Ukraine: A Deep State Analysis

Tyler Durden's picture

Submitted by Charles Hugh Smith from Of Two Minds

Ukraine: A Deep State Analysis

Some preliminary thoughts on a complex situation.

It doesn't take any special insight into the situation in Ukraine to conclude that no one narrative illuminates all the dynamics. Various contesting Grand Narratives have emerged in the media--neofascist coup, rampant corruption, east versus west, to name a few--but these only describe a few of the regional fault lines and complexities.

At my request, correspondent A.C. offered a preliminary Deep State analysis of the situation. A.C.'s perspective is informed by decades of experience in Eastern Europe, Russia and the Baltic region.

I recently discussed the Deep State in The Dollar and the Deep State, and offered this definition by Mike Lofgren:

The term “Deep State” was coined in Turkey and is said to be a system composed of high-level elements within the intelligence services, military, security, judiciary and organized crime.

The Deep State is a hybrid association of elements of government and parts of top-level finance and industry that is effectively able to govern the nation without reference to the consent of the governed as expressed through the formal political process.

I describe the U.S. Deep State as the National Security State which enables a vast Imperial structure that incorporates hard and soft power--military, diplomatic, intelligence, finance, commercial, energy, media, higher education--in a system of global domination and influence.

One key feature of the Deep State everywhere is that it makes decisions behind closed doors and the surface government simply ratifies and implements the decisions. I have covered various aspects of geopolitics and the Deep State for years, for example:

The Great Game: Geopolitics and Oil (October 19, 2010)

The Banality of Evil and Imperial Over-Reach (December 14, 2010)

Speaking of Iraq--let's start with the obvious Deep State agenda in Ukraine: energy. Nations with a strategic "vital interest" in the region's energy mix include Ukraine, Russia, Poland, Germany (and the rest of the Europen Union, which currently depends on natural gas piped through Ukraine from Russia), Romania and (of course) the United States, which maintains a strategic interest in every square meter of the planet (including the seas and ice caps).

It's not much of a stretch to say that Russia's fiscal health and geopolitical influence are based on hydrocarbons--specifically gas and oil delivered to other nations for cash and/or political favors.

The maturation of fracking technologies have led to the exploration of western Ukraine, Poland and Romania by super-major oil companies such as Chevron: Where We Operate - Chevron

Chevron holds four shale concessions in Poland—Frampol, Grabowiec, Krasnik and Zwierzyniec—which total approximately one million acres. In the Grabowiec concession, drilling of the first well was completed in March 2012, followed by a diagnostic fracture integrity test in December 2012. A first well also was drilled in the Frampol concession in 2012. In the Zwierzyniec concession, drilling began in December 2012. Continued exploration drilling is planned for 2013.


Chevron holds more than 2 million acres in Romania, including a 1.6-million-acre concession in the Barlad Shale. We plan to drill an exploration well in 2013. We hold three additional concession agreements covering 670,000 acres in southeast Romania. Acquisition of 2-D seismic data across these concessions is expected to begin in 2013.


Chevron successfully bid for the right to exclusively negotiate with the government of Ukraine for the Oleska Block. The company is expected to operate and hold a 50 percent interest in the 1.6 million-acre concession.

Ukraine holds promise for shale gas despite uncertainty

The development of gas fields in these regions poses a direct competitive threat to the near-monopoly currently held by the Russian national oil company, Gazprom. This sets up a scramble for energy, where western Ukraine, Poland, Romania and the EU have powerful financial incentives to develop energy sources outside of Russian control, while Russia has an incentive to secure energy resources and assets in Eastern Ukraine and Crimea.

Here is A.C.'s outline of some of the key dynamics:

This gas pipeline map graphically illustrates Gazprom's real problem. A major competing gas field is appearing literally underneath a major existing east-west gas pipeline running into central Europe. Drill wells and immediately begin selling to Germany and other existing Gazprom customers. And also undercut Gazprom's pricing by a touch.


The extent to which US-based multinational oil and gas firms are directly displacing Russian enterprises in supplying the EU is remarkable. Chevron and Exxon are very prominent in the emerging offshore and shale plays.


I think the imminent threat of Ukrainian shale gas development is a factor in forcing Putin's hand over the EU trade deal. Putin's regional Great Power ambitions are backed entirely by strong arm hydrocarbon diplomacy. Putin's domestic political position equally rests on stable and elevated hydrocarbon prices to fund the state budget.


He has no revolutionary ideology with mass appeal in religion, politics or economics. Nor does he possess a large internationally recognized sphere of dominance like Stalin obtained at Yalta in 1945.


