Documentary | How the West Missed Putin’s Most Important Signal

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Even before the beginning of the Ukraine war, a perfect storm was brewing.

To get really tough on Russia economically, you need the Europeans on board.

But the Europeans were too reliant on Russian energy. Putin knew it and leveraged that need to get away with most of his aggression in Europe.

The fight left hundreds dead and tens of thousands displaced, and reasserted Russia’s military dominance in the region.

What about America? Would America be willing to reign in Russia?

Because of the rise of China is going to be the most important area of the world for the United States, the Persian Gulf because it’s inextricably linked with Asia–oil flowing to India, oil flowing to China. The Persian Gulf will be number two and Europe will be a distant three. We’re basically leaving Europe in the rearview mirror.

I think people do think it is an interest and we shouldn’t simply abandon it or give up on Ukraine, but it’s not a kind of priority interest, uh, for the United States.

The West chose to ignore Russia’s protest against NATO expansion. Then, when Russia reacted violently against the Eastern European countries seeking NATO membership, the West collectively chose not to give Russia a real lesson. Is there something wrong with this thinking?

He walked toward the small crowd at the front gate in what a witness later described as a slow and calm manner. For a while he simply stared. Then, after a brief conversation during which the protesters were surprised to hear his fluent German, he informed them that if they entered, they would be shot.

This is a description of Putin on December 5, 1989, taken from the book Not One Inch by M.E. Sarotte. At that time, Putin was a senior officer at the Soviet State Security, or the KGB, on Angelika Street in Dresden, Germany. The Berlin wall was open and the headquarters of his secret police allies, the Stasi, had just been stormed by a crowd of protesters who were now drifting over to Putin’s building. Putin had called to request Moscow’s instruction and help, but “Moscow is silent.” Putin decided to take action on his own.

After he told the protestors that they would be shot if they entered the gate, the crowd paused, murmured, and decided to go back to the Stasi headquarters. Putin returned to the house, where he and his crew “destroyed everything,” burning “papers night and day” until “the furnace burst.”
According to Putin’s own account, the phrase “Moscow is silent” haunted him for years. He felt at that moment that his country no longer existed. He believed Moscow made a big mistake by exiting from Eastern Europe in a rush. He was convinced that the Soviet Union could have defended itself and avoided the many resulting problems if their hasty exit had not happened. He considered the breakup of the Soviet Union the greatest geopolitical tragedy of the 20th century. From that ideological foundation he formed a lasting conviction on the need to avoid a paralysis of power. He said this when he became president of Russia: “only one thing works in such circumstances—to go on the offensive. You must hit first, and hit so hard that your opponent will not rise to his feet.”

Putin’s comment was made in reference to the conflict with Chechnya and at a time when he was receiving death threats from the Chechens. He ordered harsh crackdowns on the Chechen rebels until they were scattered and destroyed. Putin was unapologetic about the cruelty of the Second Chechen War, a war that caused between 25,000 to 50,000 Chechen civilian casualties and 7,500- to 15,000 deaths of Russian soldiers. In fact, he has been loyal to the conviction of preemptive wars throughout his time as the top leader of Russia. In hindsight, this conviction of Putin, together with his conflicting drives that pulled him toward democracy on the one hand and authoritarian rule on the other, should have been given more attention by Western leaders and military strategists.

In a 2000 article titled “Putin Tells Why He Became a Spy,” the New York Times wrote that Putin described his separation from the KGB after the attempted coup against President Mikhail S. Gorbachev in August 1991 as a wrenching experience. When he later stashed his Communist Party card and other documents away in a desk drawer, he said he ”made the sign of the cross over them” — as if laying that part of his life to rest.

But that past would not rest. NATO’s expansion eastward and Russia’s rejection from consideration for NATO membership, combined with Putin’s consistent efforts to suppress the media and dissidents, led to mutual distrust between Putin and the West. That distrust made Russia’s integration into the European community highly unlikely. Democracy has failed to be fully established in Russia. Where once there was hope that Putin might embrace the ideals of democracy, the world watched as Putin drifted away from Western ideals and toward his authoritarian instincts.

Putin had expressed the idea of there being a ‘Russian World.’ Experts continue to debate whether this means Putin has aspirations to revive the great Russian or Soviet empires by reclaiming lost lands. To that, Putin said “Whoever does not miss the Soviet Union has no heart. Whoever wants it back has no brain.”

So which way is it? Perhaps to Putin this is not a black and white question. “Russian World” could mean Russian dominance and a re-gathering of their “one people,” a term he repeatedly used for Ukrainians and Russians. But he likely understands that not all the Soviet territories can be physically re-joined to the Russian Federation. Domination can take many forms. Annexation is not the only way, and marginalization may be a desirable alternative.

To marginalize a country is to make the leaders of that country completely dependent on Moscow, either by Moscow appointing Russian-friendly leaders through rigged elections or ensuring that they are tethered to Russian economic and political security networks. Russia has been doing this with increasing frequency and urgency. For example, Russia pressured Kazakhstan to reorient itself back toward Russia instead of balancing between Russia and China. And, just days before the Ukraine invasion, Azerbaijan signed a bilateral military agreement with Russia, an agreement that country had resisted for decades. Russia has also “made itself the final arbiter of the future relationship between Armenia and Azerbaijan.” Belarus has also been completely subjugated by Moscow.

In many ways, this is Russia’s resistance to NATO expansion.

During the early days of this pattern, NATO and America made a critical mistake. While ignoring Russia’s repeated protests against NATO expansion, they largely left Putin’s aggression towards neighboring countries unpunished. The first significant instance of this was the Russo-Georgian War. Professor John Mearsheimer, a renowned international relations theorist at the University of Chicago, had the following to say about the cause of that war:

But then the big trouble starts, and it comes in the famous Bucharest Summit–uh, NATO’s Bucharest Summit–in April 2008 where, at the end of the summit, a declaration is issued which says, “NATO welcomes Ukraine’s and Georgia’s euro-Atlantic aspirations for membership in NATO. We agreed today that these countries will become members of NATO.” So, the Soviets and the Russians made it perfectly clear this was unacceptable. Russia’s deputy foreign minister said Georgia’s and Ukraine’s membership in the alliance is a huge strategic mistake which will have the most serious consequences for pan-European security. Putin himself said Georgia and Ukraine becoming part of NATO is a direct threat to Russia.

NATO’s promise to Georgia and Ukraine was never fulfilled. A war broke out between Georgia and Russia in August 2008, four months before NATO’s scheduled review of the two countries’ applications to the alliance. The war involved Georgia, including its two breakaway states of South Ossetia and Abkhazia, and Russia.

On August 1, pro-Russian forces in South Ossetia attacked the Georgian village but were then counterattacked by Georgian government forces. Russia then hurled accusations, claiming that Georgia committed genocide against Russians in South Ossetia and using that claim as justification for launching a full-scale land, air and sea invasion of Georgia on August 8th.

The Russian army had a series of significant victories before the two countries reached a ceasefire agreement through the mediation of international parties. The war ended and, on August 26, 2008, Russia recognized the independence of South Ossetia and Abkhazia. On that same day, Georgia severed diplomatic relations with Russia.

The Russo-Georgian war successfully prevented Georgia and Ukraine from becoming NATO members. Putin got his way. More importantly, he got what he wanted and paid a very small price.

During and after the Russo-Georgian War, sanctions against Russia from Europe and the United States were light and quickly lifted. According to the Atlantic Council, the truce drafted by the French president was biased towards Russia, and subsequent reports by the European Union put the responsibility for the war primarily on Georgia. Later that year, France also announced the sale of Advanced Arms, a Mistral-class helicopter carrier, to Russia.

