In recent decades, there has been a development of several related concepts, some under the category of thermodynamics, which may be applied, to some degree, to the current geopolitical scene.
One is the perception of organization in this universe as ordered energy flows. This perspective can be characterized as ‘‘non equilibrium thermodynamics”. Probably the foremost and broadest scale explicant of this way of looking at the universe is cosmologist Eric Chaisson, now at Harvard. One of his signature books is ‘Cosmic Evolution’ .
Chaisson quantifies energy flows, and relates them to structures, at stellar, galactic, planetary, and even life levels. He relates complexity, at each of these levels, to ‘energy rate densities’. Somewhat surprisingly, he points out that energy rate densities in life forms exceeds those of cosmic structures such as suns. He also identifies energy rate densities of different types of life organization, such as plants and animals, and even the structure of industrial human activities, such as cities, airplanes, etc.
On separate but related themes, explorations of concepts such as ‘hierarchy theory’ and ‘emergence’ have shown that all structures at the scale humans perceive are in a sense hierarchic. Simple atoms make up complex, heavy atoms, atoms make up complex elements often described as molecules and chemical species, molecular structures make up, or are involved in, life structures, single cells make up multicellular organisms, both single cells, at their level, and multicellular organisations make up what we tend to call social systems, and so forth. (e.g. in currently visible human terms, cities are clumped in States, or provinces, states in an United States, ‘nation states’ around the world in the United Nations; or at lower levels franchisees under franchisors, etc,) In this framework, each level of aggregation is seen as a system of relationships, and a differentiated unit at that level joins with other elements, or systems, in a set of stabilized relationships to form the next level of hierarchy.
All these ordered systems involve — or more accurately consist of — stabilized energy flows, or, equivalently, stable systems of relationships, in energy flows. A condensed public summary of this perspective, with citations, is available.
Insights which arise in this perspective include that all organization is combinatorial — combinations of elements. Relatedly, ‘emergent’ effects of any combination of elements upon other combinations which it encounters are the effects of the organization as a whole as distinguished from the effects of its components might have were they not bound in their particular organization. That is, all organized systems are identified and in effect measured, or given meaning, by other systems in terms of the relationships system-to-system, so to speak.
This is an highly condensed overview, but one can get further, and somewhat complementary, clues concerning the stream of thought by looking at some of the work involved in the International Big History Association, including some of its leading members such as Fred Spier and David Christian. This Association traces cosmic evolution from its origins through human historical processes, in a variety of ways and from a variety of perspectives. The Association is recently formed, and its work is evolving in form and content.
Another architectural insight has been offered by Mark Buchanan, in his book ‘Ubiquity’ , to the effect that, as far as he could identify, all phenomena seemed to fall on ‘power law’, or log normal, statistical distributions — wars, city sizes, wealth distributions, earthquakes, etc. This author has suggested that this is because all ordered phenomena consist of, or arise from, correlational processes, and such correlational processes produce this sort of statistical distribution.
Lastly, for initial introduction, a set of theories, or concepts, called ‘maximum entropy production’ (MEP) suggests, in general layman’s conceptualization, that given a differential (e.g. heat, or temperature, differential), it will be dissipated by all available means, and at situation-quantifiable rates, with common statistical signatures.
Now to human societies, and the relationships between them. Each society is a group, and a group of groups. For each of these groups to have sustained coherence, its constituents must have stable inter-se relationships, or systems of relationships. But for any given group or set of groups to coexist with others, rather than devouring or being devoured by others, they must work out modi vivendi, so to speak. They must somehow establish complementarities, or symbiotic relationships, or at least non-lethal sets of relationships. Each and all must have an energy basis — a flow of energy into and through the stable system of relationships.
In large scale agricultural society examples, all ‘empires’ are hierarchic, in the sense of being made up by a coordinating mechanism which maintains relationships between component elements.
In analysing any given society, or set of them, we have to follow the energy flows. Karl Marx’s thesis that societies are structured by their means of production translates into the view that any given society, or set of them, will have institutions (regular patterns of activity embodying energy flows) which feed off of, embody and maintain the energetics of the system.
