Sense And Nonsense In Dealing With Russia

With the Mueller Report now out, and having concluded that nothing remotely akin to “collusion” between the Trump presidential campaign and Russia could be found, you would think that every prominent Democrat would only want to change the subject as quickly as possible. But weirdly, the Trump/Russia obsession persists even in the face of the Mueller Report.

Many examples could be cited, but one of the weirdest is the op-ed by Hillary Clinton published in the Washington Post on Wednesday, headlined “Mueller documented a serious crime against all Americans. Here’s how to respond.” The gist is that Trump is somehow allowing Russian President Putin to continue to attack our country, and probably to steal the upcoming 2020 election. Excerpts:

[T]he president of the United States has proved himself unwilling to defend our nation from a clear and present danger. . . . This is . . . an administration that refuses to take even the most minimal, common-sense steps to prevent future attacks and counter ongoing threats to our nation. . . . [U]nless he’s held accountable, the president may show even more disregard for the laws of the land and the obligations of his office. He will likely redouble his efforts to advance Putin’s agenda . . . .

“Redouble his efforts to advance Putin’s agenda”? It’s hard even to conceive of the level of nonsense to which this woman has descended — along with many of her Democratic colleagues who are advocating the same or similar themes.

If you try taking a look at the big picture with regard to Russia, it will take you only a moment or two to figure out that far and away the most important thing to Russia for advancing its interests in the world is high prices for oil and gas. I last covered this subject in a post titled “How Are Things Going In Russia?” in March 2018. That post noted that the oil and gas sector accounted for an enormous 16% of Russia’s economy, and even more importantly, 52% of government revenues and 70% of exports. (By contrast, the oil and gas sector in the U.S. is only about 1% of the economy, despite our producing just about as much of the stuff as does Russia.) When oil prices fall well below $100 per barrel — where they have been for the last 5 or so years — Russia is essentially broke. It does not have remotely the funds it would need to put together a competitive military on the world stage. That March 2018 post noted that Russian annual military spending was then running at the rate of $69 billion per year, less than 8% of U.S. defense spending (then about $886 billion per year). Yet the U.S. defense spending was a substantially smaller percentage (4.5%) of our GDP than the Russian spending is of Russian GDP (6%). With the U.S. economy now rapidly growing and Russia’s stagnating, things have only gotten worse for Russia since then, and are continuing to get still worse.

To get a sense of just how bad things are for the Russian military, an excellent source is the website Strategy Page, which covers this issue regularly. They ran a lengthy roundup on the Russian military on February 27, headlined “Russia: Full Time Faking It.” The gist is that even the modest adventure in Syria has strained Russian military resources to the breaking point, and that there just isn’t enough money to fund any of the basic needs for the army, navy, or air forces. Here are a couple of key quotes:

  • Russia is weak and getting weaker both economically and militarily. The navy rebuilding program has collapsed because the shipbuilding industry was never able to modernize after 1991 and lost its best people to migration or better jobs elsewhere in Russia. The air force is better off because export orders from China and India kept warplane production and development going. But China was buying mainly so they could clone the latest Russian designs and eventually go on to producing their own designs which they are now doing. The army is stuck with a lot of Cold War era weapons and a growing personnel shortage. Prospects for improvement are dim and the government has resorted to the Iranian tactic of full time faking it.

  • Since the oil price collapse in 2013 the Russian economy has contracted and the government budget had to shrink along with it. . . . It was also public knowledge that the military could not recruit or conscript enough men to keep the armed forces (now officially 8o percent smaller than when the Soviet Union collapsed in 1991) up to strength (about a million personnel). Press releases from the Defense Ministry declare the creation of dozens of new brigades and divisions for which there are no troops. New weapons are either not delivered or do not work when they are. 

On February 2, Strategy Page had another post focusing specifically on the disastrous state of the Russian navy, headlined “Winning: The Russian Navy Suffers Heavy Losses.” Excerpts:

  • The prolonged low oil prices are doing major damage to the Russian Navy.

  • Russia has been trying, since the late 1990s, to build replacements for Cold War era warships. Most of these have reached the end of their useful lives and many of them, while still listed as in service, rarely, if ever, seem to leave port. Russian admirals have been aware of the fact that they won't have much of a navy by the 2020s unless these older ships are replaced. The problem is that the older ships cannot be refurbished or upgraded because that would cost more than buying new ones. These older ships are not just falling apart, but because there was not any money available right after the Soviet Union dissolved in 1991, there were few repairs and no upgrades during the 1990s.

  • The Russian economy revived in the late 1990s and parliament came up with more money after 2000 to build enough surface ships to maintain a respectable fleet. But that revealed another problem. Most of Russia's warship building capability (experience and skills) disappeared after 1991. Before 2014 the government thought it had a solution and that was to make a deal with France to import modern warship building techniques, by purchasing two Mistral amphibious assault ship/helicopter carriers, and the right to build two more in Russian shipyards. . . . But the deal to import French shipbuilding techniques disappeared when Russia invaded Ukraine in 2014. France refunded the billion dollars paid for the two Mistrals (and later sold them to Egypt) leaving the Russians on their own.

  • Now the Russian navy is in desperate shape. 

There is much more detail at the link.

It couldn’t be more obvious that the thing that has dramatically weakened Russia is the oil and gas price collapse brought about by the American fracking revolution. Everything else about dealing with Russia is of minor significance by comparison. Yet the heart of Democratic Party energy policy is the suppression of oil and gas production and/or transport, designed intentionally to drive consumption down by increasing prices. During the Obama years, the administration tried to force down production by refusing permission to drill on government lands; but the frackers beat that by doing their drilling on private land where the government couldn’t stop them. When the Obama administration couldn’t stop production, it then resorted to blocking pipelines so that the oil and gas could not get to market. Trump has reversed that policy, although he continues to face resistance from adverse court decisions, let alone from state environmental regulators in blue states who use their own local environmental laws to block pipelines. Meanwhile, the Green New Deal — endorsed by essentially every candidate for the Democratic nomination for President — would do everything possible to reduce and eliminate U.S. fossil fuel energy production.

Here in New York, our governor and environmental regulators, mostly using the pretext of protecting “clean water,” have managed to block essentially all pipelines that would cross the Hudson River to bring fracked gas from Pennsylvania and points West into New England. New England has been left with a shortage of gas for heating. Result: New England needs to import liquified natural gas from abroad in order to keep its homes warm. And what is the source of that gas? According to World Oil here (on December 28), it’s Russia (of course). Example:

[A] tanker named Exemplar has been loitering just outside Boston harbor after picking up a cargo from France’s Montoir-de-Bretagne terminal two weeks ago, according to ship tracking data. That ship picked up a cargo of LNG from the Yamal LNG facility in Russia that had been brought to the French terminal by another tanker, according to Madeleine Overgaard, an LNG market analyst for Kpler.

So here are the competing policies for dealing with Russia:

Trump: Remove artificial government restrictions on fossil fuel drilling and on pipelines, and let our capitalist system of private investors go out and achieve “energy dominance” without further government assistance. The prices of oil and gas drop and remain low. Russia is deprived of funds, and sinks to insignificance on the world military stage.

Hillary and the Democratic presidential candidates: Impose endless artificial restrictions on drilling and on pipelines, with the purpose of driving up the price of oil and gas. If we want heated homes in the winter, let alone reliable electricity, we’ll just have to buy oil and gas from Russia at inflated prices. Meanwhile, claim to be really concerned about the threat from Russia, and to combat it, advocate for doing more and still more investigations to stop Russia from “meddling” in U.S. elections.

Which one of these policies makes sense, and which is nonsense? I’ll let you be the judge.