The Emerging Russian Giant Plays
its Cards Strategically
By F. William Engdahl, October 9,
2006 / Updated Ocotober 20, 2006
On October 10, Russian President
Vladimir Putin flew to the German city of Dresden for a summit on energy issues
with Germany’s Chancellor Angela Merkel. On the agenda were proposed plans to
more than double German import of Russian natural gas. Putin told the German
Chancellor that Russia would ‘possibly’ redirect some of the future natural gas
from its giant Shtokman field in the Barents Sea. The $20 billion project is
due to come online 2010. Putin’s Dresden talks followed an earlier summit in
Paris in late September with Putin and French President Chirac and Merkel. A
week after his Dresden talks, the Indonesian Navy Chief of Staff announced a
remarkable shift away from that country’s traditional purchases of NATO
military equipment. Indonesia will buy twelve modern Kilo-Class and Lada-Class
Russian submarines. Indonesia cited advantages of cost and reliability over
NATO French or German equivalents.
These developments underscore the re-emerging of
Russia as a major global power. The new Russia is gaining in influence through
a series of strategic moves revolving around its geopolitical assets in
energy—most notably its oil and natural gas. It’s doing so by shrewdly taking
advantage of the strategic follies and major political blunders of Washington.
The new Russia also realizes that if it does not act decisively, it soon will
be encircled and trumped by a military rival, USA. The battle, largely
unspoken, is the highest stakes battle in world politics today. Iran and Syria
are seen by Washington strategists as mere steps to this great Russian End
Game.
In recent years major attention has been paid to the
emergence of a China economic colossus. What is generally missing in these
discussions is the fact that China will not be able to emerge as a truly
independent global power over the coming decade unless it is able to solve two
strategic vulnerabilities—its growing dependence on energy imports for its
economic growth, and its inability to pose a credible nuclear deterrence to a
US nuclear first strike.
Russia is the one remaining power which still has sufficient military deterrence potential in its strategic nuclear arsenal, and is expanding same, as well as abundant energy to make a credible counterweight to global US military and political primacy. A Eurasian combination of China and Russia and allied Eurasian states, essentially the states in and around the Shanghai Cooperation Organization, do present a potential counterweight to unilateral USA dominance. An understanding of recent Russian developments in this light is essential to understand United States foreign policy as well as global politics at present.
Russia`s Strategic Dilemma
Since the devastating setbacks two
years ago from the US-sponsored ‘color revolutions’ in Georgia, and then
Ukraine, Russia has begun to play its strategic energy cards extremely
carefully, from nuclear reactors in Iran to military sales to Venezuela and
other Latin American states, to strategic market cooperation deals in natural
gas with Algeria.
At the same time, the Bush
Administration has dug itself deeper into a geopolitical morass, through a
foreign policy agenda which has reckless disregard for its allies as well as
its foes. That reckless policy has been associated with former Halliburton CEO,
Dick Cheney, more than any other figure in Washington.
The ‘Cheney Presidency,’ which is
what historians will no doubt dub the George W. Bush years, has been based on a
clear strategy. It has often been misunderstood by critics who had overly
focused on its most visible component, namely, Iraq, the Middle East and the
strident war-hawks around the Vice President and his old crony, Defense
Secretary Don Rumsfeld.
The ‘Cheney strategy’ has been a
US foreign policy based on securing direct global energy control, control by
the Big Four US or US-tied private oil giants - ChevronTexaco or ExxonMobil, BP
or Royal Dutch Shell. Above all, it has aimed at control of all the world`s
major oil regions, along with the major natural gas fields. That control has
moved in tandem with a growing bid by the United States for total military
primacy over the one potential threat to its global ambitions - Russia. Cheney
is perhaps the ideal person to weave the US military and energy policies together
into a coherent strategy of dominance. During the early 1990s under father
Bush, Cheney was also Secretary of Defense.
The Cheney-Bush administration has
been dominated by a coalition of interests between Big Oil and the top
industries of the American military-industrial complex. These private corporate
interests exercise their power through control of the government policy of the
United States. An aggressive militaristic agenda has been essential to it. It
is epitomized by Cheney`s former company, Halliburton Inc., at one and the same
time the world`s largest energy and geophysical services company, and the
world`s largest constructor of military bases.
To comprehend the policy it`s
important to look at how Cheney, as Halliburton CEO, viewed the problem of
future oil supply on the eve of his becoming Vice President.
‘Where the Prize Ultimately Lies’: Cheney`s 1999 London speech
Back in September 1999, a full
year before the US elections which made him the most powerful Vice President in
history, Cheney gave a revealing speech before his oil industry peers at the
London Institute of Petroleum. In a global review of the outlook for Big Oil,
Cheney made the following comment:
By some estimates there will be an
average of two per cent annual growth in global oil demand over the years ahead
along with conservatively a three per cent natural decline in production from
existing reserves. That means by 2010 we will need on the order of an
additional fifty million barrels a day. So where is the oil going to come from?
Governments and the national oil companies are obviously controlling about
ninety per cent of the assets. Oil remains fundamentally a government business.
While many regions of the world offer great oil opportunities, the Middle East
with two thirds of the world‘s oil and the lowest cost, is still where the
prize ultimately lies. Even though companies are anxious for greater access
there, progress continues to be slow. It is true that technology, privatisation
and the opening up of a number of countries have created many new opportunities
in areas around the world for various oil companies, but looking back to the
early 1990‘s, expectations were that significant amounts of the world‘s new
resources would come from such areas as the former Soviet Union and from China.
Of course that didn‘t turn out quite as expected. Instead it turned out to be
deep water successes that yielded the bonanza of the 1990‘s.
The Cheney remarks are worth a careful
reading. He posits a conservative rise in global demand for oil by the end of
the present decade, i.e. in about 4 years. He estimates the world will need to
find an added 50 million barrels of daily output. Total daily oil production at
present hovers around the level of some 83 million barrels oil equivalent. This
means that to avert catastrophic shortages and the resultant devastating impact
on global economic growth, by Cheney`s 1999 estimate, the world must find new
oil production equal to more than 50% of the 1999 daily global output, and
that, by about 2010. That is the equivalent of five new oil regions equal to
today`s Saudi Arabian size. That is a whopping amount of new oil.