‘Agricultural’ societies can be seen as group-organized means of harvesting the photosynthetic capture of energy by plants, plus the energy of other-animal harvesters of the plants (‘livestock’). ‘Industrial’ societies maintain the plant and animal harvesting base, but have taken flight, so to speak, by capturing stored and concentrated energy of the residues of past eons of plant life on earth.
Since this cache of stored plant energy is finite and its boundaries are visible, it increasingly appears that if the multibillion human complex thus created is to be maintained in some form, over decades and centuries, humans will have to move to reliance on artifactual photosynthesis (AKA ’solar energy’), supplemented by wind energy, tapping the energy of breakdowns of heavy, complex atoms (nuclear energy), and perhaps some trace additions of current and earth-stored biological photosynthesis. Perhaps the best references for the data and analysis underlying this perspective are an international review of renewable energy sources, and a conceptually elegant report by Sandia Laboratory personnel.
We currently tend to call this a ‘renewable’ energy society. But it can be seen as a larger scale, current technological, or artifactual, or human-mediated, direct harvesting of sunlight, bypassing the biological processes of other organisms, past and present. In addition there seems a likelihood of harvesting of the differentials created by differentials in sunlight on the Earth’s surface (wind energy), with limited additional sourcing.
We tend to think of this all as a human created and engineered mastering of energy flows. But let us try to look at it from the Universe’s point of view, were the Universe to bother itself, apart from creating ourselves, to have one. From a thermodynamics perspective, from Chaisson on down, one can consider that life itself was created as a means of channelling energy flows to reducing differentials caused by universal ordering, as proposed by Santa Fe Institute researchers. Derivatively, all our institutions, being driven by energy differentials and flows, and ourselves, can be seen as expressions of thermodynamic forces. We are, from such a point of view, but the enablers of Chaisson’s energy density rate functions.
Lest this expression be interpreted as a whimsy to attract attention, I will use it to make suggestions about how current and future societies may tend to work out.
Let us consider the turbulent Middle East. Also we can consider the Soviet Union, and nearby Euro-asian areas.
Assuming no system-wide catastrophic breakdown, the stored plant energy potentials of these areas have been and will continue to be tapped. Pipelines will be built. Streams of oil tankers will continue.
This does not mean that there will not be intrastate and interstate maneuvering about where, when, and at what rate. Water flows downhill. But humans make dams, channels, irrigation projects, etc. And we humans do a lot of squabbling about how to create and divide up participation in reservoirs and flow systems over and outside political boundaries. Elinor Ostrom was given a Nobel prize for her careful and extensive work on how such situations, particularly those involving economic ‘commons’, have been successfully managed. Her prescriptions are worth careful attention.
The fractured and fractious political organizations of the Persian Gulf area have been, to some extent, and are likely gradually to be shaped to allow these energy concentrations to be distributed, or, to use MEP logic, dissipated. If democracies cannot reliably be constructed, autocracies and dynasties will have to conform themselves to these requirements. If they cannot do so, then possibly ‘trusteeships’ might be constructed by the world’s hydrocarbon thirsty and consuming polities. The political entities in the area will be monitored for efficiency and stability. This may lead to assistance, if possible; reshaping if necessary: both from outside their boundaries, and, possibly to a lesser degree, from within.
Though thinly populated in many of its parts, Russia will, from its vast and central position on the Eurasian land mass, continue to feed gas into the highly organized energy transformation and use systems of Europe, and perhaps also China. It will also continue to be a source of other resources. (There may be some question whether the Easternmost portion of Russia remains European oriented, or becomes Sinified to such an extent as to lead to rearrangement of the State identification and administration.)
