Ukraine: Follow the Energy

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 Journaleven 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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21 comments on “Ukraine: Follow the Energy
  1. The Dork of Cork says:

    The pressures of war will collapse eastern Europe as Russian oil use will become internal again.

    We are seeing a collapse of the Euro market state much like 1914.

    It is in the mutual interest of Both the Anglos and Russia to do this.
    Money not flowing to the Oligarchs will be distributed via military fiat to the soldiers.
    They will thus have enough money to consume vodka and the local women.
    No need to export their women to the west anymore.

  2. The Dork of Cork says:

    In 1914 people thought countries would run out of money (gold) to fight wars…the war could not last more then 6 months etc etc.

    Today they think they will run out of $$$$$
    But Russia does not need $$$$ to fight a war.

    Do they understand what a renationalization of money claims really means ????

  3. johneattle says:

    It’s not that simple and I’m not going into the error’s in this commentary.
    The following is counter propaganda to please help us America I’m a young Ukrainian under siege.

  4. Enviro mental says:

    “I tend to think the one that really counts is energy”

    meanwhile in other news, bears really do shit in the woods.

  5. chris m says:

    Very interesting article, regarding Russian oil and gas exports.

    However, i think you might be a little economical
    with situation regarding Chinese rare earth metals.

    What we may be witnessing is probably just phase#1
    regarding Chinese rare earth metal supply and demand.

    i think phase#2 is currently underway for past 2 years.
    it involves consolidation of Chinese rare earth metal industry,
    among other things.

    i think there will be a phase#3

    Chinese people devilishly clever.
    Everybody else just numbskulls.

    ps rare earth industry is a very small industry in $$$$$ terms
    Chinese have bigger fish to fry.
    rare earths are just a small stepping stone in overall
    Chinese industrial policy

  6. Andy Perry says:

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

    No it doesn’t.
    It boils down to whether there is more than one kind of white person in the world- Slavic, Gaelic or just German. It boils down to whether German culture, property rights (capitalism) and politics (‘democracy’) is the ideal of ‘white’ society and should be the ideal of the entire world. This is something far more important than simply energy; it is the strugle for supremacy of identity. The cult of capitalism claims to like competition in hamburgers and training shoes but it is unwilling to allow any competition where it really matters- who represents ‘white’ people. The Slavs must bend the knee to their German masters.

  7. Greg Vega says:

    Those who read this, beware. this guy doesn’t know much of anything about world energy resources and supply/demand dynamics. Im sure he read few articles before he wrote this and figured his assumptions were close. My head tilts like the rca dog when I read this. Anyway if u want to accept a grade school essay on international energy by all means enjoy, but go find reality in some other places if not

  8. Hawkeye says:


    Re: “rare earths are just a small stepping stone in overall Chinese industrial policy”

    Given that rare earth metals are essential for efficient & scalable electricity generation (e.g. solar panels) and storage (batteries), I presume you infer that China is planning to control these post-fossil fuel critical resource materials? i.e. they are planning to dominate the post-carbon industrial world.

  9. Hawkeye says:


    Re: world energy resources.

    What sources would you recommend we should look at, to go find reality ?

  10. Greg Vega says:

    Oh I forgot to say “FUCK YOU” to the young Ukrainian. We can’t even help ourselves.

  11. Greg Vega says:

    Gail tvberg, jeffrey brown, the jackass, the voice, paul craig roberts ,karl denninger

  12. yawp says:

    As a member of the USA California, I have always supported the Nazis, and the Ukraine Nazi’s are no different. ALL HAIL USA!!

  13. Agnes says:

    With all due respects to Occam and his razor, the simplest answer is not always the only one. I would add agricultural land. It has been fought over in the Ukraine for over 1000 years. Energy, yes. Food, yes, also.

  14. Boooooooooooooooooooom !!! says:

    Ein bisschen Beeilung bitte mit den Atombomben, bevor man euch noch die Show stiehlt !
    BOE Seeks Derivatives Pact to Prevent a Repeat of Lehman Cascade
    $600+ Trillion – BOE Seeks Derivatives Pact to Prevent a Repeat of Lehman Cascade 😎

  15. And again Booooooooooom !!! says:

    Largest Oil Refinery in Europe is on Fire

  16. Jonny James says:

    Same goes for Venezuela, stay tuned. The CIA-led coup attempt in 2002 was a disaster for the US. But the empire is striking back and the propaganda is thicker and heavier than ever before.

  17. Flopot says:


    I’m waiting for mysterious snipers to start shooting up the protesters. The cynicism of the Western IC infuriates me; the myopia of the protesters is maddening in this information rich world. When it comes to destabilizing events in South America the US is ALWAYS involved. You’d think they would realize by now.

  18. Jonny James says:

    You may be right on that, but I really hope the NED/CIA backed “protesters” do not resort to murder. Who knows maybe the “snipers” would not be Venezuelans (maybe US-trained Colombian thugs).

    Despite claims from Chatham House AEI and the corporate media cartel that Chavez and Maduro were/are your typical Latin-american dictators (how ironic, as you alluded, the US is always behind the dictators) Maduro’s party won landslide elections just a few months ago.

    Venezuela has some of the best and cleanest elections in the world, I would argue, cleaner than the US general elections. (2000 for example).

  19. Jayme says:

    I think it’s the sunflower seeds. Follow the sunflower seeds. 😉

    if you can tolerate the singing and the music … and the corny lyrics … it’s not too bad

    Sunflower: A Song About Sowing Seeds of Love

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