Russia Reduces German Gas Supply Further

With Gazprom 1 having announced another reduction in the Nord Stream 1 pipeline’s output to around twenty percent of its capacity, Germany and other Central European nations could be faced with having to make some unpalatable choices in the weeks to come. Service resumed on the pipeline last week following a ten-day maintenance period at roughly 40 percent capacity. Now that has been halved and the prospect of even deeper reductions is looming. Other nations in Central Europe are contending with reductions as well. Italy has been informed by Gazprom that the amount of gas it normally receives is being reduced as well. The Russian energy giant claims overall gas flow in the pipeline is lower because of technical concerns with one of the turbine engines. Germany claims this reason is a ‘made up pretext’ and the move is nothing less than a Russian powerplay.

Earlier in the week EU energy ministers announced support for a voluntary 15% reduction in natural gas usage. The plan has been somewhat watered-down following resistance from Southern European nations, but the 27 member-states have agreed to cut back on usage by the winter. The plan is an effort to make certain fuel supplies are adequate for the coming winter. Despite the claim by Brussels that the bloc is united in standing up to Russian energy strongarm tactics, objections by nations not reliant on Russian gas raise the prospect of a disunited front in the future.

In a somewhat ironic reversal of fortunes from ten years ago, now it is Southern European nations like Spain and Portugal chiding Germany for its failure to prepare and short-sighted thinking. They’re not wrong. Berlin ignored the warnings for quite some time as it became dependent on Russian gas. Therefore, the argument put forward by Madrid and Lisbon is that the Germans should carry the largest burden instead of nations whose economies are not reliant on Russian gas.

Pelosi’s Planned Trip To Taipei Causes A Stir

Speaker of the House Nancy Pelosi’s possible trip to Taiwan next month is the latest potential flashpoint in the Western Pacific. Beijing is warning Pelosi to cancel the trip and is attempting to put pressure on Washington to prevent the third-highest ranking official in the US government from visiting Taiwan. Over the weekend Financial Times reported that China has delivered warnings to US officials about the trip. According to sources, the warnings were stronger than the threats Beijing generally makes when it is unhappy with US policy or actions in the region. The fact that these warnings were given in private suggest the possibility of a Chinese military response to the trip.

At the Chinese Foreign Ministry’s regular Monday press conference, the spokesman told reporters “We are seriously prepared,” when he was asked about the report. “If the U.S. is bent on going its own way, China will take firm and strong measures to defend national sovereignty and territorial integrity.” China’s tactics are pure intimidation at this point, intended to make Washington back down. The Taiwanese government is watching events closely.

Right now, Taipei is caught between two chairs. If Pelosi’s visit takes place as planned, China could punish Taiwan for it. On the other hand, if the trip is canceled it undermines Taiwan’s security and appears to give China a voice in US-Taiwan policy. There’s a growing number of Taiwanese who are skeptical about the US commitment to Taiwan. As the threat from China grows, this cross-section of Taiwanese voters is sure to have more influence at the polls. To minimize skepticism, the US government needs to reassure Taiwan’s population that its commitment to their nation’s security is firm.

Ukraine Update: 24 July, 2022

Condemnation of Russia’s strike on the Ukrainian port of Odesa just one day after an agreement was signed with Ukraine that allows the resumption of grain exports from the country. According to city officials in the port city two Russian cruise missiles struck the port infrastructure while another pair was allegedly downed by air defenses. US Secretary of State Antony Blinken led the charge against Russia’s attack and released the following statement on Twitter. “The United States strongly condemns Russia’s attack on the port of Odesa today. It undermines the effort to bring food to the hungry and the credibility of Russia’s commitments to the deal finalized yesterday to allow Ukrainian exports.” Other diplomats and world leaders mirrored Blinken’s words in their own statements. ‘Striking a target crucial for grain export a day after the signature of Istanbul agreements is particularly reprehensible & again demonstrates Russia’s total disregard for international law & commitments,” European Union High Representative for Foreign Affairs Josep Borrell said.

The agreement reached by Ukraine and Russia was set to unblock ports on the Black Sea to allow the safe passage of grain and oilseeds, two of Ukraine’s biggest exports. The fate of that agreement is up in the air following the strike against Odesa.

This is only a short update, but I will be posting another Ukraine entry around mid-week.

Lessons From The Ukraine War Will Influence China’s Taiwan War Planning

China is absorbing the battlefield lessons coming out of the war in Ukraine and carefully analyzing the poor performance of Russian military forces early in the conflict. Beijing’s goal is to identify relevant lessons and apply them to plans for potential military action against Taiwan in the future. The topic was discussed at length during the Aspen Security Forum with senior US military and government officials openly speculating on how Russia’s long war will affect China’s designs for Taiwan. The opinions and comments put forth by US officials have been rather generic and understandably lacking details. CIA Director Bill Burns said yesterday “I suspect the lesson that the Chinese leadership and military are drawing is that you’ve got to amass overwhelming force if you’re going to contemplate that in the future.”

Western military leaders seem obsessed with the prospect of a Chinese invasion. Nearly to the point where other possible scenarios or war plans are ruled out entirely. For the past ten years US general officers and defense secretaries have periodically declared that China is at least 5-10 years away from the point where its military capabilities will support an invasion of Taiwan. And with every year that goes by, China’s military becomes more proficient and better equipped. Yet the 5-10 year window remains unchanged. Earlier this year as the war in Ukraine raged on, the Pentagon changed its tune slightly and estimated the Chinese military will be ready to conduct a cross-strait invasion in the second half of the current decade.

Personally, I believe the PLAN and PLAAF are in a position to conduct operations against Taiwan at the present time. An air and sea blockade could be launched at any time and remain in place indefinitely, barring an effort by an outside force to break the blockade.   It must also be recognized that an air/sea blockade is preferable to a bloody land invasion of Taiwan. If anything, the war in Ukraine has demonstrated the ability of a smaller army to inflict defeats and heavy casualties on a larger and supposedly more powerful foe.

Gazprom’s Force Majeure Claim Rattles Nerves in Germany

Yesterday’s declaration by state-owned Russian energy giant Gazprom that ‘unforeseeable circumstances’ could make it unable comply with European gas contracts is placing Germany in an even more precarious position. The prospect of Russia shutting down the flow of natural gas to Germany seems more probable. With Gazprom threatening to send less gas to Germany and other European nations, German firm Uniper, a major energy importer, has rejected the claim. According to a company spokesperson, Uniper rejects the force majeure claim put forward by Gazprom. Realistically, Uniper’s rejection does not change matters one way or another.

The Nord Stream 1 pipeline is scheduled to come off its 10-day maintenance period and resume operations on Thursday. It’s unclear if the pipeline will start operating at a reduced capacity, or at all. Despite Berlin claiming to have reduced its overall dependence on Russian gas from 55% to 35% it is still highly dependent on Nord Stream 1. The two other pipelines providing natural gas to Germany from Russia were closed off.

Many analysts still seem to agree that Nord Stream 1 will resume operations, albeit in a limited capacity, perhaps. However, Germany’s nightmare scenario of Putin halting gas deliveries entirely is haunting Berlin and Brussels. The nation is already falling behind efforts to top off its natural gas storage supplies before winter sets in. We discussed this in an earlier entry last week. Gas rationing and other conservation steps will have a detrimental effect on the German economy.  A number of companies are concerned such measures will force them to close permanently.

Germany is not the only target either. A dozen EU nations have seen their gas supplies from Russia either severely reduced or cut off entirely. The lack of a European-based energy sharing plan and the shortsighted thinking of EU leaders on the energy-security front are now coming home to roost.