After the Georgia Armistice was signed, then-US President George W. Bush refused to provide Georgia with anti-tank and anti-aircraft weapons. A few months later, Obama took office and initiated the Russia reset which did not materialize.

Six years later, In Putin’s continued effort to stop NATO expansion, he seized an opportunity in Ukraine. He repeated what he did to Georgia in Ukraine, only with big escalation.

And my aim is that the main deep causes the aim of the United States and its European allies to peel Ukraine away from Russia’s orbit and incorporate it into the West. Our basic goal has been to make Ukraine a western bulwark on Russia’s border. And Russia says this ain’t happening, period. End of story. And we will do everything we can to make sure it does not happen. That’s the deep cause. Now take it a step further. There are three key elements in our strategy. The first is NATO expansion and, in many ways, the most important. And I’ll talk in some detail about that in a second. But as you all know, since the Cold War ended, starting with the Clinton administration we have been moving NATO eastward toward Russia’s border and the Russians have said this is an absolute no-no. And I’ll walk you through the story in a minute. Second, is EU expansion. EU expansion is all about integrating Ukraine economically into the West the way we are in the process of integrating Poland, the Czech Republic, Slovakia, the Baltic states into the West and, of course, we’re doing that with NATO as well. These are two sets of institutions: NATO, a military institution; the EU, an economic institution. And the idea again is to take Ukraine, peel it away from Russia, and make it part of the West. The third part of the story is fostering an Orange Revolution. This is all about promoting democracy in Ukraine and in other places. As you all know, the United States runs around the world trying to topple regimes and put in their place democratically elected regimes. And for almost all of you, me included, it’s hard to be against promoting democracy. We all love democracy. But if you’re Vladimir Putin or if you’re part of the leadership in Beijing, when the United States talks about democracy promotion that means toppling your regime. And you won’t be surprised to hear this–they don’t like that in Beijing and they don’t like that in Moscow.

In November 2013, a wave of large-scale protests erupted in response to then-Ukrainian President Yanukovych’s refusal to sign a political association and free trade agreement with the European Union. Instead, he was interested in a Russian proposal that involved cooperation among the EU, Russia, the International Monetary Fund, or IMF, and Ukraine which he believed offered more favorable terms to Ukraine. These protests continued for months without major incident. That is, until February 2014 when clashes between the protestors and special riot police turned violent, leading to the deaths of nearly 130 people.

As you might imagine, the deaths ignited an already heated situation and led to protestors seizing control of Kyiv on February 22nd. Yanukovych fled Ukraine and the Ukrainian parliament voted to remove him from office that same day.

18 days before Yanukovych fled Ukraine, in the heat of the street protests, a recorded phone conversation was leaked between Assistant Secretary of State of the United States, Victoria Nuland, and US Ambassador to Ukraine, Geoffrey Pyatt. They were discussing their wishes for a Ukraine transition to an interim government and, specifically, the roles in which they hoped to see the prominent opposition leaders:

“I don’t think Klitsch (Klitschko) should go into the government. I don’t think it’s necessary. I don’t think it’s a good idea.”
“Just let him stay out and do his political homework and stuff.”
“I think Yats (Yatsenyuk) is the guy who’s got the economic experience, the governing experience. I just think Klitsch going in… he’s going to be at that level working for Yatseniuk, it’s just not going to work.
“We want to try to get somebody with an international personality to come out here and help to midwife this thing.”

Arseniy Yatsenyuk, Nuland’s pick to lead Ukraine, did become the leader of the interim government after Yanukovych fled to Russia and later became the prime minister of Ukraine.

Is it right/in the best interest of America for America’s diplomat to get involved in other countries and domestic affairs? I mean, um, particularly referring to Under Secretary of State Victoria Newland’s leaked phone call that reveals her choice for Ukrainian leaders during the Maidan revolution?

I think it’s, I hate to say it, but kind of is almost, well, let me just put it this way: all countries meddle around in other countries’ domestic politics. They always wanna claim that only other countries do it and they don’t do it. So, Russia does it all the time. China does it all the time. The United States does it all the time. This is basically one of these sort of things we don’t like to talk about in international politics, but such meddling is common. Victoria Newland’s phone call was, as you know, it was over, uh, it was, uh, it was monitored by Russian intelligence and Russian intelligence released it to try to embarrass the United States and embarrass the newly emerging government in Ukraine. And this is sort of a part of a series of operations the Russians attempted to do to discredit that government and seek to keep Ukraine close to Russia and prevent Ukraine’s westward drip.

But the bottom line of your question really is an important one, which is, you know, should we get deeply involved in these countries’ domestic politics? I think, I think it’s pretty hard for us not to, when you see a democratic revolution or a democratic leaning occur in other countries. It’s very hard for America as a democratic country to say, “Well, that’s your business. We’re not going to do anything about it.” However, I do think we need to observe some sort of circumspection or care when this country or these countries are very close to geopolitical rivals. Um, that said it’s not as if our rivals China and Russia keep their hands out of our domestic politics or out the domestic politics of other countries. So, in some sense, this is how the game is played in international politics. And it’s kind of unrealistic to think that we’re going to stop it. It’s just, we probably want to try to be extremely careful about it and put some limits on it.

Russia’s involvement in the 2014 Maidan Revolution in Ukraine officially started after Ukrainian President Yanukovych fled to Russia on February 22. Yanukovych claimed the parliamentary vote to remove him was illegal and asked Russia for assistance. Russia deployed troops to Crimea and occupied government buildings. On March 16th, in a move deemed illegal by Ukraine and most countries around the world, Russia put forward a referendum for reunification between Crimea and Russia. Official results showed over 90% support for that reunification and, on March 18th, Russia formally incorporated Crimea into the Federation. where it remains today.

Following the annexation of Crimea, NATO initiated economic sanctions on Russia. There are three types of economic sanctions. The first restricts access to Western financial markets and services for designated Russian state-owned enterprises. The second and the third place an embargo on exports of certain goods to Russia. Meanwhile, America worked with Saudi Arabia to increase oil production which brought down the prices of oil globally.

These combined efforts caused significant downward pressure on the value of the Ruble, increased the flight of international capital out of Russia, and forced their entry into a recession.
However, the sanctions left out the most important sector: imports of Russian oil and gas. Roughly 40% of Europe’s natural gas comes from Russia. 8% of America’s imported oil also comes from Russia. Oil and gas accounted for 60% of Russia’s exports and 39% of their federal budget revenue. When Russian oil and gas are still flowing to Europe and America, the blow of other sanctions imposed on Russia is not fatal to their economy.

Why did NATO and America on the one hand ignore Russia’s protest against the NATO expansion for years but, on the other hand, wouldn’t punish Russia when Russia invaded other countries such as Georgia and Ukraine to stop such expansion?

It’s strange, you might say in hindsight, that we sort of opposed those moves but put fairly weak, I would say, sanctions and penalties on Russia. We did sanction them. Relations did get a lot worse. But these things don’t seem to be, in hindsight, uh, as damaging to Russia as would’ve been necessary to change Russia’s thinking. And I think the reason is that they were very clever strategies by Russia to try to keep the threshold of Russian action sufficiently low so that a consensus in the Western alliance could not be achieved regarding punishing Russia. To get really tough on Russia economically, you need the Europeans on board, and yet by only taking Crimea and then just this subtle–I mean not so subtle, but this kind of, sort of denied intervention in Eastern Ukraine–Russia could keep the threat level low enough that key players like Germany wouldn’t agree to tougher sanctions.