Given that it can take up to seven
years or more to bring a new major oilfield into full production, that`s also
not much time if a horrendous energy crunch and sky-high oil and gas prices are
to be averted. Cheney`s estimate was also based on an overly conservative
estimate of future oil import demand in China and India, today the two fastest
growing oil consumers on the planet.
A second notable point of Cheney`s
1999 London comments was his remark that, ‘the Middle East with two thirds of
the world‘s oil and the lowest cost, is still where the prize ultimately lies.’
However, as he revealingly remarked, the oil ‘prize’ of the Middle East was in
national or government hands, not open to exploitation by the private market,
and thus, hard for Cheney`s Halliburton and his friends in ExxonMobil or
Chevron or Shell or BP to get their hands on.
At that time, Iraq, with the
second largest oil reserves after Saudi Arabia in the Middle East, was under
the rule of Saddam Hussein. Iran, which has the world`s second largest reserves
of natural gas, in addition to its huge oil reserves, was ruled by a
nationalist theocracy which was not open to US private company oil tenders. The
Caspian Sea oil reserves were a subject of bitter geopolitical battle between
Washington and Russia.
Cheney`s remark that ‘Oil remains
fundamentally a government business,’ and not private, takes on a new
significance when we do a fast forward to September 2000, in the heat of the
2000 Bush-Cheney election campaign. That month Cheney, along with Don Rumsfeld,
Paul Wolfowitz, and many others who went on to join the new Bush
Administration, issued a policy report titled, ‘Re-building America`s
Defenses.’ The paper was issued by an entity named Project for the New American
Century (PNAC).
Cheney`s PNAC group called on the
new US President-to-be to find a suitable pretext to declare war on Iraq, in
order to occupy it and take direct control over the second largest oil reserves
in the Middle East. Their report stated bluntly, ‘While the unresolved conflict
with Iraq provides the immediate justification (sic), the need for a
substantial American force presence in the Gulf transcends the issue of the
regime of Saddam Hussein ...’
Cheney signed on to a policy
document in September 2000 which declared that the key issue was ‘American
force presence in the Gulf,’ and regime change in Iraq, regardless whether
Saddam Hussein was good, bad or ugly. It was the first step in moving the US
military to ‘where the prize ultimately lies.’
No coincidence that Cheney
immediately got the task of heading a Presidential Energy Task Force review in
early 2001, where he worked closely with his friends in Big Oil, including the
late Ken Lay of Enron, with whom Cheney earlier had been involved in an Afghan
gas pipeline project, as well as with James Baker III.
Buried in the debate leading to
the US bombing and occupation of Iraq in March 2003 was a lawsuit under the US
Freedom of Information Act brought by Sierra Club and Judicial Watch, initially
to find data on Cheney`s role in the California energy crisis. The suit
demanded that Vice President Cheney make public all documents and records of
meetings related to his 2001 Energy Task Force project.
The US Commerce Department in
summer 2003 ultimately released part of the documents, over ferocious Cheney
and White House opposition. Amid the files of the domestic US energy review
was, curiously enough, a detailed map of Iraqi oilfields, pipelines, refineries
and terminals, as well as two charts detailing Iraqi oil and gas projects, and
‘Foreign Suitors for Iraqi Oilfield Contracts.’ The ‘foreign suitors’ included
Russia, China and France, three UN Security Council members who openly opposed
granting the US UN approval for invading Iraq.
The first act of post-war
occupation by Washington was to declare null and void any contracts between the
Iraqi government and Russia, China and France. Iraqi oil was to be an American
affair, handled by American companies or their close cronies in Britain, the
first victory in the high-stakes quest, ‘where the prize ultimately lies.’
This was precisely what Cheney had
alluded to in his 1999 London speech. Get the Middle East oil resources out of
independent national hands and into US-controlled hands. The military
occupation of Iraq was the first major step in this US strategy. Control of
Russian energy reserves, however, was Washington`s ultimate ‘prize.’
De-construction of Russia: The ‘ultimate prize’
For obvious military and political
reasons, Washington could not admit openly that its strategic focus, since the
fall of the Soviet Union in 1991, had been the dismemberment or de-construction
of Russia, and gaining effective control of its huge oil and gas resources, the
‘ultimate prize.’ The Russian Bear still had formidable military means, however
dilapidated, and he still had nuclear teeth.
In the mid-1990s Washington began
a deliberate process of bringing one after the other former satellite Soviet
state into not just the European Union, but into the Washington-dominated NATO.
By 2004 Poland, the Czech Republic, Hungary, Estonia, Latvia, Lithuania, Bulgaria,
Romania, Slovakia and Slovenia all had been admitted into NATO, and the
Republic of Georgia was being groomed to join.
This surprising spread of NATO, to
the alarm of some in western Europe, as well as to Russia, had been part of the
strategy advocated by Cheney`s friends at the Project for the New American
Century, in their ‘Rebuilding America`s Defenses’ report and even before.
Already in 1996, PNAC member and
Cheney crony, Bruce Jackson, then a top executive with US defense giant,
Lockheed Martin, was head of the US Committee to Expand NATO, later renamed the
US Committee on Nato, a very powerful Washington lobby group.
The US Committee to Expand NATO
also included PNAC members Paul Wolfowitz, Richard Perle, Stephen Hadley and
Robert Kagan. Kagan`s wife is Victoria Nuland, now the US Ambassador to NATO.
From 2000 - 2003, she was a foreign policy advisor to Cheney. Hadley, a
hardline hawk close to Vice President Cheney, was named by President Bush to
replace Condoleezza Rice as his National Security Adviser.
The warhawk Cheney network moved
from the PNAC into key posts within the Bush Administration to run NATO and
Pentagon policy. Bruce Jackson and others, after successfully lobbying Congress
to expand NATO to Poland, the Czech Republic and Hungary in 1999, moved to
organize the so-called Vilnius Group that lobbied to bring ten more former
Warsaw Pact countries on Russia`s periphery into NATO. Jackson called this the
‘Big Bang.’
President Bush repeatedly used the
term ‘New Europe’ in statements about NATO enlargement. In a July 5, 2002
speech hailing the leaders of the Vilnius group, Bush declared, ‘Our nations
share a common vision of a new Europe, where free European states are united
with each other, and with the United States through cooperation, partnership,
and alliance.’
