Ukraine: Follow The Energy

Tyler Durden's picture

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Scrape away the media sensationalism and geopolitical posturing and it boils down to a simple dynamic: follow the energy.

Though many seem to believe that internal politics and geopolitical posturing in Ukraine are definitive dynamics, I tend to think the one that really counts is energy: not only who has it and who needs it, but where the consumers can get it from.

Let's cut to the chase and declare a partition along long-standing linguistic and loyalty lines a done deal. Let's also dispense with any notions that either side can impose a military solution in the other's territory.

Media reports on the weakness of Ukrainian military forces abound (for example, Ukraine Finds Its Forces Are Ill Equipped to Take Crimea Back From Russia), but Russia's ability to project power and hold territory isn't so hot, either.

A knowledgeable correspondent submitted these observations:

RE: Russian Army. Effective draft evasion is running 80%. Morale is low, training is very poor and poorly funded. The Russian army has also gone through 22 years of near continuous contraction.

And this standing army has heavy commitments in the Caucasus and Far East Siberia. Moreover, at least half of these Russian ground troops are short term 12 month conscripts. I don't think these kids will produce many usable and motivated troops. The low morale recently seen in the Ukrainian Berkut and other police will be multiplied by at least 10x.


Russian speaking Ukrainian bands are rumored to already be crossing the borders into Russia territory. They're to be ready to sabotage bridges and infrastructure and generally retaliate. Fluent Russian speakers with many years experience of living in Russia. Who can say for sure if this has already happened or is just being threatened? We can say this is a very real danger. These people look just like "Russians."


And we can also say this threat will seriously complicate Russian rear area security and logistics. And speaking of logistics, the distances in south Ossetia and Abkhazia were very short and the populations were entirely friendly. Neither condition prevails in the Ukraine outside the Crimea.


Supplying moving armored units over hundreds of miles of occupied country is very difficult logistically. The logistics for air assault helicopter units are just as bad. These helo units look mobile but they're a lot like a yoyo being twirled around your head on the string. They only go fast within a fixed radius anchored by logistics that are about as heavy to move as an armored division's supply columns. That is years in the 101st Airborne Division talking. The fuel consumption rates are immense. Stuff starts breaking down fast.

Conclusion: a de facto partition is already baked in because neither side can force a re-unification. Various jockeying and posturing will undoubtedly continue for some time, but the basic end-game is already visible: de facto partition.

Let's move on to correspondent A.C.'s observations about energy.

This map rounds out the European energy Rosetta Stone. When they hear that Italian fighter jets are over Tripoli, or that the French Foreign Legion has returned to the deep Sahara Desert, they can can better understand the reasons and real objectives of such operations.



Many have noted that the Russia economy is critically dependent on oil and gas exports to the EU. It should be noted that the converse is less true every day about EU dependence on Russian oil and gas. The Wall Street Journal even had a line about an EU proposal to push natural gas EAST to the Ukraine. It's hard to understand that passage or where the natural gas could come from unless one understands the North Africa to southern Europe gas pipelines.


The factors bringing the conflict in Ukraine to a head are:


1. The natural gas discoveries in eastern Poland and western Ukraine played the largest role.


2. The reduced importance of the gas pipeline running through the Ukraine to Europe as compared to 2009. Since that time the Nordstream lines have been finished and Gazprom acquired commercial control of the Belarus pipeline. The South Stream lines are well along in development.


3. Fast developing liquid natural gas (LNG) seaport terminal infrastructure.


Events in Libya, Mali and Algeria are not hermetically isolated from this. They are part of a comprehensive energy policy problem being dealt with by the same leaderships. It increasingly looks like a series of peripheral Energy Wars that are being fought out for control of Europe.

LNG exports are going to become a weapon in the struggle for geopolitical influence and control.


This highlights another problem for Russia/Gazprom. Its present natural gas advantage in Europe now rests mainly on its pipeline infrastructure. This advantage is fading due to the current and proposed pipeline projects running through Turkey to Europe, plus LPG terminal & ship developments, plus the five trans-Mediterranean pipelines from Libya, Algeria and Morocco to southern Europe, plus local shale gas plays...


The Ukraine is not the only country becoming less systemically important to Europe for natural gas supply. So is Russia. Current events will only accelerate everyone's efforts to diversify away from such an unstable and apparently dangerous supplier.


I think the long-term fallout from the Ukrainian Crisis will be similar to China's attempt to exploit its temporary low price monopoly position in rare earth metals a few years ago. The result is rare earth metals are becoming less rare by the day as alternate mines outside China are opened and reopened.

