Ukraine and the Battle for South Stream Pipeline

 By Tony Cartalucci

The ongoing conflict in Ukraine, admittedly an attempt to expand both NATO and the European Union (EU), has escalated in terms of dominating Europe’s energy markets. Attempts to halt the ongoing construction of Russia’s South Stream natural gas pipeline appears to be a direct attempt to further penalize Russia for its role in defending Ukrainians currently under siege by aircraft, artillery, heavy armor and irregular troops.

Toward a Europe “Whole and Free,” and its Energy Market Too 

“Toward a Europe Whole and Free” was literally the title of NATO’s Atlantic Council’s May 2014 event celebrating NATO’s continuous expansion since the fall of the Soviet Union and its aspirations to integrate all along Russia’s borders and even Russia itself into its geopolitical socioeconomic order. The Atlantic Council’s official program webpage for the event stated:

This two-day conference will honor the historic milestones that have forged a strong and prosperous Atlantic community and explore the most pressing challenges to the completion of a Europe whole and free. This vision, successfully implemented for two decades with a bipartisan and transatlantic strategy, has been called into question both within current NATO and EU members and by Russia’s aggressive actions. Leaders and experts will gather at the Council’s headquarters to debate the opportunities and challenges in Europe’s east and south with the aim of exploring a renewed common transatlantic approach.

What is essentially a celebration of expansionism, military aggression, and extraterritorial political subversion, the event featured many of the chief protagonists in Ukraine’s current crisis. These included US Secretary of State John Kerry and US Vice President Joseph Biden, along with NATO commanders and US corporate-financier funded policymakers who have authored America’s decades of “exceptionalism.” It also included US Senator John McCain who literally flew to Kiev during the height of the “Euromaidan” protests and took the stage with ultra-right Neo-Nazi Svoboda Party leaders.

In their own words, those attending the Atlantic Council gathering describe the battle for Ukraine being fought to “complete” their socioeconomic consolidation in Europe – this includes “integrating Russia.” Secretary John Kerry at the gathering would literally state:

Our European Allies have spent more than 20 years with us working to integrate Russia into the Euro-Atlantic community.

By “integrating” Russia, of course, Kerry means overthrowing any independent national political order that exists in Moscow and replacing it with one that answers to Wall Street, London, and now Brussels. This can be seen clearly in attempts by the West to replicate its model of “color revolution” within Russian territory itself.

But Kerry and the rest of EU-NATO, recognizing that efforts to subvert and overthrow an independent political order in Russia have failed, have resorted to a policy of encirclement, containment, and confrontation, with Ukraine being only one of many battlefields the West is fighting upon. Kerry would declare Europe’s energy market as another.

He stated (emphasis added):

…if we want a Europe that is both whole and free, then we have to do more together immediately, with a sense of urgency, to ensure that European nations are not dependent on Russia for the majority of their energy. In this age of new energy markets, in this age of concern about global climate change and carbon overload, we ought to be able to rush to the ability to be able to make Europe less dependent. And if we do that, that will be one of the greatest single strategic differences that could be made here. We can deliver greater energy independence and help to diversify energy sources that are available to the European markets, and we can expand the energy infrastructure across Europe, and we can build up energy storage capacity throughout the continent.

And immediately they did. After resisting pressure from the EU regarding Russia’s South Stream pipeline, Bulgaria has been forced to suspend ongoing construction, jeopardizing interests and opportunities not only for Russia, but for the nations the pipeline is to pass through.

The Battle for South Stream

The halting of construction followed a visit by US Senators John McCain, Christopher Murphy, and Ron Johnson – with McCain in particular directly supporting the armed overthrow of the Ukrainian government earlier this year. In a Washington Post article titled, “Bulgaria halts work on South Stream gas pipeline,” it states:

Bulgaria’s prime minister has ordered on Sunday a halt to construction work on the Gazprom-led South Stream pipeline project planned to bypass Ukraine as a transit country and consolidating Russia’s energy grip in Europe.

Plamen Oresharski said after meeting U.S. Sens. John McCain, Christopher Murphy and Ron Johnson that he has ordered all work on the disputed project to continue only after consultations with Brussels.

Moscow responded by pointing out the obvious nature of what are in all intents and purposes sanctions against Russia. The Moscow Times reported in an article titled, “Russia Sees Underhanded Sanctions in Bulgaria’s Suspension of South Stream,” that:

Bulgaria’s decision to suspend construction of the Russia-led South Stream pipeline project on its territory, undermining Russia’s efforts to diversify its gas transportation infrastructure to Europe away from Ukraine, is an underhanded economic sanction thrust on Russia by the West, a top Russian diplomat and Russian industry analysts said Monday.

