The Sanctions Mess, Energy and You

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First, let’s filter past all the suicidal political gestures leading toward World War III, and examine what’s at the basis of this growing schism of East and West:

Economics, natural resources, and consumption. That’s right. Not democracy. Not human rights. Primarily we’re talking about energy—what makes a country’s economy run and its people survive. Essentially we’re talking about oil, natural gas, and atomic energy. How to get it and how to control it.

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Eurasia-Regions-Map
Eurasia: Key to global energy control.

A paragraph of quick review: Peculiar Progressive has cited energy as the third (behind water and food) of our globe’s five vital realities. In 2012, we wrote about how President Carter’s national security adviser, Zbigniew Brzezinski, had written about how the U.S. had to control Eurasia to be the world’s lone super power. In other words, control the access to energy in Eurasia. We also wrote about how President Obama called Brzezinski a genius in foreign relations.

According today to Pepe Escobar, the far-traveling journalist for Asia Times, America under Obama appears to still be trying to implement the Brzezinski Method and control Eurasia, now with the help of the European Union. They’re hoping to corner Russia through supporting the Ukraine revolt and new right-wing government, and use NATO as a force to intimidate Russia. Escobar believes this is actually splitting Europe and Asia. And he makes sense.

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Sanctions Lead Russia to Look East

Energy currently is high and deep on the minds of policymakers in the U.S., European Union (EU), Russia and China…the major players in the sanctions war allegedly over Ukraine. While the EU and U.S. are only yelping about Russia, and not including China in the mix, reality shows the Great Dragon to be heavily involved. And energy is the main reason.

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When the Ukraine revolt broke early this year, we wrote of how the EU opposing Russia could lead to Russia cutting off its vital supply of natural gas and oil to Europe. The EU and Russia didn’t really talk about it then. But now the possibility of a cutoff is becoming clearer to Europe. The EU recently agreed to find new sources of energy as insurance for a potential end to Russia’s supply.

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On Sept. 1, Reuters’ story “Europe drafts emergency energy plan with eye on Russia gas shutdown” explained:

The European Union could ban gas exports and limit industrial use as part of emergency measures to protect household energy supplies this winter, a source told Reuters, as it braces for a possible halt in Russian gas as a result of the Ukraine crisis.

 

Russia is Europe’s biggest supplier of oil, coal and natural gas, and its pipelines through Ukraine are currently the subject of political maneuvering – not for the first time – as Europe and Moscow clash over the latter’s military action in Ukraine.

Will this also hurt Russia? Yes, in its immediate economy. But we’ve written about Russia’s recent historic contracts with neighbor China for oil and natural gas. And this, along with the EU’s growing sanctions on the Big Bear, could prove the major impetus for a real separation of East and West as Russia turns away from its economic cooperation with Europe. Instead, it would concentrate on the East, not only China, but India and other Asian countries.

As for China, it appears to be welcoming the growing cooperation with Russia. Quartz, a New York-based business-news outlet, on Sept. 1 published the story headlined “As the West tries to punish Moscow, China touts growing energy ties with Russia.” That story noted:

This past weekend, leaders from Beijing and Moscow met in the Russian capital for the 11th “China-Russia Energy Cooperation Committee.

 

China’s first vice premier Zhang Gaoli, one of the country’s seven most powerful men, was there. He told China’s state-run media that Beijing would “devote consistent and unswerving efforts to establishing a strategic partnership of energy cooperation with Russia.”

 

Zhang then flew to Yakutsk, Siberia to attend a ceremony today marking the opening of the $5 billion “Sila Sibiri” (Power of Siberia) gas pipeline that will ship Russian gas to China, possibly as soon as 2017. Russian President Vladimir Putin will also be there. Construction of the 4,000 kilometer (2,485 mile) pipeline will employ thousands of Russians.”

Martin Henneke of The Henley Group, a Hong Kong-based division of a British-listed wealth management firm, said in a TV interview today (Monday) that he considered Russia and China as the world’s “two major equity markets.” That falls in line with a Sept. 2 story from moodys.com stating “Russian oil and gas producers poised to benefit from China energy deals.”

Also consider this: The recent news that BRICS, the cooperative international body consisting of Brazil, Russia, China, India, and South Africa, formed a bank fund to oppose the West’s International Monetary Fund and World Bank—and that Russia and China have made it clear they want to replace the U.S. dollar as the international reserve currency. It seems obvious that any continued effort by the EU and U.S. to challenge Russia could bring China, and perhaps other nations, into the conflict. Which so far has been peaceful. But may not stay that way, as we noted in our column “Hurtling Toward World War III.”

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The Tipping Point

U.S. and EU sanctions on Russia, and Moscow’s response with a few smaller shutoffs, may hurt Europe and irritate America. But has anyone in the major media conglomerates looked at how Russia might truly hurt the U.S. with retaliatory sanctions yet unknown? Haven’t seen it from the biggies, but a finance researcher and a former assistant Treasury Secretary under Ronald Reagan have looked at the possibilities.

Vladimir Putin, Xi Jinping
China’s Xi Jinping and Russia’s Vladimir Putin

Marin Katusa, Casey Research’s chief energy investment strategist, in a TV interview last week emphasized this: 20% of American homes run on nuclear power. Half of those are powered by utilities who receive nuclear fuel from Russia.

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Which leads to this question: Should Russia really get frustrated and stop delivering that fuel, thus shutting off power to 30 million Americans, would that lead Washington’s military-industrial complex to advance to a hot war?

Then there’s Paul Craig Roberts, who helped create Reaganomics in the ‘80s. In his Sept. 14 column entitled “Washington’s War Against Russia,” he opined:

My conclusion is that the purpose of the sanctions is to break up and undermine Europe’s economic and political relations with Russia. When international relations are intentionally undermined, war can be the result. Washington will continue to push sanctions against Russia until Russia shows Europe that there is a heavy cost of serving as Washington’s tool.

Later in the column, he added:

A Russian response to Washington would be to stop selling to the US the Russian rocket engines on which the US satellite program is dependent. This could leave the US without rockets for its satellites for six years between the period 2016 and 2022.

 

Possibly the Russian government is worried about losing the earnings from gas and rocket engine sales. However, Europe cannot do without the gas and would quickly abandon its participation in the sanctions, so no gas revenues would be lost. The Americans are going to develop their own rocket engine anyhow, so the Russian sales of rocket engines to the US have at most about 6 more years. But the US with an impaired satellite program for six years would mean a great relief to the entire world from the American spy program. It would also make difficult US military aggression against Russia during the period.

How do you think Washington’s military-industrial complex, including the spying-conscious National Security Agency (NSA), would respond to that?

As always, we urge you to get organized, educated, and active, so you can demand your Congressional representatives take care of this nation, rather than continually lead it into wars we never seem to win. Or, in the case of World War, a conflict no one will win.