Thank you, A.C. Scrape away the media sensationalism and geopolitical posturing and it boils down to a simple dynamic: follow the energy.

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orkneylad's picture

If you ain't in the oil business, you ain't in business.

Escrava Isaura's picture

Tyler, talking about business, is there anything wrong with Zero Hedge site?

Zero Hedge at Mozilla is crashing. Tried at Explorer and it's very slow. The others sites are fine at Mozilla.


MarsInScorpio's picture

I posted - repeatedly - there isn't going to be a hot war. MAD is still around, and doing its job.


Frankly, I wondered why anyone would oppose anyone else having the bomb. After all, it's highly effective at stopping war.


Then it dawned on me: The reason is because then the US, China, Russia, et. al couldn't go in and drone countries, or loot counties, or finance a coup in countries that have the bomb. They’d have to actually use win-win scenarios to advance their agendas.


Can't have that, can we? How can you rape the world if everyone is carrying a gun to kill the attacker?


The more I read ZHer posts - well, some excluded of course but most posts - the more I realize how long I bought the Big Lie of the oligarchs and their wage slaves carrying out their policies.


George Wallace once said of the Dems and Reps, "Tweedle Dee and Tweedle Dum."


How true.


And how true of all the Controllers no matter where you are in the world.


So I say, "People of Ukraine, you have thrown off the chains of one group of oligarchs to have them replaced with the chains of another group of oligarchs. Either way, you are nothing but slaves."


And to think of all the innocent lives the oligarchs are guilty of murdering for wealth. 


The French Revolutionaries only killed half the guilty parties - and replaced them with the other blood-thirsty half that survived.


In the Big Scheme of things, nothing changed.


And nothing ever does.


Or to put this in the form of a Robert Crumb cartoon:


Average Joe is climbing the mountain to seek the wisdom of Mr. Natural.


He reaches the top, and exhausted, he asks, "Mr. Natural! Mr. Natural!! What's it all mean??"


Mr. Natural, in his finest guru attire looks down at him and says, "Don't mean shit."



Independent's picture

Russia at minimum needs Crimea and Odessa to control Kiev because these are the only two ports, otherwise everything has to come overland through other countries and makes things more expensive.  Odessa also links up to Transniester the breakaway part of Moldova which is made up of mostly Russians and has been isolated all this time.  Odessa in Russian hands gives Transniester umbilical cord to the sea and to Mother Russia.  I think the referendums will have Odessa go to independence from Kiev and join up with Russia.  We will see the same in the industrial East referendums.  Then Kiev can do nothing as Russian troops come in to regions that are ethnically Russian and want to be part of Russia.   Putin has made it clear that he will not allow Ukraine troops to fire on Russian citizens which is what will happen if Ukraine sends troops into the areas that want to break away.

Phuk u's picture

I think you will find that a lot of russian speaking ukrainians do not want anything to do with Putin,

this is all a Russian exercise in propaganda which it holds in spades. I also believe that some idiot from either side

will pull the trigger and cause a serious problem, I hope I am wrong.


Occident Mortal's picture

Russian Natural Gas exports to Europe....$35bn per year

Russian Crude Oil exports to Europe.....$240bn per year

Gas is cheap. Oil is not.

Lost Word's picture

Is that Russian Oil exported mainly by pipeline or ship?

Either method could be blocked by war.

angel_of_joy's picture

I think you will find that a lot of russian speaking ukrainians do not want anything to do with Putin

Very true ! However, these Russians tend to live mostly in North America, and definitely not in Eastern Ukraine...

Truthseeker2's picture
The Ukraine Deception: US/EU-Directed Coup D’état Exposes Itself


disabledvet's picture

they'll need at least a 250,000 man Army to take and hold Odessa.
Turkey will not stand idly by while 300,000 tartars are subjugated either.

Again..."these are ghosts best left undisturbed."
Putin and all his "pom-pommers" should GO BACK NOW.

vened's picture

"Turkey will not stand idly by while 300,000 tartars are subjugated either."

Good, Russians also want Constantinople back. Unfinished business from 1852....



Ecclesia Militans's picture

Byzantine Catholics would like their Basilica in Constantinople back too - held it for almost a 1000 years until being slaughtered by the Jannisaries in 1453 - how far back do you want to take this line of reasoning?

Unpopular Truth's picture

Indeed, Ecclesia!
I say, let's go to the time when Alexander the Great died.

