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Is Biden Ready For A New Era Of Conflict With Russia?

The failure of the new U.S. Biden Administration to respond with resolve and dexterity to the first Russian “tests” of it in March-April 2021 guaranteed an escalation of maneuvering between Russia and the U.S. and its allies until equilibrium could be established. That escalation came to a head off the Crimean coast on June 23, 2021. In the meantime, all thought of attempting to keep Russia strategically out of a tight cooperative strategic alliance with the People’s Republic of China (PRC) now seems to have been abandoned by Washington and Whitehall. 

Moscow’s “second test” of incoming U.S. Pres. Joe Biden came with Russian (and international) monitoring of his performance at the 47th G7 (Group of Seven nations) Summit in Cornwall, UK, June 11-13, 2021; the North Atlantic Treaty Organization (NATO) summit in Brussels, on June 14, 2021; and Pres. Biden’s meeting with Russian Pres. Vladimir Putin on June 16, 2021, in Geneva. Each of these three major performances encouraged Russia to believe that it could maintain a strong position vis-à-vis strategic posturing in relation to the U.S. and its allies.

It became clear to policy officials in the United Kingdom that it would be left to the UK to re-assert Western attitudes toward Russia, and particularly Russian expansion in the Black Sea, and for the UK to determine the strength of Russian confidence and resolve, while demonstrating that there was, in fact, a strong Western position and decisiveness facing Russia. The result was Operation Ditroite, a UK military operation planned and agreed by the Permanent Joint Headquarters (PJHQ), Britain’s tri-service headquarters at Northwood, near London, with the U.S., to take advantage on June 23, 2021, of the presence in the Black Sea of a Royal Navy warship visit to Ukraine. 

The plan was for the warship to depart Odessa (Ukraine) and then sail through waters off Russian-occupied Crimea, some 12 miles (19km) offshore, and therefore — under UK and U.S. terms — within Ukrainian exclusive economic zone (EEZ) waters, with the destination stated as Batumi, Georgia. Inadvertently-leaked UK documents showed that a strong Russian “welcome party” was expected. The test, however, was to determine the actual strength of the Russian pushback, which was, in fact, to come from the Russian Navy, Russian Coast Guard, and Russian Air Force (VKS).

Russian authorities claimed that the Royal Navy’s HMS Defender, a 2009-commissioned Type 45, Daring-class air defense destroyer (pennant D36), entered Russian territorial waters and that, as a result, warning shots were fired over the bow of Defender. The British Government denied that warning shots had been fired by a Russian warship, but Russian-released video showed that the shots had been fired in coordination with a radio warning to Defender, although there was no evidence shown that the rumored discharge of airborne munitions ahead of Defender had taken place.

UK Ministry of Defence (MoD) documents showed the voyage of HMS Defender as an “innocent passage through Ukrainian territorial waters”. Defender’s main armament was to be covered and the ship’s helicopter stowed in its hangar, in the expectation that Russia might — as it did — respond decisively. Not only, as Russian-released video footage showed, was a significant fleet of vessels on hand to attempt to divert Defender from its course — with constant radio exchanges by both sides — VKS Sukhoi Su-24 combat aircraft, maritime reconnaissance aircraft, and helicopters flew relatively close to Defender to demonstrate capability and intent.

There was a known Russian naval and air exercise underway at the time. Russia claimed that Defender had been “chased out” of Russian waters, but there was no evidence that the RN vessel veered from its projected course (which had been known from leaked documents in London the day before).

It was a robust set-piece theater, with each side showing complete resolution short of direct engagement, with Russia demonstrating that the reintegration of Crimea into Russia was complete, and the UK demonstrating that this was not recognized by the West. 

More importantly, Western governments were exploring the possibility of reducing Russian geopolitical and energy influence over Turkey. That aspect remains central to the confrontation.

The new Southern Gas Corridor has allowed Turkey to buy more Azerbaijani gas at better prices than were available for Russian gas. Turkey received more than six bcm (billion cubic meters) of Azerbaijani gas between January and July of 2020, an increase of 24 percent compared to the same period the previous year. 

