Sunday, March 16, 2014

Are the energy markets the new military surrogate in the crisis in Ukraine?

"A coup by stealth," could well be the headline, following today's rigged vote in the Crimea, where 2 million Russian-aligned voters will cast ballots to determine whether Crimea joins the Russian Federation or becomes an independent state. The option of remaining under Kiev, as part of Ukraine, is not available on the ballot.
While Republican leaders in the United States accuse President Obama of screaming loudly and carrying no stick, (a scathing indictment of his failure to grant arms, ammunition and military support to the new government of Ukraine, echoing Teddy Roosevelt's "walk softly and carry a big stick" foreign policy adage, the Obama administration seems to have become paralyzed, as far as the public is permitted to know.
Like the missing MH370 from Malaysia Airlines, it is not the Russian army that Ukrainians are worried about; it is the secret Russian agents who are allegedly moving into several areas in the Ukraine, based on the Russian denial of legitimacy of the new government in Kiev which Putin claims is either controlled or at least infiltrated by fascists and right wing extremists, and on a previously deployed 'incursion' into Afghanistan in 1979 by a cadre of the Spetsnaz, the Russian military’s highly trained saboteurs, spies and special operations forces.*
It is not only the people and the government of Ukraine who need physical evidence of support from outside, including the White House, along with the governments of the UK, the EU and NATO; it is also the people in neighbouring states like Poland who have serious and legitimate concerns that Putin's voracious appetite could impact their people and their nations.
In some quarters, energy (specifically oil and gas, both their untapped reservoirs and their refineries) are becoming the new pieces on the global chess board. If Putin has already taken over gas production facilities in Crimea and the Eastern Ukraine, while supplying a considerable percentage of the energy needs of countries in the EU (39% of Germany's natural gas, for example) Senator Lindsay Graham and former House Speaker Gingrich, in an opinion piece on CNN today, urge Obama to step up US permits to additional natural gas production facilities, and to compete directly with Putin in supplying additional U.S. exports of natural gas to EU countries, thereby confronting Putin on his own lifeline. (The Russian economy is almost exclusively dependent on the revenue from the sale of energy to "satellite" and neighbouring countries.)
However, using the market to "fight" Putin will inevitably take months, if not years to accomplish.
Today, with the vote taking place in Crimea at this moment, and the outcome in no doubt that Crimea will choose to join the Russian Federation, and the "consuming" passion of Putin to restore Russian "greatness" including a stable and growing economy with additional supplies for additional sales and revenue from energy sales, turning the world's need for fossil fuels into a "military surrogate" in a foreign and diplomatic struggle for the future of the Ukraine, and potentially other countries neighbouring Russia, seems both dangerous and short sighted.
Leverage, the favourite word in the diplomat's lexicon, is only attainable when the actions that achieve it are responsible, credible and sustainable for all sides. The U.S. is only recently poised to become fully independent of Middle East oil and natural gas. Exporting that new-found "commodity" into the EU, in order to combat Russian sales, and the crimp those sales/purchases place on leader like Angela Merkel of Germany, while appearing to be another quick fix in this situation, seems to put the markets under the thumb of the State Department, to a degree that neither the markets nor the diplomatic core would appreciate, not to mention writhe under. Using capitalist markets that are owned and controlled by the energy behemoths is not comparable to Putin's using the state-owned Russian energy company as a weapon for hegemonic ambitions.
The U.S. and the west generally, have attempted to keep corporate and state "levers" separate and independent for a long time, while never shying away from encouraging corporate interests to supplement diplomatic interests in developing countries of the 3rd world. Putin's access to his energy "levers" is more direct, more immediate and more rapidly deployed than a similar initiative by  Obama could be. However, just because Ukraine is not a formal member of NATO, neighbouring countries are NATO members, and just because the U.S. is war weary and also war-poor, there is no reason that, joining hands with other NATO members in showing a force in Ukraine, Obama could not demonstrate U.S. and 'western' support for the new government of Ukraine, adequate to at least get Putin's attention.
Even that meagre objective (getting Putin's attention) has not yet been achieved in spite of a spate of face-to-face meetings between Secretary of State Kerry and Russian Foreign Minister Lavrov. The Obama administration risks being portrayed as "one hand clapping" while Putin's agents surreptitiously march into Crimea and Ukraine in a demonstration of "real politik" that will have lasting and negative impact on U.S. interests and foreign policy in the near and mid-term future.
Sadly, while George W. Bush demonstrated one extreme of U.S. involvement in the outside world, through deceitful and belligerent invasions of Iraq and Afghanistan, Obama could have pulled back too far from the spectre of military conflict, given eminently good reasons to avoid another round of a cold war with the 'new' Russia.
China's abstention in the Security Council vote condemning the "incursion" by Russia into Crimea, while not a military or an economic "lever," could stand as a slight if momentary brake on Russian hegemony. With the west committed to talking without effect, and Putin determined to continue his shadow war, the world needs China to broker this potentially volcanic and violent military and diplomatic tension to a negotiated settlement, and their interest in so doing could also demonstrate some trust among the community of nations that they will not make a similar "incursion" into Taiwan.
While the diplomats and world leaders like to speak about different "pieces" on the chess board, as if they were discreet from each other, there is no geopolitical file that does not have some spill-over into many other geopolitical files. And the United Nations, without an army, navy or air force, and without its own intelligence apparatus, is somewhat hampered in its attempts to bring opposing views and their proponents to a negotiated settlement.
The people of Ukraine fear additional Russian intervention, including a total rejection of the new government in Kiev; the people in countries  bordering Ukraine are somewhat anxious that Russian ambition might look for and find a pretext for similar incursions into their countries. The whole world is anxiously watching this drama displayed on the signs where we all purchase our gas for our own vehicles, knowing that those prices are impacted by whatever tremors are being felt, whether geophysically or geopolitically, around the globe. So, once again, we truly are "all in this together" whether we like or admit that or not.

