Reprimands for Russia

Reprimands for Russia
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Given the sheer wealth and power of the place, America is not an easy country to discipline. It probably takes more than a hashtag, at least.

Reuters reported the other day that a bunch of young Russians have started (spontaneously, I’m sure) an aggressive social media campaign to mock and belittle President Obama over his — and the rest of the now-G7’s —economic retaliation against Moscow’s annexation of Crimea. It’s called “My Sanctions,” and is supposedly taking the nation by storm. Apparently hip cool Russian dudes are supposed to make these custom memes wherein they proudly declare what comically personal thing they’re not going to “let” Obama do anymore, like borrow their skateboard or whatever.

Maybe it loses something in the translation.

Or maybe it’s just that the humor of Russian “retaliation” against America already peaked when the Kremlin imposed actual sanctions against what it perceives to be the American ruling elite last week. The nine targeted muckity-mucks include Democrat leader Harry Reid, obscure Indiana Senator Dan Coats, 32-year-old White House speechwriter Ben Rhodes, and of course, noted non-president John McCain. Not one of them seems to consider their reprimand anything but a bizarre badge of honor, with McCain perhaps having the best line of all  — “I guess my spring break in Siberia is off!”

Tit-for-tat spite, no matter how petty, seems to be one of the trademarks of the Putin regime. We may recall that last year Moscow imposed an across-the-board ban on American adoptions of Russian orphans after Washington froze the US assets of 18 apparatchiks associated with the death of crusading anti-corruption lawyer Sergei Magnitsky, a move, which like the politician sanctions, didn’t actually hurt the US so much as make a very uppity point.

But the balance of power between the two nations isn’t entirely tilted in America’s favor, either. In announcing his government’s latest package of sanctions last week — which targeted the holdings of several Russian billionaires and banks — President Obama cautioned that doing much more of this sort of thing “could be disruptive to the global economy,” given Russia’s economic clout.

These days, the vast majority of Russian trade involves oil, with petroleum representing about two-thirds of the country’s exports. More than half of this goes to western Europe, with more than half of that going to Germany, the world’s third most powerful economy.

Europe’s Russian dependence, in turn, is seen to be critical enough to threaten American economic interests by proxy, even though direct US-Russian economic ties are quite weak (at around $24 billion a year the economic relationship between the two one-time superpowers is only worth about half the relationship between America and Italy, and only about 3% of America’s imported oil comes from Russia). In a globalized world, one is always hesitant to instigate a chain reaction of unknowable consequence.

To the extent sanctions ever work (and it’s widely disputed if they do), they work best when the sanctioner is vastly more powerful than the sanctionee, as was the case with the western boycotts against apartheid South Africa, the decade-long international isolation of Saddam Hussein’s Iraq, or our current embargoes against nuke-happy Iran and North Korea. If the two parties are equally co-dependent, or equally independent, however, the outcome is doomed to remain stagnant in the status that defines Russian-western relations today: rhetorically fierce but functionally flaccid.

Which isn’t to say the goal of isolating and weakening Russia is impossible, it just requires a united west willing to make a long-term commitment to two complex and challenging goals: energy development and free trade.

This isn’t a big part of the narrative, but one of the benefits of Keystone XL — the proposed transcontinental pipeline to ship bitumen-derived crude from western Canada to refineries in the Southern US —  will be an increase in North America’s ability to export petroleum overseas. Since both Canada and the US are well on their way to becoming energy self-sufficient within a decade or two, eventually  much of the Keystone oil will be, by definition, excess. Why not let Europe take several million barrels off our hands?

That, however, would first require Europe to lessen its current fussy practice of labelling bitumen-derived oil as fundamentally worse for the environment than other sorts, a designation that limits the amount of such oil EU countries can import under their complex climate change-battling regulatory regime (and one the Canadian government claims lacks “sound scientific justification”). The relevant laws are currently in the process of revision, and Canada’s been lobbying hard to get them ditched. The Euros would be wise to do so.

But North America can’t do it all. Europe would also be wise to get more vigorous about developing their own presently-untapped petroleum reserves, particularly the vast amounts of shale oil lying within their borders. But that too will only happen once more EU countries are willing to lessen their dogmatic bans on the fracking technology necessary to harvest it.

All this is the nightmare scenario of hardcore environmentalists who fear the dawn of a new age of oil. But it would be no less a fright for Putin as well. Once countries like Germany are able to gradually pull themselves from the energy orbit of the Russian petrostate, the west will have a much freer hand in managing their relationship with Moscow; one no longer quite so severely restrained by the pragmatic calculations of the present.