Lockheed Martin`s former
executive, Bruce Jackson, took credit for bringing the Baltic and other members
of the Vilnius Group into NATO. Testifying before the Senate Foreign Relations
Committee on April 1, 2003, Jackson claimed he originated the ‘Big Bang’
concept of NATO enlargement, later adopted by the Vilnius Group of Baltic and
Eastern European nations. As Jackson noted, his ‘Big Bang’ briefing ‘proposed
the inclusion of these seven countries in NATO and claimed for this enlargement
strategic advantages for NATO and moral (sic) benefits for the democratic
community of nations.’ On May 19, 2000 in Vilnius, Lithuania, these
propositions were adopted by nine of Europe`s new democracies as their own. It
became the objectives of the Vilnius Group. Jackson could also have noted the
benefits to US military defense industry, including his old cronies at Lockheed
Martin, with the creation of a vast new NATO arms market on the borders to
Russia.
Once that NATO goal was reached,
Bruce Jackson and other members of the NATO eastern expansion lobby, closed the
US Committee on Nato in 2003, and, seamlessly, in the very same office,
re-opened as a new lobby organization, the Project on Transitional Democracies,
which according to their own statement was ‘organized to exploit the
opportunities to accelerate democratic reform and integration which we believe
will exist in the broader Euro-Atlantic region over the next decade.’ In other
words, to foster the series of Color Revolutions and regime change across
Russian Eurasia. All three principals of the Project on Transitional
Democracies worked for the Republican Party, and Jackson and Scheunemann have
close ties with major military contractors, notably Lockheed Martin and Boeing.
Jackson and other PNAC and U.S.
Committee on NATO members also created a powerful lobby organization, the
Committee for the Liberation of Iraq (CLI). CLI`s advisory panel included
hardline Democrats such as Rep. Stephen Solarz and Sen. Robert Kerrey. It was
dominated by neo-conservatives and Republican Party stalwarts like Jeane
Kirkpatrick, Robert Kagan, Richard Perle, William Kristol, and former CIA
Director, James Woolsey. Serving as honorary co-chairs were Senators Joe
Lieberman (D-CT) and John McCain (R-AZ). Jackson related that friends in the
White House had asked him to create the CLI in 2002 to replicate the success he
had had pushing for NATO expansion through his US Committee on NATO by
establishing an outfit aimed at supporting the administration`s campaign to
convince Congress and the public to support a war. “People in the White House
said, ‘We need you to do for Iraq what you did for NATO’,” Jackson told
American Prospect magazine in a January 1, 2003 interview.
In brief, NATO encirclement of
Russia, Color Revolutions across Eurasia, and the war in Iraq, were all one and
the same American geopolitical strategy, part of a grand strategy to ultimately
de-construct Russia once and for all as a potential rival to a sole US
Superpower hegemony. Russia - not Iraq and not Iran - was the primary target of
that strategy.
During a White House welcoming
ceremony to greet the ten new NATO members in 2004, President Bush noted that
NATO`s mission now extended far beyond the perimeter of the alliance. ‘NATO
members are reaching out to the nations of the Middle East, to strengthen our
ability to fight terror, and to provide for our common security,’ he said. But
NATO`s mission now would extend beyond even global security. Bush added, ‘We`re
discussing how we can support and increase the momentum of freedom in the
greater Middle East.’ Freedom, that is, to come into the orbit of a
Washington-controlled NATO alliance.
The end of the Yeltsin era put a
slight crimp in the US plans. Putin began slowly and cautiously to emerge as a
dynamic national force, committed to rebuilding Russia, following the
IMF-guided looting of the country by a combination of Western banks and corrupt
Russian oligarchs.
Russian oil output had risen since
the collapse of the Soviet Union to the point that, by the time of the 2003 US
war on Iraq, Russia was the world`s second largest oil producer behind Saudi
Arabia.
The real significance of the Yukos Affair
The defining event in the new
Russian energy geopolitics under Vladimir Putin took place in 2003. It was just
as Washington was making it brutally clear it was going to militarize Iraq and
the Middle East, regardless of world protest or UN niceties.
A brief review of the spectacular
October 2003 arrest of Russia`s billionaire ‘oligarch’ Mikhail Khodorkovsky,
and state seizure of his giant Yukos oil group, is essential to understand
Russian energy geopolitics.
Khodorkovsky was arrested at
Novosibirsk airport on October 25, 2003, by the Russian Prosecutor General`s
office on charges of tax evasion. The Putin government froze shares of Yukos
Oil because of tax charges. They then took further actions against Yukos,
leading to a collapse in the share price.
What was little mentioned in
Western media accounts, which typically portrayed the Putin government actions
as a reversion to Soviet-era methods, was what had triggered Putin`s dramatic
action in the first place.
Khodorkovsky had been arrested
just four weeks before a decisive Russian Duma or lower house election, in
which Khodorkovsky had managed to buy the votes of a majority in the Duma using
his vast wealth. Control of the Duma was to be the first step by Khodorkovsky
in a plan to run against Putin the next year as President. The Duma victory
would have allowed him to change election laws in his favor, as well as to
alter a controversial law being drafted in the Duma, ‘The Law on Underground
Resources.’ That law would prevent Yukos and other private companies from
gaining control of raw materials in the ground, or from developing private
pipeline routes independent of the Russian state pipelines.
Khodorkovsky had violated the
pledge of the Oligarchs made to Putin, that they be allowed to keep their
assets - de facto stolen from the state in the rigged auctions under Yeltsin -
if they stayed out of Russian politics and repatriated a share of their stolen
money. Khodorkovsky, the most powerful oligarch at the time, was serving as the
vehicle for what was becoming an obvious Washington-backed putsch against
Putin.
The Khodorkovsky arrest followed
an unpublicized meeting earlier that year on July 14, 2003 between Khodorkovsky
and Vice President Dick Cheney.
