Stephen Blank has a Tantrum

Uncle Volodya says, “No sound is so ominous as the silence of a patient man.”

“It is cruel to discover one’s mediocrity only when it’s too late. It does not improve the temper.”

W. Somerset Maugham, from “Of Human Bondage”

Stephen Blank is upset; in a bit of a pet, as the English of years ago would say. Gosh-darn it, those thickheaded Yurrup folk know nothing of loyalty – you always buy from friends, even if their product costs more, and its logistics for delivery are shaky. You know: those friends who threaten to sanction you until you can’t see straight if you don’t do as they want you to. Because in the end, it’s about freedom, damn it all.

I’m speaking of his recent effort for The Atlantic Council; “European Involvement with Nord Stream 2 Is a Deal with the Devil”. Well, it’s no surprise that The Atlantic Council is opposed to Russia’s Nord Stream II pipeline; it’s an American-dominated think tank headquartered in Washington, DC, formed in 1961 with the mission of preserving the cooperation between Europe and the United States that was forged in World War II. A big part of ‘cooperation’ in modern American parlance is ‘trade policies which are in our favour’, and the current president has squashed quite a bit of goodwill to death in his pursuit of US advantage. The Atlantic Council has included such congenial friends of Russia as Susan Rice, and hosted such pro-Russian guests as Mikheil Saakashvili, Arseniy Yatsenyuk and Richard Lugar. The United States wants to sell Liquefied Natural Gas (LNG) to Europe, but it would not be the happiest to do so in concert with Russian pipeline gas – it would like to replace Russian gas supplies. And there, I’m afraid, Mr. Blank and his friends are the victims of geography and America’s own capitalist success. I’m not going to dwell on it, because readers of this blog are well aware of it, but the United States cannot sell LNG to Europe at a competitive price with pipeline gas, and delivery would have to be via seaborne tankers, which are at the mercy of weather conditions and marine traffic congestion. Delays would be remarkable only if there were none, while the necessary increase in trans-Atlantic marine traffic would increase the risk involved.

Instead, I’d like to focus on the petulance.

Mr. Blank draws on every trope, every stereotypical insult and childish squall he can muster, and if it is a measure of his frustration, he must be wound tighter than a Timex. I have to say, I’m kind of enjoying it. Let’s look, shall we?

Since seizing Ukrainian territory, Mr. Blank tells us, Russia has waged systematic warfare in an attempt to destroy Naftogaz, Ukraine’s state energy company. Do tell. I don’t suppose there’s any sense in repeating that Crimea was always Russian, was given to Ukraine as a gift by a decree of the Russian president, and then was taken back – to the obvious delight of the great majority who live there – when it became evident Ukraine would not be satisfied with merely being independent, but wanted to be an enemy. A little like the Sally of “Mustang Sally” fame; remember that old song? “Bought you a brand-new mustang/ nineteen sixty-five/when I come around, you signify, woman/You won’t let me ride.” Okay, perhaps that’s not the best example, since the ‘ride’ in that instance has a tongue-in-cheek double meaning. But I think the context is pretty clear. Ukraine made an ostentatious big deal about its non-Russianness, and seized upon every opportunity to express its contempt and hatred, just as it continues to do now. Why should Russia allow it to keep the gift which was bestowed when they were fraternal brothers?

As to a Russian effort to destroy Naftogaz, I’m afraid I just don’t see it. In fact, in accordance with President Putin’s letter to European leaders of 2014, Ukraine and Naftogaz accepted significant and deep discounts to its natural-gas prices for the continuation of Russia’s Black Sea Fleet’s use of the Crimean port of Sevastopol beyond 2017. The agreement was approved by the Rada, with 236 votes in favour. While it was clear the coup government would waste no time evicting Russia from Sevastopol, Ukraine had already benefited from 3 years of these deep discounts. There was no offer to pay the money back. Discounts were extended to Ukraine’s chemical companies. Ukraine received a discount in the first three months of 2013, owing to the precipitous fall of its currency and the parlous state of its economy. Discounts which, from 2009, amounted to more than $17 Billion in value. To that should be added at least that amount in take-or-pay fines resulting from the contract Ukraine signed for the provision of natural gas. That contract was signed, for Ukraine, by then-Prime-Minister Yulia Tymoshenko. Is she in jail for putting Ukraine in that terrible position? Hardly; she’s running for President, so I guess Ukraine approved of the terms.