So, the sort of tragedy of, of politics is that you could only build a consensus behind a really powerful response to Russia when Russia actually took a far more damaging, threatening and dangerous action, as it did two weeks ago.

If this was indeed Putin’s calculation, he got it right. He knew too well that Europe would not stand up strongly against Russia because they were reliant on Russian energy. The dance between depending on Russian energy and guarding against Russia militarily has been going on for decades. The result is that the Nord Stream and Nord Stream 2 pipelines were built regardless of notable American opposition. It turned out, even the United States was not able to reign in Europe’s appetite for Russian energy.

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Are Putin’s Sanctions Countermeasures Working? Chat with William Wohlforth, Part 2

Okay. Let’s talk about the sanctions. What do you think of Putin’s countermeasures to the sanctions so far? He forced so-called unfriendly countries to buy Russian oil and gas with rubles. Uh, how long do you think he can insist on that?

The EU has responded. So, that was back in March, and the EU responded and said that they would refuse to settle the accounts into rubles because essentially, if you do that, then essentially you’re in some ways kind of insulating Russia from the financial sanctions. And, um, and so far it’s unclear to me what’s happened. Putin claimed, about a week ago, that the Europeans were not settling up in rubles. So, the status of that particular move by Putin is unclear to me at the moment. In other words, the news that I had seen, and even from the Russians themselves, is that Europeans are continuing to insist on payment in convertible currencies. But the Russian overall response has been sort of effective in the near term, particularly in defending the ruble and other defensive measures they’ve taken against these sanctions. However, the Russian central bank chief yesterday, the head of the Russian state bank, I think it was yesterday or the day before yesterday, essentially said in no uncertain terms that all of these measures are temporary in nature that Russia has taken and that the costs to the Russian economy are going to be quite spectacular and compounding and escalating in the weeks and months ahead. So, you can expect the bite of those sanctions to get tougher and tougher and tougher for Russia, according to Russia’s own officials, with each passing week.

You talked about Russian central bank. The West has frozen much of Russia’s, you know, over 600 million dollar foreign reserves held in foreign banks. But this, I mean, has not really crushed the Russian economy. China won’t freeze Russia’s, you know, foreign reserves held in [unknown phrase]. And because Russia still makes money from energy sales, its economy is getting by. The ruble now even bounced back to its pre-war value. So, do you think, you know, you just said this could be successful, but it would not be long lived. Is that right?

Yeah. I mean, the ruble bounce back is the result of very high interest rates being paid on ruble holdings, ruble assets, and capital controls. I mean, basically you’re putting on capital controls and you’re turning the ruble into a, into a domestic-only currency. In some sense, the long-term effect is to cut off the Russian economy from the world even more. The more you make, uh, impose these capital controls. So, that’s essentially a limited, that’s an option, that is an option for maintaining the ruble’s value that is not going to be sustainable forever without a significant cost to Russia’s ability to act in the international economy. You know, Russia needs to supply its inputs for everything that it creates. We still live in a globalized economy. There are still such things as supply change, and Russia is part of this. Indeed, there’s speculation that even Russian military production requires some degree of access to imports. And they’re not getting any of these now and therefore the ramified effects throughout the Russian economy of their inability to obtain these key inputs is, according to the Russian central banker herself, going to be escalating with each passing month.

Hmm. Okay. What do you think of Putin’s measure to link the ruble and gold? I mean, he said that the central bank will buy gold at a certain price with ruble from, I mean, at least until June 30th.

And from whom? Who wants to own all those rubles? That’s the question. When you have capital controls on the ruble, the ruble’s only really particularly useful for people inside of Russia. So, the question is who is now holding rubles is gonna want to transfer those rubles into gold? So, I don’t know. The international finance can have many tricks and many schemes within it, but to my mind, I’m not seeing that as a lifesaver for the Russian economy. Bottom line is you have an unprecedented set of sanctions against Russia, and they do take time to work. And as I’ve stated, we’ve now had the mayor of Moscow, we’ve had the deputy prime minister and we’ve had the Russian central bank head all say that, “get ready for feeling the bite of these sanctions.They’re going to hit and they’re going to hit hard.” So I–essentially, in some sense–defer to them and their expertise. In fact, in a way, they’re kind of brave to be even saying these things since they’re cutting against the line that Putin wants to send out that we can handle these sanctions, no problem.

Yeah. Yeah.

It should be stressed that it’s not clear that any of this is going to materially affect Russia’s ability to continue to prosecute the war. So, if the idea of these sanctions is to stop Russia from any kind of immediate action in the coming weeks or months in Ukraine, that’s not their capacity. That’s not their strong suit. Their strong suit is a longer term imposition of costs, such that if Russia’s contemplating trying to continue this campaign over really long periods of time, that the costs are gonna be very, very high for the Russian economy.

Mm-hmm. If Russia stops the war, do you think the sanctions will come off right away?

I’m worried about that. I mean, that goes back to what I was, how I was responding to your earlier question about Western, how the West can help try to find a resolution. If you put Russia in a position–again, I don’t like, you know, it’s very hard to have much feeling of concern for Russia’s wellbeing given that that country is responsible for this horrific war. On the other hand, if you wanna try to find a settlement of some kind, there ought to be some thought given to the upside for Russia. In other words, not just imposing costs but suggesting benefits if they are to cease this action in Ukraine. And so for that, saying it’d be nice if these sanctions were contingent, namely saying, “we put these sanctions on you because of what you were doing in Ukraine. If you stop doing that, we’ll take the sanctions off.”

Unfortunately, I’m not seeing any kind of talk of that nature because of the first part of the Zelensky speech that you referred to some time ago, his outrage at seeing that mother looking down the well and seeing her son. The emotions that are elicited by what Russia is doing in Ukraine are so intense that the feeling now is a desire simply to punish Russia and isolate Russia indeterminately. And as much as I can understand those emotions, I don’t think it’s prudent to act in this way. I think it’s better to suggest the possibility, the conditions under which the sanctions would be relieved. Certainly we should say explicitly that if the Ukrainian government agrees to a deal with Moscow, we will certainly, at the behest of the Ukrainian government, reduce these sanctions.

Hmm. What if the Ukrainian government does not require the West to reduce the sanctions? If, they say, you know, this is your decision?

Yes. Well, that gets to this tricky point of does the West want to actually be pressuring Ukraine to accept some kind of deal that the Ukrainian government does not want accept? Do we want to tell Zelensky that, “Hey, you know, the deal that Russia’s offering right now looks pretty good to us, and we really think you should accept this deal. In fact, you’re being unreasonable if you don’t accept that deal. You’re not being a responsible statesman.” I would love it if that scenario were to happen. In other words, for this to happen, we need to have some sign from Russia that there is some remotely plausible deal, some remotely acceptable agreement that Russia’s prepared to accept. And if we see some language like that, then it’s not inconceivable to me that we would really strongly urge Ukraine to begin to talk about such a deal. But we see nothing of the kind right now.

On the contrary, I think it’s very important to recognize that we’re seeing rhetoric from Russia, from Russian commentators and even some Russian officials, that literally does sound like genocide. I mean, I don’t use that term lightly, but there’s talk that basically says any assertion of an independent Ukrainian national identity is by definition Nazi, and our job is to de-Nazify Ukraine. If you hear talk like that from your so-called bargaining partner, how can we possibly be pressuring Ukraine to accept the deal? But if Russia starts to talk more reasonably and unless this kind of, if it were to cease, this kind of crazy talk about Nazis in Ukraine, then the West certainly would be in a position potentially to put some pressure on the Ukrainian government if the Ukrainian government is the one that seems to be blocking a deal.