Following the Cheney meeting,
Khodorkovsky began talks with ExxonMobil and ChevronTexaco, Condi Rice`s old
firm, about taking a major state in Yukos, said to have been between 25% and
40%. That was intended to give Khodorkovsky de facto immunity from possible
Putin government interference by tying Yukos to the big US oil giants and,
hence, to Washington. It would also have given Washington, via the US oil
giants, a de facto veto power over future Russian oil and gas pipelines and oil
deals. Days before his October 2003 arrest on tax fraud charges, Khodorkovsky
had entertained George H.W. Bush, the representative of the powerful and secretive
Washington Carlyle Group in Moscow. They were discussing the final details of
the US oil company share buy-in of Yukos.
Yukos had also just made a bid to
acquire rival Sibneft from Boris Berezovsky, another Yeltsin-era Oligarch.
Yukos/Sibneft, with 19.5 billion barrels of oil and gas, would then own the
second-largest oil and gas reserves in the world after ExxonMobil.
Yukos/Sibneft would be the fourth largest in the world in terms of production,
pumping 2.3 million barrels of crude oil a day. The Exxon or Chevron buy-up of
Yukos/Sibneft would have been a literal energy coup d´etat. Cheney knew it;
Bush knew it; Khodorkovsky knew it.
Above all, Vladimir Putin knew it
and moved decisively to block it.
Khodorkovsky had cultivated very
impressive ties to the Anglo-American power establishment. He created a
philanthropic foundation, the Open Russia Foundation, modeled on the Open
Society foundation of his close friend George Soros. On the select board of
Open Russia Foundation sat Henry Kissinger and Kissinger`s friend, Jacob Lord
Rothschild, London scion of the banking family. Arthur Hartman, a former US
Ambassador to Moscow, also sat on the foundation`s board.
Following Khodorkovsky`s arrest,
the Washington Post reported that the imprisoned Russian billionaire had
retained the services of Stuart Eizenstat - former deputy Treasury Secretary,
Undersecretary of State, Undersecretary of Commerce during the Clinton
Administration - to lobby in Washington for his freedom. Khodorkovsky was in
deep with the Anglo-American establishment.
Subsequent western media and
official protest about Russia`s return to communist methods and raw power
politics, conveniently ignored the fact that Khodorkovsky was hardly Snow White
himself. Earlier, Khodorkovsky had unilaterally ripped up his contract with
British Petroleum. BP had been a partner with Yukos, and had spent $300 million
in drilling the highly promising Priobskoye oil field in Siberia.
Once the BP drilling had been
done, Khodorkovsky forced BP out, using gangster methods that would be unlawful
in most of the developed world. By 2003 Priobskoye oil production reached 129
million barrels, equivalent to a value on the market of some $8 billions.
Earlier, in 1998, after the IMF had given billions to Russia to prevent a collapse
of the Ruble, Khodokorvosky`s Bank Menatep diverted an eye-popping $4.8 billion
in IMF funds to his hand-picked bank cronies, some US banks among them. The
howls of protest from Washington at the October 2003 arrest of Khodorkovsky
were disingenuous, if not outright hypocritical. As seen from the Kremlin,
Washington had been caught with its fat hand in the Russian cookie jar.
The Putin-Khodorkovsky showdown
signaled a decisive turn by the Putin government towards rebuilding Russia and
erecting strategic defenses from the foreign onslaught led by Cheney and friend
Tony Blair in Britain. It took place in the context of a brazen US grab for
Iraq in 2003 and of a unilateral Bush Administration announcement that the USA
was abrogating its solemn treaty obligations with Russia under their earlier
Anti-Ballistic Missile (ABM) Treaty, in order to go ahead with development of
US missile defenses, an act which could only be viewed in Moscow as a hostile
act aimed at her security.
By 2003, indeed, it took little
strategic military acumen to realize that the Pentagon hawks and their allies
in the military industry and Big Oil had a vision of a United States unfettered
by international agreements and acting unilaterally in its own best interests,
as defined, of course, by the hawks. Their recommendations were published by
one of the many Washington hawk conservative Think-Tanks. In January 2001 The
National Institute for Public Policy (NIPP) issued Rationale and Requirements
for U.S. Nuclear Forces and Arms Control, just as the Bush-Cheney
Administration began. The report, demanding a unilateral US end to nuclear
force reduction, was signed by 27 senior officials from past and current
administrations. The list included the man who today is Bush`s National
Security Adviser, Stephen Hadley; it included the special assistant to the
Secretary of Defense, Stephen Cambone, and it included Admiral James Woolsey,
the former head of CIA and chairman of the Washington NGO, Freedom House.
Freedom House played a central role in Ukraine`s US-sponsored ‘Orange
Revolution’ and all other ‘Color Revolutions’ across the former Soviet Union.
These events were soon followed by
the Washington-financed series of covert destabilizations of a number of
governments in Russia`s periphery which had been close to Moscow. It included
the November 2003 ‘Rose Revolution’ in Georgia which ousted Edouard
Shevardnadze in favour of a young, US-educated and pro-NATO President, Mikheil
Saakashvili. The 37-year-old Saakashvili had conveniently agreed to back the
Baku-Tbilisi-Ceyhan oil pipeline that would avoid Moscow pipeline control of
Azerbaijan`s Caspian oil. The United States has maintained close ties with
Georgia since President Mikheil Saakashvili has come to power. American
military trainers instruct Georgian troops and Washington has poured millions
of dollars into preparing Georgia to become part of NATO.
Following its Rose Revolution in
Georgia, Woolsey`s Freedom House, the National Endowment for Democracy (NED),
Soros Foundation and other Washington-backed NGOs organized the brazenly
provocative November 2004 Ukraine ‘Orange Revolution.’ The aim of the Orange
Revolution was to install a pro-NATO regime there under the contested
Presidency of Viktor Yushchenko, in a land strategically able to cut the major
pipeline flows from Russian oil and gas to Western Europe. Washington-backed
‘democratic opposition’ movements in neighboring Belarus also began receiving
millions of dollars of Bush Administration largesse, along with Kyrgystan,
Uzbekistan and more remote former Soviet states which also happen to form a
barrier between potential energy pipelines linking China with Russia and the
former Soviet states like Kazkhstan.
Again, energy and oil and gas
pipeline control lay at the heart of the US moves. Little wonder, perhaps, that
some people inside the Kremlin, notably Vladimir Putin, began to wonder if
Putin`s new born-again Texan partner-in-prayer, George W. Bush, was in fact
speaking to Putin with forked tongue, as the Indians would say.
