Russians."

And we can also say this threat will seriously complicate Russian rear area security and logistics. And speaking of logistics, the distances in south Ossetia and Abkhazia were very short and the populations were entirely friendly. Neither condition prevails in the Ukraine outside the Crimea.

Supplying moving armored units over hundreds of miles of occupied country is very difficult logistically. The logistics for air assault helicopter units are just as bad. These helo units look mobile but they're a lot like a yoyo being twirled around your head on the string. They only go fast within a fixed radius anchored by logistics that are about as heavy to move as an armored division's supply columns. That is years in the 101st Airborne Division talking. The fuel consumption rates are immense. Stuff starts breaking down fast.

Conclusion: a de facto partition is already baked in because neither side can force a re-unification. Various jockeying and posturing will undoubtedly continue for some time, but the basic end-game is already visible: de facto partition.

Let's move on to correspondent A.C.'s observations about energy.

This map rounds out the European energy Rosetta Stone. When they hear that Italian fighter jets are over Tripoli, or that the French Foreign Legion has returned to the deep Sahara Desert, they can can better understand the reasons and real objectives of such operations.





Many have noted that the Russia economy is critically dependent on oil and gas exports to the EU. It should be noted that the converse is less true every day about EU dependence on Russian oil and gas. The Wall Street Journal even had a line about an EU proposal to push natural gas EAST to the Ukraine. It's hard to understand that passage or where the natural gas could come from unless one understands the North Africa to southern Europe gas pipelines.

The factors bringing the conflict in Ukraine to a head are:

1. The natural gas discoveries in eastern Poland and western Ukraine played the largest role.

2. The reduced importance of the gas pipeline running through the Ukraine to Europe as compared to 2009. Since that time the Nordstream lines have been finished and Gazprom acquired commercial control of the Belarus pipeline. The South Stream lines are well along in development.

3. Fast developing liquid natural gas (LNG) seaport terminal infrastructure.

Events in Libya, Mali and Algeria are not hermetically isolated from this. They are part of a comprehensive energy policy problem being dealt with by the same leaderships. It increasingly looks like a series of peripheral Energy Wars that are being fought out for control of Europe.

LNG exports are going to become a weapon in the struggle for geopolitical influence and control.

This highlights another problem for Russia/Gazprom. Its present natural gas advantage in Europe now rests mainly on its pipeline infrastructure. This advantage is fading due to the current and proposed pipeline projects running through Turkey to Europe, plus LPG terminal & ship developments, plus the five trans-Mediterranean pipelines from Libya, Algeria and Morocco to southern Europe, plus local shale gas plays...

The Ukraine is not the only country becoming less systemically important to Europe for natural gas supply. So is Russia. Current events will only accelerate everyone's efforts to diversify away from such an unstable and apparently dangerous supplier.

I think the long-term fallout from the Ukrainian Crisis will be similar to China's attempt to exploit its temporary low price monopoly position in rare earth metals a few years ago. The result is rare earth metals are becoming less rare by the day as alternate mines outside China are opened and reopened.

Thank you, A.C. Scrape away the media sensationalism and geopolitical posturing and it boils down to a simple dynamic: follow the energy.

[Woodsman]

Re: Ukraine: Follow the Energy?

March 4, 2014

Scrape away the media sensationalism and geopolitical posturing and it boils down to a simple dynamic: follow the energy. Though many seem to believe that internal politics and geopolitical posturing in Ukraine are definitive dynamics, I tend to think the one that really counts is energy: not only who has it and who needs it, but where the consumers can get it from.

Let's cut to the chase and declare a partition along long-standing linguistic and loyalty lines a done deal. Let's also dispense with any notions that either side can impose a military solution in the other's territory.

Media reports on the weakness of Ukrainian military forces abound (for example, Ukraine Finds Its Forces Are Ill Equipped to Take Crimea Back From Russia), but Russia's ability to project power and hold territory isn't so hot, either.

