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On Point

The Eagle's and the Bear's Relationship Redefined

by Austin Bay
July 10, 2002

series of "re-defining" moments. The quiet arrival of the oil tanker "Astro Lupus" at the Port of Houston --with 2 million barrels of Russian oil for American refineries -- didn't attract the headlines of a summit or anti-ballistic missile treaty snarl, but the strategic shifts this first direct shipment of Russian crude symbolizes loom large in the 21st century.

Those redefining moments began in 1985, when the still-Soviets quit carping about U.S. Pershing IIs (the left-wing cause celebre of 1983). Moscow returned to the European theater-missile talks and began to seriously discuss removing their 200 multiple-warhead SS-20 missiles from Eastern Europe.

The big redefinition occurred on Nov. 9, 1989, when the Berlin Wall cracked, East and West Germans shook hands, and Russian soldiers sheathed their bayonets. Mikhail Gorbachev mused upon our "common European home."

Russia's entrance into that home, however, has been fraught with violence and mafiya corruption that in the 1990s often erased even the veneer of emerging democracy and free markets. The despotic legacy of czars and Marxism simply devastated the country, economically, ecologically and psychologically.

Russia still faces a long march on a hard road. The dissolution of the Soviet empire drew new borders and reawakened "old troubles" to the south among the "Muslim" ex-Soviet republics. Small wars flared, with Chechnya being the ugliest.

Which leads to America's great strategic misperception. The United States saw Chechnya as merely a war of Soviet devolution. It dismissed Russian charges that Islamic fundamentalists (with a larger agenda) inflamed Chechen troubles.

Which makes 9-11 another redefining moment. Where U.S. policy consisted of encouraging democratic change in Russia while "containing" Russian anarchy (including accounting for Russian nuclear weapons), 9-11 made it clear to everyone that Moscow can positively contribute to the West. Sound strategic partnerships require confidence and reciprocation. If alliances are one-way streets, they lead to dead ends.

Enter the "Astro Lupus." The first thought for many Americans is Russian oil stuffs the petro-sheiks. Not quite -- or at least, not yet. Saudi Arabia has one-quarter of Earth's oil reserves. In April, the Saudis quietly threatened the United States with a two-month oil cut-off is Washington failed to moderate support for Israel. Perhaps that was symbolic speech, directed at a Saudi domestic audience. Still, it was a reminder of potent economic power.

But symbols matter. "This first shipment of Russian oil is a symbolic thing," advised Dr. Michelle Foss, director of University of Houston's Institute for Energy Law and Enterprise. "We're not going to see fleets of Russian tankers arriving in the U.S. That's not how Russian oil's going to come in the marketplace."

Russian oil will go where transport costs make sense, which means Europe or perhaps Asia by pipeline. (Supertankers just can't safely risk snaking through the Bosporous.) "But the presence of Russian oil neutralizes world oil markets at bit," Foss added, "and counters Persian Gulf influence and vagaries. More barrels in the marketplace make it a more secure commodity."

Here's what else the tanker symbolizes:

  • The promise of honest money in Russian pockets. Entering the global oil business will also force positive changes in Russian business practices. (Don't snicker. Global Crossing and Enron got caught. Real competition penalizes corruption and "no (real) wealth without character." There are sound foreign policy reasons for Ken Lay and Marc Rich to do jail time.)

  • Stabilization along Russia's southern periphery. A long-haul project? Sure, but the Caucasus and Caspian basin have something the world needs. Building pipelines provides jobs and creates connections.

  • New Russian confidence. The czars styled themselves as defenders of Christendom. Russia now has the chance to demonstrate to the West and itself it can be a reliable partner, contributing to European economic stability and collective defense. That's one reason U.S. abrogation of the archaic ABM Treaty caused no brouhaha in Moscow. Saddam's SCUDs demonstrated missile defense is part of collective defense, and Moscow knows it. (Too bad American leftists don't.)

There's one other point the tanker's arrival makes. The American left loves to hammer on oil companies as guys in black hats. The truth is much more nuanced and complex. American oil companies are the front line for economic change in Russia. Here's an explicit case where the energy industry's profit motive aligns well with national security, to include developing alternative supplies outside the Persian Gulf.

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