Your trusted source

By Eric Draitser
From RT

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.