A knowledgeable correspondent submitted these observations:

RE: Russian Army. Effective draft evasion is running 80%. Morale is low, training is very poor and poorly funded. The Russian army has also gone through 22 years of near continuous contraction. And this standing army has heavy commitments in the Caucasus and Far East Siberia. Moreover, at least half of these Russian ground troops are short term 12 month conscripts. I don't think these kids will produce many usable and motivated troops. The low morale recently seen in the Ukrainian Berkut and other police will be multiplied by at least 10x.

Russian speaking Ukrainian bands are rumored to already be crossing the borders into Russia territory. They're to be ready to sabotage bridges and infrastructure and generally retaliate. Fluent Russian speakers with many years experience of living in Russia. Who can say for sure if this has already happened or is just being threatened? We can say this is a very real danger. These people look just like "Russians."

And we can also say this threat will seriously complicate Russian rear area security and logistics. And speaking of logistics, the distances in south Ossetia and Abkhazia were very short and the populations were entirely friendly. Neither condition prevails in the Ukraine outside the Crimea.

Supplying moving armored units over hundreds of miles of occupied country is very difficult logistically. The logistics for air assault helicopter units are just as bad. These helo units look mobile but they're a lot like a yoyo being twirled around your head on the string. They only go fast within a fixed radius anchored by logistics that are about as heavy to move as an armored division's supply columns. That is years in the 101st Airborne Division talking. The fuel consumption rates are immense. Stuff starts breaking down fast.

Conclusion: a de facto partition is already baked in because neither side can force a re-unification. Various jockeying and posturing will undoubtedly continue for some time, but the basic end-game is already visible: de facto partition.

Let's move on to correspondent A.C.'s observations about energy.

This map rounds out the European energy Rosetta Stone. When they hear that Italian fighter jets are over Tripoli, or that the French Foreign Legion has returned to the deep Sahara Desert, they can can better understand the reasons and real objectives of such operations.





Many have noted that the Russia economy is critically dependent on oil and gas exports to the EU. It should be noted that the converse is less true every day about EU dependence on Russian oil and gas. The Wall Street Journal even had a line about an EU proposal to push natural gas EAST to the Ukraine. It's hard to understand that passage or where the natural gas could come from unless one understands the North Africa to southern Europe gas pipelines.

The factors bringing the conflict in Ukraine to a head are:

1. The natural gas discoveries in eastern Poland and western Ukraine played the largest role.

2. The reduced importance of the gas pipeline running through the Ukraine to Europe as compared to 2009. Since that time the Nordstream lines have been finished and Gazprom acquired commercial control of the Belarus pipeline. The South Stream lines are well along in development.

3. Fast developing liquid natural gas (LNG) seaport terminal infrastructure.

Events in Libya, Mali and Algeria are not hermetically isolated from this. They are part of a comprehensive energy policy problem being dealt with by the same leaderships. It increasingly looks like a series of peripheral Energy Wars that are being fought out for control of Europe.

LNG exports are going to become a weapon in the struggle for geopolitical influence and control.

This highlights another problem for Russia/Gazprom. Its present natural gas advantage in Europe now rests mainly on its pipeline infrastructure. This advantage is fading due to the current and proposed pipeline projects running through Turkey to Europe, plus LPG terminal & ship developments, plus the five trans-Mediterranean pipelines from Libya, Algeria and Morocco to southern Europe, plus local shale gas plays...

The Ukraine is not the only country becoming less systemically important to Europe for natural gas supply. So is Russia. Current events will only accelerate everyone's efforts to diversify away from such an unstable and apparently dangerous supplier.

I think the long-term fallout from the Ukrainian Crisis will be similar to China's attempt to exploit its temporary low price monopoly position in rare earth metals a few years ago. The result is rare earth metals are becoming less rare by the day as alternate mines outside China are opened and reopened.

Thank you, A.C. Scrape away the media sensationalism and geopolitical posturing and it boils down to a simple dynamic: follow the energy.

Is that before or after following the money?

---

UK seeking to ensure Russia sanctions do not harm City of London

Government document photographed outside No 10 states that 'London's financial centre' should not be closed to Russians
Nicholas Watt, chief political correspondent
theguardian.com, Monday 3 March 2014 14.28 EST

Britain is drawing up plans to ensure that any EU action against Russia over Ukraine will exempt the City of London, according to a secret government document photographed in Downing Street.

