* Russia spins global energy spider’s web *

2006-08-27

Richard Moore

Friends,

Below is a very insightful and informative article. Stroupe's 
analysis is brilliant, on a par with what we've seen from William 
Engdahl. I agree entirely with his view of 'what's going on', but I'd 
like to comment on some of the attitudes he expresses.

    "We are witnessing not merely the formation of some new
     oil-and-gas cartel with Russia at its center, but rather the
     formation of something that includes both producers and the
     key consumer states of the East in an ever more cohesive de
     facto confederation...
      ...the circle defining international energy security is now
     being drawn. Inside the circle are those producer and
     consumer states whose political and geopolitical affinity
     for each other is the result of no mere chance occurrence
     and whose energy-security interests are being strategically
     served and addressed on both sides of the producer/consumer
     equation."

In other words, nations are learning to work together for their 
mutual benefit, producers and consumers in voluntary cooperation. 
Sounds reasonable to me. A very sound way for the world to operate; 
much better than imperialism.

   "Almost none of the world's oil and gas producers wants to
     be inordinately dependent on the US market any longer.
     Additionally, the steady rise of the powerful economies of
     Asia beckons oil and gas producers toward such lucrative
     markets that are politically cost-free, meaning they do not
     attach political demands and seek to interfere in the
     domestic affairs of the producing regimes, as does the US."

What we see is that Russia is acting as a friend, while Uncle Sam 
plays the bully. When you have a friend who can stand up to the 
playground bully, you naturally flock around your friend.

    "Rather than being merely unrelated and random events,
     global developments in the energy and geopolitical spheres
     over the past seven years form a distinct pattern that
     bespeaks the execution of a developing strategy of a Russian
     reacquisition of global power, but in concert with its
     strategic partners, at the incalculable expense of the West
     in general and of the US in particular."

In what currency is this 'incalculable expense" being calculated? I 
think it is not 'cost of oil': no one is refusing to make fair oil 
deals with the US. I believe that 'power' is the currency being 
referred to. The ability of the US to play the bully is being 
challenged.

    "Contrary to the assumptions of conventional wisdom, the US
     hasn't any longer the global leverage to shape unfolding
     developments in its favor. Russia is rapidly acquiring such
     leverage, and it is expertly plying that leverage against US
     vulnerabilities in the energy sphere."

It is the vulnerabilities of the bully-role that are being plied. 
Those need not be seen as US vulnerabilities. The US can choose to 
act as a friendly member of the global community rather than 
insisting on remaining a bully.

The more the US pushes its bully-imperialist role, the more the SCO 
et al will be infused with hostile intent. If the US were to enter 
the game of seeking mutually-beneficial deals, and take the lead in 
nuclear disarmament, quite different outcomes could be produced.

The basic problem here is that the US does not act out of national 
interest.  Rather it pursues the interest of those who control it 
from behind the scenes: a small clique of banker-financiers.

rkm

--------------------------------------------------------
http://www.atimes.com/atimes/Global_Economy/HH25Dj01.html

Russia spins global energy spider's web
By W Joseph Stroupe

The vast bulk of the world's oil, gas and strategic minerals 
resources either is coming under or is already under the control of 
authoritarian, or less-than-democratic, or leftist, or otherwise 
radical regimes either with a decidedly anti-Western political stance 
and ideology or pointedly decreased sensitivities to strategic US 
interests.

It is difficult to name more than a handful of resource-rich states

that are liberal democracies and that are still significantly aligned 
with the West. Only Canada and Mexico come immediately to mind, and 
even Canada is increasingly embracing China and the East in the 
sphere of strategic energy deals and agreements.

Even those resource-rich regimes that are considered to be the

most moderate of the globe's producing states are far less closely 
aligned geopolitically with the US than they were previously.

Saudi Arabia, for example, continues its "Look East" policy of 
diversifying its markets away from the US. It has concluded a range 
of important deals in the energy sector with China and India and is 
steadily moving into closer geopolitical alignment with the rising 
East.

A number of other key Middle Eastern regimes are following suit. By 
and large Latin America is doing the same, as are Africa and Central 
Asia. Almost none of the world's oil and gas producers wants to be 
inordinately dependent on the US market any longer. Additionally, the 
steady rise of the powerful economies of Asia beckons oil and gas 
producers toward such lucrative markets that are politically 
cost-free, meaning they do not attach political demands and seek to 
interfere in the domestic affairs of the producing regimes, as does 
the US.

In virtually all cases, the interests of the West and of its 
multinational oil companies and big Western financial institutions 
are being minimized and/or pushed out as the global trend of 
nationalization, by one means or another, of the oil-and-gas sector 
picks up speed.

That is occurring in Russia, which has now surpassed Saudi Arabia as 
the world's largest exporter of oil, in Central Asia, the Middle East 
and in Latin America. Within virtually all such regimes the lines of 
separation between the top levels of political leadership and the 
directorship of key corporations and industries are not only blurred 
but are being obliterated. The multinational oil companies of the 
West are being marginalized as a direct result.