By the end of 2004 it was clear in
Moscow that a new Cold War, this one over strategic energy control and
unilateral nuclear primacy, was fully underway. It was also clear from the
unmistakable pattern of Washington actions since the dissolution of the Soviet
Union in 1991, that End Game for US policy vis-à-vis Eurasia was not China, not
Iraq, and not Iran.
The geopolitical ‘End Game’ for
Washington was the complete de-construction of Russia, the one state in Eurasia
capable of organizing an effective combination of alliances using its vast oil
and gas resources. That, of course, could never be openly declared.
After 2003 Putin and Russian
foreign policy, especially energy policy, reverted to their basic response to
the ‘Heartland’ geopolitics of Sir Halford Mackinder, politics which had been
the basis of Soviet Cold War strategy since 1946.
Putin began to make a series of
defensive moves to restore some tenable form of equilibrium in face of the
increasingly obvious Washington policy of encircling and weakening Russia.
Subsequent US strategic blunders have made the job a bit easier for Russia.
Now, with the stakes rising on both sides - NATO and Russia – Putin`s Russia
has moved beyond simple defense to a new dynamic offensive, to secure a more
viable geopolitical position, using its energy as the lever.
Mackinder`s Heartland and
Brzezinski`s Chess Game
It`s essential to understand the
historic background to the term geopolitics. In 1904, an academic British
geographer named Halford Mackinder made an address before the Royal Geographic
Society in London which was to give the British Empire and later the United
States a roadmap to change history. In his speech, titled, ‘The Geographical
Pivot of History,’ Mackinder sought to define the relation between a nation`s or
region`s geography - its topography, relation to the sea or land, its climate -
with its politics and position in the world. He posited two classes of powers:
sea powers including Britain and the United States as well as Japan; and he
posited the large land powers of Eurasia, which, with development of the
railroad, were able to unite large land masses free from dependency on the
seas.
For Mackinder, an ardent Empire
advocate, the implicit lesson for continued hegemony of the British Empire
following the 1914-1917 World War, was to prevent at all costs a convergence of
interests between the nations of East Europe - Poland, Czechoslovakia,
Austria-Hungary - and the Russia-centered Eurasia ‘Heartland’ or ‘pivot’
land,as he termed it. After the Versailles peace talks, Mackinder summed up his
ideas in the following famous dictum:
Who
rules East Europe commands the Heartland;
Who
rules the Heartland commands the World-Island;
Who
rules the World-Island commands the world.
Mackinder`s Heartland was the core
area of Eurasia, and the World-Island was all of Eurasia, including Europe, the
Middle East and Asia. Great Britain, never a part of Continental Europe, he saw
as a separate naval or sea-power. The Mackinder geopolitical perspective shaped
Britain`s entry into the 1914 Great War, it shaped her entry into World War
Two. It shaped Churchill`s calculated provocations of an increasingly paranoid
Stalin, beginning 1943, to entice Russia into what became the Cold War.
From a US perspective, the
1946-1991 Cold War era was all about who shall control Mackinder`s
World-Island, and, concretely, how to prevent the Eurasian Heartland, centered
on Russia, from doing just that. A look at a polar projection map of US
military alliances during the Cold War makes the point: The Soviet Union had
been geopolitically contained and prevented from any significant linkup with
Western Europe or the Middle East or Asia. The Cold War was about Russian
efforts to circumvent that NATO-centered Iron Curtain.
Former US National Security
Adviser, Zbigniew Brzezinski, writing in the post-Soviet era in 1997, drew on
Mackinder`s geopolitics by name, in describing the principal strategic aim of
the United States to keep Eurasia from unifying as a coherent economic and
military bloc or counterweight to the sole superpower status of the United
States.
To understand US foreign policy
since the onset of the Bush-Cheney Presidency in 2001, therefore, it`s useful
to cite a revealing New York Council on Foreign Relations Foreign Affairs
article by Brzezinski from September/October 1997:
‘Eurasia is home to most of the
world`s politically assertive and dynamic states. All the historical pretenders
to global power originated in Eurasia. The world`s most populous aspirants to
regional hegemony, China and India, are in Eurasia, as are all the potential
political or economic challengers to American primacy. After the United States,
the next six largest economies and military spenders are there, as are all but
one of the world`s overt nuclear powers, and all but one of the covert ones.
Eurasia accounts for 75 percent of the world`s population, 60 percent of its
GNP, and 75 percent of its energy resources. Collectively, Eurasia`s
potential power overshadows even America`s.
‘Eurasia is the world`s axial supercontinent.
A power that dominated Eurasia would exercise decisive influence over two of
the world`s three most economically productive regions, Western Europe and East
Asia. A glance at the map also suggests that a country dominant in Eurasia
would almost automatically control the Middle East and Africa. With Eurasia now
serving as the decisive geopolitical chessboard, it no longer suffices to
fashion one policy for Europe and another for Asia. What happens with the
distribution of power on the Eurasian landmass will be of decisive importance
to America`s global primacy….’ (emphasis added-w.e.)
If we take the words of Washington
strategist Brzezinski and understand the axioms of Halford Mackinder as the
driving motive for Anglo, and later, American foreign policy for more than an
entire century, it begins to become clear why a reorganized Russian state under
the Presidency of Vladimir Putin has gone into motion to resist the overtures
and overt attempts at deconstruction being promoted by Washington in the name
of democracy. How has Putin acted to shore up Russian defenses? In a word:
energy.
Russian energy geopolitics
In terms of the overall standard
of living, mortality and economic prosperity, Russia today is not a world class
power. In terms of energy, it is a colossus. In terms of landmass it is still
the single largest nation in land area in the world, spanning from the Pacific
to the door of Europe. It has vast territory, vast natural resources, and it
has the world`s largest reserves of natural gas, the energy source currently
the focus of major global power plays. In addition, it is the only power on the
face of the earth with the military capabilities able to match that of the
United States despite the collapse of the USSR and deterioration in the
military since.
Russia has more than 130,000 oil wells and some 2000
oil and gas deposits explored of which at least 900 are not in use. Oil
reserves have been estimated at 150 billion barrels, similar perhaps to Iraq.
