February 2022

by Alex Davidson

The West, especially the United States and the UK, has been ramping up tensions over Ukraine. Repeatedly using the refrain, ‘Russian troops on the Ukraine border’, the West has been steadily deploying more troops, missiles and bases to Eastern Europe and the Baltic States. The Western mainstream media continually talks about defending Ukrainian sovereignty but neglects to mention that the Russian troops are actually within Russia defending Russian sovereignty.

It may well be that the US intention is to provoke Russia, impose further sanctions and kill the Nord Stream 2 gas pipeline project. Russia is intent on stopping the further encroachment of NATO on its borders, while the US is encouraging the entry of Ukraine into NATO membership.

SHIFTING ALLIANCES

The tensions around the situation in Ukraine between the West and Russia have further unveiled serious differences, rivalries and contradictions in the West including:

• Germany and Austria have major differences with the US over the Nord Stream 2 gas pipe-line and the US imposition of sanctions on European companies involved.
• France was angered over the secret creation of the Australian-UK-US (AUKUS) nuclear arrangement which led to the aborted submarine deal between Australia and France and the withdrawal of the French Ambassadors from Australia and the US. This was the first time that France has withdrawn its Ambassador from the US since the American Revolution.
• The sharp differences with the US over its withdrawal from the Iran nuclear deal and the US imposition of sanctions against European companies dealing with Iran.
• The US ending of the Intermediate-Range Nuclear Forces Treaty.
• Tariffs imposed on European companies by the US related to the US-China trade war.

For some time there has been a developing re-configuration of western imperialist alliances.

The AUKUS deal reflected the US pivot to China but also reflects the divergence between the US/UK and the EU.

The core of this Anglo-American alliance is the Five Eyes intelligence gathering and sharing network first established during the Second World War by the United States and the UK, joined in 1948 by Canada and in 1956 by Australia and New Zealand. New Zealand has expressed its disquiet with the Five Eyes moving to a new and enhanced strategy including the promotion of shared values and not simply gathering and sharing intelligence. New Zealand’s reservations are largely due to its wish to continue to develop its trade with China and a realisation that China would not welcome Australia being provided with nuclear-powered submarines on its doorstep.

France has been pushing for some time for an autonomous EU Defence Force and the development of AUKUS has further encouraged this in French ruling circles. France, as the only remaining nuclear power in the EU following Brexit, would be in pole position to lead an EU Defence Force. This would assist its resistance to the German dominance of the EU and it has ambitions to further extend its colonial reach. The US wants its NATO allies to increase their share of the burdens of NATO but it is unhappy with the idea of the development of a separate EU Defence Force not directly under its control. The Anglo-American alliance, or the alliance of the capitalist English-speaking world, is of course under US leadership and is set on keeping the EU tied to its policies and securing other allies.

The recent agreement signed by the British Foreign Secretary, Liz Truss, and the Israeli Foreign Minister, Yair Lapid, on Iran, trade, defence and cyber activities takes British-Israeli relations to a new level. Britain announced that Israel is now a ‘tier-one’ cyber partner.

UKRAINE

Germany and France would prefer Ukraine to be under their tutelage through an association with the EU and have reservations about the US-led NATO approach. This difference of approach was crystalised when the US was cut out of the talks in 2014, known as the Normandy Format, which produced the Minsk Agreement and a ceasefire. The talks which led to that agreement only involved Ukraine, Russia, Germany and France.

Meanwhile the US and Britain are developing their control of Ukraine having engineered regime change in 2014. When Biden was Vice-President under Obama he worked hard to pull Ukraine into NATO’s orbit and used Victoria Nuland as the US prime mover on the ground in the coup against Ukrainian President Yanukovych. As well as handing out cookies to demonstrators in Maidan Square she was recorded on 28 January 2014, in a leaked phone call to Geoffrey Pyatt, US Ambassador to Ukraine, discussing who should become President of Ukraine. She was recorded saying, “I think Yats is the guy…”. On 27 February 2014 Yatsenyuk became President of Ukraine. The leaked phone call also recorded her saying, “Fuck the EU”, in reference to the EU’s involvement. Nuland is now back in the Biden administration as Under-Secretary to Secretary of State, Anthony Blinken. It should also not be forgotten that Biden’s son, Hunter, was put in as a director of Ukraine’s Naftogas, which Trump tried to use to his advantage in his losing presidential campaign. 

Britain has also been developing a very close relationship with Ukraine and now has a huge armaments contract with the country. Rosyth dockyard in Scotland has recently signed a contract to build frigates for Ukraine. This will provide work for Rosyth for some years to come. There are also moves to upgrade Ukraine’s ports and Britain is taking the lead.

NORD STREAM 2

The US threat of further sanctions against Russia, whilst having the explicit aim of preventing a Russian invasion of Ukraine, is also about economics and stopping Russian gas going to Europe. The US are opposed to the Nord Stream 2 gas pipeline from Russia to Germany as are countries in Eastern Europe which the pipeline will bypass as it runs under the Baltic Sea. 