Energy independence won’t be a quick, easy, or magic solution, of course. But at the same time, one wonders if there wouldn’t be some strategic advantage, as President Obama and the American EU ambassador recently seemed to imply, in just talking about the goal more loudly and often.

At the very least, it will probably grab more attention than a few Russian kids on Twitter.




^ 8 Comments...

  1. Pete

    Thanks for the link about the sanctions against Bank Rossiya. The move was generally seen as incomprehensive and farcial. Those who did not read the linked release (like everyone I know) assumed that Obama was dumb enough to imagine that a bank with such name was the country's main bank. The release, however, points out how insignificant that bank is, so the Administration is aware. So they hopes to attack "the regime". It remains to be seen how effective this action is going to be.

  2. projectiridium

    What is even worse for energy exporting nations is that the US doesn’t have a national oil company and an ‘export quota’ is pretty much a non-existent concept. The result is that the energy exporting nations won’t even be able to dangle foreign policy carrots or sticks to try to influence production levels because the government will have virtually no influence over the nation’s LNG exports, and attempts to negotiate with the energy firms directly would be illegal price fixing. In addition, most of the profits those companies make will be reinvested. So any successes the state energy firms have in boosting the price of energy are just going to make the American energy companies more formidable in the future.

    On top of which, when these ‘free agents’ see China’s money as just as green as Germany’s, how can the energy exporting nations hope to play energy politics? How many of their buyers would be happy to throw their supplier’s foreign policy under the bus if they can cheaply meet their energy needs from companies that never ask for embarrassing favors on the UN Security Council?

    Keystone pipeline or no Keystone pipeline, change is inevitable. America and Canada’s private infrastructure are already retooling for the coming energy exporter economy. Freight tracks are getting double-tracked, refineries on Gulf for gearing up, and over a dozen permit applications for LNG export facilities are pending. The next couple decades are going to be interesting times for the energy industry.

  3. Jake_Ackers

    Russia was going to enter into a recession anyway. Sanctions are always a joke though in general. But what is needed here is to release the grip of Russia on oil and natural gas with respects to Europe more specifically Eastern Europe (EE).

    Short answer? More trade. Long answer? Export more oil and natural gas from the West. Including helping the EE explore their own. As soon as prices fall so does Russia's ability to bully the world.

  4. Svan

    The commitment to global warming is an unfortunate political cause. It relies heavily on international co-operation and offends both the rich and the poor. It is seen at times to suggest dramatically lower standards of living for those with an American appetite for energy. There are harsh anti-business restrictions on developing nations who don't really have the means create a mass production economy capable of competing globally without also illegally polluting. It's virtually impossible for most Americans to participate in their economy without traveling by car or having access to a computer. Without climate controlling their home or owning a large screen T.V. While all of modern science agrees climate change to be real and man-made, its influence remains a fractured story of one-offs and any sort of mayan disaster is still floating up in the tea leaves.

    It is however a relatively undisputed physical process with plausible negative outcomes on a grand scale. The Keystone Pipeline is the antithesis of what it means to be seriously committed to the goal of stopping or reversing climate change. It plays to all the cheap narratives. That selfish business interests are poisoning the environment with horrible new technology and its terrible fracking toxins. That incompetent, unregulated gas baronies will inevitably spoil the earth and drop the whole darn thing in Lake Michigan. While American environmentalists should respect the many definitive rulings against a significant environmental danger it still must understandably chafe and indeed not address the central point of whether it should be drilled for at all, to be so complicit in it.

    That said, this is the most compelling argument I've heard yet for the construction of the pipeline. While Climate Change dangers remain non-obvious, Putin's Russia represents a much more real threat to the possibility of global war. If the tailbone of western Europe must break over oil, then why not have a little more tugging power? It's fatal diplomacy with just the right kind of screws for this problem. You're right to have recently called left the "conscious" of the nation, even if they don't have any answers, they do see how silly it all is.

  5. Bill

    Kind of forgetting that Europe can probably become energy-independent almost without oil entirely there, aren't you?

    Even putting aside alternative energy, which will likely be pretty viable in the same time-scales that developing entirely new branches of the petroleum industry will take since it's verging on viable even now, France has been energy-independent just off of nuclear power for the better part of a century now. It's not exactly rocket science to just cut the dependence on oil entirely once you've resolved to alter the infrastructure anyhow.

  6. Dan

    This newsreader character is fantastic.

  7. Guest

    Is it referencing someone and funny through that way? I actually don't like the art for this at all. I wish we could get back to the comics that looked more like the one where Stephen Harper has all those little collectibles.

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