Around the globe the hydrocarbon potentials available from fracturing rocks will also continue to be developed, geographically unevenly but widely, on and adjacent to several continents. The phasing will be partially gated over time by relative efficiencies as between the hydrocarbon pools of the Middle East, Venezuela, and Canada, and ‘shale’ systems elsewhere. And the extent and rate of rock mining for hydrocarbons may be affected by the efficiencies of emerging photovoltaics based energy systems. But the techniques and tools are in hand, so to speak, in use, and expansible at current and sufficiently rewarded EROEI (energy return on energy investment) ratios.
Two factors seem likely to limit, or boundary, these extractions from the energy concentrations of life’s past, other than exhaustion. One is the possibility that the atmospheric temperature effects of the gaseous emissions from freeing up all these hydrocarbons — particularly carbon dioxide — will so disrupt the organic processes of current life as to arrest the whole process. The other is, as noted, the apparent potential of tapping the vastly larger solar energy flux of Earth to entrain larger energy flows with lesser disruption of current life patterns.
The first potential limitation has engendered much attention, but limited current effect, other than to lead to some effort to manage replacement of hydrocarbon mining by tapping the global solar energy flux — ‘renewable energy’ technologies, including the ancillary and necessary technologies to make solar energy universal, convenient, and supportive of at least the current level of human activity.
Efforts to coordinate limitations on ‘greenhouse gas’ emissions may slow the rate of increase, but seem far short of capping or reducing such emissions in immediately upcoming decades.
The salient geopolitical consequences of this projected transition to artifactual solar energy are interesting in a number of respects, prominently two.
First, artifactual solar energy capture, like biological, is inherently geographically extensive. The capture systems may be on the whole more southerly (take note, Northern Europe), and less co-located with water (but still dependent on some water to keep the needed biological support mechanisms in place). Whether this leads to massive territory wars like those of the agricultural era remains to be seen. We had best hope not, and strive to avoid them, for urgent reason.
The scope, efficiency and sustainability of this artifactual photosynthetic system seems likely to depend upon a complex web of interconnected resource, processing, and exchange systems implemented by humans, as distinguished from self sustaining (if we do not too much interfere) plants, ocean oxygen emitters, and generally the vast web of biological processes which we call Nature. The combinatorics of this system, globally employed, will be complex, subtle and demanding — of us.
In other words, whatever the array of geographically defined governance systems, if the systems for replacement of ‘fossil’ energy support for humans are to be realized, humans are going to have to construct and durably maintain large, and probably at best global, cooperation systems.
We may characterize these systems in economic, social, institutional, and other terms. But if we are going to get, for example, silicon, lithium, iron, copper, aluminum, etc. from where they are first found, and do all the intricate dances of transporting them, cunningly shaping them into microscopically toleranced formats, in large volume and at large scale, covering them with sand made into glass (or not), and have them harvest energy for decades, we have to have sophisticated coordinating mechanisms (including markets, and thus also including financial markets). And if humans seek a sustainable future of abundance of the sort many humans now enjoy, we can’t be blundering about periodically, or widely, destroying parts of such interconnected systems at will or impulse (read, if you wish, ISIL).
Lastly, for the moment, the imperative for hierarchical construction suggests that central coordinating functions, like those now embodied by the United Nations, will continue to evolve.
I have suggested that the above general directions, or tendencies, emerge from a consideration of order building, non equilibrium thermodynamic forces. However, I cannot assure my fellow humans that life on Earth, and our human part of it, must necessarily realize all the potentials one can envisage. Life, and order building in it, works in probabilistic increments. Over several billions of years, Earthlife has advanced as a whole in mass and complexity, it now appears, but also suffered some catastrophic setbacks in the process.
Whether our species of language and tool wielding ape will be able to achieve and maintain — over centuries — global integration at high levels of energy-fed activity, with current or better levels of individual welfare, is thus very much an open question. We have no good reason to think that an Abrahamic God, or other general Universal Governor, has decreed success for our hopeful projections of organizational potentials of human life on this Earth at this time. We are on our own, in an evolutionary adventure. In Star Wars terms, the force(s) may be with us, but guarantees are not on order.
