IMI-Analyse 2007/023

The Contours of the New Cold War

von: Jürgen Wagner | Veröffentlicht am: 19. Juni 2007


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Paper prepared for the international conference on the so-called US Anti-Missile Shield, organized by the GUE/NGL Group in the European Parliament in Brussels on 12th June, 2007.

First let me thank you for the opportunity to take part in this conference.

The topic of my presentation is whether the current sharp controversy around the American plans to build parts of their missile defense system in Poland and the Czech Republic is just one sign of a New Cold War, which is highly possible, as I will lay out.

This is an important question because we cannot understand Moscow's harsh reaction to these plans without putting them into the context of the intensifying geopolitical confrontation and the rapidly eroding relationship between Russia and not only the United States but also between Russia and the European Union.

How could this happen?

As the argument goes, the source of the dispute is the increasingly autocratic behavior of Russian President Vladimir Putin – this is nonsense! Although there are many good reasons to criticize his authoritarian tendencies, they are currently instrumentalized to implement distinctively anti-Russian policies which makes this criticism highly hypocritical – especially as the harshest accusations are brought forward by proponents of a „Western community of values“ which are themselves violating civil rights on a large scale, as we most recently witnessed during the G8-summit in Germany.

As I will lay out, the real reason for the intensifying conflicts is that the European Union has joined the American effort to ultimately de-construct Russia once and for all as a major power on the international scene.

A first turning point in the relations between Russia and the West came, when Vladimir Putin took office in March 2000 whose stated ambition is to reverse the dramatic erosion of Russia's power position in the 1990s and to foster its re-emergence as a world power.

For this purpose he systematically reversed the rushed privatizations of the 1990s which had resulted in the large scale buy out of Russian companies under the distinctively pro-Western government of Boris Jelzin, guided by the very visible hand of the International Monetary Fund.

Additionally, he abandoned the pro-American course of his predecessor Boris Jelzin and distanced himself from the United States. Simultaneously he sought rapprochement with the European Union by the invitation to form an alliance to counterbalance the United States.

But despite the talk of an emerging axis „Paris-Berlin-Moscow“, from Washington's abrogation of the ABM-Treaty to the second round of NATO's expansion, to name only two examples, Europe did very little to stop America's continued violation of core Russian interests.

This was all the more evident regarding the „color-revolutions“ beginning in 2003, when pro-Russian governments were subsequently replaced by pro-western ones in Georgia, the Ukraine und Kirgisistan with heavy support from Washington.

As the European Union also fully supported these revolutions, this interference in its direct neighborhood was in Moscow's view a massive violation of its core interests and further evidence that Brussels had ultimately joined Washington's efforts to encircle Russia.

Energy as Russia's key asset

To bolster its position against these perceived attacks, Moscow sees its energy resources as the key asset. With Russia owning 34% of the world gas reserves (and some 13% of the oil) and providing the bulk of Europe's skyrocketing gas imports, this is indeed a major power political tool. And this is precisely the reason why currently the European Union (with Washington in the background) is massively trying to undermine Moscow's efforts to further increase its control over Europe's energy supply.

This is especially true for the gas sector to which I will turn now because it is the area where the power political conflict between the European Union (again with massive support from Washington) and Russia is most visible. Furthermore this area currently seems to be a catalyst for the formation of new alliances which could indeed mark the contours of a New Cold War, as I will briefly lay out in the following.

Russia's energy offensive

As has been already mentioned, Russia methodically tries to monopolize Europe's gas supply, as a tool to counter what is perceived as hostile policies by the European Union. For this purpose, Putin re-established control over the Russian gas-monopolist Gazprom which the Kreml lost in the 90s because the company is seen, in Putin's own words, as a „powerful political and economic lever of influence over the rest of the world.“

That Russia is willing to use this influence became obvious in the Russian-Ukrainian gas-dispute which lasted from March 2005 until January 2006. As the Ukraine – and the other eastern European countries as well – is nearly totally dependent on energy imports from Russia, Moscow used this lever to dramatically raise the price of Russian gas nearly up to the level that is paid in Western Europe. When Kiev refused to pay this price, Moscow used the „Energy-weapon“ by withholding gas deliveries.

