Sunday, November 9, 2014

Ukraine Crisis, Is it about the Power over Oil, and Control of a Gas Pipeline ?

Ukraine Crisis, Is it about the Power over Oil, and Control of a Gas Pipeline ?

A resource scarcity, and ruthless competition to dominate Eurasian energy corridors, are behind Russian and US interference.

[[[ This story first ran in March, shortly after the Coup installed Govt. ousted Viktor Yanukovych a democratically elected President. ]]] 



Russia's armed intervention in the Crimea undoubtedly illustrates President Putin's *(ruthless determination to get his way in Ukraine.)* But less attention has been paid to the role of the United States in interfering in Ukrainian politics and civil society. Both powers are motivated by the desire to ensure that a geostrategically pivotal country with respect to control of critical energy pipeline routes remains in their own sphere of influence.

*[The author describes Putin derogatorily]* 

Much has been made of the *(reported leak)* of the recording of an alleged private telephone conversation between US assistant secretary of state Victoria Nuland and US ambassador to Kiev Geoffrey Pyatt. While the focus has been on Nuland's rude language, which has already elicited US apologies, the more important context of this language concerns the US role in liaising with Ukrainian opposition parties with a view, it seems, to manipulate the orientation of the Ukrainian government in accordance with US interests.

*[Ukraine crisis: Transcript of leaked Nuland-Pyatt call]*



Victoria Nuland and Geoffrey Pyatt, Kiev, 10 December Victoria Nuland and Geoffrey Pyatt together toured the opposition camp in Kiev in December
An apparently bugged phone conversation in which a senior US diplomat disparages the EU over the Ukraine crisis has been posted online. The alleged conversation between Assistant Secretary of State Victoria Nuland and the US Ambassador to Ukraine, Geoffrey Pyatt, appeared on YouTube on Thursday. It is not clearly when the alleged conversation took place.
Here is a transcript, with analysis by BBC diplomatic correspondent Jonathan Marcus:

Warning: This transcript contains swearing.
Voice thought to be Nuland's: What do you think?
  • Jonathan Marcus: At the outset it should be clear that this is a fragment of what may well be a larger phone conversation. But the US has not denied its veracity and has been quick to point a finger at the Russian authorities for being behind its interception and leak.
Voice thought to be Pyatt's: I think we're in play. The Klitschko [Vitaly Klitschko, one of three main opposition leaders] piece is obviously the complicated electron here. Especially the announcement of him as deputy prime minister and you've seen some of my notes on the troubles in the marriage right now so we're trying to get a read really fast on where he is on this stuff. But I think your argument to him, which you'll need to make, I think that's the next phone call you want to set up, is exactly the one you made to Yats [Arseniy Yatseniuk, another opposition leader]. And I'm glad you sort of put him on the spot on where he fits in this scenario. And I'm very glad that he said what he said in response.
  • Jonathan Marcus: The US says that it is working with all sides in the crisis to reach a peaceful solution, noting that "ultimately it is up to the Ukrainian people to decide their future". However this transcript suggests that the US has very clear ideas about what the outcome should be and is striving to achieve these goals. Russian spokesmen have insisted that the US is meddling in Ukraine's affairs - no more than Moscow, the cynic might say - but Washington clearly has its own game-plan. The clear purpose in leaking this conversation is to embarrass Washington and for audiences susceptible to Moscow's message to portray the US as interfering in Ukraine's domestic affairs.
Nuland: Good. I don't think Klitsch should go into the government. I don't think it's necessary, I don't think it's a good idea.

Anti-government protesters in Kiev Anti-government protesters have been camped out in Kiev since November
 
Pyatt: Yeah. I guess... in terms of him not going into the government, just let him stay out and do his political homework and stuff. I'm just thinking in terms of sort of the process moving ahead we want to keep the moderate democrats together. The problem is going to be Tyahnybok [Oleh Tyahnybok, the other opposition leader] and his guys and I'm sure that's part of what [President Viktor] Yanukovych is calculating on all this.