Nor does he have a large land army with which to intimidate and subdue neighboring states. He's only managed to convert a portion of the shrunken Army to "kontraktniki" (well-paid professional volunteers). These guys are the ones suppressing the Muslim insurgents in the Caucasus. If Putin attempted to openly intervene in the Ukraine with the available and virtually untrained conscript military forces it would produce a political explosion in Russia's own internal politics. This is addition to the surge of Ukrainian nationalist opposition that would ensue.


Putin's risk arises not just from the example being set for Russian domestic opponents. If Putin is seen to be responsible for alienating and finally "losing" the Ukraine he'll find himself in trouble with the Russian Deep State.


What's Happening in Kiev Right Now Is Vladimir Putin's Worst Nightmare (New Republic)


Will Ukraine Break Apart (New Yorker)


As this piece notes, modern Ukraine in its present form is an artifact of the 1945 Yalta Conference and the post World War II order. Just like Yugoslavia. Unfortunately for all concerned, this latent instability is now compounded by a happenstance of geology and the recent maturation of the technology for exploiting shale gas reserves. Adjoining neighbors like Poland now have motives that were missing when the Ukraine was a poor and primarily agrarian land.


The gas pipeline map shows the major incentives and rational objectives of a partition strategy from Putin's perspective. He can't stop development in Polish Lublin or near Lviv. He at least needs to keep control of infrastructure in the eastern Ukraine. Offshore Black Sea oil and gas tract concessions are also at stake.

This suggests that the interests of all parties align in supporting a de facto partition rather than a civil war in Ukraine in which neither side could establish stable, long-term control of the other.

I asked A.C. for his view of the U.S. Deep State's goals in the region.

The short two-part answer is:


1. Frustrate Moscow's ambitions to dominate Eurasia. The operative strategic analyses employed are MacKinder's World-Island Theory as subsequently and heavily modified by modern hydro-carbon fuel economics: The Geographical Pivot of History.


2. Continue to improve the EU's Central European position with respect to its hydrocarbon fuel supplies. The Neocons were already deeply worried about the growth of NATO dependence on Gazprom and the eastern pipelines in the mid-1980s. This has been on their radar for decades.


The overall objective is to destroy Putin's capacity to set marginal natural gas prices in Europe. If pipelines under the Baltic and Black Seas are feasible so are pipelines under the Mediterranean Sea from North Africa to France, and from the eastern Mediterranean and Aegean to Greece and southeastern Europe. Add some LPG terminals and European shale gas operations and this is achieved.


There may be a third goal in trying to set an example for domestic Russian opponents, which exist in great numbers. I think it's more likely the Russian Federation's Deep State will find another leader first.

Thank you, A.C., for your perspective on this complex, fast-evolving situation. Sometimes strategic goals can be met not by establishing overt control (i.e. becoming a target) but by indirectly thwarting the goals of competing Deep States.

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cossack55's picture

Its all about the (petro)Benjamins.

Looney's picture

Whoever wrote this article is a shill tryin' to passive-aggressively find a full-time job with either MSM, KerryDepartment, or LBGT(sp?) community. Chucky Smith used to have some interesting things to say...

The only way anybody could understand the dynamics of what's goyim on in Ukraine are those who actually lived over there (and not in the phuckin' Baltic Region).

Looney (I'm goyim back to watching my toenails grow)  ;-)

kaiserhoff's picture

Solid piece from Charles as usual.  It points out how much Russia has to lose from an extended civil war.  Their income and foreign exchange are from oil and gas.  The international arms trade just isn't working that well for them anymore.

fonestar's picture

AC = Anderson Cooper?


Looney's picture

Nahhh... "AC" stands for Affordable Care WITHOUT the actual ACT or CARE, or AFFORDABLE. Just like a blow-up girlfriend purchased with BTC  ;-)


EverythingEviL's picture

Wow nice find, this is getting very interesting

johngaltfla's picture

TY. I lurk in very dark places as a habit.

Occident Mortal's picture

I am tired of the way Western media twists the facts about world events.



Why don't we just call the "Arab Spring" what it really is?


The Pipeline War.

Flakmeister's picture

Why would you go to war over pipelines when they point in the best direction for you already?

I'd call that a logic fail....

americanspirit's picture

Very interesting site - I've bookmarked it and will be a frequent visitor.

gonetogalt's picture

Looney, did you bother to read past the first sentence of the article? Or did you forget the <sarc> tag?

macbone's picture

Like the Russians are not an evil Gangster imperialist power. You have to be a special variety of shithead to be a pro-Russian, pro-Putin, anti-US bigot. ZH is rapidly becoming shithead central.