The dispute was settled by a compromise in which Ukraine continues to get cheap energy – albeit at higher prices than before – but in exchange had to hand over its gas transit system which provides a key supply route to Western Europe.

Nearly the same happened to a range of other eastern European countries: While those who where willing to hand over the control of their gas transport system to Russia – notably Armenia and Belarus which was forced to sell its transport-monopolist Beltransgaz to Gazprom – will continue get cheap energy, all other countries (for example Georgia) are literally paying the price for resisting to Russia's pressure.

This strategy is a major geopolitical challenge because thereby Russia is on the way to fully control the energy transit routes to Western Europe. Therefore, the European Union, heavily supported by Washington, is dead set to reduce this dependence by the diversification of its gas supply routes.

Brussels NABUCCO counteroffensive

This goal is obviously developing into a key common interest of Washington and Brussles, as the neoconservative Heritage Foundation points out: „It is vital that the EU and the U.S. work together to find and implement innovative methods of reducing energy dependence on a monopolistic Russia. At a minimum, they should work to sup¬port new transit lines that bypass Russia and to limit the length of time that the EU spends being over-reliant on Russian gas.“

Similarly, the European Commission's GREEN PAPER on Energy, published in March 2006, emphasized the need for „A clear policy on securing and diversifying energy supplies“ by the construction of „new gas and oil pipelines […] from the Caspian region […] into the heart of the EU.“

The central project in this context is the so called NABUCCO-Pipeline, which will cost around 5 Bill. Euros. By completely circumventing Russia, when realized, the pipeline will deliver gas from Armenia, Kasachstan and possibly Turkmenistan to Western Europe via Turkey, Romania, Bulgaria, Hungary to Austria.

This project explicitly aims to break Russia's transport-monopoly because currently the huge gas reserves especially from Kazakhstan and Turkmenistan can only reach Western Europe via the Russian pipeline system.

So, not surprisingly, Nabucco enjoys high level support. In 2006, then President of the Council of Europe, Martin Bartenstein, referred to Nabucco as „Europe's most important energy project.“

The European Union already paid 4.8 Mio Euros for the feasibility study and its Energy Commissioner, Andris Piebalgs, is currently heavily lobbying for the project. In January 2007 the European Commission explicitly named Nabucco as one of the most important European energy projects.

Not surprisingly, given its geostrategic importance, Moscow massively tries to undermine this project by various strategies. The most successful was an agreement Putin reached with Kazakhstan and Turkmenistan in Mid-May 2007. It assures that most if not all of the gas resource of both countries will reach Europe only via Russia for many years to come.

Thereby Putin dealt a heavy blow to Nabucco. Because there is not enough gas for the pipeline, currently the project seems to be dead on arrival.


With the plans for pipeline-diversification lying in ruins, the European Commission has already stated its intention to intensify its efforts to expand the market for Liquefied Natural Gas (LNG) to diversify its supply.

Because gas can currently only be delivered via pipelines, unlike in the oil sector, there doesn't exist a spot market for gas, and its markets are still local, not global. But LNG makes gas flexibly transportable and converts it into a global tradeable commodity.

The development of LNG, European Commission energy spokesman Fernando Espuny said, „will give us access to a global market like oil.“ And with an obvious side blow to Russia he continued: „If somebody suddenly can't sell you gas, you just go somewhere else.“


But here Putin also has obviously developed a strategy to counter this move. As long as there where only regional gas markets, a Gas-cartel like OPEC in the oil sector made no sense. But LNG changes the equation and that's why Putin in February 2007 for the first time underscored his interest to build some sort of a Gas-OPEC.

Furthermore, by revitalizing the „Gas Exporting Countries Forum“ which consists of 15 countries that together control 73% of the world's gas reserves, Putin took up the initiative and first steps to form such a Gas cartel were initiated at its latest meeting on the beginning of April 2007.