They could be far larger but have not yet been exploited owing to difficulty of
drilling in some remote arctic regions. Oil prices above $60 a barrel begin to
make it economical to explore in those remote regions.
Currently Russian oil products can
be exported to foreign markets in three routes: Western Europe via the Baltic
Sea and Black Sea; Northern route; Far East to China or Japan and East Asian
markets. Russia has oil terminals on the Baltic at St. Petersburg for oil and a
newly expanded oil terminal at Primorsk. There are added oil terminals under
construction at Vysotsk, Batareynaya Bay and Ust-Luga.
Russia`s state-owned natural gas
pipeline network, its so-called ‘unified gas transportation system’ includes a
vast network of pipelines and compressor stations extending more than 150,000
kilometers across Russia. By law only the state-owned Gazprom is allowed to use
the pipeline. The network is perhaps the most valued Russian state asset
outside the oil and gas itself. Here is the heart of Putin`s new natural gas
geopolitics and the focus of conflict with western oil and gas companies as
well as the European Union, whose Energy Commissioner, Andras Piebalgs, is from
new NATO member Latvia, formerly part of the USSR.
In 2001, as it became clear in
Moscow that Washington would find a way to bring the Baltic republics into
NATO, Putin backed the development of a major new oil port on the Russian coast
of the Baltic Sea in Primorsk at a cost of $2.2 billion. This project, known as
the Baltic Pipeline System (BPS), greatly lessens export dependency on Latvia,
Lithuania and Poland. The Baltic is Russia`s main oil export route, carrying
crude oil from Russia›s West Siberian and Timan-Pechora oil provinces westward
to the port of Primorsk in the Russian Gulf of Finland. The BPS was completed
in March 2006 with capacity to carry more than1.3 million barrels/day of
Russian oil to western markets in Europe and beyond.
The same month, March 2006, former
German Chancellor Gerhard Schroeder was named chairman of a Russian-German
consortium building a natural gas pipeline going some 1,200 km under the Baltic
Sea. Majority shareholder in this North European Gas Pipeline (NEGP) project,
with 51%, is the Russian state-controlled Gazprom, the world`s largest natural
gas company. The German companies BASF and E.On each hold 24.5%. The project,
estimated to cost €4.7 billion, was started late 2005 and will connect the gas
terminal at the Russian port city of Vyborg on the Baltic near St. Petersburg
with the Baltic city of Greifswald in eastern Germany. The Yuzhno-Russkoye gas
field in West Siberia will be developed in a joint venture between Gazprom and
BASF to feed the pipeline. It was Gerhard Schroeder`s last major act as
Chancellor, and provoked howls of protest from the pro-Washington Polish
government, as well as Ukraine, who both stood to lose control over pipeline
flows from Russia. Despite her close ties to the Bush Administration,
Chancellor Angela Merkel has been forced to swallow hard and accept the
project. Germany`s industry is simply dependent on the Russian energy import.
Russia is by far the largest supplier of natural gas to Germany.
The giant Shtokman gas deposit in
the Russian sector of the Barents Sea, north of the Murmansk harbor, will
ultimately also be a part of the gas supply of the NEGP. When completed in two
parallel pipelines, NEGP will supply Germany up to 55 billion cubic meters more
a year of Russian gas.
In April 2006 the Putin government
announced the first stage of construction of the East Siberia-Pacific Ocean
Pipeline (ESPO), a vast oil pipeline from Taishet in the Irkutsk Region near
Lake Baikal in East Siberia, to Perevoznaya Bay on Russia`s Pacific Ocean
coast, to be built at a cost of more than $11.5 billion. Transneft, the Russian
state-owned pipeline company will build it. When finished, it will pump up to
1.6 million barrels/day from Siberia to the Russian Far East and from there on
to the energy-hungry Asia-Pacific, mainly to China. The first stage is due to
be completed by end of 2008. In addition, Putin has announced plans to
construct an oil refinery on the Amur River near the China border in Russia`s
Far East to allow sale of refined product to China and Asian markets. Presently
the Siberian oil can only be delivered to the Pacific via rail.
For Russia, the Taishet to
Perevoznaya route will maximize its national strategic benefits while taking
oil exports to China and Japan into account at the same time. In the future,
the country will be able to export oil to Japan directly from the Nakhodka
Port. Oil-import-dependent Japan is frantic to find new secure oil sources
outside the unstable Middle East. The ESPO can also supply oil to the Republic
of Korea and the Democratic People`s Republic of Korea through building from
Vladivostok branch lines leading to the two countries and to China via a branch
pipe between Blagoveshchensk and Daqing. The Taishet route provides a clear
roadmap for energy cooperation between Russia and China, Japan and other
Asia-Pacific countries.
Sakhalin: Russia reins in Big Oil
In late September 2006 a seemingly
minor dispute exploded and resulted in the revocation of the environmental
permit for Royal Dutch Shell`s Sakhalin II Liquified Natural Gas project, which
had been due to deliver LNG to Japan, South Korea and other customers by 2008.
Shell is lead energy partner in an Anglo-Japanese oil and gas development
project on Russia`s Far East island of Sakhalin, a vast island north of
Hokkaido Japan.
At the same time, the Putin
government announced environmental requirements had also not been met by
ExxonMobil for their De Kastri oil terminal built on Sakhalin as part of its
Sakhalin I oil and gas development project. Sakhalin I contains an estimated 8
billion barrels of oil and vast volumes of gas, making the field a rare
Super-Giant oil find, in geologists` terminology.
In the early 1990s the Yeltsin
government made a desperation bid to attract needed investment capital and
technology into exploiting Russian oil and gas regions at a time the government
was broke and oil prices very low. In a bold departure, Yeltsin granted US and
other western oil majors generous exploration rights to two large oil projects,
Sakhalin I and Sakhalin II. Under a so-called PSA or Production Sharing
Agreement, ExxonMobil, lead partner of the Sakhalin I oil project, got tax-free
Russian concessions.
