World War Trump

by Hall Gardner

  On the one hand, ExxonMobil, for example, has claimed that it has been taking considerable losses due to US sanctions placed on Moscow. Some elements in the Trump administration want to eliminate, or at least minimize, sanctions and safeguard ExxonMobil's considerable joint investment deals in the Arctic Kara Sea, western Siberia, Sakhalin island, and the Black Sea, which had been reached with Russian-government energy company, Rosneft, in 2012–2013, given the massive size of Russian reserves.5 In April 2017, ExxonMobil applied to the Treasury Department in April 2017 for a waiver from US sanctions on Russia in a bid to resume its joint venture with state oil company Rosneft. In July 2017, ExxonMobil sued the Treasury Department over a $2 million fine for purportedly violating US sanctions against Russia in 2014. In fact, a number of energy deals sought by ExxonMobil, Chevron, Royal Dutch Shell, Repsol, and Petrochina, with Kiev and with its state-owned Chornomornaftogaz, have been placed in jeopardy and in legal limbo due to the Russian annexation of Crimea.6 This makes it nearly impossible for Moscow to legally make deals with these same companies, among others, over formerly Ukrainian owned assets—until there is a political and legal settlement between Kiev and Moscow.

  Specifically, both the American-based multinational Chevron and Royal Dutch Shell pulled out of their promised investments in Ukraine. Shell pulled out in part due to the annexation of Crimea and the outbreak of war in eastern Ukraine and in part due to the fact shale oil and gas reserves in both Poland and Ukraine were not as large as previously believed. ExxonMobil, among other oil companies, will need to renegotiate its Black Sea energy exploration deals with Moscow, after it annexed Crimea, if possible—as the area is still disputed with Kiev. But Chevron had actually pulled out in December 2014 due to, in large part, Ukraine's complex tax laws, and not the conflict in eastern Ukraine.7

  For its part, Moscow has nevertheless hoped that it can ride out US and EU sanctions. Moscow still believes that it can eventually develop Black Sea energy and other resources seized from Ukrainian jurisdiction that are potentially worth trillions of dollars. Moscow hopes to obtain finance and investment from Swiss, Qatari, and Chinese, if not Japanese and South Korean, banks and corporations that are not subject to US and EU sanctions. Moscow also hopes to engage in trade with countries in Latin America, in the Middle East (including Israel and Turkey), and in the Indo-Pacific (including China and Japan) that have not imposed sanctions. Moscow wants to believe that the United States and/or the European Union will eventually abandon sanctions altogether.

  The sanctions have initially tended to cut off Russia's access to Western capital markets and know-how and scare off foreign investors, even though the Russian economy began to strengthen in 2016.8 Coupled with generally low global oil prices, the general economic crisis has cut real incomes, fueled inflation, and caused significant capital flight. Since 2012, consumer prices in Russia have risen by 50 percent. There had been a drop in the value of the ruble against the dollar, and average salaries fell by 36 percent from 2012 to 2016 in dollar terms. Inflation has been officially described at 5.4 percent but is probably much higher.9

  Even though it does open some opportunities for non-US and non-EU firms, the Russian annexation of Crimea comes at a major political-economic cost to Moscow. It also undermines US and EU trust in the Russian leadership—which it makes it even more difficult to build a positive relationship.

  IDEOLOGICAL DIVISIONS IN THE TRUMP ADMINISTRATION

  The Trump administration appears divided into two ideological camps. Against the globalists, there is a general move among other America First economic nationalists to reduce, or at least minimize, multinational energy investments in Russia in favor of the development of US shale oil and gas. Trump's nationalist America First ideology stands against multinational corporate investments, such as those of ExxonMobil in Russia, and wants ExxonMobil to invest back in the United States.

