Is The Cold War Heating Up?

By Jamie Cain

Today President Obama announced that the planned Missile Shield Program in Czech Republic and Poland Have Been Scrapped. I am going to try to explain why it is so very important that we have these missile shields in place as quickly as possible and show how very dangerous shutting down the Missile Shield Program is to America and the EU. With this move on President Obama’s part, it is a given that the efforts of President Reagan, culminating to the end of the Cold War are about to be undone and we must be aware of that fact.

Let’s start with an article from January of this year, over a Natural Gas crisis between Russia and the Ukraine.

As the story goes, Russia supplies 20% of Europe’s heating fuel through a series of pipes that run through the Ukraine, which (as of 2004) is now an independent State. Qualify this story with the larger fact that Russia wants Ukraine back, along with Georgia, Bulgaria, Slovakia, the Czech Republic, and numerous other States that used to belong to the USSR (most of whom now control certain key natural resources or infrastructure that used to belong to the Kremlin) and the little fact that the Kremlin never was truly happy sharing the power with anyone, let alone those who were once subservient to them. That is one big huge ego slap to the Kremlin and they do not like it, not one little bit.

In the midst of a freezing winter, Russia stopped supplying Ukraine with gas that Ukraine was beholden to send through its pipelines to supply 15 EU countries with a fifth of its required gas for heating. It appeared on the surface that Russia said, “Um no. I’m not selling you the gas anymore, Ukraine, to deliver to all these fine people. In fact, I am going to hold it hostage while people freeze until you agree to my deal. My deal (step one of the taking of the Ukraine) is that I want you to pay FULL market price while I pay discount prices to deliver it through you”.

Well heck, delivery is simply the turning of a valve, albeit the right valve, which Ukraine contends Russia didn’t do as witnessed here. It’s a complex pipeline dedicated to delivering Natural Gas, one that requires regular maintenance which costs money and the proper flow lines that require monitoring, which also costs a lot of money.

The issue to this “reduced delivery price” that Russia forced down Ukraine’s throat, is that Ukraine IS the delivery system, they have pipes to upkeep and Russia doesn’t want to pay those prices while belligerently demanding that Ukraine pay full price for the gas Russia sells them. It’s enough to break the bank for Ukraine, even if the agreement is just for this year until Russia will pay market prices. Any businessperson can do the math on this one. Ukraine could be forced to let those pipes go without maintenance or efficient monitoring to be able to afford the costs of the gas, which could create a multitude of future delivery problems. But no one seems to notice that little problem, let alone intervene in them on behalf of the Ukraine.

None-the-less during the coldest winter in a long time, Ukraine was forced to agree to buy Russia’s gas at $450 per 1000 cubic meters through the entire winter. This is a deal that only offered some relief in price after winter was over, when most countries utilizing the gas would have no more need of the gas.

How untypical is it that a middleman would pay full price for anything that it is responsible for delivering? In the home heating business, one only has a certain amount of months to recoup the cost of doing business, let alone make a profit, and Russia has effectively cut any ability to turn a profit off at the knees even supposing that Ukraine can manage to maintain a breakeven to their customers. There is simply nowhere to go in price once the middleman pays the vendor full price for their product. Not to mention that 2010 will be a whole new deal - once again - that Ukraine will have to get through without freezing out a large part of several ex-Soviet and other EU nations as well.

As it stands now, fifteen countries in the EU were sent scrambling for alternative fuel, while Ukraine had no choice but to sign the hostage agreement (as I am sure they had agreements they were bound to with their customers, in addition to facing the human suffering element and the anger pouring in from their customers).

Meanwhile Russia sat back willing to freeze millions of people in order to further weaken the geopolitical landscape just so they could further their purposes.

Might I remind you this all happened on the heels of the little to do over Georgia’s Oil Reserves where Russia sent several thousand troops into Georgia to prove their point there. Same point, same reason, these were once their resources and they are no longer, a point which Russia seems all too happy to make again and again. The war over Oil with Georgia was a very dangerous game indeed, that so easily could have disintegrated into WWIII given just the right set of circumstances and to which we came closer to seeing happen, than most of us can even fathom.