Under the terms of the PSAs,
typical between major Anglo-American oil majors and weak Third World countries,
Russia`s government would instead get paid for the oil and gas rights in a
share of eventual oil or gas produced. But the first drops of oil to Russia
would flow only after all project production costs had first been covered. PSAs
were originally developed by Washington and Big Oil to facilitate favorable
control by the oil companies of large oil projects in third countries. The
major US oil giants, working with the James Baker`s James Baker Institute,
which drafted Dick Cheney`s 2001 Energy Task Force Review, used the PSA form to
regain control over Iraq`s oil production, hidden behind the façade of an Iraqi
state-owned oil company.
Shortly before the Russian
government told ExxonMobil it had problems with its terminal on Sakhalin,
ExxonMobil had announced yet another cost increase in the project. ExxonMobil,
whose attorney is James Baker III, and which is a close partner to the
Cheney-Bush White House, announced a 30% cost increase, something that would
put even further off any Russian oil flow share from the PSA. The news came on
the eve of ExxonMobil plans to open an oil terminal at De Kastri on Sakhalin.
The Russian Environment Ministry and the Agency for Subsoil Use suddenly
announced the terminal did ‘not meet environmental requirements` and is
reportedly considering halting production by ExxonMobil as well.
Britain`s Royal Dutch Shell under
another PSA holds rights to develop the oil and gas resources in Sakhalin II
region, and build Russia`s first Liquified Natural Gas project. The $20 billion
project, employing over 17,000 people, is 80% complete. It`s the world`s
largest integrated oil and gas project, and includes Russia`s first offshore
oil production, as well as Russia`s first offshore integrated gas platform.
The clear Russian government moves
against ExxonMobil and Shell have been interpreted in the industry as an
atttempt by the Putin government to regain control of Russian oil and gas
resources it gave away during the Yeltsin era. It would cohere with Putin`s
emerging energy strategy.
Russia-Turkey Blue Stream gas
project
In November 2005 Russia`s Gazprom completed
the final stage of its 1,213 kilometer $3.2 billion Blue Stream gas pipeline.
The project brings gas from its gas fields in Krasnodar, then by underwater
pipelines across the Black Sea to the Durusu Terminal near Samsun on the
Turkish Black Sea coast. From there the pipeline supplies Russian gas to
Ankara. When it reaches full capacity in 2010 it will carry an estimated 16
billion cubic meters gas a year.
Gazprom is now discussing transit
of Russian gas to the countries of South Europe and East Mediterranean,
including based on new contracts and new volumes of gas. Greece, South Italy
and Israel all are in some form of negotiation with Gazprom to tap gas from the
Blue Stream pipeline across the territory of Turkey. A new route for the gas
supply is being developed now - the one via the countries of East and Central
Europe. The interim title of the project is the South-European Gas Pipeline.
The main issue here is to establish a new gas transmission system, both from
Russian origin and from the third countries.
In sum, not including the emerging
potentials of Gazprom`s entry into the fast-developing Liquified Natural Gas
markets globally, energy, oil and gas and nuclear, is firmly at the heart of
Russian attempts to build new economic alliance partners across Eurasia in the
coming showdown with the United States.
US plans for ‘Nuclear Primacy’
The key to the ability of Putin`s
Russia to succeed is its ability to defend its Eurasian energy strategy with a
credible military deterrent, to counter now-obvious Washington military plans
for what the Pentagon terms Full Spectrum Dominance.
In a revealing article titled ‘The
Rise of US Nuclear Primacy,’ in the March/April 2006 Foreign Affairs, the
magazine of the New York Council on Foreign Relations, authors Kier Lieber and
Daryl Press made the following claim,
‘Today, for the first time in
almost 50 years, the United States stands on the verge of attaining nuclear
primacy. It will probably soon be possible for the United States to destroy the
long-range nuclear arsenals of Russia or China with a first strike. This
dramatic shift in the nuclear balance of power stems from a series of
improvements in the United States› nuclear systems, the precipitous decline of
Russia›s arsenal, and the glacial pace of modernization of China›s nuclear
forces. Unless Washington›s policies change or Moscow and Beijing take steps to
increase the size and readiness of their forces, Russia and China -- and the
rest of the world -- will live in the shadow of U.S. nuclear primacy for many
years to come.’
The US authors claim, accurately,
that since the collapse of the Soviet Union in 1991, Russia`s strategic nuclear
arsenal has ‘sharply deteriorated.’ They also conclude that the United States
is and has been for some time, intentionally pursuing global nuclear primacy.
The September 2002 Bush Administration National Security Strategy explicitly
stated that it was official US policy to establish global military primacy, an
unsettling thought for many nations today given the recent actions of
Washington since the events of September, 2001.
One of Defense Secretary
Rumsfeld`s priority projects has been the multi-billion dollar construction of
a US missile defense. It has been sold to American voters as a defense against
possible terror attacks. In reality, as has been openly recognized in Moscow
and Beijing, it is aimed at the only two real nuclear powers, Russia and China.
As the Foreign Affairs article
points out, ‘the sort of missile defenses that the United States might
plausibly deploy would be valuable primarily in an offensive context, not a
defensive one -- as an adjunct to a U.S. first-strike capability, not as a
stand-alone shield. If the United States launched a nuclear attack against
Russia (or China), the targeted country would be left with a tiny surviving
arsenal -- if any at all. At that point, even a relatively modest or
inefficient missile-defense system might well be enough to protect against any
retaliatory strikes, because the devastated enemy would have so few warheads
and decoys left.
In the context of a United States
which has actively moved the troops of its NATO partners into Afghanistan, now
Lebanon, and which is clearly backing the former USSR member Georgia, today a
critical factor in the Caspian Baku-Tbilisi-Ceyhan Turkey oil pipeline, in
Georgia`s move to join NATO and push Russian troops away, it is little surprise
that Moscow might be just a bit uncomfortable with the American President`s
promises of spreading democracy through a US-defined Greater Middle East. The
invented term, Greater Middle East is the creation of various Washington
think-tanks close to Cheney including his Project for the New American Century,
to refer to the non-Arabic countries of Turkey, Iran, Israel, Pakistan,
Afghanistan, Central Asian (former USSR) countries, and Azerbaijan, Georgia and
Armenia. At the G-8 Summit in Summer 2004 President Bush first officially used
the term to refer to the region included in Washington`s project to spread
‘democracy’ in the region.