Ukraine broke a contract signed by its Prime Minister, and just walked away. The west made no effort to persuade it to honour its contractual debt. Russia lent Ukraine $3 billion just before the Glorious Maidan; Ukraine kept and spent it, and did not pay it back. The west encouraged it to default, offering free legal advice that it should be declared an ‘odious debt’. The IMF cooperated by changing its rules so that it could continue ‘lending’ to a country which was in default. But big, bad Russia is picking on poor, helpless Naftogaz.

Mr. Blank then goes on to laud plucky Naftogaz’s legal victories; now, he says, Gazprom is building Nord Stream 2, with the aims of suffocating Ukraine’s economy and strengthening its grip on European energy supplies.

How will it do the latter, if about the same amounts of gas are going through Nord Stream 2 as would have gone through Ukraine? Let’s say, for the sake of argument, that Europe receives 20 BcM of gas through the Nord Stream pipeline, and 20 BcM through Ukraine. One year later, Europe receives 20 BcM of gas through the Nord Stream pipeline, and 20 BcM through its twin line, Nord Stream 2. How has Russia strengthened its grip on European energy supplies? The gas is just not going through Ukraine. Whose fault is that? Russia’s? I don’t see how.

In fact, the west wants Russia to continue transiting gas through Ukraine because, among other reasons, it does not want to have to subsidize Ukraine’s flailing economy for the money it will lose in transit fees. There’s nothing noble or high-minded about it – either Russia pays it, the west pays it, or Ukraine collapses. Kind of ironic, really, to see the Revolution of Dignity (taking bets on the probability that title originated in the US Department of State) result in an impecunious state that lives as a beggar for IMF handouts, isn’t it? You probably don’t need me to point out what that says about western management skilz in the nation-building department.

Well, let’s get back to Mr. Blank’s bitter musings.  We next learn that Russia is “working assiduously to promote a Ukrainian presidential candidate (or two) that is connected to Russia through corruption and would end Naftogaz’s current submissions to European arbitration.” Anyone know who that might be? The western press acknowledges it is a lopsided race between Zelenskiy, Poroshenko and Tymoshenko, with the latter two battling for second place in the hope of pulling out a win in a run-off vote. None of the other candidates is even on the radar – so much for assiduous promotion. Zelenskiy has no connection to Naftogaz, although he is trying to dispel some misgivings that he might be closely connected to Ihor Kolomoisky, bad-boy oligarch. Zelenskiy went on record early that there would have to be dialogue with Russia, with a view to ending the fighting in the east. Under pressure, he later walked it back to say that of course there could be no yielding of Ukrainian sovereignty, borders must be respected, bla, bla. So that means the default position, Crimea must be returned to Ukrainian control, etc… That also means he may as well not have even said any of that out loud, because Russia is not going to hand Crimea back under any circumstances.

I would submit he probably means Tymoshenko, since she has close and pervasive ties to the energy industry, and was once a major player in it, known as ‘The Gas Princess’. But did he really say she was connected to Russia through corruption?? Mr. Blank is coming dangerously close to – gasp! – interfering in the Ukrainian election!

I think it is a given that Washington would prefer Poroshenko stays on for another term. He can be relied upon to bad-mouth Russia loudly at every opportunity, and with him in the saddle there will be no chance at all of improving relations between the two countries, which is just how Washington likes it. In return for his loyalty and fawning, Washington ignores that he has remained an active businessman throughout his presidential tenure, in direct violation of the Ukrainian constitution, and has steadily increased his personal wealth and influence, while his government recently struck down a law against public figures enriching themselves through their positions. Oh, the US Ambassador to Ukraine – currently Marie Yovanovitch – ‘slammed’ Ukraine, and flung ‘scathing criticism’ right and left, but she didn’t really go after Poroshenko; she agitated for the current anti-corruption prosecutor to be fired (because they, you know, have wiretap evidence of him advising corruption suspects on their best course of action to avoid prosecution, which kind of calls his impartiality into question). And doubtless he should be fired. But it is extremely likely his appointed replacement will have pretty much the same laissez-faire attitude toward official corruption. Yovanovitch called for a complete audit into defense-company procurement – Poroshenko’s inner circle, possibly including the president himself, is accused of embezzlement of millions in rigged defense contracts – but the chances of that being completed, plus findings being generated, before the election are somewhere between zero and nil decimal fuck-all.