[don]

Re: Ukraine: Follow the Energy?

energy, western currency and the military - inseparable. note the order of magnitude correlation with the dollar reserve currency & the US military, followed by the Euro and NATO, with the pound bringing up the rear . . .

[don]

Re: Ukraine: Follow the Energy?

Ukraine and the Great Asian Enclosure

by ALEXANDER REID ROSS

The Cornerstones of Eurasia

When Pravy Sektor’s Dmitry Yarosh called on the Chechen liberation fighters to join Ukrainian nationalists in global struggle, he accented the North Atlantic’s energy politics better than anyone before him. Although Pravy Sektor blamed hackers for the call to arms, we ought to take the connection between the Caucasus and the Crimea extremely seriously.

The US and UK support Chechen moves for independence based on the vision of a “liberated region of the Caspian Sea,” which would turn over its vast energy resources to “the global marketplace.” This vision has been thwarted by Putin’s devastating grip on Chechnya, as well as Moscow’s involvement on behalf of Abkhazia and South Ossetia during the Russia-Georgia War of 2008. The outcome of the Kremlin’s maneuvers has secured Russia’s energy corridor from Central Asia into Europe through Ukraine. Hence, Pravy Sektor’s manifesto for cross-cutting resistance in infrastructural cornerstones appears to connect North Atlantic’s interests while also exposing the general strategy of provoking separatism in order to overthrow competing circles of influence.

It seems surprising, then, that Yarosh left out the rebels in that other Western infrastructural cornerstone—Syria—in his sabre rattling. Syria under Assad seeks to become a “four seas” hub, uniting the Caspian, Black Sea, Persian Gulf, and Mediterranean. Currently, Russia dominates the Caspian Sea, and holds the weight of power in the Black Sea after grabbing the Crimea. With Assad’s Syria in place, the Kremlin has a strong foothold in the Mediterranean as well.

As in Chechnya and Ukraine, the US and allies such as Turkey support militants in Syria for a variety of reasons—not least of all, to pry hegemony from China and Russia. In the case of Syria, a gas pipeline from Iran through Iraq stands to generate capital and sovereignty for those powers that the US seeks to oppress. It also connects the Persian Gulf to Russia’s encircling network. Critical within this network is also the nearly-concluded Iran-Pakistan gas pipeline, which could be linked up to the Russia-China Central Asian pipeline labyrinth that spans more than 6,500-miles.

Southern Lines of Contention

While China and Russia are lassoing in the Asian steppes one pipeline at a time, the US has its own pipeline in mind—one that runs from Turkmenistan into India via Afghanistan and Pakistan (the TAPI), and provides a possible counterbalance to the Iran-Pakistan pipe. To secure its TAPI, the US famously entered into deals with the Taliban in 1998, and the Taliban are again being called upon through what RusEnergy analyst Mikhail Krutikhin calls an “informal tripartite union” with Pakistan and China to keep the pipeline safe. Business as usual.

While the Taliban is called upon for “protection” of TAPI in South Afghanistan and Central Pakistan, Baloch insurgents have been reportedly commissioned by the CIA to run down the Taliban in southern Pakistan. Meanwhile, the US army has attempted to mediate between the different factions of the Baloch liberation movement, against the interests of Pakistan. According to Sharat Sabharwal, India’s former High Commissioner to Pakistan, the Quetta Shura and Haqqani network have been regarded as assets by Pakistan’s military, as “they have political links and have been used by the security establishment to settle scores with Baloch nationalists.” However, the settling of scores does not rule out collusion. Leading Balochistan separatist groups like the Jundullah are also part of the Taliban, so Pakistan’s sheltering of the latter has only fed the former.

US influence in the region boils down to a deeper purpose of US-Saudi hegemony: use the militants to protect the TAPI in Southern Afghanistan and Central Pakistan, but keep the Pakistan-Iran pipeline in the danger zone. Only a week ago, a pipeline from the southern field of Quadirpur exploded, killing two security guards. The explosion was likely the result of an attack by militants, as was another attack a month before, which destroyed part of a pipeline in the Southwest. Suspicions of Sunni Baloch separatists in the service of US-Saudi hegemony are intensified by a smattering of recent revenge attacks on the border of Iran in response to, among other things, reports of massacres carried out by Iran’s overseas elite squad, the Quds Force, in Syria on the side of Assad.