This leads to questions about what those concerned with ‘diplomacy’, or forms of facilitating international concert, may need to focus on in order to foster the needed, but far from guaranteed, international coherence. Modern Diplomacy, as a publication, is oriented to this topic.
In a prior post in another publication, I attempted an outline of some major themes, or focal points. In very brief summary, I suggested that we be aware of the central importance of energy flows and hierarchical ordering tendencies, mentioned here, that participants will be required to focus on arrangements which yield sustained mutual benefit to the participating parties (in current parlance, ‘win-win’ solutions), that there need to be monitoring of and controls on parasitism of the coordinated system by the coordinators, or ‘elites’ in the systems, that sound, objective knowledge systems of the sort developed in the sciences, and published through ‘free speech’ and ‘free presses’, be maintained, and that there is a need for continuity in systems (as massive breakdowns in an highly industrialized world may be very difficult, if not impossible, fully to repair).
Some of these suggestions relate to a need to prevent ossified, myopic national and international structures evolving, milked unproductively by national and international elites, stifling the growth potentials of the global human (and life) community.
I also pointed out that however much we wish completely to equalize welfare results for all participants globally, the prevalence of ‘power laws’ in the Universe counsels that we will never be able to do so. The operational possibility to be sought is that the various elements of the system be better off than if there were no system. (The philosopher John Rawls addressed this criterion in a way when he suggested that one approve or disapprove of a given system as if one did not know where one would fit in it.) A refinement of this concept is that an optimal system is one in which no one can be made more well off without making someone else less well off. But this logic does not, strictly, imply that in all circumstances complete equality applies as to all system participants.
On the global scene, both State and non-state actors seek to encourage successful and sustainable global integration. Some current organizations target selected international objectives from time to time, such as, but not limited to, Citizens for Global Solutions, and other organizations seek to create a global ‘parliament’ to parallel and inform the United Nations, promote a global ‘rule of law’ at the UN level and non governmental organization level, promote economic freedom, protect human rights, as by indexing State performance in human rights protection, and inhibit corruption in various polities by indexing State success in doing so. This is only a very limited sketch of such organizations. Please feel free to point up others in any comments on this essay.
The concepts I suggest here provide some support for the specifics of such efforts. Given my background as an attorney, I suggest that the ‘rule of law’ can be justified as an universal requirement by appeal to the basic nature of ordered processes — that is, that there be regularity and thus predictability in component processes — and the requirement that participating elements, such as ‘elites’, do not advantage themselves at the expense of the regularity and efficiency of the whole (the generic word for this is ‘corruption’). This basis goes deeper than others conventionally offered.
I would also note that ‘human rights’ activities can be justified, perhaps somewhat undramatically and colorlessly, by the requirement that participating human elements in social groups, such as States, be accorded those nutrients and potentials for action which allow them to function with some equilibrium and effect.
How well are such efforts succeeding? In the IA Forum piece, this author, perhaps parochially, attempted to rate the performance of his own native country, the United States, in meeting these criteria,, or requirements. Readers of this article are invited to correct this rating, and self-evaluate the conformance of their own polities by these criteria, if so inclined.
The effort reflected in this paper to to re-conceptualize some of traditional ‘statecraft’ has resulted in a limited and general set of suggested approaches. Broader efforts can be undertaken. Having had some connection with the US State Department and its education program for its foreign service officers, this author has proposed that such institutions might consider fostering research organizations (in a loose parallel to the US Defense Department’s DARPA) to probe analytically the theoretical and practical underpinnings of State construction and interaction.
China’s Unorthodox Intervention in the Global Oil Market
Apparently, China has been the talk of the town for quite some time. While the entire yesteryear passed in a flurry of blame game over the pandemic, this year has been nothing short of a blessing for Xi’s regime. However, while China rapidly compensated for the drastic slump last year, the bustling economy has now cooled down – though a bit prematurely. Due to the expansive outbreak of the delta variant, China – like most countries around the world – now faces surging inflation and a crippling shortage of raw materials. However, while one might get a bolder vibe from China’s recent crackdown on industrial giants, the supposed ‘Second Cultural Revolution’ seems on a divergent path from the government’s latest aspirations for the domestic industry.
