Putin's War: A Sober Lesson For U.S. and Its Allies

Kremlin thug Vladimir Putin strutted on the world stage for weeks, daring any country to intervene with his plan to invade Ukraine. The West, including the U.S., bloviated and did little else.  Sensing weakness, the former KGB agent unleashed his military on Europe's second largest country.

While Putin issued chilling warnings about Western inference, President Biden and Secretary of State Anthony Blinken threatened sanctions, but appeared helpless in the face of the Russian pariah's threats. Their tone was defeatist. It was a striking juxtaposition on the projection of strength. 

Russia's mafioso-president was relying on U.S. vacillation.  After all, Putin had invaded Georgia, annexed Crimea, intervened in Syria's civil war, interfered with American elections and waged cyber warfare. In response, the U.S. inflicted sanctions, which proved inept and short-lived.  

It wasn't until Russian troops stormed into Ukraine that the U.S. and Europe levied sanctions targeting Kremlin banks, imports and rich oligarchs.  Even as sanctions were unfurled, Mr. Biden admitted the restrictions would not deter Putin.  The West played defense while Russia was on the offensive.

The ruthless dictator's ambitions are to reclaim territories of the old Soviet Union and to defang the NATO military alliance.  Ukraine had been lobbying NATO for membership. Putin loathed  the idea of NATO forces and weapons camped on his border.

Europe is economically handcuffed by its reliance on Russian natural gas.  The European continent gets nearly 40% of its natural gas from Putin, according to the U.S. Energy Information Agency (EIA).  In addition, Russia ships 48% of its crude oil production to European nations.

Germany depends on Russia for 65% of its natural gas. Poland gets 50% of its supply from Russia.  Italy receives 43% of its natural gas from Russia, while France imports 16% of its needs.  Smaller countries, such as Czech Republic, Hungry and Slovakia, are nearly totally dependent on Russian gas.  

Those figures explain why Europe balked at diplomatic suggestions to embargo Russian oil and natural gas, the so-called nuclear option. Today, if Russia turns off the spigot, European homes and factories go cold and dark. Natural gas prices would skyrocket, crippling the entire continent's economy.

The United States, despite its title as the world's largest oil producer, also is ensnared in the Russian bear trap.  

Until the invasion, few Americans knew the U.S. is also dependent on Russian crude.  Beginning in 2021, our nation began importing between 12 and 26 million barrels of crude oil from Russia every month.  In November, the latest data available, Russia shipped 17.8 million barrels to this country.  

For context, the U.S. uses about 18.9 million barrels of crude oil every day, according to the EIA.  President Biden pleaded last year for Russia and OPEC to ramp up oil production to ease U.S. gasoline prices.  OPEC ignored Biden's overture, while Russia willingly acceded.

Biden surrendered American oil independence when he became president.  One of his first acts was to cancel permits for the Keystone XL pipeline, a 1,200 mile project from the Canadian province of Albert stretching down to Nebraska to join an existing pipeline. 

The pipeline was designed to carry 830,000 barrels of Canadian crude to the U.S. every day. Through executive orders and regulatory maneuvers, the Biden Administration has made its mission to decrease American oil and natural gas production, leading to higher prices at the gasoline pump.

Europe made a deal with the devil in the Kremlin because it had few crude oil and natural gas reserves. Decades ago, Putin schemed to exploit Russia's rich natural resources to make Europe a vassal of Russia. 

Russia received an unexpected assist from environmentalists. Germany, in particular,  embarked on a Green Energy diet, turning to wind and solar power.  Nuclear facilities were unplugged.  Coal burning plants shuttered.  However, the unreliability of alternative energy created power gaps.

To meet energy needs, Europe turned to Russia, which had laid the groundwork to seize the opportunity.  Putin bulked up Gazprom, a Kremlin controlled company, into a natural gas powerhouse. Over two decades, Russia constructed natural gas pipelines into Europe to supply the continent. 

In 2011, Russia turned on the spigot on the first pipeline, called Nord Stream 1.  A second line was added a year later.  The 759-mile pipeline runs through Ukraine and Poland, which creates a potential problem for Putin.  Germany is the largest customer for Russian natural gas on the continent.