In the very next sentence, Mr. Blank laid bare the very nub of his bitterness: “Unfortunately, it now looks like Nord Stream 2 will go through, even though the Trump administration has threatened German firms with sanctions if it does.”

He does not speculate on why America was unsuccessful in its drive to stop the Russian pipeline from being built. And make no mistake; Washington tried every trick in the book short of military intervention, even threatening to impose sanctions against European companies if they did not take a stand against it.

But I will.

Steadily, progressively and measurably, the United States has burned through the stock of goodwill and ‘soft power’ in Europe – and the world – that was the work of decades to build. As America increased its confrontational attitude in global politics, and demanded ‘allies’ follow along, it began to breed doubt, reluctance and antipathy, until the only effective tool it had left was fear. Its regime-change operation and abject failure to overthrow the government of Bashar al-Assad in Syria then blunted the fear, reducing it to the degree of weakness that longstanding allies are openly defiant, as German Chancellor Angela Merkel was to US Vice-President Mike Pence over the Iran nuclear deal, as the UK was in its rejection of a total ban on use of Huawei 5G network components. For whatever reason, America failed to heed the signals that its gauche pressure tactics were unappreciated, instead pursuing a course that has led us to now, when it walks into the room and swings its balls around, and nobody applauds or gasps.

Sad, yes, I know. Oh, look: more sour-grapes whining. “It is important to understand what it means to the EU for Nord Stream 2 to be built. Apart from the bypassing of Ukraine and the potential corrupting of German politics, Nord Stream 2 essentially forces German and Eastern European states and customers to subsidize Russian state expenses and unwittingly assist in Naftogaz’s destruction. Those expenses may result in the rearming of the Russian army, which threatens the sovereignty and integrity of EU and NATO members. It also means that despite their connections to the EU, the investors in this pipeline are winking at the flouting of international law, as embodied in the arbitration verdicts that have ruled against Gazprom. Gazprom, thus encouraged, will continue corrupting European governments and energy policies; and European legal institutions will continue to be impotent against Russia.”

Let’s unpack that a little, what say? As to the ‘essentially forcing German and Eastern European states and customers to subsidize Russian state expenses and unwittingly assist in Naftogaz’s destruction’, what does he imagine would be the result of Europe deciding to switch its dependence to American LNG? Wouldn’t European states and customers then be forced to subsidize American state expenses? Would a triumphant USA be sure to build in some room for Russian-supplied pipeline gas, delivered through Ukraine by Naftogaz?  Ha, ha; as if. So the USA is perfectly all right with the destruction of Naftogaz, in principle, just as long as it works to American advantage and not Russian. Is it difficult to imagine some of the money realized as profit from the USA’s LNG sales to Europe might end up in the American defense budget, considering it is larger than the composite of the next 7 countries combined? If that were the case, would Europe not be assisting the re-arming of the US Army? Pop quiz – America or Russia, which country has started the most wars in the past 30 years?

Are American sanctions against Nord Stream 2 ‘international law’? Because nothing else precludes the building of the pipeline. The EU dropped all its legal objections to Nord Stream 2, and concentrated its efforts on bringing it under European regulation so as to force concessions on unbundling and third-party usage and so forth. Europe has acknowledged that it cannot stop the construction of the pipeline without changing the law, and it has even tried that. So we are left with American threats of sanctions against European companies if they don’t pull out. Is that international law? You tell me. America has been very much in the spotlight of late, for its hurling of sanctions in all directions, particularly those under the rubric of ‘national security’. Over objections from other countries, the USA claims the WTO has no capability to review exceptions based on national security claims, and that “such a review would undermine the legitimacy of the WTO dispute settlement system and even the viability of the WTO as a whole”. So the American premise is that it can impose any trade restriction it likes, stamp “National Security” on it, and nobody can question it. And now it wants to move that policy into the category of international law.

