Why the Trump-Putin Meeting Was About 'Energy Wars'
I, along with millions of others, was watching closely as Donald Trump and Vladimir Putin held a joint press conference in Helsinki on Monday, July, 16th.
Beyond the rebuttals of election meddling and Putin’s tactical jibe at George Soros’s track record on the matter, the most interesting thing about the conference were the references to the ‘energy wars’.
This came on the heels of President Trump’s earlier swipe at Germany for being ‘captive to Russia’ vis-a-vis its oil dependence.
So what’s with all the sudden focus on energy?
Oil and energy is the lifeblood of Putin and his oligarchic network of support, and is therefore a major priority.
Point in case...
1. Oil revenues
Revenue from oil made up 39% of the revenue for the Russian Federation in 2017 and has been an important revenue source historically, especially in 2014 at 51.3%.
Gazprom, the Vladimir Putin-linked Russian energy giant, has been highly involved in Europe, with its share of the EU gas market topping 35% last year.
Russia is geographically connected, strategically invested and economically interdependent with Europe and China - two massive energy users.
Europe already has several gas pipelines that supply gas around the continent to various countries.
Nord Stream 2 is a proposed joint project between Gazprom, France’s Engie, Austria’s OMV, Royal Dutch Shell, and Germany’s Uniper and Wintershall.
This prospective pipeline would be running on the Baltic seabed and would allow Russia to pump 55 billion cubic meters of gas directly into Germany, bypassing land routes over Poland and Ukraine.
Moscow insists the project is “purely commercial,” as Kremlin spokesman, Dmitry Peskov said earlier this month.
However, the pipeline helps the Kremlin expand its energy dominance over Europe. It also isolates the Ukraine, Poland, and other Russian adversary states on the continent’s periphery, which are rightfully fearful of Russian encroachment.
China has been having talks with Russia about a new gas pipeline for many years and this will materialize sooner or later. China is simply too hungry for energy to resist it.
The new gas pipeline discussions with China have three separate inlet points:
Novokuznetsk, Blagoveshchensk and Vladivostok, from the existing Unified Gas Supply System (UGSS) of Russia.
The UGSS is the world’s largest gas transmission system including 168,300 km of gas trunklines and 222 line compressor stations with 3,738 gas compressor units totalling 43,870 MW in capacity.
Energy is a key determinant of the international balance of power. So for the U.S., being aware and involved in Russian energy plans will allow future global power games to be more accurately foreseen.
This is especially the case with regards to Iran, and the showdown that many pundits are claiming is imminent with the country.
Trump has taken a much harder line against the country, pulling out of the nuclear agreement and is now poised to re-apply highly disruptive sanctions on its oil exports.
It’s likely that Russia and Saudi Arabia are already prepared to compensate for the drop in Iranian oil in international markets.
This may be an indication that Trump is going to use his newfound cooperation with Russia to further support Israel in its ambition to force Iran out of Syria, and may even be a prelude to a much more aggressive approach to the country going into the future.
However, for the time being, what I think is more important than weapons right now is the global integration of the energy industry.
Whether this integration manifests as consolidation of power and interconnection for and between the large powerful nations of Russia, China, the U.S., and Europe - at the expense of the security and stability of the smaller ones like Iran and Ukraine - remains to be seen.