Petrodollar System Beneficiary's picture

I think the Kremlin has infiltrated Zerohedge...

But in all seriousness, I am finding this site to be more pro-Russian as of late.

HardAssets's picture

Petrodollor Sys:

"But in all seriousness, I am finding this site to be more pro-Russian as of late."


No actually a lot of us are against an agenda of bringing about "a new world order" even if it also brings about thermo-nuclear world war 3.

"We are now at the year 1908, which was the year that the Carnegie Foundation began operations. In that year, the trustees, meeting for the first time, raised a specific question, which they discussed throughout the balance of the year in a very learned fashion.  The question is: “Is there any means known more effective than war, assuming you wish to alter the life of an entire people?” And they conclude that no more effective means than war to that end is known to humanity."

- Norman Dodd, Chief Investigator for US House Select Committee to Investigate Tax Exempt Foundations - relaying content of Carnegie Foundation minutes as discovered by his team


johngaltfla's picture

That's funny. I'm noticing more pro-Soros/NWO types infiltrating ZH lately also.

Flakmeister's picture

Would you like to put together a list?

We can compare notes...

BTW, it is called registering as a user....

TheReplacement's picture

Exactly.  Just because their guy can beat up our guy but doesn't need to because he's also much smarter doesn't mean he's the good guy.  Both are bad.  Both should lose.  Too bad the real losers will be Ukrainians on both sides.

KickIce's picture

At least Putin is a known quantity and not the wolves in sheep's clothing that wrap tyranny in the American flag.


Flakmeister's picture

Knock me over with a feather, really?

silvermail's picture

NLP for linguistic elements of provocation :
- " Holodomor " - there is no such word in the dictionary, it's newspeak . Purpose - introduction into people's minds , the myth of the genocide of Ukrainians from the Russian . To divide the Slavs through historical hatred and thus gain power over them .
- " Kosovars " - there is no nation in the world is Newspeak . Purpose - introduction into people's minds , the myth of the nation , which has the right to self-determination. People had to think so, because if there is no nation, there is no right to self-determination. Therefore ordinary Albanians living in Kosovo, Western propaganda began to call "people Kosovars".
- " EU and NATO " - there is no such unit , and legal concepts. This phrase is used to embed in people's minds the idea that " the EU" and " NATO " - is a common unit . The purpose - to intimidate slaves.

I propose to go further. I suggest using the phrase "EuroNATO". Or "EuroNATO of USA".

The_Prisoner's picture

Thanks for sharing. That is a good analysis.

EverythingEviL's picture

I thought the piece was pretty well written and made a lot of sense.

EverythingEviL's picture

The problem is you are looking at this from the perspective that any of the major players care what eastern Ukrainians do or do not identify themselves as. This is plain ol U.S. vs. Russia and the article explains quite nicely what fears the Russians have and why and what the US might be trying to do in order to "frustrate" the Russians. I suspect more than frustrating them is in the works

silvermail's picture

Author of this article tries to argue that what he is a complete ignoramus. He has no idea about the relationship between Russia and Ukraine. He lives in captivity his illusions of Western propaganda. He does not understand that the population in eastern Ukraine - is the Russian people and those Ukrainians who feel yourself as Russian. He does not understand that the entire western Ukraine - is subsidized region. There is no industry and developed agriculture. I do not understand why some people are trying to publish articles about something, where they are absolutely ignorant?
This is not an article , it's bullish shit about anything.

Looney's picture

Zactly, SilverMALE!  ;-) Ukraine IS Russia and Russia IS Ukraine. You, dude, must be getting your free-quent flyer miles from the same source as our own dearly beloved "Boris the Un-Weird".  ;-)


gonetogalt's picture

You forgot the <sarc> tag again...(ya better not be serious)

123dobryden's picture

i believed that shit about subsidized west until an hour ago i saw avg. wage and uneployment stats for the last year...


go and do your homework too

Mine Is Bigger's picture

It's really difficult to figure out how much people are acutally making in a country like Ukraine.  When I was there (in southern Ukraine), I met quite a few people who worked under the table and paid no taxes.  They did not have bank accounts either.  But a few of them I got close enough gave me some hints about how much they were earning.  It was a quite bit more than the official average wage.

frenzic's picture

I noticed that in Bulgaria too. Some did not even have an address or a mailbox. Now that's the life.

Petrodollar System Beneficiary's picture

Russia's last major attempt to expand its ring of influence failed due to technical difficulties:

Flakmeister's picture

Chevron better hope that its better than what Exxon got into in Poland...