That is the case in Russia, where in many key areas of industry 
corporate directors are intimately tied to President Vladimir Putin, 
having formed a close association with him long before he became 
president, and many even hold key positions as upper-level Kremlin 
officials, or as government ministers. Not merely coincidentally, the 
key corporations the directors of which are so closely allied with 
Putin are often resources-based and are also those that are 
state-controlled businesses, with the Russian state holding 
controlling (51% or more) interests.

To varying yet alarming degrees, the resource-rich regimes around the 
globe are copying the Russian model. Resources-based corporate states 
with a profound political affinity for one another and a simultaneous 
collective disdain and even a hatred for US-led unipolar dominance 
are proliferating around the globe.

Resource-rich Russia's mounting global leverage with the world's 
other producing states and with the powerhouse economies of the East, 
and its profound political affinity with such producers and key 
consumer states, far outweighs the influence of the Organization of 
Petroleum Exporting Countries (OPEC).

How so? Russia is crossing the membership boundaries of OPEC to court 
its most powerful members and to conclude with them joint-venture 
agreements of huge consequence and importance for the future of 
global oil and gas exploration and production. The West is rapidly 
being pushed out of such ventures, or is being forced to take radical 
reductions in the size of its stakes, and is being left out entirely 
in many new ventures.

Instead, the world's producing regimes are increasingly entering key 
joint ventures between themselves and in very close cooperation with 
the powerhouse economies of the rising East, such as China. We are 
witnessing not merely the formation of some new oil-and-gas cartel 
with Russia at its center, but rather the formation of something that 
includes both producers and the key consumer states of the East in an 
ever more cohesive de facto confederation. This is dedicated to the 
achievement of strategic energy security for those within its clearly 
defined circle.
In the process, OPEC itself, as an entity, is being undermined and 
marginalized. Simultaneously, the West is being forcibly cast from 
the proverbial frying pan into the fire as something far more 
powerful, compelling and all-encompassing than OPEC is coalescing.

The ominous rise around the globe of the resources-based corporate 
state is accelerating. The implications for the West are enormous, 
yet such implications are only beginning to be understood. As noted 
above, such states are concluding rapidly increased numbers of 
strategic agreements among themselves for the joint exploration and 
production of oil and gas, and with the rapidly rising powerhouse 
economies of the East, such as China and India, for the private 
long-term supply of oil and gas.

The creation of such private pools of oil and gas for the consumption 
only by specific economic powers in the East and select economies of 
the West is also a new development that carries with it profound 
implications for the West.

In essence, the circle defining international energy security is now 
being drawn. Inside the circle are those producer and consumer states 
whose political and geopolitical affinity for each other is the 
result of no mere chance occurrence and whose energy-security 
interests are being strategically served and addressed on both sides 
of the producer/consumer equation.

Some of the economies of the West, such as Germany, are being 
included within the developing circle. Outside the circle are those 
economies of the West that are to be left out of the growing 
international energy-security arrangements currently being 
constructed, as alluded to above. Interestingly, and as a profound 
new development, it isn't the United States that defines the path and 
scope of the circle. Instead, it is Russia and its strategic partners 
who are defining it.

Because Russia's leaders adroitly positioned the Russian Federation 
to capitalize massively on global energy developments, it is the 
state that inherited the unique ability to shape global developments 
as they unfold. Russia is shaping important developments among the 
world's key producing and consuming powers. They are being shaped 
contrary to the strategic interests of the United States, as noted 
above. The US is also shaping developments, foolishly handing Russia 
and the East ever more global leverage. By incessant strategic 
blunders, the US has isolated itself internationally and fanned the 
fires of global anti-Americanism, which increasingly engulf the very 
regions where its own resources-based strategic interests lie.

An entire array of fundamental global developments as respect 
strategic resources is quite literally changing the landscape of the 
traditional global energy order. With regard to energy and energy 
security, a new global order is emerging. The US-backed liberal, open 
global oil market order is beset by an accelerating proliferation of 
private, state-to-state long-term agreements and contracts concluded 
within the circle Russia and its partners are defining.

This is creating increasing numbers of private pools of oil and gas 
dedicated only to serving the energy-security interests of the circle 
of private participants. Along the way, Russia's export monopoly of 
the oil and gas that still flows outside the circle to the West 
continues to grow, further ensuring its mounting global leverage.

Rather than being merely unrelated and random events, global 
developments in the energy and geopolitical spheres over the past 
seven years form a distinct pattern that bespeaks the execution of a 
developing strategy of a Russian reacquisition of global power, but 
in concert with its strategic partners, at the incalculable expense 
of the West in general and of the US in particular.

Contrary to the assumptions of conventional wisdom, the US hasn't any 
longer the global leverage to shape unfolding developments in its 
favor. Russia is rapidly acquiring such leverage, and it is expertly 
plying that leverage against US vulnerabilities in the energy sphere.

W Joseph Stroupe is editor of Global Events Magazine online at 
http://www.GeoStrategyMap.com. He has authored a new book on the 
implications of ongoing energy geopolitics titled Russian Rubicon - 
Impending Checkmate of the West.

(Copyright 2004-06 W Joseph Stroupe.)
-- 

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