On October 3, the Russian Foreign
Ministry warned that Russia would ‘take appropriate measures’ should Poland
deploy elements of the new US missile defense system. Poland is now a NATO
member. Its Defense Minister, Radek Sikorski was a former Resident in
Washington at Richard Perle`s hawkish AEI think-tank. He was also Executive
Director of the New Atlantic Initiative, a project designed to bring the former
Warsaw Pact countries of eastern Europe into NATO under the guise of spreading
democracy. The United States is also building, via NATO, a European Missile
Defense System.
The only conceivable target of
such a system would be Russia in the sense of enabling a US first strike
success. Completion of the European missile defense system, the militarization
of the entire Middle East, the encirclement of Russia and of China from a
connected web of new US military bases, many put up in the name of the War on
Terror, all now appear to the Kremlin as part of a deliberate US strategy of
Full Spectrum Dominance. The Pentagon refers to it also as ‘Escalation
Dominance,’ the ability to win a war at any level of violence, including a
nuclear war.
Moscow`s military status
Moscow has not been entirely
passive in the face of this growing reality. In his May 2003 State of the
Nation Address, Vladimir Putin spoke of strengthening and modernizing Russia`s
nuclear deterrent by creating new types of weapons, including for Russia`s
strategic forces, which will ‘ensure the defense capability of Russia and its
allies in the long term.’ Russia stopped withdrawing and destroying its SS-18
MIRVed missiles once the Bush Administration unilaterally declared an end to
the Anti-Ballistic Missile Treaty, and its de facto annulling of the Start II
Treaty.
Russia never stopped being a
powerful entity that produced state-of-the-art military technologies -- a trend
that continued from its inception as a modern state. While its army, navy and
air force are in derelict conditions, the elements for Russia›s resurgence as a
military powerhouse are still in place. Russia has been consistently fielding
top-notch military technology at various international trade shows, and has
been effective in the demonstration of its capabilities.
In spite of financial and economic
difficulties, Russia still produces state-of-the-art military technologies,
according to a 2004 analysis by the Washington-based think tank, Power and
Interest News Report (PINR). One of its best achievements after the dissolution
of the Soviet Union has been its armored fighting vehicle BMP-3, which has been
chosen over Western vehicles in contracts for the United Arab Emirates and
Oman.
Russia›s surface-to-air missile
systems, the S-300, and its more powerful successor, the S-400, are reported to
be more potent than American-made Patriot systems. The once-anticipated
military exercise between the Patriot and the S-300 never materialized, leaving
the Russian complex with an undisputed, yet unproven, claim of superiority over
the American system. Continuing this list is the Kamov-50 family of military
helicopters that incorporate the latest cutting-edge technologies and tactics,
making them an equal force to the best Washington has. European helicopter
industry sources confirm this.
In recent joint Indo-American air
force exercises, where the Indian Air Force was equipped with modern
Russian-made Su-30 fighters, the Indian Air Force out-maneuvered American-made
F-15 planes in a majority of their engagements, prompting US Air Force General
Hal Homburg to admit that Russian technology in Indian hands has given the US
Air Force a ‘wake-up call.’ The Russian military establishment is continuing to
design other helicopters, tanks and armored vehicles that are on par with the
best that the West has to offer.
Weapons export, in addition to oil
and gas, has been one of the best ways for Russia to earn much-needed hard
currency. Already, Russia is the second-largest worldwide exporter of military
technology after the United States. As reported in various magazines, journals
and periodicals, at present, Russia›s modern military technology is more likely
to be exported than supplied to its own armies due to the existing financial
constraints and limitations of Russia›s armed forces. This has implications for
America›s future combat operations since practically all insurgent, guerrilla,
breakaway or terrorist armed formations across the globe -- the very formations
that the United States will most likely face in its future wars -- are fielded
with Russian weapons or its derivatives.
Russian nuclear arsenal has played
an important political role since the end of the Soviet Union, providing
fundamental security for the Russian state. After a bitter intra-services fight
within the Russian General Staff which lasted from 1998 to 2003, the General
Staff realized along with the Defense Ministry that a further policy of neglect
of nuclear forces in favor of funding rebuilding conventional forces in the
face of tight budget constraints, was not tolerable. In 2003 Russia had to buy
from Ukraine strategic bombers and ICBMs warehoused there. Since then strategic
nuclear forces have been a priority. Today, the finances of the Russian state,
thanks largely to high prices of oil and gas exports, are on a strong footing.
The Russian Central Bank has become one of the five largest dollar reserve
holders with reserves of more than $270 billions.
The material foundation of the
Russian military is its defense industry. After 1991 the Russian Federation
inherited the bulk of the Soviet defense industrial complex.
Today, with little fanfare, the US
is building up its influence and military presence in the Middle East despite a
general draw-down in its military commitments and expenditure. It is putting
huge resources into the periphery countries of the Russian Heartland of
Eurasia. Why? Oil is a large part of the answer. But oil seen in geopolitical
terms. The ultimate game, and the stakes are the highest, is to render
permanently impotent the Eurasian land power, Russia, to control its access to
the seas and to China - just as Mackinder argued. The push for a US ‘nuclear
primacy’ over Russia is the factor in world politics today which has the most
potential for bringing the world into a World War III, a nuclear conflagration
by miscalculation.
The Shanghai Co-operation
Organization (SCO), founded several years ago by Russia and China to bring
together select Eurasian countries for common dialogue. Founded in June 2001 by
China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan, its stated
goal initially was to facilitate ‘cooperation in political affairs, economy and
trade, scientific-technical, cultural, and educational spheres as well as in
energy…’ Iran`s Ahmadinejad was invited as an honored observer last June and
Iran is being encouraged by Russia and China to join SCO. Today SCO remains on
the surface rather a rather amorphous discussion forum. Given a bit more
provocation from Washington and NATO, that could change rapidly into the core
of a broader Eurasian military and energy alliance to counter-weigh US nuclear
primacy. The nightmare of Halford Mackinder would be fulfilled, ironically,
owning largely to the unilateral and aggressive foreign policy of an
over-confident United States.
The basic argument of the
Mackinder`s geopolitics is still relevant: ‘The great geographical realities
remain: land power versus sea power, heartland versus rimland, centre versus
periphery...’ This Russia understands every bit as much as Washington.