Turkey has contracts to purchase more than 12 bcm from Azerbaijan, and transit infrastructure crossing Azerbaijan and Georgia allows Turkey to receive these volumes of gas with no geopolitical strings attached. These realities led to a major drop in Russian gas sales to Turkey. Turkey has also been buying more liquefied natural gas (LNG) from the United States and other sources, allowing major diversification from dependency on Russia. 

During the first quarter of 2020, Gazprom’s share on the Turkish market dropped below 10 percent, compared to 33 percent in March 2019. The Southern Gas Corridor project aims to increase and diversify the European energy supply by bringing gas resources from the Caspian Sea to markets in Europe. The Southern Gas Corridor consists of four projects: (i) operation of Shah Deniz natural gas-condensate field (“SD1” project) and its full-field development (“SD2'” project), (ii) the operation of the South Caucasus Pipeline (“SCP” project) and its expansion (“SCPX” project), (iii) the construction and operation of the Trans-Anatolian Natural Gas Pipeline (“TANAP” project) and (iv) the construction and operation of the Trans-Adriatic Pipeline (“TAP” project) (SD2, SCPX, TANAP, and TAP collectively, the “Projects”). The Projects have an estimated investment cost of approximately $40-billion. 

Related: The EV Boom Is Coming Much Earlier Than Expected Upon completion, the SD2 project would add a further 16 bcm of natural gas a year to 10.9 bcma (maximum production capacity) already produced under SD1 project. The total length of the newly-constructed SCPX, TANAP, and TAP pipelines was projected to be more than 3,200 kilometers. The entity holding and managing the participating interests of the Republic of Azerbaijan in the Projects is Southern Gas Corridor CJSC.

As well, the construction of a large Mediterranean gas pipeline is planned, which should collect natural gas from the Mediterranean (Israel, Cyprus, Greece, and Lebanon) and whose significant resources would be supplemented with natural gas from Azerbaijan. Eastern Mediterranean (EastMed) is a 1,900km natural gas pipeline project to connect the gas reserves of the eastern Mediterranean to Greece. The pipeline would have an initial capacity to transport 10-billion cubic meters a year (bcm/y) of gas to Greece and Italy and other south-east European countries. The capacity was expected to be increased to a maximum of 20bcm/y in the second phase. The £5.1-billion ($6.7-billion) project has been confirmed as the Project of Common Interest (PCI) by the European Union. It is being developed by IGI Poseidon, a 50:50 joint venture between the Public Gas Corporation of Greece (DEPA) and US-controlled Edison International Holdings. 

The energy ministers of Greece, Israel, and Cyprus signed the final agreement for the pipeline project in January 2020. 

Although the Russian-Turkish marriage is on the scene, the situation on the ground is still different. Turkish multi-companies are oriented towards the West, the U.S., and Israel, but the Turkish policy is oriented towards Russia. However, Turkey’s domestic capacity from production to gas transmission facilities has not been controlled by the Turkish state since 2007 because its main company, BOTAS, has been privatized.

One of the main participants in the privatization was Royal Dutch Shell. In other words, a part of BOTAS’ capacity, especially those for energy transmission belonged to Shell. Control over Turkish energy transmission installations is as important as who controls BTC Pipeline, given that BP is a 30 percent co-owner and that last year (2020), Azerbaijani Pres. Ilham Aliyev announced the privatization of SOCAR, a 25 percent state-owned Azerbaijani company, BTC pipeline. 

Russia’s plans have been disrupted by a joint initiative to build a Mediterranean gas pipeline (Israel, Cyprus, Greece, the United States, and Italy) to transfer gas from the Mediterranean to Europe and to be complemented by large quantities of gas from the Caspian Sea, some of it through the Turkish port city of Ceyhan on the Mediterranean.

Meanwhile, the 1,770km BTC links the Sangachal Terminal near Baku (Azerbaijan) to the Ceyhan Terminal on the Mediterranean coast of Turkey. Dr Mamuka Tsereteli, writing for the US Middle East Institute on October 28, 2020, outlined much of the complexity — and strategic significance — of the energy distribution network which was now evolving.