The idea for an independent Balochistan has high-powered public support in the US vis-à-vis a faux-camarilla surrounding Congressman Dana Rohrabacher, who declared last year, “It is time Washington stopped aiding Pakistan and developed a closer friendship with India and, perhaps, Baluchistan.” Rohrabacher’s less public allies include retired Lieutenant-Colonel Ralph Peters, who hopes for the dissolution of Pakistan in tandem with Baluchistan’s self-determination. Peters’s ambitiously redrawn map of West Asia, which includes a Sunni Iraq partitioned from a new “Arab Shia State,” along with a vastly reduced Pakistan, has been used in a training program for senior military officers at the NATO Defense College and likely the National War Academy.

Running Up North

What is most at stake in Balochistan is not only the gas pipeline network, but the strategic deep sea Port of Gwadar, which the US and Saudis have sought in vain to keep from Chinese hegemony. At the end of last month, China approved $1.8 billion to nine projects destined to develop road, rail, and fiber links between China and Pakistan via an “oil city” in Gwadar including a refurbished oil refinery. Pakistani authorities have followed up by insisting on the need to develop a strong naval base.

China has another $10 billion it is looking to spend on projects in Pakistan, including an oil pipeline running crude from Dubai through Gwadar, and sweeping north up the Karakorum Highway, the highest paved international road and the shortest distance from Pakistan to Western China. The pipeline would likely complete its journey in Xinjiang—the symbolic starting point of China’s “march west.”

Xinjiang is the site of massive development projects currently underway to bring “prosperity” into the mountains and deserts once dominated by Uighers. The US Congress, of course, was only five years ago found to be giving $200,000 per year via the National Endowment for Democracy to the World Uigher Congress, which has been blamed for intense rioting and uprisings that have marked the Uigher separatist movement in Xinjiang. (Incidentally, the Uigher separatist movement made an inglorious reappearance in the form of a rampaging knife attack at a train station just days ago.) Xinjiang is also a critical stopping point for the Kazakhstan-China oil pipeline running from the Caspian, which would complete the circle of pipelines.

Within this great ring lies a huge amount of investment that China is making in Afghanistan, Turkmenistan, Tajikistan, and Kyrgyzstan. Kyrgyzstan’s Bukhara-Tashkent-Bishkek-Almaty pipeline, operated by KyrKazGas (a joint venture of KazTransGas and Gazprom-owned Kyrgyzgas), will be connected to China, and a new pipeline from Turkemistan to China through Tajikistan will be built in the ongoing development of the China-Central Asia gas pipeline.

The Enclosed

Last month, China also set into operation an oil refinery in Kara-Balta, Kyrgyzstan, run by Zhogda. Billed as taking Kyrgyzstan off of Siberian oil dependence, the refinery ran into problems from the early stages of construction. While Kyrgyz Prime Minister, Jantoro Saptybaldiyev, encouraged a hasty construction, the refinery fell behind schedule, and the site began to rack up violations. Meanwhile, China began to construct a new refinery in Tokmak connected via Soviet-era railway to Chinese-owned oil fields in Kazakhstan.

With Central Asia’s oil-by-rail already in its nascence, a new pipeline is in the planning stages. Upstream, downstream, and infrastructural control means Xi Jinping is becoming a new oil baron in Central Asia. But protests against the Kara-Balta refinery within Kyrgyzstan have also occurred on a regular basis. Residents insist that the refinery is too close to rivers and residential areas, and that it pollutes the air. Indeed, the state environmental agency’s test showed local petroleum levels in soil 175-times the limit. Many also fear the intrusion of Chinese influence. For now, the Kara-Balta refinery is suspended.

Enormous enclosures do not come without a price. The growing global tumult is a symptom of the global land grab—the expropriation of land and resources by competing international powers to suit the needs of a rapidly expanding global consumer culture.