The Empire Strikes Back

Russia’s state-owned gas monopoly is on the attack. Just how powerful is the former empire becoming?
From the April 2006 Trumpet Print Edition

Moviegoers might identify that headline with Lucasfilm, Ltd., but foreign-policy watchers identify it more with recent Russian policy.

It was only 15 years ago when the Communist Death Star that was the Soviet Union imploded, sending cheers throughout the free world. Sure that this meant a future of democracy and capitalism for behemoth Russia, Francis Fukuyama proclaimed the late-20th century world as “the end of history.”

But now we see a return to the historic majesty of the Russian “Republic.” “Under Putin’s stewardship, Russia is gradually putting the Kremlin in control of everything that matters: energy, the economy, politics and the media,” wrote the Chicago Tribune. “Last year, Russian authorities engineered takeovers and deals that gave the state partial or complete control in some of the country’s most lucrative enterprises. The most significant of those deals involved the acquisition of Russian oil major Sibneft by state-owned Gazprom, the world’s largest natural gas producer” (January 15).

Gazprom even bought one of Russia’s largest newspapers last June, not to mention acquiring former German Chancellor Gerhard Schröder (who now chairs Gazprom’s major North European Gas Pipeline project).

The monopoly has also been eyeing energy deals that will help Moscow regain control of former Soviet states like Georgia, Armenia and Uzbekistan. It has a pipeline deal with Germany already, and is in talks for one with Greece.

Now Gazprom’s insatiable appetite for takeovers and acquisitions has it considering bids even further from home. There was one rumor, later denied, that it wanted to buy Scottish Power. Now come reports that it is interested in the UK’s largest energy supplier, Centrica. Associated Press paraphrased Gazprom’s deputy CEO as saying, “Gazprom would like to control about 20 percent of the British gas market” (February 2). Centrica’s shares jumped 30 percent on the London Stock Exchange after a Gazprom official said on January 18, “The issue is being analyzed and is under consideration.”

Russia’s return to relevance is largely attributable to its vast energy supply. Our planet’s limited oil and natural gas supplies are in greater and greater demand. The world’s most powerful nation gets much of its oil from the world’s most precarious region. Other growing nations are jockeying for contracts in more stable parts of the world. Some are considering different forms of energy, including nuclear power. Add to that, the world’s fourth-largest supplier of oil, Iran, has now been reported to the United Nations Security Council for its nuclear shenanigans.

To say the least, things look extremely unstable in the world energy market. Put bluntly, we are gearing up for the resource war of the ages.

Where does reborn Russia fit in?

Whether Russia takes over Centrica is largely irrelevant. The idea’s mere consideration shows the peril that once-self-sufficient nations like Britain are in—how crown jewels like Centrica are in danger of being lost as resources are lapped up in an energy-hungry world.

Russia, because of its ample oil and gas deposits, sits in a good position, and we can expect it to become more bold and defiant in its foreign policy. Remember when Moscow unilaterally and audaciously decided that Ukraine—and by extension the rest of Europe—didn’t deserve its energy supply for those few brisk days in January?

Gazprom’s—and Russia’s—growing sphere of influence certainly will cause concern in Europe, as it has historically just before full-scale war has broken out.

Watch for Russia’s growing preponderance to stimulate greater change in world politics. Europe will be driven to unite. By forming alliances with Iran and other nations hostile to America, Russia will hijack American interests and handicap U.S. foreign policy. Russian oil and gas will continue to fuel the rise of China.

A galactic struggle lies just ahead.