China seems to be on a path to harness growth that appears to be slowing down as the global economy battles uncertainty. However, while many expected China to take orthodox measures to prolong growth, hardly anyone expected a drastic change of strategy: intervening in a close-knitted global market like never before.
China recently posted its most robust trade surplus in history, with a record rise in exports jumping 25.6% from last year to stand at $294.3; $10 billion more than any previous month. However, while the glowing figures imply sturdiness, the underlying fragility of the Chinese economy is not disguised. In the past few months, China’s production engine has taken a toll as surging energy costs have inhibited production capacity. The factory-gate inflation stands at a 13-year-high which has forced factories to cut output. Amid declining domestic demand due to covid restrictions, manufacturing surveys show that China’s export orders are eroding as supply bottlenecks coupled with energy costs have weighed heavily on the production function. To counter the problem, China recently supplied its reserves into the domestic market; undercutting the surging global price tag dictated by the petroleum giants.
Last Thursday, China’s National Food and Strategic Reserves Administrator made a press release, confirming that the world’s second-largest economy tapped into its crude reserves – estimated at 220 million barrels – to “ease the pressure of rising raw material prices.” While China is known to intervene in commodity markets by using its strategic reserves, for example, Copper, Aluminium, or even grains.
Recently, China tapped into its national reserves to intervene in the global commodity market of industrial metals for the first time since 2010. The intervention was situated as a release to normalize surging metal prices and retain domestic manufacturers’ margins. However, it is a novelty that a national agency confirmed an active supply of petroleum buffer via an official press conference. And while no additional details were offered, it is presumed by global strategists that the press release referred to the 20-30 million barrels allegedly poured into the domestic industry around mid-July: when Xi’s government offered to supply crude to the OPEC.
Furthermore, China’s Stockpile Agency claimed that through open auctions, China’s reserve crude was intended to “better stabilize the domestic demand and supply.” It was apparent that as China ventured through a supply crunch when Brent Crude – Global Crude Index/Benchmark – breached the $76 bpd mark, the country instead resorted to utilizing its own stockpile instead of relying on expensive imported petroleum. Thus, it shapes a clear picture of how China managed to clock a phenomenal trade surplus despite not importing its usual crude quota.
While it is common knowledge that economies like the US and Europe maintain strategic petroleum reserves, the buffers held by China were utilized to actively manipulate the price in a ‘normalized’ oil market instead of their designated usage in supply crunches or wars. The situation today is anything but critical for the oil market to warrant such an intervention. As OPEC+ has boosted its output by 400,000 bpd starting August, output has bloomed beyond its peak since the price war back in April 2020. While the oil market is still well below the output capacity, mutually curbed by the OPEC+ alliance, the demand is still shaky and an equilibrium seems set. Yet, when we observe China – the world’s largest oil importer – we extricate reason that despite a growing economy, China continues to experience massive shortages: primarily in terms of oil, gas, coal, and electricity.
Furthermore, with the ensue of Hurricane Ida, massive US crude reserves have been wiped which has majorly impacted China as well. The US and China rarely stand on the same page on any front. However, even the White House recently asked OPEC to pump more crude into the market due to the rising gasoline prices in America. The same scenario is panning in China as energy shortages have led to surging costs while domestic demand is diminishing. The brunt is thus falling on the national exchequer: something China is not willing to haggle. While it is highly unorthodox of China to explicitly announce its intervention, many economists believe that it was a deliberate move on part of China’s communist brass to amplify the impact on the market. The plan seemingly worked as Brent fell by $1.36 to stand at $71.24 on Thursday.
