The pipe as the price of aggression. The fate of Nord Stream 2 is in doubt (Radio Liberty Interview with Paul Gregory)

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The future of the Nord Stream 2 gas pipeline will be in question if Moscow does not make serious concessions. 

At best, its commissioning will take place in June next year and only if Russia fulfills the preconditions that will prevent the Kremlin from using this pipeline as an instrument of political and economic pressure. Such a forecast in the Washington edition of The Hill is made by Professor Emeritus of the University of Houston, researcher at the German Institute for Economic Research, economist Paul Gregory.

According to Paul Gregory, the first statements by members of the new coalition government of the Federal Republic of Germany, where the majority were Social Democrats, sounded partly sensational. Germany's new foreign minister, Annalena Berbock , a Green Party spokeswoman long known for her skepticism about Nord Stream 2, announced in a Sunday television interview that the new pipeline could not be operational as members of the government coalition believe it does not meet the requirements of European energy legislation. A few days ago, the new German chancellor Olaf Scholz in response to a question whether Nord Stream 2 could be used as an instrument of pressure on the Kremlin to prevent a possible Russian invasion of Ukraine, he said that such a move by Moscow would have consequences, which, according to Paul Gregory, means that the Kremlin will have to pay with Nord Stream 2 in the event of an attack on Ukraine.

If the new German government demands that Russia comply with all the requirements of European energy legislation, then the operating conditions of the new gas pipeline may be unacceptable for Gazprom and the Kremlin, Paul Gregory explained to Radio Liberty:

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- The problem for Gazprom is that if it is forced to comply with these requirements, the competitiveness of Nord Stream 2 will plummet. Gazprom will not be able to act as a producer and supplier of gas. He will have to allocate a certain share of the capacity of his gas pipelines to transport competitors' products. All rates must be made public. From my point of view, these conditions are unacceptable for Gazprom. I assumed that Germany might allow, roughly speaking, a shell company to take over the transportation of gas in order to separate producer and supplier. The new German government, apparently, will not allow this. Among other things, the start-up of the gas pipeline must be approved by the European Commission, which initially opposed this project,

Meeting European conditions will not only reduce the potential profitability of Nord Stream 2, but, more importantly for the Kremlin, prevent it from using the pipeline as a political tool, says Paul Gregory:

- The use of Nord Stream 2 as an instrument of pressure in the event of meeting European requirements will be impossible, and in fact it was conceived in many respects in order to exclude Ukraine as a transit country for Russian natural gas. The capacity of Nord Stream 2 is close to the capacity of gas pipelines passing through the territory of Ukraine. Russia, of course, needs the money it can get by putting into operation a new gas pipeline, but I think the ability to use gas as an instrument of pressure is still more important for it.

According to Paul Gregory, the current US sanctions and the possibility of new sanctions also continue to pose a serious problem for Nord Stream 2:

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- The Senate is very decisive about the sanctions against the gas pipeline. And now there is a struggle between the Senate and the administration, which, as you know, has decided not to subject the pipeline operator to sanctions. But the existing sanctions are very tangible for Gazprom, because any European company related to Nord Stream 2 is in constant danger, it could become the target of US sanctions. This threat is taken seriously by any business.

It is possible that in these new conditions, the future of Nord Stream 2 will be in question, says Paul Gregory:

- In my opinion, we can say that the fate of the gas pipeline is in question. So far, there is no answer to the question of whether it will be possible to start its operation in June 2022 or the process of obtaining final approval for its launch will drag on for several years. If I had been asked this question two weeks ago, I would have answered in the affirmative: yes, it will be launched in June. But the picture was radically changed by the comments of representatives of the new government coalition in Germany, although it has been in power for only a few days, so it is too early to draw final conclusions, says Paul Gregory.

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  Yuri Zhigalkin

  ZhigalkinY@rferl.org

Have Greens and European bureaucrats outsmarted Putin?

Now the bombshell: In her Sunday appearances on national TV, Baerbock declared that Nord Stream 2 could not become operational because, according to coalition agreements, the undersea pipeline was not consistent with European energy law. Hence, per Baerbock, Nord Stream 2 cannot be approved because it does not meet the decoupling, transparency, and capacity-sharing required by the EU’s Gas Directive. Who would have thought that the Social Democrats and Greens would be Ukraine’s savior?