With an eye to expanding its European footprint, Gazprom began constructing a 764-mile long natural gas pipeline, dubbed Nord Stream 2, in 2016.  The pipeline traverses under the Baltic Sea from Russia straight to Germany's Baltic coast.  The undersea line will double current natural gas capacity.

Although Gazprom owns the entire pipeline, it only paid half of the $11 billion in costs.  The remaining costs were shared by Shell and European natural gas and energy companies: Austria's OMCV, France's Engie and Germany's Uniper and Wintershall DEA.  Europe is heavily invested in the pipeline.

In the wake of the Ukraine invasion, Germany's new chancellor Olaf Scholz called off certification of the pipeline.  The largely symbolic move will have little immediate impact on Russia since Nord Stream 2, completed last year, was already on hold, awaiting European Commission and German approval.

Germany had green lighted the new pipeline after the Biden Administration last year lifted sanctions on the project.  Those sanctions had been ordered by President Trump.  Only after Russian troops entered Ukraine did Mr. Biden reverse course and reimpose the sanctions. 

Those sanctions will not stop Russian natural gas from flowing through Nord Stream 1 pipelines to supply Europe with natural gas.  In fact, Putin has virtually guaranteed he will continue to pump natural gas without interruption because it enriches Russia. Gazprom even raised prices before the invasion.

With unrest in Ukraine, the U.S. and Europe will soon begin feeling the pain of sky-high gasoline prices at the pump. Any disruption of oil production by Russia will ignite a gold rush for a crude oil.  In January, the global benchmark for a barrel of oil passed $90.  

Oil traders are predicting a barrel of crude oil will touch the $100 milestone soon.   That compares to $41.96 in 2020 and $54.25 in 2017.  A rise of $10 a barrel for crude oil correlates to approximately a 25-cent per gallon rise in gasoline prices.  Experts are forecasting $5 to $6 gallon prices in the U.S.  

Putin wins no matter what Germany or the West does.  Rising prices for crude oil make Russian oil and natural gas more valuable on the open market.  And Putin just inked a $117.5 billion deal with China, to keep Russian exports of oil and natural gas flowing despite any delays in Nord Stream 2.

There are two lessons for the U.S. and Europe. First, they can no longer kowtow to the unhinged Putin. His threats have to be met with strength and an immediate response.  Also, the allies should work together to support a regime change in Russia. As long as Putin is in power, the world is not safe  

Secondly, dependence on Russia for a strategic resource, such as energy, gives Putin the bargaining chip he needs to discourage interference with his expansion plans and his effort to weaken NATO's resolve to come to the aid of other countries in future confrontations. 

Energy independence would help insulate Americans from spiraling prices for crude oil, triggered by the Russian invasion. In addition, the U.S. could assist Europe by shipping crude oil and liquified natural gas to ease the continent's dependence on Russia.  

However, the Biden Administration has made it clear it will not unshackle energy production, a decision that leaves the U.S. at the mercy of OPEC and Russia for crude oil to satisfy our nation's energy requirements. 

Russia's incursion into Ukraine is a pivotal point for the world.  These are dangerous times. How the U.S. and its allies react will determine how other rogue nations, including China, Iran and North Korea, view the West's willingness to discourage future military aggression.  

Joe Biden: His Son And The Ukraine Oligarch

Democrats accused President Trump of a quid-pro-quid deal with Ukraine in a veiled move to distract media attention from a controversy engulfing Joe Biden and his son Hunter.  Details continue to emerge about the son's involvement with a Ukrainian oligarch's corruption-plagued gas company.

The former vice president and Democratic Party presidential candidate initially shooed away reporters asking questions about his son's questionable activities and the apparent conflict of interest.  The stonewalling ended when Biden was finally prodded into publicly proclaiming to the media:

"I have never spoken to my son about his overseas business dealings."  However, Biden is on shaky ground based on credible information in the public domain.

To set the stage, President Obama appointed the vice president his "point person" on Ukraine in February of 2014.  From 2014-2017, he made five trips to the Ukraine in his official capacity as vice president as Russian aggression escalated tensions in the Eastern European country.

During the diplomatic shuttling, Biden's son with two business partners were deep in discussions about a deal with the scandal ridden natural gas firm Burisma Holdings.  One of Hunter's partners, Devon Archer, arranged for a meeting with the elder Biden on April 16, 2015 at the White House.

