Beloved founder and president of London Center for Policy Research, Herbert London passed away on November 10th.
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‘Energy NATO’ could rein in Putin

John Kerry, the U.S. Secretary of State, recently said that Russian President Vladimir Putin is using 19th century methods in the 21st century. Kerry is behaving as if Putin was impolite during a state banquet and burped at the table. But Putin’s mind-set is largely rooted in the 19th century. Politics is about power, not about law. The West, accustomed to diplomatic conferences on noble UN objectives, has trouble with cynical realpolitik.

Modern political leaders know more about public relations than about history, let alone the 19th century. Kerry is no Kissinger. The former US foreign minister obtained a PHD with the thesis ‘A World Restored’, on the Congress of Vienna (1814-1815). Henry Kissinger wrote in the Washington Post: “Far too often the Ukrainian issue is posed as a showdown: whether Ukraine joins the East or the West. But if Ukraine is to survive and thrive, it must not be either side’s outpost against the other — it should function as a bridge between them.”

What can we expect from Putin with his 19th Century methods? He used the chaos in Ukraine to annex Crimea, home to the Russian Black Sea Fleet and where 60% of the population is Russian. He received massive support from the Russian people for whom Crimea has always been part of the Russian demos. Ukraine cannot do anything, and the West is both shocked and helpless. For Putin, there was little risk.

The situation is different for Ukraine itself. Kissinger: “Putin should come to realize that, whatever his grievances, a policy of military impositions will produce another Cold War”. For Putin, the disadvantages of a military intervention in eastern and southern Ukraine outweigh the benefits by far. If he does annex these parts of the country, it will lead to a lot of violence, a possible civil war, in the poorest areas of Ukraine. Western Ukraine will then emerge as a virulent anti-Russian state, even more militant than Poland, and will join NATO. His best option is therefore to return to the way things were: Ukraine as a whole, a weak state with a large Russian minority that gives Moscow disguised guardian rights over its neighbouring country.

The appetite for more power has to be constrained by a countervailing power. Here, Europe has utterly failed. Putin can use energy as a tool of power because Europe has become too dependent on Russian gas. That fact may tempt Putin to go on adventures like the political leaders of the 20th century. The EU has been preaching less dependence on energy imports since September 11 2001. The opposite has happened. The EU now imports 85% of its oil, 67% of its gas and 62% of its coal. By 2030 oil imports even exceed 90% and gas imports 80%. The largest supplier in each sector: Russia.

The main reason of increased dependency is European climate policy which prevailed over reduction of gas imports. The EU became a self-proclaimed world leader in the fight against ‘global warming’. During the climate hysteria, coal became bad, oil became dirty, fracking is a sin and nuclear energy the devil. This denunciation resulted in more imports from Russia. The German energy transition following Fukushima – closing nuclear power plants and embarking on the mass construction of windmills – was a classic example. Windmills cannot replace nuclear power plants, while coal power plants are needed to address the power shortages, for which Germany is importing cheap coal from the United States. Germany now imports 60% of its gas from Russia, thanks to the direct Nord Stream pipeline managed by former German Chancellor Gerhard Schröder on behalf of Gazprom.

The West can hold off Putin’s ‘adventures’ by becoming a sufficient countervailing power and forming an ‘Atlantic Energy Pact’, a sort of ‘Energy NATO’. Norway, Canada and the United States are major producers of energy within NATO and can increase gas exports to EU countries. The Netherlands could launch such an initiative, as a major hub in European gas distribution. Forming an Atlantic Energy Pact is not trouble free. In the U.S. there are legal restrictions on gas exports, supported by powerful lobbies such as the steel and chemical industries, as well as the unions. Gas exports raise domestic prices. A 1938 law prevents free export of natural gas and makes it subject to an authorization procedure. John Boehner, speaker of the House of Representatives, rightly advocated (WSJ March 6) a dramatic expansion of American-made energy and the lifting of the de facto ban on exports of US-produced liquefied natural gas (LNG). Over the past 3 years only 6 applications for US exports of LNG have been approved while 24 applications are pending. Furthermore, the EU should give up its resistance to the import of Canadian sand oil which it regards as ‘detrimental to the Canadian environment’; apparently, the Brussels bureaucracy knows best, even from a distance of 6000 miles. An Atlantic Energy Pact could create countervailing power to Russian overreach.

Putin is playing chess on the board of Russian history and only a counter-power could confine his realpolitik, not public outcry. The Ukrainian issue should finally be resolved at the negotiating table. Kissinger: ‘The test of policy is how it ends, not how it begins’. Kissinger was the Metternich, architect of the Congress of Vienna, of the 20th century. This century has yet to produce one.