Russia Initiates Overtures to Obama While Plotting Energy Extortion

On November 25 the New York Times reported that "Russian leaders would like to improve ties with the United States under the administration of President-elect Obama." Mr. Putin was quoted "We hope the new leadership of the United States will be more constructive...."

Then, the very next day Russia's energy minister Sergei Shmatko would pronounce "Russia will coordinate with OPEC to defend its interests." This coming after Russia's extensive discussions in Tehran late in October with Iran and Qatar aimed at forming an OPEC-style cartel for natural gas.

One can surmise that all this is happening on Russia's presumption that the new American administration will continue business as usual inured to oil patch politics and policy as has the current administration, in effect turning a blind eye to OPEC's machinations. A policy that has been a boon to oil producers both here and abroad no matter the cost to the American consumer and the world economy.

It has been a policy of purposeful neglect permitting a major oil producer such as Russia to presume that they could freely conspire with the OPEC cartel in the firm belief that it would continue to be viewed as a responsible interlocutor with our government, all the while it instituted policies inimical to our anti-trust laws, and in effect plotted to initiate economic aggression against us and the world's economy. Actions that are patently outside the purview and spirit of recognized international trade law.

It is a breach that would be the equivalent to the United States declaring that henceforward this nation would only export food grains in consort with other major national grain exporters toward extorting the highest prices possible. It would be an untenable position for the United States to take given its espousal of free international trade, and its responsiveness both in law and conduct to the communal economic well being of other nations, not to speak of the humanitarian disaster it would entail.

Russia's actions have given the Obama administration-elect an opportunity to show the American public and the world, that this new administration will not sit idly by as oil interests attempt to game the market under the protection of an acquiescent and supportive administration as at present. That the days of oil patch hegemony over Washington are at an end.

Perhaps one of the first orders of business on the energy front for the new administration should be the passage and signing into law of NOPEC legislation, legislation that has wide support in Congress that would permit legal process against nationally sponsored oil companies as those of the OPEC cartel members. NOPEC legislation would remove the judicial technicality that permits OPEC to flout American law under the rubric of "sovereign immunity". Legislation an obdurate President Bush has repeatedly threatened to veto.

And no, this is not a pleading simply for lower oil prices, but rather a recognition, as currently construed, the transfer of wealth to oil interests and oil nations presents an imminent danger to our national security. (In case of any doubts of OPEC intentions one need only look at its defacto leader, Saudi Arabia, whose entreaties at this past weekend's OPEC meeting in Cairo militated for a 50% increase in price to $75/bbl. A price target initiated by none other than King Abdullah who in June proclaimed, "We are very concerned for consumers in all countries".)

The diminution of fossil fuel consumption is in large measure another aspect of the same issue and will be largely dependent on the vision and leadership of the new administration. President-elect Obama has clearly stated his intention to confront this issue. We can only hope for our sake and that of our progeny that he will succeed.

Comments

[kalidescopemind]

What about US blowing off the Kyoto treaty? I say gouge away, it well help our transition to different energy source. As Sheik Yamani said (founder of OPEC) "The stone age did not end due to lack of stones"

[SoD1]

Hmm, "conspire"? Excuse me, Mr. Raymond J. Lears, but Wasn't it the other 'side' - this U.S. side- which firstly "conspired"?
To just name 3 here quickly:
Invasion and Exploitation of Iraq and attempt to "conspire" to sell Iraqi Oil SOLEY to American Companies, what would have translated in the U..S solely in control of mayor part of the Oil resources of the World, even more so after invading, Iran or Pakistan, hm?
And not to forgot the one-sided Bush dropping of 123 Agreement with Russia and now the latest "challenging" the Russian bear "Missile Defense Shield" in Europe?

Action always cause a Reaction, but we can "chose" through our very own action how the reaction can become as Power will prove to be in reality a weakness of the mind..

[MagisterLudi]

Energy extortion?
Since when attempting to charge 80% of market values is " extortion."
It is ironic that the same people who constantly compain abour lack of economic and political freedom in Russian suddenly found religion when Russia is attempting to adhere to market forces.

Here's a hint. A country-- can elect to give one friendly country an energy subsidy. While choosing to charge an unfriendly country market rates. Note-- MARKET RATES. NEVER higher than.

This is extortion?