The article would also point out that once the South Stream pipeline is completed it will diminish Ukraine’s importance as a transit point for Russian natural gas into Western Europe. It appears that the moves against South Stream are designed to at the very least, delay this inevitable outcome for as long as possible, to maintain leverage as the West struggles to consolidate power on behalf of their teetering proxy regime in Kiev.

For Bulgaria’s part, not only have they disregarded US sanctions on Russia, choosing a Russian firm to build the pipeline, they appear eager to resolve the legal obstacles conveniently laid down amid the ongoing Ukrainian crisis, and complete the pipeline as soon as possible.

Exploiting South Stream’s Delay

The West’s plans to use South Stream’s delay to extort concessions from Russia and those working with it on the project. Additionally the delay will help preserve the benefits of Ukraine’s current monopoly on transporting Russian natural gas to Western Europe. To ensure maximum leverage, the West is placing key personnel within Ukraine’s energy sector, in addition to propping up the regime in Kiev. Perhaps the most indicative of the overall illegitimacy and criminal nature of the current EU-NATO posture was the appointment of Hunter Biden, son of US Vice President Joseph Biden, as a member of Ukraine energy giant Barisma’s board of directors.

Biden Jr.’s nepotist appointment is not where the conflict of interest begins or ends. Biden Jr. was also a director of the US State Department’s National Endowment for Democracy (NED) subsidiary National Democratic Institute (NDI). The NED/NDI played an admitted role in building up opposition parties in Ukraine prior to the so-called “Euromaidan” protests and admittedly engineered the so-called “Orange Revolution” in Ukraine in 2004. More recently, they served as “election monitors” lending their stamp of approval of polling in Ukraine where entire provinces failed to vote in the east, opposition parties were unable to campaign in the west, and the aerial bombardment of cities across the country was underway.

In effect, Biden Jr’s. NDI overthrew a government ahead of himself being appointed as a director in the targeted nation’s largest energy company – a dizzying conflict of interest. Coupled with the stated US agenda of reducing Russia’s influence in Europe’s energy market, this conflict of interest becomes a self-evident impropriety and an obvious component of the West’s agenda of encircling and containing Russia.

It remains to be seen how long the South Stream delay lasts and what other moves the EU, NATO, and Ukraine’s openly foreign-influenced regime and industries take in implementing Secretary Kerry’s stated goal of confronting Russia. For nations like Bulgaria, the cost to their sovereignty upon entering the European Union can now be acutely felt. Bulgaria is now unable to pursue their own interests because of dictates from Brussels made on behalf of special interests operating well beyond their borders and in absolute disregard to the peace and prosperity of the Bulgarian people. It is a cautionary tale for other nations around the world seeking to enter into similar supranational “communities,” most notably Southeast Asia’s ASEAN/AEC.

NATO and the EU’s open intent to “integrate” all of Europe including Russia into their geopolitical order, clearly by force if necessary, their abuse of the EU’s legal framework to impose thinly veiled sanctions on Russia, overt nepotism, as well as obstructing the completion of projects that are demonstrably beneficial to their own member states reveals an emerging political order of immense criminality unbound by the rule of law and a clear and present danger to global stability. For those in eastern Ukraine weathering air raids, artillery barrages, and mechanized “national guard” composed of ultra-right Neo-Nazi militants, that instability is already a deadly, daily reality.

Tony Cartalucci, Bangkok-based geopolitical researcher and writer, especially for the online magazine New Eastern Outlook”, where this first appeared.



The US Keeps on Waging a Gas War on Russia

Column: Economics Region: Russia in the World

6-28-2014 8-08-42 AM

By Petr Lvov, PhD


As it was predicted in the previous article, the US has been doing everything it possibly can to complicate the construction of the South Stream pipeline. It’s a well-known fact that Gazprom is creating this project in order to diversify gas supplies to Europe and to reduce its dependence on transit countries, especially on Ukraine. A company that was established for the successful execution of the project – South Stream Transport BV is an international joint venture, organized for the planning, construction and the subsequent exploitation of the offshore pipeline, which will run across the Black Sea. Gazprom’s share in this joint venture is 50%, the Italian company Eni has 20%, both the French energy company EDF and the German company Wintershall Holding GmbH share 15% each. The offshore section of the pipeline will cross the Black Sea, stretching from a compressor station in Russian to the Bulgarian coast. The estimated capacity of this project will amount to 63 billion cubic meters.

