Russian Power

We've had many, many discussions with friends over this in stately MoltenManor:

Russia's energy lifeline to Europe is a powerful instrument of coercion, even if only by the potential of its being cut off. In the same way the rather Hollywood bravura -- like placing the Russian national flag on the seabed of the oil and gas rich Arctic -- is the same as the announcement of a hostile takeover bid challenging existing claims of the other stockholders: Canada, the USA, Denmark, and Norway.

Putin has found that being flamboyant in his actions -- such as insisting Russia had to alter its existing missile targeting -- was a preferred method of negotiation on American plans for an anti-Iran missile defense proposed for placement in Poland and the Czech Republic. This is not a strategic challenge; it's a businessman's ploy to scare off a perceived rival from setting up shop in "his" territory.

In hard terms of military planning, threatening the Baltic States with missile targeting hardly adds anything new to the strategic equation. It does make good home office copy, though. Similarly, the announcement of the resumption of long-range reconnaissance by 14 Soviet era strategic bombers hardly brings a tremble to the U.S. Strategic Air Command. Nor the does the announcement that Russian Navy vessels may once again show their flag in the Mediterranean really bother the vastly superior NATO Southern Command.

All this followed Putin's personally announced intention to place a moratorium on the Cold War period's arms control accord, the Conventional Forces in Europe Treaty. An experienced observer of international affairs would have to yawn a loud ho-hum at these tough guy poses.

The big stick that Putin has to back up his relatively empty military strutting is the increasingly muscular Russian financial and business weaponry. Russia had an oil income of $170 billion in 2006 and substantially more is projected for '07, while having already built up an oil stabilization fund of $160 billion.

Meanwhile, Russian muscle flexing has resulted in cuts to oil supplies to Germany of about one third in July and August -- without explanation. The Germans can replace the oil, but the unilateral breaking of the Russian contracts certainly raises concerns over Russian energy reliability. This whipsawing of their customers is a tactic that usually precedes a demand to alter existing agreements to the supplier's (Russia's) advantage.

Here's the basic breakdown:

1. Vladimir Putin remains in power by enriching his cronies.
2. Most of the riches come from Russia's energy utilities, which Putin nationalized and is currently raiding.
3. Much of the money from Russia's energy utilities comes by selling these resources to Europe.
4. Much of Russian political influence comes from the ability to turn on or turn off energy to Europe at will.
5. While Russia is rich in energy resources, extracting them takes time and costs money, money which would better be placed in the hands of Putin cronies.
6. An alternate source of oil in particular would be useful.
7. The lack of warm water ports makes shipping via sea expensive, time-consuming, and easily interdicted in time of war.
8. Russia has been seeking to run a pipeline from Iranian oilfields through the formerly Soviet 'stans around the Black Sea.
9. This pipeline would quickly and cheaply supply Russia with vast amounts of additional resources, scaleable upon demand, and not as easily interdicted as tankers attempting to leave Iran through the Persian Gulf.
10. Additional oil would enrich Putin's cronies even more, strengthening his hold on power.
11. Additional oil would strengthen Russia's ability to economically blackmail Europe, even present the spectre of preventing European and American forces from having sufficient oil and gasoline to effectively wage war.
12. Putin very much wants to see America lose in Iraq and a nuclear Iran friendly to Russia and eager to ship lots of energy north to her.

That's the state of play as the march toward World War III continues.