"Morality is the attitude we adopt towards people whom we personally dislike."
Oscar Wilde

[MilwaukeeDan]

Majister Ludi, I agree, this is just another in a long list of anti Russian ranting and propaganda. EXTORTION??,please Mr Leasy, as with most Americans, you are still fighting the cold war. American foreign policy has done everything possible to undermine Russia over the last 20 years. Why is NATO still around? Why is it expanding? What is its purpose? Why is it US policy to bypass Russia on a planned Central Asia natural gas pipeline? Why did the US get involved in the Balkans against Russia's wishes? Why did we grant Kosovo independance? Why did we help create the Oligarchs in Russia during Yeltins rule? And this list is almost endless and the Russians have figured it out, Americans need an enemy, real or imagined. How else would we survive.

[SiberianRat]

Not mentioned in this article is the complete mismanagement of the US-Russia relationship under Bush. Things could have been VASTLY different if he had not screwed this up along with all of the other international disasters. Part of Russia's current bluster is a reaction to the arrogance and dismissive stance that US diplomacy has taken toward Russia under Bush. I do truly believe that Russia wants a better relationship with us, but I also know they have every reason to be less than trusting after the past 8 years. The Russian people are very intrigued though by Obama and I think that the current chilly attitude toward the US will thaw quickly with Obama, at least on the level of ordinary Russians.

[MagisterLudi]

I do truly believe that Russia wants a better relationship with us,"
At this point it's more like "wanted" a better relationship. Russia is now is in a ( not so) secret military alliance with China. Now that the east of Russia is secured, it's the Western borders turn.
1. This one is a biggie. To make the Russians reassess the situation-- cancel the missile placement in E. Europe.
Step number 2-- stop NATO expansion. Now. NATO was created with only ONE purpose-- military alliacne against Soviet Union. USSR no longer exists. Why is NATO still around?

Nothing less will suffice.

[MagisterLudi]

P.S. Yo help Russo-Am. relationships get rid of Brzezinski. ASAP.

[MilwaukeeDan]

Siberian Rat, you are wrong, the mismanagement started under Clinton. Remember all the Clinton Ivy League goons during the Yeltsin administration? They tried destroying what was left of Russia. They gave a rise to the thieving Oligarchs that are now hiding like cowards in England. The Russians don't really care about the last 8 years, it was the starving they did in the 1990s that hurt them the most.

[MagisterLudi]

The Schrödinger's Cat's is out of the box, so to speak. Russian leadership has formulated a long-term strategic plan vis-à-vis U.S. and Western Europe. And they're not going to change it based on the whims of American leadership. Russian Federation finally shook off the last vestiges of Yeltsin's defeatism. And now is pursuing an independent energy and national security interests.
The struggle for Central Asian energy reserves is just one of the elements. Securing Western borders is another. At the same time, all countries -including Russia- are interested in maintaining cordial relationship with U.S.: weakened but still dominant superpower.

[research]

The USA has withheld food from many country to coerce them.

The solution is to spend those wasted banker trillion on wind solar and efficiency.

1T$ buys 100-500GW of wind or solar.

worth 100-500 Billion dollars per year.

That's a whole lot better than wall street.

[deepfreezevideo]

I'm a fan of Raymond J. Learsy.

[aslinged]

I would be a fan of Raymond J. Learsy if only he would be honest and call this whole charade what it is: the positioning of armed resource wars---oil and water. As it is, this piece of his comes off as no more than precision guided propaganda. But of course...that is what it is.

[Deparis]

Let me see if I get this right. Other countries cannot protect their interests, however selfish, but the USA can declare war to protect its interests! Isn't this type of reasoning exactly why the world hates us so much? How about we stop buying their oil and gas altogether and find alternatives to fossil fuels?

[Veri]

Most nations do it. The news does not report it. That is the blind side of your reasoning. Think Russia did not do it? They occupied most of Eastern and Central Europe for around forty-four years. Russia still considers that area "their" back yard to walk the Russian bear in when the Bear feels like it needs to p*ss or sh*t.

Another American apologist? I hope not. It is like White Man's Burden. Almost a mental disease. Though, with Bush and Finance running America for the last eight years, I do not blame the world for condemning America. International Finance is the enemy. Not America.

[SiberianRat]

We GAVE much of Eastern/Central Europe to the Soviets at the time! This is not about being an American apologist, it's about being historically accurate. I agree 100% with Deparis.