When you talked about the tough talk from Russia about the genocide and stuff, do you think that’s also Putin’s thoughts?

Yeah. I mean, look, Putin’s rhetoric fed this kind of talk. It began last summer with an article he wrote on the historical unity of Russians and Ukrainians. Its very extreme nationalist take or view of the relationship between the Ukrainian nation and the Russian nation was in that article. And we moved on and on from there. There’s been a ceaseless strain of Russian state propaganda which supports this idea that essentially equates the assertion of an independent Russian, I’m sorry, an independent Ukrainian identity that is not part of the Russian world, that any assertion of that kind is essentially Nazism, fascism, unacceptable and needs to be destroyed. They are denying the right of an Ukrainian government or intellectual, or an educator or anyone to assert the idea that yes, we Ukrainians are independent of Russia. And in fact, we’re not really part of the Russian world. We’re part of the West. That sentiment, they are saying in Russian propaganda, is in and of itself Nazi. And that propaganda line is official Russian government propaganda. And the head of that government is named Vladimir Putin. So, he has to accept some responsibility for this.

Do you think Putin regretted his war?

I hope he does. I mean, I have no idea. He, of course, would never admit to this in public. When you are a personalistic dictator whose claimed rule in part is based on power and just the ability to continue ruling, but your claim to legitimacy is partly based on the image of a highly competent leader, as someone who is smart strategically, is a grand master of the game of politics, and when your legitimacy hinges upon this image, you are never going to admit that you made a catastrophic strategic blunder of historic proportions. However, I very much hope he recognizes that it was a blunder in private, and I hope he’s seeking a way to get out of this with a modicum of prestige intact so that he can go home, lick wounds and rethink his approach. I don’t know that’s the case, but I certainly wish it were the case.

I think Putin is a very puzzling figure. If you listen to his speech, I mean, a lot of his speeches a few years ago made a lot of sense, to me at least. I mean, he was talking about the country, the direction the country is taking, and he talks about some of the problems the West has and, uh, their way of dealing with it, and direction of the country and stuff like that. I think it all made a lot of sense, but, um, on the other side, he has this dictator authoritarian instinct in him that I think the West has not paid enough attention to. What do you think?

I agree. I actually have read and carefully studied many, many, many of Putin’s speeches about international position of Russia and how Russia has been treated, particularly by the United States. I have assiduously and carefully read the writings of public affairs and foreign policy commentators in Russia who articulate this viewpoint. And I view a lot of it, much of it, as completely reasonable, but none of it justifies what they’re doing in Ukraine. I think you can hold those two views in your head at the same time that yes, Russia has, actually does have some legitimate, reasonable complaints about its role in the world since 1991 or since 2001 or whatever year you wanna pick. You can agree with that and also say, but seeking to dismember Ukraine in 2014, fomenting a rebellion in Ukraine in 2014, and now attacking Ukraine and blowing up cities in Ukraine is not a good way to deal with those problems. So, yes, I do think we underestimated, potentially, the emotion, the degree to which Putin was willing to take drastic steps. And perhaps also, frankly, the degree to which Putin and his high command underestimated Ukraine’s position as a state with an identity of its own and with institutions that function, particularly with a military that functions. All of those are blind spots of Putin that many of us observing his foreign policy did not see as clearly as we probably should have.

Hmm. I think Putin probably had one huge miscalculation. That’s the stiff resistance of the Ukrainian people. If he thought he can get away with this, if the work can be finished very soon, very quickly, then, you know, maybe this is not a bad thing for him to do from his point of view. You know, his relations with the West and how it didn’t work out and all these supposedly grievances and stuff. If he can solve all these problems with a quick war with no real consequences afterwards, I mean, from the previous experiences, that might not be a bad thing for him. But he miscalculated how the West just solidified after the stiff resistance of the Ukrainians.

That’s right. The fundamental miscalculation had to be. The only way we can make even any sense out of what Putin did was the fundamental miscalculation was about Ukraine. Because the West’s response is a result of the Ukrainian response. Had the Ukrainians not been so powerful and brave in their resistance to Russia, had they not been so effective to force Russia to fight hard, you wouldn’t have seen this Russian, this, uh, Western response. So everything, the fundamental miscalculation, is a miscalculation about Ukraine, a blind spot, an inability to see the Ukraine that really existed and only seeing in the mind of Moscow, in the mind of Kremlin, seeing only the Ukraine that they thought existed, that they wished existed, that they imagined existed, but not the real Ukraine. That was a profound and deep blind spot that led them into this quagmire, led them into this disastrous war.

I can tell you, interestingly, there were people in Russia in February writing articles saying don’t do this thing. This is crazy. In fact, there was a wonderful article by a former, by a retired Russian colonel in the Russian armed forces who was retired from the general staff of the Russian armed forces who wrote a whole article saying stop talking about a quick two to three day invasion of Ukraine. It’s not gonna work that way, folks. It’s going to be, if you do this, it’ll be a total disaster. And he wrote this article in early February. So, there were people in Russia who could see what a disaster this would be, but it’s just Putin and his leading circle didn’t see it that way, as you suggested. The only way we can make sense of this is they literally thought they could make this thing happen very quickly, get a regime change, and the West would sort of protest and be bothered about it, but ultimately come around and accept a pro-Russian government in Kyiv.

Right. Right. So that just means Putin is isolated. He is not getting good intelligence from his people.

It’s one of the, it’s one of the problems of a personalist regime like this where the personalist, the person, the figure, the person who’s running the country has been in power for 22 years is that you cultivate around yourself, the leader cultivates around himself, people who are very compatible, who think the same way, and it gets harder and harder for people to bring to the leader contrary or uncomfortable or unwelcome assessments and opinions.

Yeah. That’s bad for Putin, but it’s also bad for the world. Let’s talk about how the world would change after this war. Do you think even before the war broke out, we were still living in this America-dominated unipolar world order?

I think much less dominated than it used to be. I still think there really remains one country in the world that truly does still stand above most others, indeed, all others in certain areas. I mean, you can see this in the financial area of dominance, there’s still layers of technological and economic strength, still some military advantages the United States has when compared to contenders, even China, but these advantages are far slimmer than they were in the 1990s, in the first decade of the two thousands. So, no question about it this unipolar era is not as robust and strong as it used to be. Indeed, I find it very unlikely that Russia would have contemplated an attack like this if the United States had been as strong and as dominant as it was in the early two thousands, let’s say,

Huh. Okay. So, I mean, America’s weakening and also, I mean, do you think President Biden played a role as well? If, uh, Trump is in power, do you think Putin would do a thing like this?

Nobody knows. I mean, that’s one of these speculations. We have no idea what role in the Kremlin’s thinking was played by, uh, their assessments of a given U.S. president. When I look at the carefully articulated analyses coming from highly connected Russian analysts, I see a rather different story. I see a story where they were thinking, you know, Biden’s a kind of realistic guy. He understands America really needs to focus on China and, therefore, he needs to kind of deal with Russia. And therefore, now is a good time to push for a renegotiation of our position, vis-a-vis NATO and Europe. And so, all of these analysts saw that buildup around Ukraine culminating in January and February as simply an attempt to bargain and get a better deal. What they did not expect, these analysts, was the actual invasion of Ukraine as it actually happened.

So, I’m not sure the assessment of Biden was, oh, he’s weak, he’s a pushover. It was more like, perhaps–again, speculating–that, oh, this president is one we can deal with. The problem with Trump was that it was a hard administration to negotiate with because it was so dysfunctional and kind of all over the place and hard to get its act together. In addition, you could argue that Trump was so hostile himself to NATO that you could calculate– again, this is all speculation–but you could calculate from a Kremlin perspective, like why should we upset the apple cart here? Why should we invade or do anything dramatic? Trump’s gonna do our job for us by, uh, if he gets elected to a second term, he’s gonna do something that’s gonna destroy NATO, which for us is a big part of the problem.

