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Thursday, April 17, 2014

Notes on the Coming Conflict

It should be clear by now that Mr. Putin has taken the measure of his adversaries, and found them lacking in foresight, intelligence, imagination and courage when it comes to handling international affairs in general, and himself in particular.

One reason :  his adversaries do not accept, or are unwilling to confront the fact, that they are regarded by Putin as such, or that their interests are clearly counter to his own and to those of his imperialist, neo-Soviet state, and that their nations' long-term interests require firmness now to forestall tragedy later.

Time and again Putin has tested the West.  In Abkazia and South Ossetia.  In Syria. And now in the Ukraine. The results have been horrendous, from any but a neo-Soviet point-of-view.

What are the odds Putin makes moves on Moldava before year's end, say, in October or November, when the U.S. is in the midst of its Congressional elections ?

Meantime, where does the Western alliance stand ? 

When, or should I say if, an objective history of the coming conflict is written, it should make reference to the seemingly unrelated 2011 Tohoku, Japan earthquake and tsunami, which caused level 7 meltdowns at the Fukushima Daiichi Nuclear Power Plant complex.

Why ? Because the ensuing environmental disaster prompted the German government to embark on a phase-out of nuclear power. Which obliges Germany to find an alternate source to supply the 12GW currently provided by the plants to be closed.  Which makes Germany all the more dependent on currently available forms of energy like oil and natural gas and even coal from Russia.

How dependent is Germany currently (April, 2014) ?  According to Deutsche Welle
The most important energy supplier is Russia: It provides 38 percent of Germany's natural gas imports, 35 percent of all oil imports and 25 percent of coal imports, covering a quarter of the country's entire energy needs. There are no suitable alternatives in sight that could cover shortfalls of this magnitude. 
Germany can supply only 15 percent of its gas needs using its own resources, the Association of Energy and Water Industries (BDEW) says. Most of its gas is supplied by Norway and the Netherlands. Both countries could increase their short-term shipments via pipelines, but not in the long run, because experts believe North Sea gas reserves are slowly being used up.   
Importing cooled, liquefied gas in tank ships from Algeria, Qatar or the US is an alternative - in theory. But US ports lack facilities to handle liquefied natural gas, and Germany does not have the corresponding unloading stations. In addition, it is very difficult to purchase large amounts at short notice on the global market. Supplies are already short because Japan has been importing large amounts of gas since the Fukushima nuclear disaster.

Could the Germans make do with their own considerable reserves of coal ? Nope. Germany has committed to ending coal-power by 2018. 

Could the Germans employ fracking to extract abundant supplies of natural gas ? As DW points out, that's unlikely given the considerable domestic opposition.

But wait. There's more ! As DW observes
[Russian company] Gazprom and [German company] Wintershall also jointly own the 2,300-kilometer German pipeline network "Gascade." But Russia now controls Germany's gas storage - and with it, the safety margin of the German gas supply. The German economics ministry evidently has no worries about the deal.
German utilities company RWE is still waiting for the green light for the sale of its oil and gas exploitation subsidiary Dea. Wintershall and Dea are the only two German companies that have enough expertise to perform fracking. Last year Dea reported a profit of 521 million euros.
But due to a debt burden of 30 billion euros, RWE desperately needs new funding. Therefore the electric utility has welcomed the 5.1 billion euros that Luxembourg-based L1 Energy is willing to pay. L1 is owned by the second-richest Russian oligarch, Mikhail Fridman, who has close ties to the Kremlin and state-owned Rosneft.
Meantime,  economic woes have forced unilateral disarmament on Britain, whose defense establishment is so strapped that it cannot afford a single aircraft carrierAnd our own enlightened administration proposes to do away with the A-10 Thunderbolt, aka 'Warthog', one of the most formidable close air-support, anti-tank weapons in our arsenal, one which was designed to counter Soviet tanks.

Then again, the U.S. might forego waging a conventional war in favor of financial one  against the neo-Soviet state, while our adversary could well engage in cyberwarfare against the U.S., which it has already successfully rehearsed : a scenario obvious even to those whose primary focus is the economy and investing.