  This group generally wants to further develop the US domestic energy market through strong support for the Keystone XL pipeline, through cutbacks on strict Environmental Protection Agency regulations, and by opening public lands for energy development purposes. Shale energy supporters see US and European sanctions on Russia as an opportunity to export shale gas to Europe, including Poland and Ukraine, and thus reduce eastern European dependency on Russian energy. In addition, shale energy supporters want to support the Baltic states to reduce their dependence on Russian energy, by helping to supply the technology to build regasification plants. Despite the ongoing Ukrainian-Russian conflict, Kiev is still dependent on Moscow for about 50 percent of its natural gas. Expanded exports of highly polluting US shale gas and oil to Europe are furthermore seen as a means to potentially undercut one of Moscow's major sources of revenue, which represents some 68 percent of Russia's total exports.10 American energy companies also hope that they can eventually break the Organization of the Petroleum Exporting Countries (OPEC), which seeks to control energy pricing. The US effort to export shale energy to Europe (despite the heavy debts involved in shale oil and gas production) could soon put the United States and Russia into direct competition for former Russian energy markets.

  In effect, Trump's “energy dominance” plan was written into the August 2017 H.R. 3364 act, “Countering America's Adversaries through Sanctions Act.” As mentioned in an earlier chapter, Trump appeared to be forced to sign this bill into law, given its strong bipartisan congressional backing, despite the fact that he publicly stated it to be “flawed.”11 H.R. 3364, Trump argued, “encroaches on the executive branch's authority to negotiate” and “makes it harder for the United States to strike good deals for the American people and will drive China, Russia and North Korea much closer together” and could additionally “hinder our important work with European allies to resolve the conflict in Ukraine.”12

  Trump claimed to have opposed the “Countering America's Adversaries through Sanctions Act,” but he nevertheless more strongly backed America First energy interests against those of Moscow by supporting the 2016 Polish-Croatian Three Seas Initiative. The latter initiative is intended to foster trade, infrastructure, energy, and political cooperation among the ex-Communist countries bordering the Adriatic, the Baltic, and the Black Seas. Nearly all the countries involved—Poland, Hungary, the Czech Republic, Slovakia, Romania, Bulgaria, Lithuania, Estonia, Latvia, Croatia, Slovenia, and Austria—are heavily reliant on Russian gas and oil imports. The Three Seas Initiative seeks to minimize these states’ dependence on Russian energy imports, and thus could clash with Russian interests.

  It is predicted that by 2040, given significant and risky investment, US shale oil production will increase 45 percent from 2015 levels to 7.1 million barrels a day—and it most like grow rapidly with the assistance of Trump's pro–fossil fuels policies.13 Over the past decade, shale gas has risen from 2 percent to 37 percent of US natural gas production. After surpassing Russia, the United States is now the world's largest producer of natural gas and is beginning to develop its export capabilities. On January 24, 2017, President Trump signed presidential memoranda to revive both Keystone XL and Dakota Access pipelines in order to speed the process after President Barack Obama had rejected the fourth phase of the Keystone XL pipeline in November 6, 2015, in an effort to reduce greenhouse gases.

  The Keystone XL pipeline has been opposed by both ecology groups and Native Americans. In November 2014, the Rosebud Sioux Tribe had called the US decision to build the pipeline “an act of war” and had vowed to block the project from crossing its lands.14 The debate has, in part, revolved around the social, health, and economic impacts of potential pipeline leakage and whether or not the pipeline will generate a significant number of long-term jobs, while also raising the question of whether these risky investments are creating new debt bubbles. Perhaps most important, the Trump administration support for the project raises real questions as to whether the government will be able to move energy producers away from carbon emissions that exacerbate the dangerous trends toward global warming, an
d toward nonpolluting and healthier energy options. (See chapter 10.)

  TRUMP TAKES AN ANTI-MOSCOW STANCE

  It was only once Trump became president that he began to stress the importance of NATO as a collective defense organization. Throughout his presidential campaign, and in the early days of his presidency, Trump repeatedly called NATO “obsolete.” On the one hand, this raised Moscow's hopes that Trump would begin to reform NATO, a collective defense organization that dates from the Cold War. On the other hand, Trump's critical statement raised the fears of eastern European countries that the United States and NATO might no longer back them against ongoing and future Russian military pressures and threats in accord with NATO's Article V security guarantees.