Independent's picture

Well seeing how there are 1.6 million ethnic Russians in Crimea I would say they have more than enough boots on the ground to hold on to Crimea, as for Odessa its a port city and the Russians rule the Black Sea, not to mention the Region is Pro Russian and dont forget Transniester is already heavily militarized and weaponized by Russian speaking population.  If the Ukraine military, which is practically nonexistand, all this media talk of Ukraine military and I see nobody, while I see tons of Russian equipment and troops, so if Ukraine military moves on Odessa they will be flanked fromt he west and North by Transniester, basically they would be walking into a pincer formation.  Look at the map.

Lordflin's picture

Well Mars, I wish you were correct... And I am more than willing to be wrong about this, but I strongly suspect I am not.

No one builds a military and then doesn't use it. Nations throughout the world are rearming... With the exception of US... one could speculate a number of reasons for that...

There has been no weapon designed by man that has not eventually been used. Near the end of WW II US built three nuclear bombs... they tested one and dropped the other two.

Currency war being fought world wide... will end in agreement or war... My money is on the latter.

US empire is crumbling... this is another prelude to war... ie WW II British empire was following apart. In fact, Hitler use to offer countries a portion of the British empire to come into the war (Stalin use to write to Hitler asking what part of the British empire he was going to get... Hitler answered him in June of '41)

I could go on... world is facing perfect storm... suspect it is going to get very wet...

zionhead101's picture

CHROME is google, never use anything from google, and especially YOUTUBE.

Freddie's picture

He has a lot of BS going on with Flash video players on Mozilla/Firefox.  Explorer is hopeless.  Opera is free and ZH work better for me using Opera.

Escrava Isaura's picture

Thanks Big Corked. Downloaded Adblock and Mozilla is rocking!!!

Son of Captain Nemo's picture


Much obliged for the intel on this problem.  You're right perfect fix.


Escrava Isaura's picture

My pleasure! Now let's focus on Flakmeister... He/she is on a row

ForTheWorld's picture

Ad-Block Edge (not Plus) is better in Firefox. Make sure you add the subscriptions to filter out malware and social networking sites - it makes things a LOT better. Ghostery is a decent add on as well for filtering out more crap, but it reports your browsing habits for "marketing research", so it's got a bad side.

Levadiakos's picture

Man up and quit looking at porn

Kirk2NCC1701's picture

As an alternative, try Ghostery.  That'll slow down or block the (4-12) marketing probes etc that tag along on every ZH page.

Aside from the hyper-texted ZH links, most of the Flash-players slave-ads vanish.  Damn Flash player and crap!

salvadordaly's picture

I had the same problems with explorer, and it was only with the hedge that I experienced it. Other sites were fine. Not saying who or why but I got it cleared up by running anti spyware software. I got that Super spyware free down load and all is better.

vulcanraven's picture

Try Adblock plus, there are certain ads that will freeze/crash your browser. Adblock should take care of that.

zionhead101's picture

You have to use a whole bunch of shit,

Just use mozzilla and use adblock+, and then get all the addon's that say 'google block', you will end up using about 5 tools, but you need to have them all installed, and make sure you always have shockwave turned off its the worst NSA trojan horse.

Note that to view Banzai's pictures they'll no longer be visible, because he's not showing JPG's, which can be done by a dumb browser, but he's using a google tool that requires all the dumb ad stuff be on, so its clear that banzai's photos are all a honey pot to get people to enable ad's,

The problem is if you enable ad's then you have 1,000's of dumb clients spying on your computer.

turn it all off, and you'll be fine, and if Banzai wants people to see his work, then he can post JPG's like normal non-nazi human beings

mkkby's picture

That faggot Banzai's pictures are stupid anyway.  After you've seen the first 2, the high school shit gets old.

ZH Snob's picture

boy, talk about competitive marketing.  it's getting rough out there.

fxrxexexdxoxmx's picture

Hey wait a minute, I am to understand that is is not about  the safety of ethinic Russians in Ukraine that is important, that it is money?

Oh for shame Mr Putin a good communist would be ashamed. 

First one to say Putin is not a communist gets a bright red star.

Idiocracy's picture

orkneylad, by chance did you pen ths bon mot:

If you ain't a Harley Rider, you ain't shit

ParkAveFlasher's picture

It's a good thing all the big billionaire money is being pumped into Europe.  /s

Flakmeister's picture

The EU is trying to wean itself of Russian supplies... They can't, but that won't stop them from trying...

The "discoveries" in Poland and the Western Ukraine are shale plays that have yet to be demonstrated. Exxon walked away from Poland in 2012 but this may be have been related to presssure over Sakhalin...

Oil does indeed trump gas....

Spastica Rex's picture

The silver lining to all these dark clouds is now often presented as "energy independence, it's just around the corner!"

I don't buy it.