From Baku, the pipeline traverses westwards to Azeri and Georgian territory and then turns southwards crossing Turkey to the Mediterranean coast. The pipeline will allow Caspian oil shipments to reach the Mediterranean coast, bypassing the Turkish straits, which are dangerously congested with oil tanker traffic. The operator of the BTC pipeline is BP. The Baku-Tbilisi-Ceyhan Pipeline Company (BTC Co.) was created in 2001 to construct, own and operate the pipeline. BTC Co. shareholders are: BP (30.1 percent), SOCAR (25 percent), Unocal (8.90 percent), Statoil (8.71 percent), TPAO (6.53 percent), Eni (five percent), Total (five percent), Itochu (3.40 percent), INPEX (2.5 percent), ConocoPhillips (2.5 percent) and Amerada Hess (2.36 percent). 

Currently, the key transit energy infrastructure elements with international significance include two oil pipelines connecting oil-producing fields in the Azerbaijani section of the Caspian Sea to the Georgian Black Sea port of Supsa and the Turkish Mediterranean port of Ceyhan: the smaller, 100,000 barrel per day capacity Baku-Supsa pipeline, and the larger, million-barrel capacity Baku-Tbilisi-Ceyhan (BTC) pipeline. At present, around 700,000 barrels of oil flow through these two pipelines, supplying crude oil to Turkish, Israeli, and other Mediterranean refineries. 

The BTC pipeline currently carries mainly crude oil from ACG fields and Shah Deniz condensate from the Azerbaijani section of the Caspian Sea. In addition, other volumes of crude oil and condensate continue to be transported via BTC, including from Turkmenistan, Russia, and Kazakhstan. Another important infrastructure network of international significance is the so-called South Caucasus Gas Pipeline, also known as the Baku-Tbilisi-Erzurum natural gas pipeline. 

It started with the production of eight billion cubic meters of natural gas annually at the Shah-Deniz field near Baku. Since 2007, it has been used to export gas to Georgia and Turkey. This pipeline, and the natural gas from the Shah-Deniz field, has provided Georgia with a much-needed alternative to Russian natural gas supplies and has helped Turkey to diversify its supplies as well. This pipeline became a basis for the larger pipeline system crossing six countries: the Sothern Gas Corridor (SGC). This $45-billion project – the largest energy project in the world between 2014 and 2020 – allowed the production of an additional 16 bcm a year. The largest recipient of the gas will be Italy. The system of pipelines has linked an upgraded South Caucasus Pipeline to the Trans-Anatolian Pipeline (TANAP) in Turkey, which is already bringing Azerbaijani gas to the western border of Turkey. 

The first supply of gas reached TANAP in Turkey in 2018. From there, natural gas is directed to European markets via the Trans Adriatic Pipeline (TAP), which stretches between Greece, Albania, and Italy. Initially, 10 bcm of natural gas will be exported through TAP each year, but capacity can be increased to 20 bcm. For comparison, Russia, the main supplier of natural gas to the EU, plans to export 170 bcm to Europe in 2020. 

The Southern Gas Corridor will be fully operational by the end of 2020, directly connecting natural gas fields in the Caspian to EU markets for the first time. Although initial volumes will cover only about two percent of total European demand, the project has the potential to expand substantially based on increased volumes from other fields in both Azerbaijan and Turkmenistan. 

The picture is different for the Turkish market. Russia traditionally dominated the Turkish natural gas market since the 1990s. In 2018, Russia sold 24 bcm of natural gas to Turkey, making it one of the most significant markets for Russia’s Gazprom. Two major pipelines directly connect Russia to Turkey via the Black Sea. The Blue Stream Pipeline, with a capacity of 16 bcm, was commissioned in 2005. The Turkstream pipeline has a capacity of 31.5 bcm annually and began supplying gas to Turkey in January 2020. 

These two pipelines allow Russia to bypass Ukraine for its supplies to Turkey, Bulgaria, and other markets in Southern Europe, and serve not only commercial but also major geopolitical objectives of Russia aimed at increasing dependency on Russian gas in Turkey and the Balkans. 

On the other hand, the Southern Gas Corridor has allowed Turkey to buy more Azerbaijani gas at better prices. Turkey received more than six bcm of Azerbaijani gas between January and July of 2020, an increase of 24 percent compared to the same period last year. Turkey has contracts to purchase more than 12 bcm from Azerbaijan, and transit infrastructure crossing Azerbaijan and Georgia allows Turkey to receive these volumes of gas with no geopolitical strings attached. 