  Prior to becoming president, Trump had appeared to ignore NATO's role as a collective defense organization against potential threats from Russia or other states. And even though NATO has thus far played only a limited role in the fight against the Islamic State, Trump also appeared to ignore NATO's role in Afghanistan and Libya as part of the Global War on Terrorism. At that time, Trump appeared unaware of the debate inside NATO as to how many resources to concentrate on defenses to the north and east against Russia and how much to concentrate on defending Europe to the south in relationship to immigration, refugees, and terrorist movements.

  At the same time, however, Trump did agree to accept the Balkan state of Montenegro into NATO membership. This action was taken in order to check Russian influence inside the country and for NATO to secure the coast of the Adriatic—angering Moscow, which purportedly tried to stage a coup, assuming the government did not pretend to stage a coup itself, as has been alleged in this age of disinformation.15 But it nevertheless remains unclear how NATO should or could deal with the high level of corruption in Montenegro, including counterfeit Euros in the country, plus the strong pro-Russian sentiment among the population.

  THE QUESTION OF RUSSIAN “AGGRESSION” AND THE THREAT OF WAR

  For understandable historical reasons, most eastern European states are afraid of Russia and believe that Moscow is inherently “aggressive.” Yet the term “aggression” does not fully explain why Russia has acted in the way it has—and at that particular moment. As Moscow had made what it believed to be reasonable deals with the previous Ukrainian Yanukovych leadership, a better explanation is that Russian military intervention in Crimea and political-military interference in eastern Ukraine was intended as a preclusive action that has sought to check further enlargement by both NATO and the European Union into the Russian-defined “near abroad.” Here, Moscow believes the EU expansion since 2008 has sought to undermine Russian political-economic influence in the former Soviet states of Belarus, Ukraine, Moldova, Georgia, Armenia, and Azerbaijan.

  Since at least March 2014, if not earlier, Moscow has been engaging in provocative overflights and submarine incursions into the territories of NATO and EU members, including EU member states Sweden and Finland. As a consequence, the latter countries have been considering closer ties to NATO. Likewise, in mid-March 2014, Moscow engaged the Russian Baltic Fleet in exercises along the Baltic coast, while also placing infantry, air force, and Spetsnaz troops on alert throughout the Russian Federation and along the borders of NATO member states from the Arctic region to the Baltic and Black Seas. A Russian military buildup has accordingly been taking place in Kaliningrad, where Moscow's warships are not as vulnerable as they are when they sail from Saint Petersburg and pass between Estonia and Finland. In addition to threatening to deploy nuclear weapons in Kaliningrad, Moscow has also threatened a nuclear and conventional weapons buildup in the newly annexed Crimea.

  These are just a few of many incidents that have taken place since the Russian annexation of Crimea in 2014 that could spark conflict. Somewhat-similar incidents involving both Russian and Chinese overflights have taken place in the Asia-Pacific region as well, while both Russia and China point to the buildup of NATO and US (and Japanese) military capabilities in Europe and Asia. From the Russian perspective, such repeated overflights into European, Japanese, and US airspace have been justified by the fact that the number of nuclear-capable fighters in the NATO Baltic air-policing mission had been significantly increased in early March 2014. In Moscow's view, advanced NATO fighter jets with potential nuclear weapons capabilities now patrol regularly along the sensitive Baltic state border only a few minutes by supersonic flight to Saint Petersburg and Moscow.

  Moscow has also opposed NATO membership for EU members Sweden and Finland, who are no longer technically neutral, having joined the European Union. Should Finland join NATO, Moscow would fear the rebirth of Finnish irredentist claims, backed by NATO, to territories taken by the Soviet Union after the Winter War and the Continuation War.16 Finland has claimed that it has no irredentist claims, yet Moscow nevertheless fears that if Finland joins NATO, then NATO might back Finnish claims to Karelia, Salla, and Petsamo. Claims to Petsamo, if pursued, could give Finland access to the Barents Sea—which will become a major sea line of communication in the coming years as the polar ice caps, unfortunately, melt. (This issue might be better addressed by bilateral Finnish-Russian negotiations than by drawing NATO into the picture.)