*By Eli Lake and Anna Nemtsova, The Daily Beast, March 15, 2014
Forget the military forces massed on the border and brief incursions into Ukrainian territory and airspace. Russia is invading Ukraine in the shadows. The same special operations forces that appear to be rigging the election in Crimea are quietly escalating tensions inside other parts of eastern Ukraine. 
This week the Security Service of Ukraine (SBU) arrested a group of people led by a Ukrainian citizen who were said to be scoping out three of its most crucial military divisions in the southern Ukrainian city of Kherson.
In Donetsk in eastern Ukraine, press reports from the ground say that Russian provocateurs have attacked Ukrainians who organized anti-Russian street protests.
The forces behind these operations, according to U.S. officials briefed on the updates in Ukraine, are likely the Spetsnaz, the Russian military’s highly trained saboteurs, spies and special operations forces who may change the face—and the borders—of Ukraine without once showing the Russian flag on their uniforms. Or, for that matter, without wearing any particular uniforms at all.In 1979 the Soviet Union was able to take over Afghanistan with less than 700 Spetsnaz soldiers. These same operatives are now spreading out over Ukraine, according to U.S. officials who spoke to The Daily Beast on condition of anonymity. One of these officials stressed that while U.S. intelligence assesses there are more Spetsnaz forces surging into Ukraine, there is no reliable number on how many are inside the country and ultimately whether their presence is a prelude to a more formal invasion.
On March 5, Jane's Defense Weekly ran an analysis of Russian troop movements near Ukraine and noted similarities with the USSR's special operations campaign in 1979 before the full invasion of the country. "A significant indicator of Russia's next steps would be the arrival in Crimea of personnel from Moscow's GCHQ-NSA equivalent organization, previously titled the Federal Agency of Government Communications and Information (FAPSI), to carry forward the situation," Jane's wrote. In the last seven weeks, two recordings of high profile telephone conversations featuring European Union and U.S. officials have mysteriously surfaced on the Internet, suggesting Russia's technical intelligence services have been active during the Ukraine crisis.

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