Berlin
The Berlin Wall fell almost 17 years ago. At the time, the future seemed clear: The fall of the wall would unleash an unstoppable tide of free markets and free people — and for about 15 years it did just that. Today, though, when you stand where the Berlin Wall once stood and look east, you see a countertide coming your way. It is a black tide of petro-authoritarianism emanating from Russia, and it is blunting the Berlin Wall tide of free markets and free people.
Why? Russia is a classic example of what I like to call “the First Law of Petropolitics,” which posits that the price of oil and the pace of freedom operate in an inverse relationship in petrolist states — states with weak institutions and a high dependence on oil for their G.D.P. As the price of oil goes down, the pace of freedom goes up. The day the Soviet Union collapsed the price of oil was near $16 a barrel. And as the price of oil goes up the pace of freedom goes down. Today, Russia’s president, Vladimir Putin, flush with surging oil and gas profits, is crushing domestic opponents, renationalizing major energy companies, throwing out Western human rights groups and generally making himself the big man on campus in Europe.
When Europeans tell you that they fear a new “cold war,” this time they really are talking about the temperature — and the fear that Russia, if it wanted to turn off the gas, could make Europeans very cold. About 40 percent of Europe’s natural gas imports come from Russia, and that is expected to grow to 70 percent by 2030.
With prices high, Russia has gone from the sick man of Europe to the boss man. Russia is a having a much bigger impact on Western Europe “with gas pipelines than it ever had with SS-20” long-range nuclear missiles, remarked the German foreign-policy expert Josef Joffe, author of the smart book “Überpower: The Imperial Temptation of America.”
“Ten years ago we thought Russia was out of it,” Mr. Joffe said. “We knew it was going to come back. But suddenly, out of the blue, with the rise in oil prices, it is back on stage, and this time it’s much more skillful. The image we have of Russia is [the port of] Murmansk, where the Russian fleet is rotting — but power comes in many forms.” And the most popular form today is oil and gas.
Goodbye NATO, hello Citgo.
The other day, the BBC quoted a senior “E.U. insider” as saying of European Union leaders: “You know what happens when they get in the same room with Putin?” They all prostrate themselves “and say, ‘I love you, Vladimir.’ ” The BBC was reporting about a tense summit meeting last Friday in the Finnish town of Lahti. E.U. leaders reportedly beseeched Mr. Putin to honor contracts with Western oil companies, as well as to ease his crackdown on press freedoms, on human rights groups in Russia and on Georgia, and to investigate the murder of a crusading Russian journalist.
What the E.U. wants, a senior German official explained, is to be able to invest in more Russian oil and gas drilling projects and pipelines upstream, so that Russian and E.U. energy interests will be so intertwined Russia will never consider turning off the gas. Mr. Putin wants Gazprom, the giant Russian gas company, to be able to buy into more downstream consumer operations in Europe. That way Russia could dominate the industry from its oilfields all the way to the gas meters of Berlin and Brussels. Right now, the two sides are in a standoff.
“We cannot allow energy to divide Europe as communism once did,” José Manuel Barroso, the European Commission president, told The Financial Times. But it is.
In fairness to Mr. Putin, turnabout is fair play. After the Soviet Union collapsed and Russia was enfeebled, the U.S. and the E.U. crammed NATO expansion down his throat. He’s now using petro-power to push back. “Russia is very different from Venezuela or Saudi Arabia,” remarked Clemens Wergin, an editorial writer at the German daily Der Tagesspiegel. Russia has nukes and oil, he noted, and therefore has the potential to play a much more domineering geopolitical role in Europe.
German officials don’t really think Russia is about to turn off the gas if it doesn’t get its way on some issue. After all, it never did that during the old cold war, and Russia today is much more dependent on Western markets. But still, centuries of uneasy relations between Europe and Russia make German officials queasy about how dependent they’ve grown on the Kremlin to heat their homes and offices. Queasy or not, one thing they know for sure: Russia is back. The gas man cometh.
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