Interesting. Okay. So, we were talking about the world order after this war. If Russian, if Russia in the end is seen as the loser of this war, wouldn’t an America-dominated liberal world order be strengthened?

I think it will be given a kick in the pants. I think it will be given a little bit more, a little bit more esteem. I’m not saying you’re gonna restore this supreme self-confidence that the liberal world order had back in the 1990s when we were talking about a kind of an inexorable march towards democracy and globalization. But I do think that if Russia really ends up having a very, very costly and tough slog in its attempt to take territory from a sovereign neighbor, and if you–and by the way, and if we see that result happening in part because of the United States’ continued abiity to put together global coalitions, to impose intense economic costs, to dramatically funnel effective military technology to the victim, in this case Ukraine–if this result is seen as a result partly of American leadership, then yes, this rules-based order under the auspices of American leadership will receive a bit of a boost.

Hmm. Okay. Talking about the American-dominant liberal order, do you think there’s anything America should reflect, do you think there’s anything that America should reflect on in terms of its effort in supporting and spreading democracies around the world?

I really do. I mean, I can hold two views in my head at the same time that Ukraine is right, Ukraine is the victim, Russia is wrong, this is Russia’s war, and it is a disaster, a mistake, and, in many ways, a crime. I can hold that view while also holding the view that the United States and the West should reflect on how it dealt with Russia in the past, how it dealt with European security and indeed how it dealt with Ukraine. I mean, again, we will argue forever whether the NATO issue was really important or not important in explaining this decision. I happen to think if you were to wind the clock back long enough, back to the 2007, 2008 period, a more proactive, more thoughtful Western policy would have told Ukraine that membership of NATO is not in the cards, and we need to come up with an alternative arrangement.

It’s just possible that if we had worked hard at it, we might have ameliorated or reduced the intensity of this problem between Russia and the West that puts Ukraine in the middle of this. But we didn’t do that. We didn’t put the effort into it. We didn’t think Russia was really worth it. It wasn’t strong enough for us to bother. We had other issues. We had war on terror. We had all these other things going on. So, I do think there is a cause here for reflection on our policy for a difficulty that America sometimes has in accepting trade-offs and saying, you know, we really can’t have both this principle and also this other principle at the same time. So yes, I completely agree that this should be an occasion for a little bit of introspection and some circumspection going forward as to how we conduct ourselves.

Hmm. And also if Russia, I mean, this is another scenario. If Russia was perceived as the winner of this war, what kind of new world order are we going to see?

Well, Russia has, again, Russian officials, leaders and commentators and intellectuals have been telling us forever, really, but really strongly since 2007, 2008, that they’re very, very dissatisfied with a U.S.-led so-called unipolar type of world. They want a multipolar world. They want a European security order in which the United States is either absent or has a much smaller role. They want a much larger role for themselves. If you look at the treaties, the draft treaties, they put forth back in February, in the lead-up to this invasion, you could see the kind of order that they wanted. They wanted one in which NATO would back away, in which Russia essentially had a sphere of influence, in which even countries that are part of NATO but joined NATO after 1997, even those countries would not host any permanent NATO forces, would not station certain kinds of weapons, et cetera, et cetera, you get the story. That’s the world order that Russia wants. And that’s the world order that, if they win, they’ll seek to create. They have been very clear about this for many, many years. They do not like a U.S.-dominated world. They want a world in which there are multiple centers of power and that Russia is one of those centers of power.

So, if Russia is perceived as the winner of this war, you think an America-dominated unipolar world order will come to an end?

Well, it depends on what you mean by winner. I think the answer to that question is if they just gain some sort of dominant position in Ukraine, so they “win” in some sense of defeating the Ukrainian military and somehow getting–whatever the outcome is–a slice of Ukraine. They take Donbas. If they succeed in doing that but the rest of Europe solidifies, and Finland and Sweden join NATO, and NATO gets stronger, in no sense could you call that a weakening of this world order. It will be a much worse situation for Russia in which the world will be very much more severely divided into different camps, in which Russia will be excluded from much of the global economy, and in which Russia will be poorer and Russia will be isolated.

So, a victory in that sense, it seems to me, just purely a victory in Ukraine without gaining some sort of understanding with the West and some sort of allies within the West, within Europe, won’t get them this new world order that they seek. That’s why I see this as such a strategic blunder, because the only way Russia can really get what it says it wants, which is an equal role as a respected pole of power in the world, is by agreement with the West, by having the West talk to it and make bargains with it. But invading countries and killing people and blowing up cities makes it so much harder for the West to be able to do that. It puts a barrier in the way of any possible negotiation with Russia and makes the West inclined to just sort of isolate it. So it’s really, the invasion has really worked at cross purposes. So, to get back to your question, it’s not clear to me that a military victory in Russia, I’m sorry, by Russia in Ukraine would end this moment, would dramatically end this so-called U.S-led rules-based order that we keep talking about.

Hmm. Okay. So all around, this is a bad deal for Russia. Putin just had one miscalculation. Okay, go ahead.

Sure. When you do wars of choice, that is to say you choose to fight wars that are not really necessary, that are optional wars, and when you misjudge the country you’re invading and end up losing or not winning, it’s bad for you. So, to take an example, the United States did this in 2003 by invading Iraq. If we rewind the clock and the U.S. never invades Iraq, my guess is if we run that alternate history, America’s position as the global leader would’ve been much stronger than it turned out to be because ultimately, our ultimate failure to achieve our objectives in Iraq really hurt the U.S. position. So, similarly, a dramatic Russian decision to invade Ukraine and not get what it wanted, not get what it sought and only bearing costs, will harm rather than help Russia’s international position. For sure.

Mm-hmm. What about China? Do you think a China-Russia alliance would last? I mean, is China the beneficiary? I mean, can China benefit from this war either way?

Yes. I mean many Russian, I’m sorry, many China analysts and analysts of the Russia-China relationship tell me, and they write and analyze, produce analyses, that say that China, in some sense, benefits here in that this whole crisis in Europe prevents the United States from that laser-like focus on China that was the original intent of the Biden administration. In Washington, DC, there are plenty of China hawks who really want the United States to refocus on China, and Putin’s decision to invade Ukraine has essentially distracted that. So, that side of the coin, that side of the equation, is good for Russia, I’m sorry, good for China, helps Chinese, gives China greater freedom of action. However, the costs imposed on the United States, the sanctions imposed by the United States, the deepening attention between the United States and Russia also put some stress on the Russia-China relationship and put up Chinese diplomacy, in some cases, in a very awkward position.

So, it’s a double-edged sword. But I’ll put it this way: Russia has no choice here. If it’s going to continue in Ukraine, it doesn’t have a westward option anymore. It used to. You know, there used to be this idea that Russia can kind of dance between China and the West and so on and so forth. That’s over for the time being, which means Russia has no choice. Now, if you connect the dots, what does that mean for China? If Russia has no choice, it means China is in the upper hand in this relationship to a greater degree even than before, which means China will be able to dictate, to a much greater degree than before it was willing to do, the terms of the Russia-China strategic partnership.

For example, if Russia has nowhere else to go, then China can try to, Chinese state-owned corporations and other entities that have to deal with the potential for secondary sanctions, they can tread a very careful line and try not to ruin their business plans via too much support for Russia. And they can do that and know that it’s not like Russia has another option. There’s no other great power Russia can go to. Only Beijing. And so, I think that’s going to play into the terms of their strategic partnership.

