From Volume 5, Issue Number 47 of EIR Online, Published Nov. 21, 2006
Russia and the CIS News Digest

Kremlin Rebuffs NATO Hubbub Over 'Gas Cartel'

The Financial Times of London reported on Nov. 14 about a leaked NATO warning against Russian gas blackmail, then editorialized the next day that nobody should overblow Russia's export activity into a "Gasfinger" plot to take Europe hostage. The leaked document is allegedly "a confidential study by NATO economics experts," circulated to all NATO members, which "warned that Russia may be seeking to build a gas cartel including Algeria, Qatar, Libya, the countries of Central Asia and perhaps Iran." The first FT article quoted Kremlin spokesman Dmitri Peskov, saying that "only a madman could think that Russia would start to blackmail Europe using gas, because we depend to the same extent on European customers." Itar-TASS also published a lengthy denial from unnamed Kremlin sources.

From the Russian side, a recent speech by the chairman of the State Duma Committee on Energy, Transport and Communications, Valeri Yazev (known as a mouthpiece for Gazprom), fed into the scare. reported Oct. 31 that Yazev spoke before the Russian Gas Society, which he also chairs, and proposed to "establish a gas alliance, which could be joined by Turkmenistan, Kazakstan, Uzbekistan, Russia, Ukraine, and Belarus. In case the issues on Iran's nuclear program are successfully solved, I believe Iran could be also invited to this alliance." The group has over half the world's natural gas reserves, and "in such an alliance, Russia's Gazprom could play a role of an integrator." Yazev explained, "Such an alliance is necessary in order to coordinate the policies of gas-exporting countries in the face of pressure, imposed by the cartel of consumer states of the European Union. This cartel is trying to force Russia to sign the Energy Charter, which contradicts the interests of Russia."

Gazprom has been pushing through a series of price hikes to Near Abroad customers like Georgia and Belarus, while, inside Russia, another leaked report—this time, from the Russian Energy Ministry on Russian gas output beginning to decline, for lack of investment—sets the stage to press for higher domestic prices, as well.

Polish Government Opposes New EU-Russia Talks

On Nov. 10, RFE/RL Newsline reports, Polish Economics Minister Piotr Wozniak announced Poland's opposition to beginning talks on a new European Union-Russia cooperation agreement (for after 2007), unless Russia first ratifies the Energy Charter. Russia has refused to do that (it was signed by the Yeltsin regime in 1994), since it would break Gazprom's control of the Russian pipeline network. Wozniak also advised Germany to "forget" the North European Gas Pipeline project with Russia. On Nov. 13 at the EU foreign ministers' meeting in Brussels, Polish Foreign Minister Anna Fotyga made good on the threat, blocking a decision on launching the talks. Russian Ambassador to the EU Vladimir Chizhov rejoined, "We warned our partners in the EU of the possible difficulties they might face after the EU's expansion two years ago," when Poland, the Baltic states, and other former members of the Comecon joined.

Nuclear Power for Siberia, Floating Plants on Russian Agenda

A round table on an Economic Development Strategy for the Urals and Western Siberia, held at the Russian State Duma on Nov. 8, put forward major economic initiatives. It discussed proposals to construct two new nuclear plants in the region: the South Ural Nuclear Plant in Ozersk, Chelyabinsk Region, and another in Seversk, Tomsk Region, as well as a new (fifth) reactor at the Beloyarsk Nuclear Plant. These are already major industrial areas, West Siberia being a center of oil and gas production, and Chelyabinsk a large manufacturing city, especially since the World War II evacuation of industry to the Urals, but they face a power shortage.

A report distributed at the event by the nuclear power agency Rosenergoatom's press service, noted that the Ural Federal District produces 92% of Russia's natural gas, 68.1% of oil, 40% of steel and other rolled ferrous metals, 45% of refined copper and 40% of rolled aluminum, and almost 10% of the output of Russia's machine-building industry. This scale of industrial production is based on the unique natural resources of the District, which include over 26% of the world's natural gas reserves, and 10% of the world's timber.

The proposal was supported by Valery Rachkov, head of the Energy Generation Department of the Federal Nuclear Energy Agency. In his speech, he emphasized that the Ural Region, with its huge industrial potential, lacks energy-generating facilities for its further development. "By 2020, this deficiency is going to increase by 30 GW," he said. Valery Rachkov also focussed on the vital importance of nuclear energy for the revival and development of such crucial industrial facilities as Siberian Chemical Works, Mayak, and Chelyabinsk Electrochemical Plant.

Also during the week of Nov. 13, Rosenergoatom announced that it would complete the world's first floating nuclear power plant, located near Severodvinsk in Russia's far northwest region, in May 2010. The plant will have two reactors, with a combined capacity of 70MW, and will be the first of this type of set of reactors, which are planned for six Russian regions.

LaRouche Release on Bush's 'Swan Song' Out in Russia

Hours after its release in Russian translation Nov. 16, Lyndon LaRouche's Nov. 9 report on the U.S. interim elections, "Bush Sings His Swan Song," was posted on the Russian economics web site, with a recommendation from economist Mikhail Khazin, the site's owner, to pay attention to it. A lively debate over how LaRouche dare say Americans are poor, whether "the Democrats" aren't bigger stooges for the international financiers than Bush is (a widely held belief in Russia), why not use a unit of account linked to a barrel of oil instead of the dollar, and what the Bardi bankruptcy of the 14th century was, had unfolded on the site forum by the evening of Nov. 16.

Primakov: Iran Is an Area Russian Diplomacy Knows

As part of a continuing campaign by the Russian information agency Novosti to bring Russian views to Western readers, the Washington Post Nov. 15 carried an RIA Novosti advertising supplement, featuring an interview with former foreign minister and prime minister, Middle East expert Yevgeni Primakov, who now heads the Russian Chamber of Commerce and Industry. Primakov started by stating that "there are serious differences between Russia and the United States, and we shouldn't conceal this fact." After referring to "the mistake the U.S. made when invading Iraq," Primakov was asked about the Iranian nuclear program. "Moscow believes that the language of force and ultimatums will not compel Iran to renounce its nuclear program," he stated, adding, "We know the situation in Iran better than the Americans do, and we are convinced that excessive pressure will unite the forces in Iranian society which are still hesitant about nuclear weapons, with those who'd like to possess them."

Georgian Prime Minister Says Russia Preparing for War

In a provocative Nov. 14 interview with Reuters, Georgian Prime Minister Zurab Nogadeli accused Russia of preparing for war in his country, by sponsoring separatist referendums and stepping up the level of rhetoric. The comments followed an overwhelming victory of the independence referendum in South Ossetia. More than 90% of voters, most of whom have taken out Russian citizenship, backed independence from Georgia, as expected, in the Nov. 12 vote. Minority ethnic Georgians largely abstained, according to the BBC.

Georgian President Mikhail Saakashvili transferred his outspoken anti-Russian Defense Minister, Irakli Okruashvili, to the Economics Ministry on Nov. 10 (only to see Okruashvili resign from the government altogether, one week later). Nogadeli told Reuters the switch did not reflect Western pressure and would not change his country's military posture. "We will continue the process of NATO integration, and we will continue to remain faithful to the peaceful resolution of the conflicts," he said.

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