The Nord Stream pipeline carries natural gas from Vyborg in Russia to Griefswald in Germany under the Baltic Sea. The first pipeline was officially inaugurated on 8 November 2011 by German Chancellor Merkel, Russian President Medvedev, French Prime Minister Francois Fillon and Dutch Prime Minister, Mark Rutte. The pipeline, 759 miles in length is the longest sub-sea pipeline in the world and has a capacity to carry 55 billion cubic metres of natural gas.

Nord Stream AG shareholders are the Russian company Gazprom (51%), the German companies E.ON (15.5%) and Wintershall (15.5%), the Dutch company Gasunie (9%) and the French company Engie (9%). The Chair of Nord Stream’s Board is Gerhard Schroder, former German Chancellor (1998-2005). His party, the Social Democratic Party (SPD), is committed to Nord Stream 2 as a key way of dealing with Germany’s energy issues as well as enhancing Germany’s dominance of the EU. Nord Stream AG signed a financing agreement for the Nord Stream 2 pipeline project with the German company UNIPER, the Austrian company OMV, Royal Dutch Shell, Wintershall and Engie. These companies ran foul of US sanctions because of their involvement with Nord Stream 2.

The Nord Stream project has split the EU, which the US is using to its advantage. The Nord Stream pipeline bypasses countries like Ukraine, Poland and the Baltic States. Nine EU countries signed a letter criticising the project. (1) Ukraine, in particular, fears the loss of billions in transit revenue if Russian gas supplies don't pass through their territory anymore once the new pipeline is built. The aim of US sanctions is to block Russian gas supplies to Europe and instead to sell shale gas from the United States.

US GAS EXPORTS

US liquefied natural gas (LNG) export capacity has grown rapidly since it first began in February 2016. In 2019, the United States became the world’s third-largest LNG exporter, behind Australia and Qatar. In January 2022 the US became the world leader in LNG exports. Since 2016 and the US-EU Agreement there has been a steep increase in US LNG exports to the EU. (2) Once the new LNG liquefaction units in Louisiana go into service by the end of 2022, the United States will consolidate its position as the world-leading LNG exporter. Since 2016 US exports of LNG to Eastern Europe and the Baltic states have been displacing Russian gas.

• Lithuania’s state-owned gas trader signed a deal in May 2017 to buy liquefied natural gas directly from the United States. This is part of Lithuania's efforts to diversify its gas suppliers and reduce its reliance on Russia's Gazprom. The deal is with a unit of US company Cheniere Energy. LNG from the US now provides Lithuania with roughly half of its gas. Gazprom supplies the rest.

• Poland’s state-run gas firm PGNiG received its first US delivery of LNG from the US company Cheniere Energy in June 2017.

• Croatia completed the building of an LNG terminal in 2019 and the state is now receiving LNG from America.

Twelve countries bordering the Baltic, Black and Adriatic seas formed a consortium, dubbed the Three Seas Initiative, in 2016, to develop regional infrastructure, trade and energy projects. (3)

On 6 July 2017 a summit of the presidents of the countries involved gathered in Warsaw, hosted jointly by Poland and Croatia. US President Trump took part in the Three Seas Summit and promoted US natural gas exports. The following is an extract from President Trump’s address to the summit:

“We're here at this historic gathering to launch a new future for open, fair, and affordable energy markets that bring greater security and prosperity to all of our citizens. We are sitting on massive energy and we are now exporters of energy. So, if one of you need energy, just give us a call…

I congratulate your nations for already beginning the critical projects that open us up to greater access, and you'll be totally open and have access to energy markets and remove barriers to energy trade, such as the floating LNG terminal on the Croatian island of Krk. Did you ever hear of that? Right? Huh? You know all about that. I bet you know all about it…

The United States is proud to see that our abundant energy resources are already helping the Three Seas Nations achieve much- needed energy diversification…

America will be a faithful and dependable partner in the export and sale of our high-quality and low-cost energy resources and technologies. We make the best technology and we make the best, best technology for fighter jets and ships and equipment, military weapons. There's nobody even close, and that's acknowledged. All over the world they talk about the greatness of our military equipment. Nobody comes close. So when you buy and as you buy military equipment, hopefully you'll be thinking only of the United States.” (4)

Of course, Trump couldn’t resist trying to sell arms as well as gas!

It is not surprising that Germany sees the American’s latest threat of sanctions against Russia as part of a move to export more US gas to Europe and undermine Germany as the gas hub of Europe and its control of eastern Europe through the EU.

US sanctions including those against western companies involved in the pipeline delayed Nord Stream’s construction for one year. However, at a summit meeting in July 2021 between Chancellor Merkel and US President Biden a deal was struck. (5) This included Biden lifting the sanctions on the European companies involved in Nord Stream 2 so construction was re-started and the pipeline is now ready to be operational. It currently awaits certification from the German and EU regulators. The quid pro quo of the German-US agreement committed Germany to “utilize all available leverage to facilitate the extension of up to 10 years to Ukraine’s transit agreement with Russia”. Germany also agreed to donate $175 million to a Green Fund for Ukraine and to provide technical assistance for Ukraine’s integration into the European electricity grid.  