Yeah. Russia is trapped.

In a way.

Well, thank you, professor. These are all my questions. Do you have anything else to add?

No, I very much enjoyed the conversation.

Alright. Thank you, professor.

You’re most welcome.

Does Putin Want an Off-Ramp? An Interview with William Wolhforth

Simone Gao:
Thank you, Professor Wohlforth, for joining Zooming In again.

William Wohlforth:
Happy to be here.

Simone Gao:
Um, you know, the Russians gave an ultimatum to the last remaining Ukrainian troops in Mariupol on Sunday, and they basically said either lay down your weapons and leave or die. Uh, obviously no Ukrainian soldiers have left. Ukraine’s president Zelensky said that the already difficult negotiation would end if Russian soldiers killed the remaining Ukrainian troops in Mariupol. Uh, he also said atrocities witnessed after Russian retreat from Kyiv soured the negotiations. Putin admitted that the negotiation had reached a dead end. So, what do you think will happen next?

William Wohlforth:
Everything depends on the battle over the Donbas, which is now getting underway by all accounts. The initial blows, the initial artillery barrages and attacks, are beginning to prepare for what may well be the decisive battle of this war, at least that’s what most observers think. Negotiations will not be possible, as each side thinks that it is likely to do better in this particular battle than the other side expects it to do. And so with both of them essentially unable to agree to terms until they test their strength in this sad and tragically bloody battle to come, I don’t expect much to occur on these negotiations.

Simone Gao:
Hmm. So everybody, everybody is watching the battle in Donbas. If Russia does take Donbas, would you think it will make the war more difficult or easier to end?

William Wohlforth:
It is, um…I don’t know exactly what will happen. War, as everybody who studies it will tell you, is the province of the deepest kinds of uncertainty. So, it’s not at all clear to me that Russia will succeed in taking the Donbas; however, should it succeed in essentially reliably conquering those provinces and keeping Ukraine from any significant counterattack, we could then see a situation of a kind of a stalemate where the war simmers on and no one is willing to reach an agreement, or there could be some temporary ceasefire. But it’s still hard for me to see any Ukrainian government formally acceding to the succession of those two republics and their acquisition by Russia, and have that Ukrainian government stay in power. So, I would expect–again, forecasting is difficult–that if the scenario you set forth actually occurs, we’re likely to see a kind of a stalemate and a percolating, ongoing conflict. One final point, though, is we are so uncertain about this war that we don’t even know if Putin is necessarily going to be satisfied with the acquisition of Donbas, if that’s indeed what he does. In other words, for all we know, if he succeeds in conquering this part of Ukraine, he will simply bide his time and build up his forces and attempt yet further attacks. We just do not know at this stage.

Simone Gao:
What about if Putin cannot succeed in the Donbas area? Would he just give up?

William Wohlforth:
It’s just very hard for me to see, right now, the avenue by which he would simply give up and say, “sorry we ever invaded Ukraine. I really deeply apologize for this. We’re all going to go home.” Nobody who studies Russian foreign and security policy thinks that scenario is likely. So, somehow, for the Russians to be willing to stop this, most people think there’s got to be some measurable gain. Now we don’t know exactly what that sort of line or that threshold is, what is necessary to get Russia to sort of declare victory and go home. But most people think that a minimum is some kind of arrangement under which Putin can claim to have saved or rescued or protected the residents of the Donbas, which he claims were under threat from Ukrainian authorities.

Simone Gao:
Hmm. In a situation like this, I mean, I just saw in a CNN interview with Zelensky, he was commenting on a video clip in which a Ukrainian mom discovered her son’s dead body in a well. Zelensky said as a father, he couldn’t watch it because it made him want to fight and kill. But as president of a country, he needs to do his best to stop the war. So, I mean, obviously this is a very, very difficult situation for him. If you were the advisor to president Zelensky, how would you advise him? What is the, what is the truly good thing to do right now?

William Wohlforth:
You know, I think that statement that he made is one of many that he has made to continue to project the image of a person who is willing to talk and not come across as a person who literally is sort of blood thirsty to fight to the death. He has already given way on the question of Ukraine’s international status. Namely, we have heard Zelensky suggest the possibility of a neutral Ukraine. Now that was coupled with a request for security guarantees that would look very much like NATO membership, but still it was a start. And so, I think that that is exactly how I would advise them. In other words, if I were so presumptuous as to do so, that to maintain that implacable commitment to the fundamental sovereignty of Ukraine while at the same time suggesting we’re willing to talk about Russian security concerns that are legitimate, that don’t involve the destruction of Ukraine or the subjugation of Ukraine. That’s exactly the face that he needs to show both to Moscow and to the rest of the world.

Simone Gao:
Hmm. And at this point, what do you think is the moral and truly prudent action the West should take?

William Wohlforth:
You know, I think that the West is, should the United States and its allies need to be, I think what they’re doing is completely understandable. That Russia’s clearly in the wrong here, let’s be honest. Even if you agree that it had some legitimate security concerns in the past, none of those justifies what it is doing to Ukraine, to Ukrainians, to Ukrainian people. And so, under those circumstances, it seems to me absolutely right and proper that the West should aid the government of Ukraine in defending its sovereignty up to the limit that we judge will not cross some threshold that would elicit a major Russian escalation. But we should also, I think, suggest that the punishment that we are imposing upon Russia with these sanctions is contingent. Namely, that we would remove these sanctions if Russia were to agree to a deal that could be accepted by the Ukrainian government. So, I think we need to both raise costs on Russia but also suggest a future in which Russia could live as a normal member of the international community if it only would revisit this decision to invade Ukraine and accept some sort of reasonable settlement.

Simone Gao:
Hmm. Talking about those possible settlements, a few weeks ago–from the terms the Kremlin had given–it seemed like Putin had shrunk his goals in Ukraine, at least he was not seeking regime change anymore. Now it seems, I mean, as you said, the biggest obstacles are the ownership of, you know, of course, Crimea and the status of the Donbas area. So, I mean, do you think these two sides could still reach some kind of agreement on those two issues? Or do you think it could only be decided by the outcome from the battlefield?

William Wohlforth:
Unfortunately, I think–as I said before and I’m sad to say it–but I just don’t see…the two sides are just way too far apart for any kind of agreement to emerge. And it’s possible that the distance between the two sides will be reduced depending on the outcome of this battle. If one side performs dramatically better than expected–let’s say, for example, as I hope is the case, Ukraine just really performs very, very well, as it has done so far, better than expectations and Russia literally is not in a position to continue the campaign–it could be that the trend that you’ve mentioned of Putin reducing his war aims could continue and we could imagine the two sides coming together on an agreement. But right now, before the outcome of this battle is known, it’s hard for me to see that happening.

William Wohlforth:
And finally, I have to say that I’m, I just remain a little bit uncertain about where Putin stands here. Some of his spokespeople and even he has used language that it seems to be refocusing Russian objectives on this Donbas question. As if, as you say, that the war aims have been reduced. But some of the rhetoric emanating from Moscow commentators and even some officials really sounds blood curdling as opposed to what they mean by de-Nazifying and demilitarizing Ukraine. So, are we really certain that the whole object can be, in fact, reduced to Donbas or, as I hinted at earlier, could it be that he wants a cease-fire after seizing Donbas, build up forces and keep going? We really just don’t know that yet. I hope that it’s true that his war aims are being tempered by the realities on the ground, but we’ll just have to wait and see if that’s really the case.