[aBr1t]

Russia's actions have given the Obama administration-elect an opportunity to show the American public and the world, that this new administration will not sit idly by as oil interests attempt to game the market under the protection of an acquiescent and supportive administration as at present. That the days of oil patch hegemony over Washington are at an end.

This has been going on for ages!!!

I posted something befor about gas prices, it is true to point out that OIL is just like orange, corn ect ect and as you point out if you was to do the same thing with corn or oranges then there would be an uproar so why not with oil?

And why do other nations all peg the price of oil to the usd, how much would oil be worth if it was sold in YEN or some other money?

if the usd falls in its buying power then the price of oil / everything that derives from it will also fall correct?

Maybe soon the PEG "if the usa goes bankcrupt" will force OIL nations to Unpeg?

there is alot more to come i fear, its going to be ride like never seen befor.

i just hope it wont start WW3 or something like that.

[GetAbike]

Gee Raymond, it has been a long time- I have missed your.. um... interesting take on energy issues. There are some great comments today that you aught to read closely.
The only thing I want to add is that your suggestion to antagonize the Russians seems silly in view of the fact that Russia provides a minuscule amount of oil product to the USA -about 3% of our total imports - hardly worth jeopardizing the good will we need on the many other pressing issues of the day.
How about some commentary on the recent IEA report?

[OneTop]

Raymond J. Learsy

Your main suggestion is at the very least problematic unless you actually believe that the entire world needs to bow to U.S law. Which by the way, would be for the sole benefit of the U.S.

There is nothing wrong or unusual with OPEC or the Russians looking after their own national interests. Unfortunate as it may be to others, this is how it works. If you think otherwise, then the U.S. should have a long hard look in the mirror.

The U.S. is in decline and sooner or later must accept that reality.

Be thankful that OPEC and or Russia don't start selling oil in Euros.

[FrictionSoul]

The US is a Member of OPEC.

[paixa3]

So? Your comment DOES NOT invalidate 'onetop's poste in the least.

Look in the mirror, much of the world does not like you and it is NOT because you failing think you are so much better than the rest of the world....it might be for contempt of ignorance.

[Michale32086]

I don't think the US is a member of OPEC.. I GOOGLED it, but could only find 1 entry with a 1 word answer to the question, IS THE US A MEMBER OF OPEC. The answer, without followup was NO..

Do you have any links that show that the US is a member of OPEC??

Thanx

Michale.....

[tkunz]

Be thankful to what? If OPEC and Russian thought it to their advantage to sell oil in Euros, they'd start.
Suing OPEC makes about as much sense as suing Colombia to keep their drugs out of the US.

[FearlessFreep]

The fall in oil prices is an opportunity. The smartest thing Washington could do is introduce a carbon tax. If gasoline gets taxed at $1/gallon, it'll still be cheaper than last summer, and downward pressure on oil prices will be increased.

[DuganS1]

Taxing gasoline an additional $1 a gallon will just make things that much harder for lower and middle income folks. At $43 a barrel (where it is right now) we don't need any more downward pressure on oil prices. Now the price of oil is getting to low, so low that it threatens stability in countries like Russia, which could be very bad for the US, and damages the commodity related industries in the US, causing great economic damage to states like Texas, Oklahoma, Iowa, Wisconsin, Illinois (agricultural commodities and related manufacturing), and West virginia, Pennsylvania (coal), and Ohio (steel and manufacturing).

[edva]

The only viable answer is alternative energy, with solar perhaps the most logical.
Until we make that commitment, we are enslaved. A solar-powered world would solve most issues.

[kalidescopemind]

I heard oil from algea is promising. It also requires CO@ to grow! win-win!!

[jbl inAZ]

I take it that in the discussion of the NOPEC legislation you meant to say "flout American law" rather than "flaunt".

[DuganS1]

Why take issue with Russia having dialogue with OPEC regarding another reduction in oil production considering oil has just collapsed from $149 a barrel just last July to the $44 a barrel mark it sits at right now today. If oil continues at these low levels, Russia will face an economic collapse similar to what it faced in the 90s. I can't blame for their leadership for doing whatever it takes support oil prices and save their economy.

[KillTheMessenger]

At $44 per barrel plenty of production sites can and will be mothballed simply for economical reasons. The market is still at work and nobody is going to give the good stuff away at a loss.