Mind you, you could argue the Exxon was told to walk away and claim failure or have their Sakhalin Island concessions "reassigned"....

Putin would never pull a stunt like that...


wee-weed up's picture



Not to worry...

Obozo, Kerry, and the UN have warned the Ruskies to stay out of it.

Hey, maybe Obozo will even draw another "red line."

That'll really scare ol' Putie-Poot!

disabledvet's picture

"to the last i grapple with thee. from hell's heart I stab at thee. For hate's sake i spit my last breath at thee."

This is dramatic stuff and a poorly written piece to go along with.
One issue in Ukraine?

Look at the plethora of minorities in Ukraine itself.
Look at the aggrieved Russian minority.

Look at the timing.

And obviously an absolutely massive amount of money has been stolen.

Ukraine has far more than just natural gas. It's coal deposits are truly massive and believe it or not the USA is now a major exporter of coal to Europe.

The land particular the strategically located.
And of course "this is railroad country"...some of the best in the world.

Glad to see it reported on at the Hedge...glad to see the strong opinions on all sides. This article is a poor start to what is a truly breathtaking and dramatic situation. A "microcosm" if you will of all going on in our new media/meets up an coming world.

It's an ugly world filled with death and violence. We shall see if cooler heads prevail.

HedgeAccordingly's picture

Rep. Dave Camp: frankly many and most financial institutions are going to do better under this plan than they do now. And you know why they’re going to do better? Because the economy’s going to grow.” | 

sunaJ's picture

Got that, Ukrainians? Kindly forsake your own personal and political ideas of self-determination so that EUSSA and Russian oligarchs can make more money and continue the status quo.


123dobryden's picture

well they got that, thats why there is a revolution...thats why the wave of nationalism, thats why they didnt run to mumy after they started to shoot them...

thats why they dont want neither janukovic nor timosenko...

what "Right sector" together with other radical groups there did in the past month is remarkable and extraordinary, i think it will be quite interesting development over there

Hohlick's picture

Do you understand Ukrainian language? I'll show you "Right Sector" at work... but, may be, you can catch it without words

watch?v=q8JC-ZjqFb4 - here one of the RS top-managers discuss come questions with Rivne' Region public prosecutor.

watch?v=XtxbGjkpkF8 - a little bit earlier, same man visited Rivne Regional Council. "Who wants to take my gun? Who wants to take my knives?"

silvermail's picture

"I'll show you "Right Sector" at work... but, may be, you can catch it without words

watch?v=q8JC-ZjqFb4 - here one of the RS top-managers discuss come questions with Rivne' Region public prosecutor.

watch?v=XtxbGjkpkF8 - a little bit earlier, same man visited Rivne Regional Council. "Who wants to take my gun? Who wants to take my knives?"

Now, it's a legitimate officials EuroNATO of USA. You do not have any right to criticize members of the new legitimate government of Ukraine.
If you do not agree with this new legal authority, then you are pro-Russian fighter and a terrorist. So you are against Western values ??and Western democracy?

Keep in mind what now, you are acting against the world forces of good. But the world forces of good will win you and will be cut off your head.

krispkritter's picture



Who blinks first?

Even under orders I can't see the spineless nit-wit in the WH maintaining composure if this goes hot.

Flakmeister's picture

You do realize that Obama can sit back and watch while the "Chess Player" figures out how get Humpty back together again...

And if you don't see that, you are blind to reality...

satoshi123's picture

Aipac apologist Charles Smith, does a DEEP analysis, my ass,

So he blames the OIL companys, and talks shit, ... anything to distract people.


Yes, its abou GAZPROM, an its about stealing the UKRAINE, and then banning Russian fuel (Gazprom).

But who the fuck paid for the COUP? The USA.

Who Called for the COUP? Israel

Who Will profit? Saudi & Israel

Did CS mention any of this? Fuck no

TahoeBilly2012's picture

Agreed. These "deep thinkers" like Smith never explain the dominance of our; media, entertainment, banking or foreign policy, by mentioning the outsized presence of a very small gang of you know WHOOS and also never explain how simplistic the lies and distraction are from these people. Deep state...yea right.

TBT or not TBT's picture

These "them", are they different from the looney naughties and TPTB, or is there also an even deeper deep central committee of They that directs these they too?

kurt's picture

I'm a quarter Ukrainian and I have half a mind to kick your whole ass.

I wonder if'n those Ukrainians have the keys and codes for Nukular Bombs? Hmmm.