Simone Gao:
So, you don’t think Putin is seeking off-ramp right now at all? He wants to fight it out?

William Wohlforth:
I’m not seeing evidence of off-ramps yet by Putin. That is to say, summarily he rejected some of the key bottom line Ukrainian demands, way back when these negotiations were still going on and when the sides were leaking to the press what was being discussed in Turkey and in Belarus many weeks ago now when these negotiations were going on. At that point, I didn’t see off-ramp kind of talk. And so far from Moscow, we haven’t heard specifics as to what’s being talked about short of, as we suggested, a complete dismemberment of the country. Recognition of Donetsk and Luhansk regions. And, by the way, it’s important to recognize these are not the region that are these little separatist republics that exist, but the entire constitutional regions of Donetsk and Luhansk. And so far, I can’t quite see how a Ukrainian government could agree to that until, as I suggest, unless something quite dramatic happens on the battlefield.

Simone Gao:
Hmm. You know, many people are worried about this and they see, they are worried that if Putin is not seeking an off-ramp or does not have an off-ramp right now, they’re worried about the possibility of him using nuclear weapons. Regarding that, I have a question. I mean, if Putin only talks about nuclear weapons, it could be a effective deterrent. Once he really uses it, I mean, do you think he will be retaliated against by nuclear weapons from either the U.S. or NATO? And if so, wouldn’t that put Russia on the fate of nuclear attacks, which could lead to its total destruction? So, if that’s not Putin’s real goal, he wouldn’t really use nuclear weapons. Am I right?

William Wohlforth:
Well, it’s important for us to clarify what we’re talking about when we talk about nuclear use. If, by nuclear use, you mean some big strike, something that hits a NATO country or hits the United States with nuclear weapons, then I think you’re right. This just doesn’t seem to be in the cards. I just, I have a hard time envisioning how Putin could ever see such use as working out for Russia or even for him personally. However, the scenario that most people worry about is, let’s stipulate, for this conversation, let us suppose that Putin actually really just cannot or will not or refuses to or feels unable to reduce his war aims and be satisfied with less than total victory in Ukraine, or at least a substantial victory. Let’s suppose that’s the case. We don’t know that it’s true. Let’s suppose it’s true. And let’s suppose that Ukraine continues to do very well on the battlefield. And let’s suppose the United States and the West continue to pour weaponry into Ukraine.

William Wohlforth:
Well, in that case, people worry he could resort to a small yield tactical, so-called, nuclear weapon in Ukraine as a kind of shock and awe approach that would somehow upset the apple cart and somehow lead to some sort of quick resolution or capitulation. And so, then the question becomes how would we, the West, respond to a small yield nuclear use inside Ukraine as a kind of demonstration or a kind of, again, shock tactic to try to bring some sort of resolution to the crisis? I think it would be very hard for us to escalate to nuclear use ourselves in response to such a small nuclear use on Ukraine. I also think that it’s very unlikely that he will choose this. I’m just suggesting that it’s, of all the scenarios discussed, it seems to me the most likely of a relatively unlikely potential.

Simone Gao:
Hmm. So, I mean, that’s very, I mean, doesn’t sound very good because if Putin does use technical, I mean, if Putin does use tactical, uh, nuclear weapons and the U.S. would not retaliate with the same weapons, then what does that lead to? Ukraine just has to surrender at that time because there’s no way they can fight that way?

William Wohlforth:
I’m not sure. I think there may be ways of calling the bluff of Russia, of escalating in response to that–to potential tactical nuclear use against a non-nuclear power, namely against Ukraine–I think there are possible ways the United States and potentially its allies could escalate in response that would be much more than we’re doing today. So, for example, I believe it’s quite…so, the economic sanctions front. Believe it or not, there are economic sanctions that have not been used yet that could be pretty devastating to Russia–what is called, somewhat confusingly sometimes, the nuclear option on sanctions–which would essentially be, of course, cut entirely the cutoff of Russian gas export. So all, basically, Russia’s main revenue streams to the West would be cut off. Or cyber escalation, where the United States maintains lots of things in the back pocket that it’s not doing. Or conventional escalation where the types and nature of intervention in Ukraine would increase. Or possibly even intervention via actual troops. In other words, there are escalatory ways, there are responses to a Russian escalation to tactical nuclear use that are not themselves replying with nuclear weapons that might be very, very, very bad for Russia. And so, my hope is that that sort of escalation is sufficiently credible to deter Putin from even considering this tactical option.

Simone Gao:
Hmm. You talked about the West just totally cut off Russian oil export. You’d think in a scenario, nuclear scenario, the European countries would be on the U.S. side to do that. We can, you know, agree on that.

William Wohlforth:
I do. I think people, scholars, who study these things debate, sort of, the normative or ethical prohibition on nuclear use against a non-nuclear state. Sometimes this is referred to as the nuclear taboo, and people debate its strength. How strongly will the moral approbation of such use affect countries’ decisions. And I think that if you look at this pattern of events thus far, you can see that as Russian actions in Ukraine get more and more extreme and there’s more and more civilian casualties, more and more innocent victims, you’ve seen a ramping up of the Western response. And if Russia then moves to a nuclear use–particularly as, very likely, civilians are potentially victims–I cannot imagine German public opinion would not simply compel the German government to reverse its position on accepting Russian gas, just to name one potential response. So, I do think you’d see real solidarity on the part of the West in response to an unprovoked nuclear attack against a non-nuclear country, Ukraine, that is only trying to defend its own sovereignty. No good explanation on the part of the Russians as to why they’re doing this. So, yes, my expectation is that that would be a credible deterrent for Putin and that, therefore, he’s unlikely to do it.

Oil Prices Soar, but American Oil Producers Are Not in the Mood to Drill, Why?

As the war in Ukraine continues into its second month, fears about global oil shortages and costs continue. European countries that have been deeply dependent on Russian oil are now looking for quick alternatives and looking to countries like Saudi Arabia, the United Arab Emirates, Iran and Venezuela to provide them. In the case of natural gas, European leaders are also reaching out to what Campbell Faulkner, chief data officer at OTC Global Holdings, calls “the Saudi Arabia of natural gas”—the United States—to do more to help their ailing NATO allies. 

Although the United States ranks 4th in proved natural gas reserves, behind Russia, Iran, Qatar, and Turkmenistan, it is the biggest natural gas producer in the world followed by Russia. 

President Biden has heeded the European leaders’ call for more natural gas from America. He committed to send 15 billion cubic tons of liquefied natural gas to Europe through the end of 2022. He has pledged to increase that total to 50 billion cubic tons per year through 2030.

But that commitment comes amid rising gas and oil prices in the United States and ongoing pressures on the shale oil industry. Despite what Bloomberg calls “vast shale fields holding a seemingly endless supply of natural gas and giant terminals capable of liquefying it and shuttling it abroad,” the U.S. shale oil industry has spent decades caught in a boom-and-bust cycle that threatened to undo the entire industry as recently as 2020. 

In the late 2000s, new technologies introduced in the U.S. oil and gas industry, like horizontal drilling and advanced hydraulic fracturing, or fracking, led to the boom of a “shale revolution.” In big shale states like Colorado, this revolution brought with it a six-fold increase in production between 2010 and 2019, according to Chase Woodruff of Colorado Newsline. That production increase drove down prices and, as Woodruff reports, “in 2018 the U.S. made the world’s top oil producer for the first time since 1973.”

These new drilling technologies were not cheap, though, and the required capital for the technologies and operating expenses came, in many cases, from Wall Street. Investment money flowed freely in the early excitement of the fracking boom. But investors soon soured on oil companies’ use of their capital to fund production with little regard for investment returns. And as early rounds of funding dried up, publicly traded companies simply issued new stock to balance the books, a habit that sent many investors packing.