Ukraine unrest: Timeline

21 November 2013: Protests start after Ukraine announces it will not sign a deal aimed at strengthening ties with the EU
17 December: Russia agrees to buy $15bn of Ukrainian government bonds and slash the price of gas it sells to the country
16 January 2014: Parliament passes law restricting the right to protest
22 January: Two protesters die from bullet wounds during clashes with police in Kiev; protests spread across many cities
25 January: President Yanukovych offers senior jobs to the opposition, including that of prime minister, but these are rejected
28 January: Parliament votes to annul protest law and President Yanukovych accepts resignation of PM and cabinet
29 January: Parliament passes amnesty law for detained protesters, under the condition occupied buildings are vacated

Nuland: [Breaks in] I think Yats is the guy who's got the economic experience, the governing experience. He's the... what he needs is Klitsch and Tyahnybok on the outside. He needs to be talking to them four times a week, you know. I just think Klitsch going in... he's going to be at that level working for Yatseniuk, it's just not going to work.
Pyatt: Yeah, no, I think that's right. OK. Good. Do you want us to set up a call with him as the next step?
Nuland: My understanding from that call - but you tell me - was that the big three were going into their own meeting and that Yats was going to offer in that context a... three-plus-one conversation or three-plus-two with you. Is that not how you understood it?
Pyatt: No. I think... I mean that's what he proposed but I think, just knowing the dynamic that's been with them where Klitschko has been the top dog, he's going to take a while to show up for whatever meeting they've got and he's probably talking to his guys at this point, so I think you reaching out directly to him helps with the personality management among the three and it gives you also a chance to move fast on all this stuff and put us behind it before they all sit down and he explains why he doesn't like it.
Nuland: OK, good. I'm happy. Why don't you reach out to him and see if he wants to talk before or after.
Pyatt: OK, will do. Thanks.
Nuland: OK... one more wrinkle for you Geoff. [A click can be heard] I can't remember if I told you this, or if I only told Washington this, that when I talked to Jeff Feltman [United Nations Under-Secretary-General for Political Affairs] this morning, he had a new name for the UN guy Robert Serry did I write you that this morning?
  • Jonathan Marcus: An intriguing insight into the foreign policy process with work going on at a number of levels: Various officials attempting to marshal the Ukrainian opposition; efforts to get the UN to play an active role in bolstering a deal; and (as you can see below) the big guns waiting in the wings - US Vice-President Joe Biden clearly being lined up to give private words of encouragement at the appropriate moment.
Pyatt: Yeah I saw that.
Nuland: OK. He's now gotten both Serry and [UN Secretary General] Ban Ki-moon to agree that Serry could come in Monday or Tuesday. So that would be great, I think, to help glue this thing and to have the UN help glue it and, you know, Fuck the EU.
  • Jonathan Marcus: Not for the first time in an international crisis, the US expresses frustration at the EU's efforts. Washington and Brussels have not been completely in step during the Ukraine crisis. The EU is divided and to some extent hesitant about picking a fight with Moscow. It certainly cannot win a short-term battle for Ukraine's affections with Moscow - it just does not have the cash inducements available. The EU has sought to play a longer game; banking on its attraction over time. But the US clearly is determined to take a much more activist role.
Pyatt: No, exactly. And I think we've got to do something to make it stick together because you can be pretty sure that if it does start to gain altitude, that the Russians will be working behind the scenes to try to torpedo it. And again the fact that this is out there right now, I'm still trying to figure out in my mind why Yanukovych (garbled) that. In the meantime there's a Party of Regions faction meeting going on right now and I'm sure there's a lively argument going on in that group at this point. But anyway we could land jelly side up on this one if we move fast. So let me work on Klitschko and if you can just keep... we want to try to get somebody with an international personality to come out here and help to midwife this thing. The other issue is some kind of outreach to Yanukovych but we probably regroup on that tomorrow as we see how things start to fall into place.
Nuland: So on that piece Geoff, when I wrote the note [US vice-president's national security adviser Jake] Sullivan's come back to me VFR [direct to me], saying you need [US Vice-President Joe] Biden and I said probably tomorrow for an atta-boy and to get the deets [details] to stick. So Biden's willing.
Pyatt: OK. Great. Thanks.
  • Jonathan Marcus: Overall this is a damaging episode between Washington and Moscow. Nobody really emerges with any credit. The US is clearly much more involved in trying to broker a deal in Ukraine than it publicly lets on. There is some embarrassment too for the Americans given the ease with which their communications were hacked. But is the interception and leaking of communications really the way Russia wants to conduct its foreign policy ? Goodness - after Wikileaks, Edward Snowden and the like could the Russian government be joining the radical apostles of open government? I doubt it. Though given some of the comments from Vladimir Putin's adviser on Ukraine Sergei Glazyev - for example his interview with the Kommersant-Ukraine newspaper the other day - you don't need your own listening station to be clear about Russia's intentions. Russia he said "must interfere in Ukraine" and the authorities there should use force against the demonstrators.
Ukrainian opposition leaders Vitaly Klitschko (L) and Arseny Yatsenyuk (R) meet with U.S. Assistant Secretary of State for European and Eurasian Affairs Victoria Nuland (2nd L) in Kiev February 6, 2014.  
Ms Nuland and Mr Pyatt (centre) met Ukrainian opposition leaders Vitaly Klitschko (L) and Arseny Yatsenyuk (R) on Thursday
 