Not surprisingly, the ambition to form a Gas-OPEC was treated as a declaration of war in the Western capitals and it seems highly likely that the NATO-countries will try to undermine the formation of such a cartel by all means possible.

Declaration of war

Ileana Ros-Lehtinen, the Republican Ranking Member on the House Committee on Foreign Affairs, requested in a letter to Secretary of State Condoleezza Rice that she should „energetically oppose the creation of a global organization of extortion and racketeering, which will present a fundamental and long-term threat to world energy supplies. […] The United States needs to clearly convey to the Russian government that the creation of a gas cartel will be looked upon as a deliberate threat to us and our allies.“

Similarly the State Department declared that it „is concerned by the possibility of the creation of a gas OPEC.“

There was also much criticism in Europe, for example from Energy Commissioner Andris Piebalgs.

It is in this context where the increased demands to form an „Energy-Nato“, first articulated by Poland's President Lech Kaczynski in the beginning of 2006, are highly explosive.


In November 2006, shortly before the NATO summit in Riga, NATO's economic committee produced a confidential study which was submitted to all member states, stating that Moscow is pushing for a Gas-OPEC to strengthen its leverage over Europe and emphasizing the danger of an increasing willingness of the gas producers to use their resources for political purposes.

Taking up this issue, in Riga, the highly influential US-Senator Richard Lugar literally went into the offensive when he proposed that NATO should treat a disruption of energy supplies as an act of war. To quote him extensively:

„Under the worst case scenarios, oil and natural gas will be the currency through which energy-rich countries leverage their interests against import dependent nations. The use of energy as an overt weapon is not a theoretical threat of the future; it is happening now. Iran has repeatedly threatened to cut off oil exports to selected nations if economic sanctions are imposed against it for its nuclear enrichment program. Russia’s shut off of energy deliveries to Ukraine demonstrated how tempting it is to use energy to achieve political aims and underscored the vulnerability of consumer nations to their energy suppliers. […] The Alliance must avow that defending against such attacks is an Article Five commitment. […] We should recognize that there is little ultimate difference between a member being forced to submit to foreign coercion because of an energy cutoff and a member facing a military blockade or other military demonstration on its borders.“

Anti-NATO: The Shanghai Cooperation Organization

Regarding NATO's expansion into Eastern Europe and the increasing talk about the formation of an „Energy-NATO“ Russia currently bolsters the Shanghai Cooperation Organization (SCO), a military alliance, encompassing also China, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan.

Because its explicit aim is to counter the growing western influence in Eurasia, it is not surprising that Washington has been denied the requested observer status. Even more telling is that observer status has been granted to Iran and Pakistan in 2005 and both countries have applied for full membership.

Such an alliance, consisting of a combination of Russia's and China's military power and the resources of one or more of the relevant OPEC countries is a „geopolitical nightmare“ for the west, as the neoconservative Heritage Foundation made clear:

„By letting Iran enter the SCO, Russia and China would clearly demonstrate that they side with Iran and its nuclear program and would embark on a collision course with the West,“

As the pro-Bush Washington Times said, „an expanded SCO would control a large part of the world's oil and gas reserves and [a] nuclear arsenal. It would essentially be an OPEC with bombs.“

Against this background, Missile Defense is a case in point that the confrontation is increasingly spilling over to the military realm because, in my opinion, Missile Defense is an essential component against such an „OPEC with bombs“.


So here we are, welcome to the New Cold War: With energy at the center, arising from the intensifying geopolitical competition, we see new formations which could indeed mark the beginning of a new block confrontation.

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So the problem is not whether Europe should or should not criticize Russia's authoritarian tendencies – it should – but whether this is accompanied by the decision to partake in the American efforts to roll-back Russia. But if it does so, this will not come without the price of a further accelerating deterioration of the European-Russian relationship, which could indeed make a New Cold War a self-fulfilling prophecy.