Then came the chaos of 2020 and, alongside it, a sharp decrease in the demand for oil amid COVID lockdowns. The price of crude oil has once dropped to below $0 dollar a barrel in the United States.

46 American oil and gas companies filed for bankruptcy that year. Many more were involved in mergers and acquisitions that began even before the pandemic and continued well into 2021. The companies that remain, says reporter Irina Slav, “rearranged their priorities from ‘growth at all costs’ to ‘returns above all’.”  We are now in a time, says Slav, “when investors are wondering if it’s even worth it to stay in oil, what with the energy transition and [environmental, social, and governance] commitments.” 

To hold on to current investors and encourage new money coming in, the shale industry has shifted its business model. This shift can be seen clearly in their financial results reports of 2021 and investor outlook documents in 2022. Language like a “new return of capital framework” or “new shareholder return framework” or “updated stockholder distribution strategy” permeate these documents. And despite the now surging oil prices, oil executives and analysts doubt we will see a change in this new industry direction. Says Scott Sheffield, CEO of Texas-based Pioneer Natural Resources, “Whether it’s $150 oil, $200 oil, or $100 oil, we’re not going to change our growth plans.” So, despite the oil and gas industry as a whole having 9,000 unused permits to drill on federal lands, they have no intention of using them to help ease the gas shortage created by the conflict in Ukraine.

They have little reason to, given the sentiments President Biden has made so clear in prioritizing alternative energies. Biden has consistently mentioned his belief that fossil fuel industries will be obsolete within 30 years and committed his administration to the work of energy transition. 

In November 2021, the Biden administration proposed reforms to the country’s oil and gas leasing program that would raise costs for energy companies to drill on public lands and water.

The report completes a review that Biden ordered in January. The president directed a halt to new federal oil and gas lease sales on public lands and waters, but a Louisiana federal judge blocked the administration’s suspension in June.

To make his intention more clear, In his recent Bipartisan Infrastructure Bill, Biden provided a more than $65 million investment in clean energy and the electric grid. That investment will go to upgrading the U.S. power infrastructure, expanding renewable energy, research and development for advanced transmission and electricity distribution technologies, and the promotion of smart grid technologies. Investments are also made in “next generation technologies like advanced nuclear reactors, carbon capture, and clean hydrogen.”

No new investments were made in the fossil fuel industries or the technologies that support them. And now, with global need climbing and no viable energy alternative, Biden is pleading with U.S. oil companies to ramp up production. Shale oil producers aren’t buying in, and for good reason. The industry needs funds to survive, and those funds will not come from Washington. They will come from shareholders and those shareholders “have been very clear that that money is theirs and they don’t want them to spend it on growing supply.” 

A Zooming In audience member summed it up quite bluntly: who wants to drill and be attacked, vilified and the profits taken by socialist? Hmm, another way to look at it.

I’m your host Simone Gao and I’ll see you next time.

Putin’s Bet on Germany; A CIA Warned, Reagan Opposed, Zelensky Protested Project Went Ahead, Why?

One month into the Ukraine war, reigning in Russia using sanctions still proved difficult for the European member countries who were deeply entangled with Putin due to their reliance on Russian gas and oil. How did that reliance come about and is there any chance for them to break free from the need for Russia’s energy?

The current European dependence on Russian oil began decades ago, during the Reagan era and with the promise of a pipeline. That Soviet pipeline traverses the landscape between Siberia and Germany and brings with it much needed gas imports that, according to a March 1981 CIA memo, were needed to offset likely declines in oil supplies for the six European countries in question. They also argued that “related equipment sales by West European firms would create thousands of jobs and billions of dollars in business.”

Despite those positives, the CIA warned of some serious risks in creating this type of infrastructure with the Soviet Union. In their memo titled USSR-Western Europe: Implications of the Siberia-to-Europe Gas Pipeline, they find that such a pipeline would “provide the Soviets one additional pressure point they could use as part of a broader diplomatic offensive to persuade the West Europeans to accept their viewpoint on East-West issues,” citing, as an example, an attempt to undermine “European willingness to act in concert with the US on economic sanctions against the Soviets or on security issues.”

They also cite a potential for a “natural gas weapon,” stating that “the likelihood is strong that the Soviets will attempt subtle exploitation of the developing natural gas relationship” and warning that the effects of that pressure would depend on “West European and NATO cohesion and will” and “progress over the next few years by Western Europe in installing ‘insurance’ in the form of strategic reserves and fuel substitution capability.”

A bitter dispute followed. Reagan vehemently opposed the pipeline and issued sanctions preventing American corporations from participating in the construction and operation of that pipeline. But after what The New York Times calls “a public-relations and lobbying blitz that played out across newspaper opinion pages, congressional committees and a direct appeal to the White House,” Reagan backed away from the sanctions, and the pipeline moved forward.

In the decades since, two more pipelines—the Nord Stream and Nord Stream 2—have been added, both running under the Baltic Sea and taking gas from the Russian coast to Germany. Together, they could deliver 110 billion cubic meters of gas to Europe every year. But while the Nord Stream has been operational since 2011, the $10 billion Nord Stream 2 project has now been put on hold. The US, UK, Poland and Ukraine strongly oppose the project, fearing that it would provide Russia with an even greater stranglehold on Europe. Ukrainian President Volodymyr Zelensky has called it “a dangerous political weapon.” And German regulators are fearful that because Russian state-owned firm Gazprom owns both a 50% stake in the pipeline and all the gas that goes through it, Russia would have too much control over supply.

That supply is substantial. Even without the Nord Stream 2, Russia currently provides roughly 40% of the European Union’s natural gas imports. Russian supply drying up leaves Europe vulnerable, especially Germany and Italy who consume 42.6 billion cubic meters and 29.2 billion cubic meters respectively. Belarus, Turkey, the Netherlands, Hungary, Kazakhstan, Poland, China and Japan are also at risk if Russia cuts off the supply.

And Russia has a history of tinkering with the supply when they feel politically justified in doing so. The Soviets cut off oil supplies to Yugoslavia in 1948, to Israel in 1956, and to China in the early and mid-1960s. More recently and more notably, Russia cut off gas supplies to the European region in a 2009 diplomatic dispute with Ukraine. According to The New York Times, they left “tens of thousands of homes without heat” and “more than a dozen people froze to death, mainly in Poland, before Russia reopened its pipelines.”

The risks the CIA warned us of in 1981 are just as real today, and we are just as unprepared for them. The EU had proposed a plan to end reliance on Russian oil by 2030 but now, eight years ahead of that date, finds itself scrambling to find alternatives in order to end their participation in the funding of the attack on Ukraine. The US has committed at least 15 billion cubic meters to Europe in the remainder of 2022 along with its commitment to making “sure the families in Europe can get through this winter and the next while we’re building the infrastructure for a diversified, resilient and clean energy future,” as Biden said in a recent statement at the U.S. Chief of Mission Residence in Brussels. But 15 billion cubic meters won’t be enough to meet that goal, and without help from Saudi Arabia, the United Arab Emirates, Iran and Venezuela, there seemed no real plan on how to offset European reliance on Russian gas and oil.

Or there is one more route, according to Bloomberg, If there’s any country that might’ve been in a position to rescue Europe from its energy crisis, it’s the U.S. — home to vast shale fields holding a seemingly endless supply of natural gas and giant terminals capable of liquefying it and shuttling it abroad.

But American shale drillers refuse to drill more. Why? We will explain in our next video.