Wed. Oct 5th, 2022

Prof. ST Hsieh

Director, US-China Energy Industry Forum

626-376-7460

[email protected]

May 10, 2022

The following report by Wahsington Post provides some very challenging questions about the Ukraine war. First, Putin is the villain who ordered the special military action against Ukriane per President Biden, US government announcements and news meida. Putin’s grievance was covered much by the meida but it has been denounced as fake cliams. Further, the impression is that Ukriane war is Putin’s personal war and Russian people are not with Putin. Now the question is when and how Putin will end the war? Unfortunately, local news meida already declared that Putin is losing so badly that Putin does not have any say about ending the war except surrender and retire.

On the other side of the table, Zellenskky Presdient of Ukraine is the vicitim turned hero as Ukraine has stood up against Russian forces for 80 days. His condition for cease fire has changed and getting tougher all the time. Of course, his country has been attacked, his population has dispersed around the world as refugues, he should have a say in the cease-fire processes as well as the cease-fire conditions. It is reported that Russian and Ukraine are engaging cease-fire talks daily without any outsiders. We simply do not know what is going on!

The most puzzling challenge is when the US led West allinace will lay out specific conditions for cease fire so that both Putin and Zellenskky can take notes. After all, they sent and keep sending military equipment worth billions of US dollars to Ukraine keeping the war. How long can that last?

The world faces severe challenges, a global recession is not inevitable but likely. Biden faces sprialing domestic inflations and Biden will be tested by the US mid-terms election six-month away. But Biden has not define an “exit strategy” for US yet. EU is almost unanimously supporting Ukraine till the issue of Russian energy supply becomes real for each of the EU nation.

It is easy to take a high moral ground, providing military and humanitarian aids to a victim. It is also easy to take sanctions against a public enemy. But sanctions are not free, the cost may be very high at home. EU’s united front against Putin shows cracking when they are developping the sixth round of sanctions with a goal to phase out Russian oil by the year end but members like Hungary could not comply. Does EU nations seriousy planning for Ukraine war to last that long? Can Ukraine stand such a long war, means it is six-month away? Or, EU would never deal with Russian for oil again even Ukraine war is settled?

Now Putin is stricken back by controlling the natural gas trade that msut be paid by Roubles after this week. Russia set up a conversion account process and Germany has indicated it will continue to buy Russian gas for the next 3~5 years. Obviously, Russia will set the price. US LNG will become available, but it will cost three~five times more than Russian gas supplied via pipieline.

Today’s news is like a joke: Ukraine is reported that it will not let Russian gas pass thru its pipeline system effective immediately.

But it is not a joke, more fun will follow. It seems that Germany has to negotiate with Zellenskky and beg him for permitting Russian gas transit! Obviously, Zellenskky is much tougher than Putin for EU to make any deal.

Biden should talk to Zellenskky soon and set a deadline for ending the war.

The big idea

Goals? Yes. Definition of ‘success’? Not so much for U.S. in Ukraine.

President Biden has given Ukraine billions of dollars in economic aid and military assistance in its war with Russia, and an open-ended promise of more. He has also provided one unusual bequest: The power to decide what constitutes victory in a conflict reshaping the global order and Moscow’s place within it.

This creates a curious dynamic. The United States and its allies are pouring vast energy and materiel into shaping the outcome on the battlefield, while Washington insists only Ukraine (not its benefactors) will decide what will constitute success and when it has been achieved.

Who defines victory and how (and when) will have far-reaching consequences not just for continued allied support for Ukraine, especially in the event of a protracted conflict, but also for whether and when the United States and its allies consider rolling back unprecedented economic sanctions meant to cow Russia.

“We believe Ukraine should define what it considers success,” the White House said in a statement to The Daily 202 when we asked for the U.S. definition of victory.  “We are focused on giving Ukraine as strong of a hand as possible on the battlefield so it has as much leverage as possible at the negotiating table.”


HOW KYIV DEFINES SUCCESS

So how does Kyiv define success? Ukrainian President Volodymyr Zelensky described it in fairly expansive terms when he spoke Sunday to leaders of the Group of Seven rich democracies Canada, France, Germany, Italy, Japan, the United Kingdom, and the U.S., according to the G7.

“He stated that Ukraine’s ultimate aim is to ensure full withdrawal of Russia’s military forces and equipment from the entire territory of Ukraine and to secure its ability to protect itself in the future and thanked G7 members for their support,” the leaders said in a joint statement.

That “entire territory” includes Crimea, the strategic Black Sea peninsula Russia invaded and occupied in 2014 then annexed, Zelensky told the Wall Street Journal’s CEO Council Summit last week.

On Sunday, Ukraine’s ambassador to the United States, Oksana Markarova, reaffirmed that point in an interview with CBS News’ Face The Nation: “Ukraine has to be whole within the internationally recognized borders.”

On Monday, at Russia’s traditional “Victory Day” celebrations marking the end of World War II, Russian President Vladimir Putin defended his expanded military action in Ukraine as “necessary, timely and the only right solution.” He announced neither an escalation nor a new willingness to find a diplomatic compromise. 

My colleagues Karen DeYoung, Dan Lamothe and Ashley Parker dug Saturday into the question of defining success and noted: “the contours of a Russian loss remain as murky as a Ukrainian victory.”

U.S. officials, including Defense Secretary Lloyd Austin, haven’t gone that far, they noted.

“‘We hope that, at the end of this, that Ukraine will be a … sovereign state with a functioning government that can protect its territory,’ Austin told the Senate Appropriations Committee. Austin and other senior officials, however, have declined to specify their idea of what that government will look like, and what territory it will include.”

But, my colleagues underlined, British Foreign Secretary Liz Truss seemed to line up explicitly with Zelensky.

“Britain was ‘doubling down’ on its aid to Ukraine, she said last week at the Mansion House, an annual London venue for delivery of a major foreign policy address. Calling Russian forces a ‘cancerous growth,’ she said ‘we will keep going further and faster to push Russia out of the whole of Ukraine,’ including Crimea and Donbas.”


DIFFERENT DEFINITIONS OF SUCCESS?

What if Zelensky could accept less than that kind of victory, which, after all, would require an extraordinary (and deeply unlikely) set of Russian concessions? Would a compromise lead to the end of economic and diplomatic sanctions on Russia, even though Biden has signaled it’s the end of business-as-usual with Moscow as long as Putin is in power?

It turns out, a senior administration official told reporters Sunday on the condition of anonymity, Ukraine’s support for loosening sanctions is a necessary but not sufficient factor.

“We would never do a deal on sanctions rollback without Ukraine at the head of the table,” the official said. “ But “if we get to the point at which this is being discussed, it really would depend on the overall shape and scope of the diplomatic agreement that’s being negotiated.”

While Biden walked back his statement that Putin “cannot remain in power” and the administration has been easing off Austin’s statement the U.S. wants a “weakened” Russia to be one result of the conflict, the anonymous official suggested the Russian president’s domestic standing is in peril.

“Putin, like any autocrat, has a social contract. And he has taken away the freedom of the people of Russia in exchange for stability, and he’s no longer delivering upon that,” the official said.

“And so, if thousands of body bags are coming home, if debit cards aren’t working, if shelves aren’t stocked the way they used to, all people can buy anymore are knock-off clothes and phones and cars, and if Russia is eventually in default and the country is bankrupt, the question we’re putting to him: Is that the endgame he was really looking for?”
 

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