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Biden No Match for Putin

 

The December 7 virtual summit between President Joe Biden and Russian President Vladimir Putin proved (as expected) an uneven match. According to the short White House readout, Biden threatened Russia with “strong economic and other measures” in the event of military escalation and reiterated his support for Ukraine’s sovereignty and territorial integrity. (There was no mention of sanctions for Russia’s use of soft power to overthrow the democratically elected government of Ukraine).  In contrast, the virtual summit format gave Putin free reign to mount an uninterrupted 700-word full-throated attack on the West. Putin’s “frank” indictment of Ukraine, NATO, and the US was meant for his domestic audience and for those many in the West ambivalent towards Ukraine.  At no time in the two-hour discussion did Biden attempt to rebut any of Putin’s charges, no matter how outrageous.  With the attention of the world focused on the Russian build up on the Ukrainian border, Biden passed on the opportunity to present a clear account of his side of the case. Perhaps Biden is unclear as to what his “side” really is.

The two sides disagreed even on why the virtual summit was called. Per Biden, the summit was called to address the Russian threat to Ukraine. Putin claimed the main topics were the “the internal Ukrainian crisis and the lack of progress in the implementation of the Minsk agreements… which are the uncontested basis for a peaceful settlement.” Putin proceeded to complain about “the destructive line of Kiev, aimed at completely dismantling the Minsk agreements.” He also condemned “Kiev's provocative actions against Donbass." So Ukraine is the real threat not the 100,000 troops poised on Ukraine’s border. It would not be hard for Biden to have rebutted this claim.

So we learn from Putin’s summit monologue that the true aggressors are NATO and the United States. Ukraine is merely a puppet, but a dangerous one that has no claim to legitimacy. Given the alleged imminent threat facing Russia, Putin contends that the West should offer guarantees that would rule out NATO expansion to the east. (I guess the Swedish and Dutch armies should stand down with no invasion of Russia in the works.)

The Russian press release briefly mentions Biden’s "allegedly" threatening "nature of the movements of Russian troops near the Ukrainian borders and outlined sanctions measures that the United States and its allies would be ready to apply in case of further escalation of the situation.” Putin’s response is that NATO is the threat in its “dangerous attempts to conquer Ukrainian territory and building up its military potential at our borders.”

The Russian Interfax release characterized the conversation as “frank and businesslike" Both presidents agreed to instruct their representatives to enter into substantive consultations on these sensitive issues. Good luck.

After the summit’s conclusion, Biden sent out spokespersons to clarify that he meant business. The new sanctions could include the newly-completed Nord Stream 2 pipeline. The Kremlin meanwhile took advantage of Biden’s ambiguity by claiming that both presidents agreed to negotiate the status of Ukraine and that NATO's growing ties with Ukraine and the possibility of the alliance deploying missiles targeted against Russia there represent a "red line" that cannot be crossed.

The key takeaways from the December 7 summit are: First, we must recognize that the two sides are separated by a Grand-Canyon-like chasm. Second, the differences are too great for a political solution, unless the West decides to capitulate. Third, even in the case of capitulation, the Russian side cannot be counted on to live up to its side of the agreement.  (If it is agreed that Ukraine must remain neutral, Russia will proceed to destroy all politically neutral forces in Ukraine). Fourth, we cannot afford to have summits that allow Putin free reign to tell his version of truth unrebutted. We now see that Biden is clearly not up to the task. Let’s hope he gives up on the idea of personal diplomacy.

Why should Putin invade, when Ukraine can be destroyed from within — with help from its 'friends'?

When Biden zooms with Putin on Tuesday, he will see that Putin holds all the cards — and he only a pair of deuces, in the form of sending enough lethal military equipment to Ukraine to raise the cost to Putin of a military invasion.

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What to Make of the Intelligence Failure Over the Steele Dossier?

At the time (January 13, 2007), I expected the intelligence community to reach the same conclusion as I that the Steele Dossier was pure garbage. All that would be required was for them to observe general rules of intelligence collection. I was wrong then. To my alarm, the FBI was taking the fake dossier seriously. We are still waiting for some kind of disavowal of the dossier from our masters of intelligence.

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Where are Biden and Merkel's sanctions against Putin's gas weapon?

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In July, President Joe Biden and German Chancellor Angela Merkel agreed to reimpose sanctions if Vladimir Putin used gas as a “geopolitical weapon.” This agreement constituted a concession in return for Biden’s waiver of sanctions on Nord Stream 2, which allowed its completion. Merkel had already vouched for continued gas deliveries through Ukraine — a questionable pledge from a politician leaving office.