On 2 June a worrying development manifested itself in a statement issued by the European Commission that requested all the parties involved to suspend works on the implementation of the “South Stream” project. Sabine Berger, spokesperson of Guenther Oettinger, European Commissioner for Energy provided the public with two “legal grounds” that would lead to such a decision. According to her, the “South Stream” is allegedly not complying with the regulations of the “Third Energy Package” of the EU. Moreover, Brussels suspects that Bulgaria is “violating European rules of tenders on the construction of infrastructure projects” and that these country has somehow provided Russian and Bulgarian companies with “preferential possibilities for Russian and Bulgarian companies”.

And since Kiev has been evading the payment of its debt to Russia all through the month of May for the gas that had been delivered earlier by Gazprom, and was at the same time claiming to be a “reliable transit partner, it would be only logical to assume that the US and the EU under the pressure of its American allies are trying to bury the “South Stream”, leaving Ukraine the only option for transit of Russian gas to the EU. Ukraine then has become an important tool of applying of pressure on Moscow. What is even more important this scenario forces Russia into subsidizing the collapsing Ukrainian economy by selling its gas at a lower price to the Ukrainian side. The West does seem to be willing to pay the costs for the “democratization” of the country, preferring to leave this burden on the Russian shoulders. In addition, it has been reported that Americans and Europeans are equally willing to buy some gas transportation infrastructure in Ukraine: Kiev is currently holding talks with ExxonMobil, Shell and Chevron. Should the South Stream project succeed there will be no commercial sense in acquiring any of it, since the Ukrainian pipelines will run dry.

That’s why the West has started to apply pressure on any country that has allowed to build the pipeline on its soil. First on June 7 the US ambassador to Bulgaria has made a statement that Sofia should abandon its support of the “South Stream” project. Then on the next day the Bulgarian Prime Minister Plamen Oresharski has ordered the suspension of all works on the South Stream project. It’s curious that an ardent Russophobe Republican Senator John McCain, that was meeting with Plamen Oresharski on the same day, stated that Russian should be forced out of this project. According to McCain “Bulgaria should be addressing all of the South Stream challenges together with its European colleagues”. Bulgaria Prime Minister mimicked his American guest by saying that it will put all construction works on halt till all disputes with the European Commission are not resolved. Only further consultations with Brussels will determine the course of further cooperation said Plamen Oresharski.

On June 9 Belgrade, despite the fact that Serbia has not joined the EU just yet, announced that it would be suspending the construction of the South Stream because of the decision made by the Bulgaria authorities, said Serbian Deputy Prime Minister Zorana Mihajlovic. “Bulgaria is the center. Until Bulgaria finishes negotiations with Brussels and the European Union and Russia, the project is suspended. Either way, the first and second scenarios mean there will be a delay in the construction in our country,” – she added.

The EU authorities seem to understand the need for an alternative pipeline that would allow bypassing Ukraine, which has seen little stability over last decades and it’s unlikely that it would see any in the nearest future, in case it will not cease to exist as a unity. When the EU started to tear the project apart, it started acting in its worst interests. This once again confirms that is a puppeteer behind all this – the United States. It no coincidence that Bulgaria has said it would put the South Stream project on a halt after John McCain’s visit to Sofia. If we recall that the US was one of the main sponsors and masterminds behind the coup in Ukraine, there will be a single conclusion to be made — the US strives to create a constant zone of turbulence between Russia and the EU.

Of course, one can only be amazed by the way Sofia and Belgrade treated the whole situation. After all, should Ukraine decide to stop the transit of gas they will be the first to suffer, since they have no alternative supply routes. The ruling parties in these countries are clearly acting against the interests of their people since they are too heavily dependent on the American support. And this despite the fact that the bilateral agreements on the “South Stream” were signed long before the adoption of the Third Energy Package. In addition, the rules of the package doesn’t specifically states that a company that owns gas, produces and sells it, has no right to own pipelines. It has no right to control it, transfer those rights to a third party. So no one can legally bind Gazprom to leave the project, but they would try by absolutely brazen and illegal political pressure and blackmail the US has been practicing for a while with little to no regard to the most powerful EU members or candidates for a membership ticket.

Petr Lvov, PhD in Political Sciences, exclusively for the online magazine “New Eastern Outlook”.

Ukraine signs historic EU pact, snubbing Russia

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