  Russia already feels “encircled” by NATO in the Arctic region. Out of the eight Arctic Circle states, in addition to Russia itself, five are NATO members: Norway, the United States, Canada, Denmark (Greenland), and Iceland (where it passes through the small offshore island of Grímsey). As previously mentioned, two are EU members considering NATO membership, Sweden and Finland.

  There are a number of major legal and defense issues here. The close overlapping links between NATO and EU members raises a delicate political-legal-security question. If an EU member is attacked, the United States and NATO could automatically become involved. This is because NATO and the European Union possess close overlapping memberships, which themselves possess mutual defense clauses. The EU defense clause, however, is much tighter than the NATO Article V clause.

  BUDAPEST ACCORDS AND NATO-RUSSIA FOUNDING ACT

  Russian actions raised the question as to whether the United States, France, and the United Kingdom were necessarily obliged to provide military assistance to Ukraine in accord with the Budapest Memorandum of 1994, but which was not a formal treaty. The United States and the European Union did agree to apply economic sanctions on Russia in 2014, but they are not legally mandatory for all states.17 Nevertheless, Moscow's ostensible violation of the Budapest Memorandum, among the other international agreements, including the 1997 NATO-Russia Founding Act, which had established the NATO-Russian relationship, led the United States and the European Union to argue that Russian actions in Crimea and eastern Ukraine could not be permitted without some form of punishment. (See the introduction.)

  The 1994 Budapest Memorandum had provided security assurances (not security guarantees) to Ukraine that obliged its signers, the United States, Russia, and the United Kingdom (plus France and China later and separately), “to respect the independence and sovereignty and the existing borders of Ukraine” once Kiev gave up its nuclear weaponry left over from the ex–Soviet Union.18 But “respect for borders” was not intended as an absolute guarantee of military assistance to Ukraine.

  The NATO-Russia Founding Act of 1997 stated, “Any actions undertaken by NATO or Russia, together or separately, must be consistent with the United Nations Charter and the OSCE's governing principles.”19 From the Russian perspective, this principle was already broken by NATO itself after it declared war on Serbia over Kosovo in 1999 without a UN Security Council mandate.

  The 1997 NATO-Russia Founding Act had also promised that NATO had no plans to deploy troops or nuclear weapons on the territories of the new members—at least at that time.20 In terms of conventional forces, the Founding Act stated that “the Alliance will carry out its collective defense and other missions by ensuring the necessary interoperability, integration, and capability for reinforcement rather than by additional permanent stationing of substant
ial combat forces.”21 Both sides were to “prevent any potentially threatening build-up of conventional forces in agreed regions of Europe, to include Central and Eastern Europe.”22

  The Russian military intervention into Crimea and eastern Ukraine has accordingly threatened to tear apart the 1997 NATO-Russia Founding Act. For this reason, the option to support Kiev through direct military assistance to counter eastern Ukrainian secessionists secretly backed by Moscow is a decision of individual states—not of NATO or the European Union as a whole. Under the Obama administration, Washington decided to provide only limited US training and support for Kiev's military units—instead of providing significant arms shipments.

  Since 2014, Russian military pressures have led NATO to consider a rotating deployment of troops on the territory of the new NATO members, so as to not technically violate the NATO-Russian Founding Act, with the questionable rationalization that the “rotation” of forces did not represent a “permanent” deployment of forces. By January 2016, the US Congress mandated the European Reassurance Initiative, which promised $985 million for the Pentagon to augment a “rotational” US troop presence in Europe for NATO activities and to preposition US military infrastructure and assets in Europe. President Obama then requested $3.4 billion for 2017 for the deployment of an additional “rotational” Armored Brigade Combat Team (ABCT) to central and eastern Europe, plus the prepositioning of combat equipment, and additional training and exercises in Europe.23