ZerOhead's picture

So Europe is counting on a reliable long term supply of natural gas/oil from a stable Libya and Nigeria?

Do these guys even have brains...

Flakmeister's picture

Libya was a reliable exporter of oil to the West for many years...

Oxy Petroleum has been a major player there from the get go along with ENI....

11b40's picture

So, why did the screw it up?

I have my answer, but curious about your Eurocentric opinion.

Flakmeister's picture

I don't know exactly what happened in Libya but clearly some people felt Muammar had to go...

And if you think he was replaced by some Western stooge, I defy you to name him...


Edit: It should be very clear that the West was "content" with Khadafi in that the oil flowed and western oil cos. were welcome and that extraction terms were reasonable...

When it became clear that Muammar was not able to deal with the uprising he got thrown under the bus...

That is what is called RealPolitik...

angel_of_joy's picture

To be more precise, the Americans pushed him under the bus.

 Like they did with Mubarak, Assad... and (surprize !) Yanukovych .

They tried the same shit with the Iranians and Putin. Didn't work !

Independent's picture

If you are the world leader of a country and you have a picture of yourself shaking the hand of a smiling western politician know that you are somewhere on the list of people to be thrown under the bus and that was your handshake of death

Flakmeister's picture

The moment Mubarak showed he could not keep things under control, he was dropped. Morsi showed he could not run the country. In fact no one can. Egypt is being propped up by Gulf money....


Is that not what anyone reasonable wants? Let the guys who have to rely on violence to fail?

It is simple, the guys that can't keep the peace don't last. And it is all about keeping the peace now, there are tremendous forces driving things, rising food prices, stagnant growth, lack of oppurtunity.... 

And there is no fix in the offing, it is about managing the overshoot...


Assad is a very different story. Perhaps later...

Yanukovych is another failed player, it all it takes is $5 billion over 23 years to topple the Crown Jewel of the FSU then someone is not doing their job... Very simple....

Iran is a failure whose roots lie 60 years ago....

angel_of_joy's picture

BS !

Mubarak has been always a very loyal American ally. They had ZERO reasons to throw him under the bus, other than Obama's idiocy.

When you treat one of your best allies like that, the others take notice.

Nobody trusts America anymore. It started after Vietnam, it became a foregone conclusion with the Egypt episode.

America SUCKS as an ally.

Flakmeister's picture

He proved that he could no longer control the country...

Were you not watching?

Would you rather the US clearly prop him up in full view of the world? 

Now that would be very stupid...

CrashisOptimistic's picture

What happened in Libya was a Total and BP production agreement expiration, and Gadaffi said he was going to replace them with Petrochina and PetroBras.

Total and BP pushed their governments into the old human rights rage (with nothing having changed there) amid the initial Tunisia upheaval.

Then the UN was persuaded to provide a resolution that authorized "protecting civilians", and both China and Russia agreed to it.  After several months of $120 Brent, the sortie total flying from Italy started to eat into the fuel supply budget of NATO and suddenly "protecting civilians" transmuted into "bombing purely defensive Gadaffi force positions".  Russia and China were angered and essentially said they would never again cooperate with any UN resolution.

I was quite taken by the actually excellent press conference transcript from Putin today in that he used the phrase "protecting civilians" several times, and noted pointedly how activity in Libya had been so very corrupted. 

Flakmeister's picture

Forget the bullshit rhetoric for public consumption, the posturing, the games of the UN and what not...

Look at what actually happens and why...

The lesson is that Russia and China cannot project power and they counted on Muammur without realizing that he could not hold the country...

Do you think that at any time more than 1500 rebels were involved in securing the export facilities? 


It is the game that has been played for long long time... Everybody plays it...

It would be wonderful if the game didn't exist, but that is not going to change anytime soon, especially when the stakes are on the rise...

CrashisOptimistic's picture

I don't know what that meant.  No number of rebels would have overthrown the Gaddafi government if it had not been bombed in a manner not authorized by the UN resolution.

Flakmeister's picture

And Khadafi could not push them out either... This is RealPolitik, if you cannot back your claim, you have no claim...

Incidentally, Russia and China got fooled at the UN? Is that what you are telling me? You know, the Chess Player and the Dragon?


Edit: BTW, thanks for the lead, I looked up the Chinese and Russian involvement, I had forgotten about that... They would have gotten some western built infrastructure pretty cheaply if Khadafi had been able to keep his word... Everyone tries to play the game....

BlackVoid's picture

Khadafi was pushing for gold for oil.The uprising was staged.


You are misinformed.

Flakmeister's picture

If it makes you feel better, then by all means cling to your childish narrative...