US Assistant Secretary of State Victoria Nuland meets President Viktor Yanukovych in Kiev. Photo: 6 February 2014  
She also met President Yanukovych
 
Rather than leaving the future of Ukrainian politics "up to the Ukrainian people" as claimed in official announcements, the conversation suggests active US government interference to favour certain opposition leaders:
Nuland: Good. I don't think [opposition leader] Klitsch should go into the government. I don't think it's necessary, I don't think it's a good idea.
Pyatt: Yeah. I guess... in terms of him not going into the government, just let him stay out and do his political homework and stuff. I'm just thinking in terms of sort of the process moving ahead we want to keep the moderate democrats together. The problem is going to be Tyahnybok [Oleh Tyahnybok, the other opposition leader] and his guys and I'm sure that's part of what [President Viktor] Yanukovych is calculating on all this.
Nuland: [Breaks in] I think Yats is the guy who's got the economic experience, the governing experience. He's the... what he needs is Klitsch and Tyahnybok on the outside. He needs to be talking to them four times a week, you know. I just think Klitsch going in... he's going to be at that level working for Yatseniuk, it's just not going to work.
[...]
Nuland: OK. He's [Jeff Feltman, United Nations Under-Secretary-General for Political Affairs] now gotten both [UN official Robert] Serry and [UN Secretary General] Ban Ki-moon to agree that Serry could come in Monday or Tuesday. So that would be great, I think, to help glue this thing and to have the UN help glue it and, you know, Fuck the EU.
Pyatt: No, exactly. And I think we've got to do something to make it stick together because you can be pretty sure that if it does start to gain altitude, that the Russians will be working behind the scenes to try to torpedo it.
As BBC diplomatic correspondent Jonathan Marcus rightly observes, the alleged conversation:
"... suggests that the US has very clear ideas about what the outcome should be and is striving to achieve these goals... Washington clearly has its own game-plan.... [with] various officials attempting to marshal the Ukrainian opposition [and] efforts to get the UN to play an active role in bolstering a deal."
But US efforts to turn the political tide in Ukraine away from Russian influence began much earlier. In 2004, the Bush administration had given $65 million to provide 'democracy training' to opposition leaders and political activists aligned with them, including paying to bring opposition leader Viktor Yushchenko to meet US leaders and help underwrite exit polls indicating he won disputed elections.
This programme has accelerated under Obama.