Despite these Biden-Merkel assurances, Putin’s Kremlin has engaged in undisguised blackmail to render Europe hostage to Russia’s gas monopoly, Gazprom. Putin’s blackmail aims to force the speedy certification of Gazprom’s Nord Stream 2 pipeline by delivering less gas to Europe. Putin’s ultimate goal: Destroy the European Union’s competitive and transparent energy market.

Ukraine Finds Cold Comfort in Biden's White House

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In the United States’ perennial quest for allies who share goals and contribute their fair share toward security, Ukraine is an exceptional bargain. This was perhaps the most important message that President Volodymir Zelenskiy carried with him to Washington last week in his face-to-face meeting with President Biden. Time will tell whether his message sinks in.

The United States has not had the best of experiences with choosing allies over the years. In Asia, Africa, and Latin America, Washington often has thrown in its lot with unsavory partners. In recent weeks, as Afghan forces collapsed despite the billions of dollars spent to train and equip them, it again became clear that lavish military aid buys neither friendly, stable governments nor territorial integrity. And within NATO, partner nations seem to want the American security blanket without always paying their dues or developing serious military forces of their own.

Zelenskiy, therefore, should have earned a warm reception from the Biden administration at the long-awaited Washington summit. Instead, he was received as a supplicant from a country characterized as paralyzed by corruption. The forty-three-year-old former TV actor, in his third year of office and first Washington visit, had come to America to counter Ukraine’s more-than-half-empty image in Washington.

A Green Light for Russian Hegemony

 As Nord Stream 2 deliveries replace those through Ukraine, Europe too loses its main lever against Russian military action. If Russian or Russian surrogate forces make a move, say, to create a land bridge connecting the separatist eastern Donbas region with Crimea, will Germany and Europe turn off Nord Stream 2 and plunge into recession? Or will European leaders beat their chests, issue diplomatic protests, recall ambassadors, and ratchet up sanctions while Putin pockets his latest territorial prizes, his flow of revenue secure?

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Biden gives Putin the Nord Stream prize and gets nothing in return

 

Former Putin advisor Andrei Illarionov points out the enormous political leverage that Nord Stream 2 will bestow on Russia’s Gazprom: Come winter, there can be service interruptions that threaten customers that oppose Russian policies; others may be favored in terms of price and delivery if they bend to Putin’s rule. Russia can continue to squeeze Ukrainian territory, while its European gas customers keep quiet.

It is notable that the Biden decision comes at the right political moment for Nord Stream 2. With a national election scheduled for September, Merkel retiring and scandals threatening the traditional German ruling coalition, the resurgent German Green Party seems scheduled for significant gains. Perhaps there will even be a Green chancellor, or a Green foreign or economics minister. In such a case, the official policy of Germany would turn against Nord Stream 2.

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Is Biden Trying To Sell Nord Stream 2 Approval As A Green Energy Initiative?

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Western powers often characterize Russia as a rogue state with nuclear weapons and a military disproportionate to its frail economy. Russia is the largest supplier of raw materials to the world economy. Its president, Vladimir Putin, does not let a trouble-making opportunity go to waste.

The new Biden administration has the responsibility of dealing with Russia that has forcibly changed Europe’s boundaries (Crimea), initiated a “separatist” war in East Ukraine, quasi-annexed parts of Georgia, shot down a passenger plane (MH17), intervened in Syria on behalf of Bashar Assad, interfered with foreign elections, assassinated regime opponents at home and abroad, kidnapped sailors in international waters and denied freedom of navigation on the Black and Azov Seas.

But Ukraine remains at the heart of Washington’s Putin Problem.

After Ukraine unseated its pro-Russian president in 2014 to pursue a policy of integration into the West, Putin has sought to unravel a democratic Ukraine through his proxy war in “separatist” Donetsk (DNR) and Luhansk (LNR) “peoples’ republics,” both governed by Moscow viceroys. The Kremlin’s propaganda campaign claims that Ukraine never has and never will be a nation, that it is run by crooks, neo-Nazis, and extremists who victimize Russian speakers.

In a word, the Kremlin hopes to convince the West that Ukraine is not worthy of support. Putin is now directing this message at President Joe Biden and his inner circle, perhaps with some success.