Oh, goodness gracious: Stephen Blank actually suggested that Russia uses energy revenues to fund opposition movements in other countries. Where has he been for the last, Jeez, since World War II?  For starters, show me some evidence of Russian money behind foreign opposition movements. The last I can remember was a loan to Marine le Pen’s Front Nationale from a Russian bank,  back in 2017. And that was remarkable enough to arouse comment from Russia-watchers and analysts: “The 11 million ($11.5 million) euro in loans the French National Front took from a Russian bank is to date the most solid bit of proof that Russia is backing nationalist populist political forces in Europe with more than just talk on Kremlin propaganda channels and invitations for meetings in Moscow.” In case you missed it, that was “to date the most solid bit of proof” of Russian backing. Which means there was less before that. Has there been more since? You tell me.

However, the United States of America opened with the concept of funding foreign opposition groups. Except it doesn’t call it that; it calls it “promoting democracy”. It has several well-established agencies such as the National Endowment for Democracy (NED) and the International Republican Institute (IRI) which do little else but dole out funding to opposition groups abroad. In addition, a plethora of private ‘democracy’ advocates such as George Soros’s Open Democracy Network funnel money to opposition groups and whoever is the ‘rebel’ flavour of the month. US government agencies such as the CIA are not often content with just fronting money and airtime to dissidents – they’ve been in the game a long time, and they know if you’re in a hurry to make political change happen in your favour, it’s probably going to get violent. So they send planeloads of guns and ammunition to the politically disaffected around the world (providing, of course, that destabilizing the country would be in US interests – so far as I am aware, Greenpeace, Black Lives Matter, Occupy Wall Street and the NAACP have never received a dollar from the CIA, never mind guns). More recently, blind drunk on exceptionalism, the USA simply announced that the democratically-elected president of Venezuela was out of a job, and appointed its own favourite, Juan Guaido, in his place.  Is that legal? Of course it isn’t. Following consultation with American advisors, much of the Venezuelan opposition boycotted the last election; candidates did not stand for election and their supporters did not vote. This was used to support the position that the election was illegitimate because the opposition did not have a chance. Therefore the president’s win was fraudulent, so the first country that thought of it got to pick a new one. See how it works? Exceptionalism, baby. Guaido favours American ‘investment’ in Venezuela’s oil industry – it just happens to have the world’s largest proven reserves – and US National Security Advisor John Bolton was saying just a few weeks ago how nice it would be for the American economy if American oil companies were running the show in Venezuela.

In Libya, American-led intervention resulted in the grisly murder of its leader, and the utter ruin of what had been the most progressive country in Africa – today, it is a failed state ruled over by tribal warlords, where women and children are openly sold as slaves in public markets.

Mr. Blank next suggests that in not ‘helping Ukraine’ by putting the brakes on Nord Stream 2, Europe is tacitly acknowledging Russia’s right to annex Crimea, and is telegraphing approval of a policy that ‘might makes right’.

Ummm….who is it, again, that is threatening Europe with sanctions if it does not forego Russian pipelines in favour of continued transit through Ukraine? That’s right – America. And why should anyone listen to America? Because the national psyche equates military might with the responsibility to do good, and fighting anyone the government says is the Enemy Of Freedom is doing good.

What a long, tortuous way the Shining City On A Hill has come from the humble musings of Abraham Lincoln: “Let us have faith that right makes might; and in that faith let us, to the end, dare to do our duty as we understand it.” Then again, Lincoln presided over the biggest and most destructive war in American history, so perhaps he’s not entirely illustrative of the concept that right makes might. Nonetheless, there is much to the credo that first you establish the rightness of your cause beyond all doubt, and then you strike if you must.

If you follow that, you might not have to lie like a hillbilly writing a check.

Here’s my reasoning, Mr. Blank – the USA will be able to make a good case for cutting Nord Stream 2 out of a large share of the European gas-supply business when it can do the following things: (1) demonstrate that it has the reserve capability to supply increasing amounts of natural gas over the long term, (2) convince Europe that American gas supplies would not be subject to leverage for political advantage, (3) reassure the buyers that there would be no interruptions in the supply and that it could match the delivery rate of Russian pipeline gas even though it is delivered by tankers, and (4) sell it to Europe for the same price as they can buy pipeline gas. Can you do all of those? Can you do any of them? Colour me skeptical.

The west in general and America in particular want Russia to be responsible for strengthening the Ukrainian economy,  because otherwise, they will have to do it themselves. Their reasoning is that if Russia must transit its gas supplies to Europe through Ukraine, Russia cannot afford to let it lapse into a failed state. An alternative route that removes Ukraine’s transit fees is a stake through the heart of that reasoning.