However, the US would still like to kill Nord Stream 2. One way of doing that would be to provoke Russia into intervention in Ukraine, impose more sanctions, bring Germany into line and force it to abandon Nord Stream 2.

GERMANY'S POSITION

Germany needs Russian gas as a bridging technology because of its decision to phase out coal and nuclear technology. It imports 119 billion cubic metres (bcm) of gas. Some 37% of Germany’s gas is from Russia, 20% from Norway, 12% from Holland, some 5% is produced domestically and 25% is in storage. It has 24 bcm of gas stored in underground caverns. The company, Astora, runs two vast storage caverns in Germany and one in Austria. Astora is owned by the Russian state-company Gazprom. Gas keeps half of Germany’s 41.5 million households warm and some manufacturing industries also depend on the fuel. In 2021 Germany imported 34% of its crude oil and 53% of its coal for power generation and steelmaking from Russia.

The previous ‘Grand Coalition’ government of Germany led by Chancellor Merkel with the SPD’s Olaf Scholz as Finance Minister was strongly committed to trade with Russia and Nord Stream 2. However, the new German government, which took office in December 2021 is deeply divided over Nord Stream 2. This government is a coalition of the Social Democratic Party (SPD), the Greens and the Free Democrats. The governing Cabinet comprises 7 SPD, 5 Greens and 3 Free Democrats with the SPD’s Olaf Scholz as Chancellor and the Green Party’s joint-leader, Annaline Baerbock, as Foreign Minister.

The SPD are in favour of Nord Stream 2 but the Greens and the Free Democrats oppose the project. Their differences over Nord Stream 2 are probably the most serious of the current differences in the German government. Prior to her appointment as Foreign Minister Baerbock campaigned against Nord Stream 2. She said that she believed providing Nord Stream 2 with regulatory approval would be contrary to EU rules. She argued that since the Nord Stream 2 AG company, which owns and operates the pipeline, is owned by the Russian company Gazprom, it goes against the EU's gas directive. "As long as that is one and the same corporation, the operating permit must not be granted," Baerbock argued. There can be no doubt that the differing views over Nord Stream 2 in Germany and the EU will play out in both Regulator’s decisions. Although Regulators, in capitalist society always argue that they are impartial and above politics in the same way that the capitalist state is declared to be neutral, one would need to be naïve to believe that. 

The West remains united in its opposition to Russia. However, there are differences over how to deal with Russia and the situation in Ukraine. One recent example is that of the resignation of Germany’s navy chief, Vice-Admiral Kay-Achim Schoenbach, who stepped down on 22 January after drawing criticism for remarks he made in relation to Ukraine during a lecture in India on 21 January. Vice-Admiral Kay-Achim Schoenbach in his lecture said, “What he (Putin) really wants is respect…and my God, giving someone respect is low cost, even no cost…It is easy to give him the respect he really demands – and also deserves.” In the same lecture, whilst Schoenbach conceded that Russia’s actions in Ukraine needed to be addressed, he added, that, “the Crimea peninsula is gone. It will never come back, this is a fact.” (6)

Crimea was part of Russia from 1783 until 1954. It was then transferred to Ukraine but still remained within the USSR. After the demise of the Soviet Union, Russia by agreement with Ukraine continued to use the port of Sevastopol as a naval base. The 2014 coup in Ukraine engineered by the US put this under threat as the Sevastopol port is a vital strategic base for the encircled Russia.

Vice-Admiral Kay-Achim Schoenbach understood some other things about Russia. In the same speech he also said that Germany and the West needed Russia against China.

• The EU countries signing the letter opposing Nord Stream 2 are the Czech Republic, Estonia, Hungary, Latvia, Poland, Slovakia, Romania, Lithuania and Ukraine.
• https://ec.europa.eu/energy/sites/ener/files/eu-us_lng_trade_folder.pdf
• The 12 countries in the Three Seas Initiative are Poland, Hungary, Czech Republic, Slovakia, Romania, Bulgaria, Lithuania, Estonia, Latvia, Croatia, Slovenia, Austria.
• https://time.com/4846780/read-donald-trump-speech-warsaw-poland-transcript/
• https://www.state.gov/joint-statement-of-the-united-states-and-germany-on-support-for-ukraine-european-energy-security-and-our-climate-goals/
• https://www.reuters.com/world/europe/german-navy-chief-resigns-over-putin-comments-2022-01-22/

 

Vice President Joe Biden meets US’s man Ukrainian President Yatsenyuk in 2014 pic by US embassy

It is not surprising that Germany sees the American’s latest threat of sanctions against Russia as part of a move to export more US gas to Europe and undermine Germany as the gas hub of Europe...