Official White House records show the meeting lasted until 11:59 p.m.  There are no details on the subject of the discussion.  However, less than a week after their chitchat Archer was invited to join the Burisma board  Three weeks later Hunter Biden became a board member, too.

It is not credible to think the vice president knew nothing about his son's Ukraine dealings after the meeting with Hunter's business partner, especially given the timing of the appointments to the Burisma board.  Unless of course, they just talked about grandchildren.  (Sarcasm intended.)

After the board appointments, Burisma touted its newest member, Hunter Biden.  It prominently mentioned he was the vice president's son.  His official role, as vaguely described by Burisma, was to provide "consulting" for the company on "various matters" and to offer "strategic guidance."

Even while the younger Biden had been negotiating with Burisma, the natural gas company was the subject of an investigation into suspected fraud. Great Britain's Serious Fraud Office froze assets of Burisma as part of a money laundering probe.  The assets were later unfrozen when Ukraine sued.

This wasn't the only brush with controversy for Burisma.  It had been suspected of corruption both inside Ukraine and by the United States.  The secretive company's founder Mykola Zlochevsky was also the subject of official Ukrainian inquiries, including for tax evasion.

None of this appeared to matter to Hunter Biden.  Bank records from 2014 and 2015 show Hunter Biden was personally paid more than $850,000.  Burisma does not release compensation details for board members, but the records were uncovered in U.S. litigation into an unrelated case.

Seneca Partners LLC, which included Biden and his two associates, received regular transfers of usually more than $166,000 per month during the 2014-2015 period, according to the same banking records cited above.  These payments came under scrutiny by the Ukraine's general prosecutor.

It was reported that the prosecutor had made plans to "include interrogations and other crime-investigation procedures into all members of the executive board, including Hunter Biden." Both Hunter Biden and the former vice president have declined to comment on this allegation.

This is where the story about the vice president's unawareness of his son's business dealings begins to crumble.   In March of 2016, Biden addressed a public meeting of the U.S. Council on Foreign Relations, bragging how he had bullied Ukrainian officials into firing the general prosecutor.

Biden described in detail as news cameras rolled how he threatened to pull $1 billion in U.S. loan guarantees if Ukraine didn't immediately fire Prosecutor General Viktor Shokin.  In Biden's own words, here is what he remembered telling Ukrainian President Petro Poroshenko in March 2016:

"I am going to be leaving here in I think about six hours....If the prosecutor is not fired, you're not getting the money," he recalled telling Poroshenko.  "Well, son of a bitch, he got fired.  And they put in place someone who was solid at the time."

There was one tiny fact Biden omitted.  The prosecutor who was summarily fired was leading a far ranging corruption probe into the natural gas company Burisma Holdings, which employed his son as a board member.  And there is more proof that the elder Biden had to know what was happening.

A New York Times article on December 8, 2015, appeared four months before the firing of the general prosecutor and included information about Hunter Biden's role in Burisma.  Biden's office was quoted as acknowledging that the younger Biden was indeed a Burisma board member.

Bloomberg News recently reported the following: "Joe Biden has said that he's never spoken with his son about his foreign business dealings.  Hunter told the New Yorker earlier this year that he once touched on Ukraine obliquely.  "Dad said, 'I hope you know what you are doing' and I said, "I do."

There is no better example of a possible quid-pro-quid arrangement between a top U.S. official and a foreign government than this case.  The former vice president has publicly admitted he threatened to withhold U.S. foreign aid if a Ukrainian prosecutor was not dismissed.

Joe Biden has skated around this issue by repeatedly claiming he was clueless about his son's business dealings.  Now it is time for the Department of Justice to open an official inquiry to determine if the former veep used his office and American aid to spare his son from prosecution.

There is far more evidence in the public record about influence peddling by Joe Biden than the thin accusations against Mr. Trump for his discussion with the Ukraine president about Hunter Biden. The media and Democrats can no longer cover up for the Democratic Party presidential candidate.

It would  be ironic if the Democrats pursuit of the Ukraine connection with Mr. Trump would instead force the party of impeachment to reconsider the candidacy of Joe Biden, whose interference in a foreign country's justice system weakens his chances in the presidential race.