In a speech at the National Press Club in Washington DC last December as Ukraine's Maidan Square clashes escalated, Nuland confirmed that the US had invested in total "over $5 billion" to "ensure a secure and prosperous and democratic Ukraine" - she specifically congratulated the "Euromaidan" movement.

So it would be naive to assume that this magnitude of US support to organisations politically aligned with the Ukrainian opposition played no role in fostering the pro-Euro-Atlantic movement that has ultimately culminated in Russian-backed President Yanukovych's departure.
Indeed, at her 2013 speech, Nuland added:
"Today, there are senior officials in the Ukrainian government, in the business community, as well as in the opposition, civil society, and religious community, who believe in this democratic and European future for their country. And they've been working hard to move their country and their president in the right direction."
What direction might that be? A glimpse of an answer was provided over a decade ago by Professor R. Craig Nation, Director of Russian and Eurasian Studies at the US Army War College's Strategic Studies Institute, in a NATO publication:
"Ukraine is increasingly perceived to be critically situated in the emerging battle to dominate energy transport corridors linking the oil and natural gas reserves of the Caspian basin to European markets... Considerable competition has already emerged over the construction of pipelines. Whether Ukraine will provide alternative routes helping to diversify access, as the West would prefer, or 'find itself forced to play the role of a Russian subsidiary,' remains to be seen."
A more recent US State Department-sponsored report notes that "Ukraine's strategic location between the main energy producers (Russia and the Caspian Sea area) and consumers in the Eurasian region, its large transit network, and its available underground gas storage capacities", make the country "a potentially crucial player in European energy transit" - a position that will "grow as Western European demands for Russian and Caspian gas and oil continue to increase."

Ukraine's overwhelming dependence on Russian energy imports, however, has had "negative implications for US strategy in the region," in particular the strategy of:

"... supporting multiple pipeline routes on the East–West axis as a way of helping promote a more pluralistic system in the region as an alternative to continued Russian hegemony."
But Russia's Gazprom, controlling almost a fifth of the world's gas reserves, supplies more than half of Ukraine's, and about 30% of Europe's gas annually. Just one month before Nuland's speech at the National Press Club, Ukraine signed a $10 billion shale gas deal with US energy giant Chevron "that the ex-Soviet nation hopes could end its energy dependence on Russia by 2020."

The agreement would allow "Chevron to explore the Olesky deposit in western Ukraine that Kiev estimates can hold 2.98 trillion cubic meters of gas." Similar deals had been struck already with Shell and ExxonMobil.

The move coincided with Ukraine's efforts to "cement closer relations with the European Union at Russia's expense", through a prospective trade deal that would be a step closer to Ukraine's ambitions to achieve EU integration.

But Yanukovych's decision to abandon the EU agreement in favour of Putin's sudden offer of a 30% cheaper gas bill and a $15 billion aid package provoked the protests.
To be sure, the violent rioting was triggered by frustration with Yanukovych's rejection of the EU deal, along with rocketing energy, food and other consumer bills, linked to Ukraine's domestic gas woes and abject dependence on Russia. Police brutality to suppress what began as peaceful demonstrations was the last straw.

But while Russia's imperial aggression is clearly a central factor, the US effort to rollback Russia's sphere of influence in Ukraine by other means in pursuit of its own geopolitical and strategic interests raises awkward questions. As the pipeline map demonstrates, US oil and gas majors like Chevron and Exxon are increasingly encroaching on Gazprom's regional monopoly, undermining Russia's energy hegemony over Europe.

Ukraine is caught hapless in the midst of this accelerating struggle to dominate Eurasia's energy corridors in the last decades of the age of fossil fuels.
For those who are pondering whether we face the prospect of a New Cold War, a better question might be - did the Cold War ever really end?

Dr Nafeez Ahmed is executive director of the Institute for Policy Research & Development and author of A User's Guide to the Crisis of Civilisation: And How to Save It among other books. Follow him on Twitter @nafeezahmed

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