The West has had almost a decade to learn how to deal with Russia. Its preferred instrument has been sanctions to punish Russia for specific criminal acts, such as the shooting down of MH17 in July of 2014 or the poisoning and imprisonment on sham charges of Putin opponent Aleksei Navalny. The Trump administration, joined by the European Union, also levied stiff sanctions on companies associated with the new undersea pipeline (Nord Stream 2) from Russia to Germany. Nord Stream 2 would replace the Ukrainian pipeline network that has transported Russian gas to Europe through Central Europe for decades.

The West imposes sanctions on Russia as an incentive to improve behavior. If Russia were to, for example, admit guilt for shooting down MH17 and compensate relatives or release Navalny, the associated sanctions would be lifted.

So far, this strategy has not worked.

The Western world had every reason to expect that the new Biden administration would impose tough new sanctions on Nord Stream 2. After all, Biden publicly declared Nord Stream 2 “a bad deal for Europe” after declaring that Putin is a “killer.” Moreover, Biden let it be known that new sanctions for the Navalny affair were in the works.

To nearly everyone’s surprise the Biden administration announced on May 19 that it was waiving Nord Stream 2 sanctions, despite the fact that a strong bipartisan Senate majority supports new sanctions.

Biden’s stated rationale for clearing the way for the completion of Nord Stream 2: Trump, as President, damaged Washington-Berlin relations by criticizing Germany harshly for not meeting its commitments to NATO. Hence, the US should repair relations with their most important ally by supporting Angela Merkel through the Nord Stream 2 deal before she leaves office in September. Already gas production in European Union is declining, with Germany alone expected to increase consumption of natural gas by 20 Bcm by 2034 to 110 Bcm. The Nord Stream 2 pipeline under the Baltic would effectively bring more supply from reserves in Russia to Germany as well as to other countries in the EU. German officials project the pipeline o lower gas prices by 13% and allow Germany to decommission all nuclear power plants and coal plants by 2038 – as called for by Germany’s Energiewende.

By contrast, much of the EU, despite the opportunity to reap economic and environmental benefits of the Nord Stream 2 gas pipeline fear it as an instrument of Russian domination. As well, following Merkel’s departure in September, elections may usher in a change in Germany’s position on Nord Stream 2.

Without a doubt the big winner from Biden’s decision is Moscow. The big loser is Ukraine and the Kyiv-Washington relationship.

Vladimir Socor of the Jamestown Foundation regrets the loss of western credibility in Ukraine, and a perceived “downgrading of Ukraine on the scale of Western policy priorities” taken in deference to Russia, in particular the exemption of Nord Stream 2.

Ukraine understands that timing was not a coincidence. The waiver announcement was made on the day of the Blinken-Lavrov meeting to prepare for the Biden-Putin summit scheduled for June 19 in Geneva. Nord Steam 2, Ukraine believes, is Biden’s gift to Putin to entice him to the Geneva summit.

Ukraine reacted in a burst of diplomatic fury to what it perceived as the Biden betrayal. Washington did not even extend the courtesy of advance notice of the upcoming Nord Stream 2 waiver.  Ukraine President Volodymyr Zelenskiy characterized the lifting of sanctions on Nord Stream 2 as a “defeat of the United States, a personal defeat of President Biden in terms of standing up to Russia […] a major Russian geopolitical victory, and a redistribution of power and influence [in Europe].” Zelenskiy went on to declare to be “personally worried about possible tradeoffs” at the Biden-Putin summit adversely affecting Ukraine.

The former Ukrainian foreign minister, Pavlo Klimkin, declaring that the US decision came as “a blow to the gut” to Ukraine and that “any signs of a crisis of confidence between Ukraine and the United States would be the worst thing that could happen at this time.”

The backlash to President Biden’s Nord Stream 2 decision required the White House Press Secretary, Jen Psaki, to declare that Washington "doesn't regard the meeting with the Russian President as a reward; we regard it as a vital part of defending America's interests." That the White House had to deny on record that Nord Stream 2 was a “bribe” to lure Putin to a summit is telling commentary.

Moreover, two fellows of the influential Council on Foreign Relations published in The Hill a “Green” apologia for Biden’s actions on May 20. The story, entitled “How to Turn Nord Stream 2 Into a Win for Ukraine,” contends that Ukraine’s loss of the gas transit business is a blessing in disguise. It frees the Ukrainian budget from reliance on carbon energy, and it allows Ukraine to focus on green energy. After all, in the long run, the world will be carbon free, so Ukraine can be at the forefront of the green energy revolution. As to Europe, the authors contend that Nord Stream 2 just replaces the capacity of the Ukrainian pipeline system. Overall gas volumes will be unaffected, so the gas price will be unaffected. Not to worry, Nord Stream 2 will have to obey German competition rules.