These realities led to a major drop of Russian gas sales to Turkey. Turkey is also buying more LNG from the United States and other sources, allowing major diversification from dependency on Russia. During the first quarter of 2020, Gazprom’s share on the Turkish market dropped below 10 percent, compared to 33 percent in March 2019. 

To fully understand the energy context of the current conflict, it is important to also mention that the development of pipeline projects connecting Azerbaijan to world markets became possible with major political and diplomatic support from the United States. For more than two decades, the United States has invested significant political and financial resources in the process of strengthening the political and economic sovereignty of countries of the Caspian. 

This effort facilitated the development of vibrant trade and transit between the Caspian region and the Black Sea and Eastern Mediterranean. Resource-rich Azerbaijan, Kazakhstan, and Turkmenistan, as well as transit and consumer countries like Georgia and Turkey, are the major beneficiaries of the functioning and expanding pipeline, railway, highway, and port infrastructure. 

Turkey acted as a close ally and partner, working closely with the United States to enhance cooperation between regional countries, improving regional connectivity, as well as the region’s connectivity to the rest of the world. The conflict with Azerbaijan over Nagorno-Karabakh prevented Armenia from being a part of these major international developments. A peaceful resolution of the conflict would mean major political and economic benefits to all parties involved, and first and foremost, to Armenia. 

Russia has long been on a major energy offensive, not only in Europe but also in other continents. 

Russia’s energy policy is linked to political demands and pressures. Some EU countries, such as Germany, publicly point out that Russia’s policy is harmful, but at the same time build major pipelines with Russia, such as the recently completed (June 4, 2021) $11-billion Nordstream 2 project. 

Related: China Starts Production At Massive Deepwater Gas Field

So the question remains for Germany, why, if Russia’s policy is carcinogenic, does it finance such a policy? Russia and its energy aspirations are exposed to a constant counter-attack by the U.S. and the UK as well as their allies. In all of this, not only is Ukraine a key country for strategic reasons, but Bulgaria is also extremely important as a major energy hub. 

The U.S. and its allies have been trying to enable the supply of both natural gas and LNG. To protect its interests, Russia seized its opportunity during the Azerbaijan-Armenia conflict in 2020 and sent some 2,000 troops to Nagorno-Karabakh with an existing contingent, securing its military presence in the heart of Azerbaijan, seemingly to the detriment of the Armenian people.

Although Armenia is a member of the Collective Security Treaty Organization, Russia has not shown a willingness to help this country, which may now have to consider leaving the organization. At the same time, Russia has built a gas pipeline in Serbia to the border with Bulgaria. However, the situation in Serbia is much more sensitive than in Bulgaria because Bulgaria owns 51 percent of its oil industry, while in Serbia, Russians are the majority owners of the Serbian oil industry. 

The Russian humanitarian center in the Serbian city of Niš is felt by Serbs to have been compromised. Given that Russia’s plan for the South Stream gas pipeline has failed, Russia is attempting to disable other subsidiary sources of gas supply and is doing everything to destabilize its opponents. 

Western allies have waited a long time to react. However, attitudes, as well as positions, have changed. The US feels that it can no longer allow Russia to control Turkey as a NATO member, despite the reality that Turkey itself brought about the conditions by which it partnered with Russia in key areas. Likewise, the US and the UK as well as other leading NATO countries have relied on the EU as the main lever in limiting Russian influence in Europe. 

For the past two years, Russian GRU (Glavnoe Razvedivatel’noe Upravlenie: Chief Directorate for Intelligence of the Russian General Staff) operatives, especially Unit 29155, have been expelled to several European countries, including Serbia (as well as from Mali, Ethiopia, and the Caucasus). So it should be expected that the confrontation between Russia and the US and the UK, as well as NATO, will be very much reflected in Serbia, unless the status of a proxy territory through which a possible future conflict will take place is diplomatically avoided. 

Western powers will have to demonstrate in a very direct way that they are ready to use diplomacy and political pressure and force to prove to Russia that there is no room in its intentions for Russian use of military force and increasingly frequent cyber-attacks and hybrid actions. 

The incident with HMS Defender in the Black Sea is only the beginning of a wider confrontation and possible conflicts. 

By GIS/Defense & Foreign Affairs

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