If China’s commitment to normalize domestic energy prices is this significant, it is highly likely that another intervention could be pegged later in the fourth quarter. Primarily to counteract the contraction in export orders by cutting imports further to maintain a healthy trade surplus. In my opinion, it is clear that both the US and China are not willing to let Brent (and WTI) breach the $70-$75 bracket as key industries are at stake. However, while one takes a passive approach, the other is touted to go as far as pouring another 10-15 million barrels of crude by the end of 2021. Yet revered global commodity strategists believe that the downturn in prices is “short-lived” just like any other Chinese intervention in a variety of other commodity markets globally. And thus, experts believe that the pump is simply “not enough physical supply” to quite strike a permanent dent in an inherently flawed market mechanism.
Energy Forum Seeks To Analyze Africa’s Energy Potentials And Utilization
African Energy Week (AEW) 2021 in Cape Town, fully endorsed by the Government of South Africa, is committed to accelerating Africa’s energy growth with the aim of establishing a secure and sustainable energy future for every individual on the continent. Accordingly, AEW 2021 firmly believes in the role that oil and gas will continue to play in Africa and will emphasise the continent’s upstream market through a collaborative, International Oil Company (IOC) forum. Led by IOC executives, as well as government representatives from notable energy markets in Africa, the IOC forum aims to address the upstream challenges faced in Africa, providing solutions and strategies to drive exploration and make Africa more competitive for investment.
With the discovery of sizeable oil and gas reserves across the continent in recent years, regional and international explorers are turning an eye to the world’s final frontier market – Africa. Nigeria’s 200 trillion cubic feet (tcf) of gas reserves and 37.2 billion barrels of oil (bbl); Mozambique’s 11 tcf of gas; Senegal’s 450 billion cubic meters of gas; Libya’s 48 billion bbl and 53.1 tcf; and Egypt’s 77.2 tcf of gas have all made Africa the ideal destination for hydrocarbon exploration. What’s more, with many African countries making significant steps to enhance their regulatory environments, implementing legislation to create an enabling environment for investment, the continent has become a highly competitive market for exploration and production. Nigeria’s recently implemented Petroleum Industry Bill, Gabon’s new Hydrocarbon Code, and Angola’s inclusive petroleum regulation, to name a few, have all ensured a competitive and highly attractive market.
With the world’s six oil ‘supermajors’ – BP, Chevron, Eni, ExxonMobil, Royal Dutch Shell and TotalEnergies – all actively present in mature and emerging markets across Africa, the continent has become an upstream hotspot. AEW 2021 aims to accelerate this trend, promoting new upstream opportunities and ensuring both National Oil Companies (NOC) and IOCs drive the continent into a new era of energy and economic success. Accordingly, Africa’s premier energy event will host an upstream-dedicated IOC forum in Cape Town, led by IOC executives and government representatives. The IOC forum aims to address key challenges in Africa’s upstream market, whereby the diverse speaker panel will offer up solutions to expand exploration and production, while ensuring the continent remains competitive for investment in a post-COVID-19, energy transition era.
In addition to the discussion on upstream activities, the forum aims to highlight the role of IOCs in enhancing capacity building, whereby emphasis will be placed on IOC-NOC collaboration. IOCs have a critical role to play in Africa, not only regarding resource development, but human capital and local business development. In order for the continent to become truly sustainable and competitive, NOCs require support from IOCs. Accordingly, the forum aims to identify strategies to enhance cooperation and partnerships, with IOCs taking the lead in Africa’s energy development.
“AEW 2021 in Cape Town will offer a real discussion on Africa. Oil and gas are critical in Africa’s development and the African Energy Chamber (AEC) will not succumb to the misguided narrative that Africa should abandon its potential. The IOCs in Africa have demonstrated the continent’s potential, and by sharing strategies to enhance growth, address challenges, and accelerate upstream activities, they will be key drivers in Africa’s energy future. The IOC forum will not only offer a description of African reserves, but will provide clear, attainable solutions to exploitation, exploration and production with the aim of using energy to enact stronger economic growth. By coming to Cape Town, attending the IOC forum, and interacting with African ministers from across the continent, you will be able to be a part of Africa’s energy transformation,” stated NJ Ayuk, Executive Chairman of the AEC.