Ah, but wait! Maybe that wasn’t what Russia said to the Ukraine…according to Moscow, the Ukraine was stealing natural gas, withholding it and not sending it out to get a better deal from their last accord as of Jan 10, 2006 (which was to last 5 years to 2011 as witnessed here). According to Russia, they were just collecting debt. So why, in 2009 was this deal no longer valid? Why, when Ukraine could buy gas at $95 per 1000 cubic meter would they want a new deal now with 2 years to go on such a sweet deal? Good question. The Ukraine didn’t. Russia breached and Russia lied about the reason why. Russia says it was two-fold; Ukraine wasn’t paying their bill (at $95 when they could turn around and sell it for $450? I seriously doubt they weren’t paying their bills) and Russia wanted higher prices. Somehow, that story just doesn’t hold water for a new country wanting to succeed outside the grip of the Motherland. Sorry Russia, but most businesses can’t stay afloat without paying their bills and Ukraine knew it would be not only its business, but it would mean State suicide to breach a contract that sweet only 3 years in, while energy prices were going through the roof.

It had to be that Russia didn’t like the deal anymore simply because Ukraine was making better than 300% profit on their gas during the 2008/09 winter season. On the heels of the Georgia War, an accord that was to last 5 years didn’t because Russia breached the contract. Russia simply cut off the gas. They just turned that little valve and said, “Let’s talk”. Millions without gas to heat their homes? 20% of the buying countries, of the population of 15 countries now literally in danger of freezing to death and Russia says “Let’s talk”? That’s one heck of a bully pulpit, isn’t it.

Millions of people nearly froze to death. The EU had to scramble to get electric heaters rushed out, spend a fortune doing so. Ukraine was risking all sorts of lawsuits, not to mention trade and supplier agreement breeches all because Russia didn’t want to miss that huge energy spike, didn’t want Ukraine turning that kind of profit because it might have strengthened their position as an independent State.

No matter how you turn it, that is exactly what Medvedev and Putin decided to do, and it is why they decided to do it. Russia is the same as it always was and America should “reset” nothing because Russia still places power over people and their State welfare over the human element. That is the great thing about holding most of the cards, they can do whatever they want, make it look like the other guy’s fault (Georgia being another point in case, Iran a third) and they can get away with it because no one can audit the truth in Russia, there are simply way too many layers.

Yushchenko (Ukraine’s President) seems to think that it is all about Russia destabilizing Ukraine (and other regions dependent on them, most of which were formerly known as the Soviet Bloc). I tend to agree as I look at all the arguments, along with the fact that Russia was selling at a loss based on the former accord and the Ukraine was reselling at a significant profit, making their weak new little State just that much stronger. So they reach an unstable deal, whose time is nearly up, and which makes the EU quite nervous. Then suddenly we see this article stating that they are entering a new crisis. Russia is speaking those fighting words again…Russia’s pushing it again and a new crisis is about to begin…um…let’s see, just a few weeks before winter sets in? Gee Wilikers, isn’t that just grand timing?

Let’s understand this. Russia is flexing its big communist muscles and Russia wants to turn back to the good old days where they were a superpower and they owned all the land, infrastructure, and power. Simply put, they want to recreate the Soviet Union.

This means they will be quite happy about the reports of Obama stopping the shield system plans. The Ukraine government and the EU know this. That is why, whether the people of Ukraine understand the truth or not, Ukraine is standing strong (as strong as an independent country of only 5 years can stand, that is) against a giant machine.

Russia is taking a low key approach hoping the people who aren’t too keen on the recently separated State will revolt, and they are busy doing just what they do as communists, quietly feeding the opposition funds and encouragement to revolt to destabilize Ukraine further; kind of like an ACORN on steroids with ALL the money at its disposal.

The Ukraine State is in turn, understandably taking a more aggressive role towards Russia’s military encroachment and is actually stopping and searching weapons transfers and placing limits, as weak as they may be, on Russia’s coming and goings.

Russia is blustering that it is our fault they can’t join the WTO, meanwhile they are increasing their aggressions against Georgia again and they are damn close to finishing their own new air defense system.

Do we have any idea how far back this will set us? This will set us all the way back to the cold war or worse, especially in light of Russia’s friendship with Iran. In his inexperience, our President is squandering our sovereignty, seemingly by order of the UN, Soros, and the like. For what? Why are we cancelling that Shield System?

For us, however (you know, the ones who supposedly believe in democracy and the capitalist system), the removal of our shields and the carte blanche ticket to power we are handing Russia in our misguided effort to “reset” relations, Ukraine and Georgia might be the only hopes we have left to stop a new Cold War and/or energy war. They are our friends. Russia will only be as long as it suits her to regain her superpower status, and by then we will be too weakened from internal strife and debt to do a damn thing about it. They know it, we know it and the rest of the world knows it.

What I want to know is, “What are We the People going do about it”? Can we have a grown up in the White House? Please? The old Soviet Union wants their power back and it looks as though we are party to laying it all in their laps with this move. It will be a very interesting few years indeed.