However, control of gas pipelines bestows considerable power over price and quantity. Given the substantial clout of the Russian lobby and its cyber warfare capacity to take out rivals, the Gazprom supplied Nord Stream 2 will not be a paragon of the competitive model.

The rules of the game have been that the US and EU were on Ukraine’s side and would do what is possible for Ukraine. Germany’s interests appear to supersede Ukraine’s, and incidentally favor Russia at the expense of Ukraine. But the Biden administration’s actions with respect to Nord Stream 2 and its rush into a one-on-one summit with Putin raise the question of whether this basic understanding has been broken – namely that the Biden administration does not regard Ukraine’s entry into the Western world as vital to the West’s interests.

Russia’s state gas company, Gazprom, makes no bones that it is an instrument of Russian foreign policy and power, not a commercial undertaking. What goes unmentioned is that, given the importance of gas revenue to Putin’s Russia. Russia cannot invade Ukraine so long as a considerable portion of its gas pipeline traverses through Ukraine. With Nord Stream 2 in full operation, Putin can invade at his convenience and a natural gas dependent Europe will do nothing except keep on buying Russian gas. If this is the cost of a greener energy mix, is the West willing to pay it?

Getting the Facts straight on Operation Warp Speed

Judged by its own benchmarks — regulatory approval and vaccinations by the end of 2020 and the accelerated delivery of 300 million doses — Operation Warp Speed is a rare private-public partnership that has met its performance benchmarks. The heavy lifting of ushering vaccines through clinical-trials, scaling-up mass production, and initiating the complicated process of distribution to the states were well on their way as the Biden administration took office. It should be emphasized that OWS was launched to almost universal skepticism and even scorn. At the time of OWS’s launch in Spring 2020, a strong consensus prevailed among media, public-health experts, consultants, and betting markets that regulatory approval by the end of 2020 and the accelerated delivery of 300 million doses were unrealistic goals.

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Do Biden's 'tough new sanctions' give Putin Nord Stream 2?

Western media is greeting the Biden administration’s Russian sanctions as “signaling a tougher stance on Russia than under former President Donald Trump.” Vladimir Putin likely thinks otherwise.

It looks as if the Biden administration has blinked on Putin’s key foreign policy objective — the completion and operation of the Nord Stream 2 pipeline, delivering Russian gas to Europe. The sanctioning of a few Kremlin officials is petty change compared to the decade-long profitable effects of Russian pipeline politics.

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"Woke" Amnesty International revokes the prisoner of conscience status of Russia's most "woke" political figure, Aleksei Navalny

Consider the irony of the unwoke Kremlin holding the feet of Western institutions to the woke fire. As a result, Amnesty International fell victim to the Kremlin's smear campaign — as did, perhaps, Navalny's chances for a Nobel Peace Prize. Putin could hardly ask for anything more.

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Navalny proves too hot for 'poisoner Putin'

Navalny offers a “Beautiful Russia of the Future” that can be gained, starting in September, by voting against any parliamentary candidate who sides with the Kremlin. The Kremlin has decided it can no longer ignore "the blogger" and "the Berlin Patient." These are significant victories.

The outcome is far from certain. It seems time for the Nobel committee to take note.

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The Kremlin, FSB, and the 'Berlin patient's' underpants

The Navalny poisoning should remove any last doubts about the Kremlin’s routine use of political murder as an instrument of state policy. Navalny was scheduled to follow Boris Nemtsov, Anna Politkovskaya, Alexander Litvinenko, and many others to their early graves. Prior to Navalny, Putin and his Kremlin allies could always blame sinister false flag operations, lone mavericks, or ethnic gangs for these murders. With an exposed assassination squad, aided by military weapons labs and transportation coordinated by transport police, it would strain credulity to argue that the Navalny poisoning was not an operation of the Kremlin itself.

A conversation in Moscow:

Where do you work?

In the FSB.

What department?

The Department of Underwear.

 

They say that every morning before Putin puts on fresh underpants, he gives them to his guards to wear first.

 

Switching out jars of urine, washing other people's panties. The FSB still has many “wet” cases ahead. The whole world should tremble and fear!

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