Nord Stream 2: A Geopolitical Tension between Russia and Ukraine and the European Dependence
Nord Stream 2 gas pipeline is a 1,230-kilometer direct linkage between the Russian natural gas producers and the consumer market of Europe. The model was made keeping in mind the successful operation of the existing Nord Stream pipeline after a thorough analysis by Nord Stream AG. The main aim of NS2 is said to be the increase in the annual capacity of the existing pipeline up to 110 billion m³. The pipeline starts from the Russian region of Ust-Luga then stretches through the Baltic Sea and ends at the area of Greifswald in Germany. It is due to this route that the project is mainly considered to be controversial. Bypassing directly through the Baltic Sea, the importance of Ukraine for Russia for exporting natural gas to the European market would reduce significantly which will end the $3 billion transit fees gained by the Ukrainian government in the year 2018 alone, causing a sudden and huge strain on the GDP of the country.
This project worth $11 billion would double the market of Russia in Germany which is the largest market in Europe, possessing a key position in international politics. It is said by the Russian officials that the pipeline has almost been completed and it may get operational by the end of August in the year 2021. Some analysts and International Relations experts have considered this as a geopolitical weapon that gives leverage to Russia to influence future events in the region particularly the ones related to the Crimean annexation.
Threat to Ukraine
Recently in a meeting with German Chancellor Angela Merkel, the President of Ukraine appeared to be displeased by the Western recognition of the NS2 pipeline. He called it a “dangerous political weapon” in the hands of the authoritative regime of Russia which has already annexed an integral part of their country to fulfill their geopolitical and economic desires. The desperate opposition of this project by the Ukrainian government has several underlying factors which are very important to discuss.
Firstly, the transit fees earned by Ukraine just by giving passage to the gas going from Russia to Europe make up a fine amount of the GDP of the country. If projects like NS2 get operational then the importance of Ukraine will decline, causing an end to the $3 billion transit fee. Although Russia has ensured to still use Ukrainian passage for the export of their gas, this does not seem to be happening in the future. States are after their national interests and Russia would prefer the direct linkage with the European market instead of paying billions to the Ukrainian government. Currently, out of the quarter of natural gas transported to Europe, around 80% has to pass through the Ukrainian territory.
Secondly, after the expiry of the transit deal between Russia and Ukraine in 2024, it would depend upon the negotiations between the two parties to revive the fate of this deal. Although Kremlin’s Spokespersons have ensured the revival of this deal after its expiry in 2024, debates still exist about the prospects. No one can claim with certitude about the future of this deal between the two states.
Thirdly, Ukraine is intimidated by the future of the country if the Russian gas pipeline bypasses its territory. There already exist many gas-related disputes between the two states which resulted in the cut-off of the gas supply in 2014 and later on in 2015. Russia can pressurize Ukraine for accepting their demands to get their gas supplies back. Recently, Ukraine has started to reduce its dependence on Russian natural gas by switching back to European gas. But this would not be beneficial in any sense if the Russian monopoly over the gas market increases through the NS2 pipeline.
And lastly, the dependence of European markets on Russian gas can undermine the Crimean cause. Once a state has to depend on the other state for the necessities, it has to let go of many important causes and decisions. As Angela Merkel has repeatedly called the NS2 pipeline a geo-economic project rather than a geopolitical “weapon” that can be used by the Russian government as a decisive tool at times of disputes and crises, this already shows the drowning picture of the cause. In addition to this, previously the US administration was very aggressive towards the pipeline but the current government despite its opposition, is unable to do much for stopping the project which can get operational very soon.
