Friday, May 02, 2014

1325 Gas Pains and Sanctions

First, a tongue-in-cheek idea, then some serious talk.

один Gas

Some time ago, Pennsylvania’s esteemed and beloved governor said his state will soon be known as the Texas of natural gas.

Maybe yes, maybe no.  Harrisburg ain’t Austin and Pittsburgh ain’t Dallas.  But Philadelphia might be Port Arthur or Houston or Galveston.  

Not only that, but here’s our chance to stick it to Putin.

Wait a minute, you say, what does Philadelphia have to do with Putin?

Well, the European Union is all in a knot about Putin maybe cutting off the supply of natural gas on which it depends and blame US- backed sanctions.

We can step in and save the day before awful northern European winter sets in six months from now.

But, you ask, doesn’t gas have to be delivered by pipeline?

No… there’s plenty of ocean-going delivery already underway and capacity for much more.

Hey, Vladimir, you want to cut off natural gas to Germany, France, Ukraine, Poland, Bulgaria, Latvia, Estonia and Lithuania?

You want to freeze out Hungary, Norway, Denmark, Sweden and Finland?  Bring it on, as President Bush used to say.

We have plenty and we don’t need it all.  Not only that... we learned a long time ago from John D. Rockefeller that if you have a strong position in a commodity and you have a ton of money, you can sell at a loss until your competitors give up… then kill the customers with price increases.

We’ll even help you with a Chapter 7 bankruptcy proceeding for Gazprom.

There are only two other ways to handle the Russians.  Military force and bribery.

Bribery is cheaper, more beneficial to more people and historically more face saving.

But undercutting one of the two mainstays of their economy is even more fun and cheaper yet.

The other mainstay is alcohol production, and there’s no way anyone can beat them at that.

два Sanctions
There are two kinds of sanctions.  One, they cut off something to an entire country as a behavior modification device.  The country misses its wheat or the spare parts for its jet fighters, and it knuckles under.

These work two ways.  Others impose sanctions against us. Remember the Arab oil embargo?  It didn’t work.  Instead of kneeling, we got our backs up.

The other kind of sanctions is where one country or group of countries pick out a few choice power-masters or moneybags and freezes their foreign accounts.

And that’s what the US and the EU are trying to do about Russia.

That might have worked in 1991 when the Soviet Union evaporated.  But since then the powerful have consolidated their assets and the asset-rich have consolidated their power.

Since the laws of physics dictate limits to both, there’s no less money or power.  But now, it’s mostly concentrated in the hands of the same guys.

So if the same group controls the country and its considerable military resources along with its capital, you can’t just freeze a dozen asset groups and figure that’ll modify any behavior.

And do you think for a minute that our backs get up higher than the Russians?  Well, perish the thought, they don’t.

Granted, sanctions are neater than war, or maybe just less messy.  But in a case like this, they’re not going to work.

I’m Wes Richards.  My opinions are my own but you’re welcome to them. ®
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© WJR 2014

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