Role of US and NS2 Pipeline
The United States of America is well aware of the changing dynamics of the region and the intentions of resurgent Russia. The Republican government under Trump proved to be very destructive for the project. The US did not only oppose the gas pipeline openly but also imposed sanctions on entities aiding Russia in the development of this gas pipeline. In January 2021, Trump imposed sanctions on the gas-pipeline laying ship, “Fortuna” and its owner under the Counter American’s Adversaries Through Sanctions Act (CAATSA). Previously, work on the pipeline had to be suspended as the US imposed sanctions on the main company, Allseas. President Biden was one of the many policy-makers who opposed this pipeline and considered it dangerous for the US and its allies. Although it was not clear what Biden’s policies would be, Blinken ensured to use “persuasive tools” against the pipeline, after acquiring the office. President Biden indeed imposed sanctions on the Russian ships and other companies involved in the laying of pipeline, but analysts think this would not cause any impact on the project as it is almost running towards completion. Rather, anti-sanction policy-makers consider it more important to waive off these sanctions and get into formal negotiation talks with the Russian government.
In May 2021, the President of the US and the Chancellor of Germany gave a joint statement for the agreement signed between the two countries related to the NS2 project. Some of the main features incorporated in the agreement are the announcement of sanctions on Russia in case it violates the peaceful use of the pipeline and utilizes it as a weapon against Ukraine. Germany would not only oppose such a step but would also press on the EU to take counter-measures. Similarly, it was decided to revolutionize the energy sector of Ukraine by the creation of a Green Fund for Ukraine by Germany worth $1 billion. Initially, it was decided that Germany would contribute an amount of $175 million. Also, it is said that Germany would use all its leverage to ensure an extension of the current transit agreement (which is going to expire in 2024) between Russia and Ukraine for at least up to 10 years. This would continue the role played by Ukraine as a transit state, helping its GDP and putting off the security threat over it. There is a sharp criticism on the Biden administration over this agreement which did not involve Poland and Ukraine while deciding their future. Also, the deal does not put any process of hindering the pipeline which is against the aspirations of all Americans and most of its allies.
In addition to limiting the role and influence of Russia in the European continent, the US is also looking forward to the opportunities of fulfilling its national interest. If the US becomes successful in hindering the operation of NS2, it can expand its gas buyers in the European countries. This way, like the post-war era the US can get a strategic and decisive role in this part of the world which can ultimately help it to counter the threats related to the rise of China and the Sino-Russian nexus. We can say that the US cannot only use this as an economic incentive but also utilize its importance in the future of great power rivalry.
Why states are against this Pipeline Project?
Along with the direct impacts of this project on Ukraine and Poland (to some extent). The major concerns of the states which oppose the NS2 pipeline include the additional leverage which Russia will gain when its national gas firm would directly export gas supplies between Russia and the European continent. This may result in a sudden disruption of the supplies, influenced by the changing dynamics of the region. The Russian authorities had cut off the gas supplies of Europe in the winters of 2006 and 2009, leaving millions without gas for days. Similarly, the increased dependence of Europe on Russian gas can be counter-productive and may hinder the interests of the states and the US soon. This situation can be utilized by both Russia and China to exploit the bonding between the US and its allies.
From the security perspective, the presence of Russia and its naval forces can cause a security threat to the states surrounding the Baltic Sea. The unsettled conditions may lead to chaos and problems in the region.
If Russia was to get a high stake in the energy market of Europe, this would also allow it to exploit the situation and create a monopoly over the market. This may not also lead to political outcomes and consequences but can also end the game of local and international gas market players in the continent. This is the biggest threat that is encouraging the US to make NS2 a security threat for itself and its allies.
Keeping in view the nature of international politics and changing economic dimensions to the project, the only possible way forward is an agreement between Russia and the US related to the pipeline and the future of Ukraine. If developments can be made over the existing US-Germany agreement then concerns of the states can be mitigated to a huge degree. The options of imposing sanctions on the pipeline are no more practical and can be counter-productive for the US concerning its allies especially Germany.
The Nord Stream 2 Pipeline despite its economic benefits cannot be separated from its geopolitical aspects and consequences. In international politics, the hardest thing to do is to trust the intentions of the other state, especially when it was a superpower previously and has several examples of violating the sovereignty and rights of neighboring states. But presently, all those who oppose the pipeline have no other option than to allow its proper functioning under certain terms and conditions.
Appliance standards and labelling is highly effective at reducing energy use
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