Gazprom Declares Force Majeure: How We Got Here

Gazprom, the Russian state’s gas monopoly notified its European customers that it was declaring force majeure in its supply contracts going back to June 14, citing “extraordinary circumstances” preventing the delivery of natural gas. It’s easy to guess what the circumstances referenced are–the conflict in Ukraine, sanctions, etc. Is this just Russian brinksmanship? A negotiating chip?

Maybe. Probably not. We shouldn’t forget that Nord Stream 1, the direct gas pipeline between Russia and Germany, is currently undergoing routine maintenance until later this week. There’s still no strong indication that Russian gas supplies will resume in whole or in part, and with today’s declaration Moscow has legal cover to halt energy supplies to the economic heart of Europe. As if legal cover is all Russia needs. 

In the links below, we’ve included a series of videos I’ve recorded over the past few months that outline Russia’s strategy, Europe’s rather pitiful few options, and the rather bleak reality that Russia increasingly sees itself not just at war with Ukraine, but in direct conflict with Europe. To expect energy supplies to continue as normal is a fantasy that not even the most optimistic German industrialists can pretend to believe in anymore. The EU–especially Germany–and Russia both saw the increase of energy interconnectivity and pipeline politics (or “diplomacy”) or the past few decades as a game of increasing leverage. The question was always, for whom? Europe always hoped that it could entice Russian good behavior through economic linkages and purchase contracts. We’re likely to see in coming days where the power in this relationship, pun intended, really flows from.

April 30, 2022 – Russia’s Natural Gas Strategy

June 21, 2022 – The Ukraine War, a New Flashpoint, and the End of Europe’s Energy Innocence

July 11, 2022 – The End of Germany’s World

Electricity in Transition

California. Germany. Texas. France.

Not a normal grouping of places or policies or politics. Especially when one wants to talk about energy. All four, however, are in the midst of a transition to renewable or green energy production and find themselves with having to grapple with energy reality, popular expectations, the vagaries of climate and weather, and rising costs. And all are experiencing a mix of successes and failures, both in and out of their control.

A Conversation with Sam Harris and Ian Bremmer

I recently had the pleasure of joining Eurasia Group founder Ian Bremmer on Sam Harris’ podcast, Making Sense. We discussed my new book The End of the World is Just the Beginning and had a wide-ranging conversation on a variety of issues from demography and population collapse to the war in Ukraine, the differing fates of China and the United States, and other topics I think my subscribers would enjoy.

More info on how to listen below.

LISTEN TO MAKING SENSE EPISODE #288 – THE END OF GLOBAL ORDER

Inflation? We Ain’t Seen Nothin’ Yet

Inflation in the United States has reached a four-decade high, according to data released by the U.S. Labor Department July 13th. Gasoline costs are leading the pack of consumer goods facing rising prices, but it’s a good mix of everything. Which makes sense, given how many supply chain dislocations across the globe.

Fuels, fertilizers, foods, industrial inputs–most of these were still in a state of flux even before one factors in China’s Zero Covid lockdowns. And the Russian invasion of Ukraine. And mass Boomer retirement. In fact, as we’ve been telling clients for months now, inflation has few places to go but up. Furthermore, the traditional tools at central banks’ disposal to tackle inflation are unlikely to have the same impact that they might once have had.

So what does that mean for the future? Well, for one: inflation is anything but transitory. And any relief is not going to come in weeks or months for much of the world, but in years. At least the parts of the world that will see any relief. And then there’s the United States. We’re in a tough spot to be sure, but thankfully the fundamentals of the American economic system remain sound. Which is not to diminish the increased costs at the pump or the grocery store, but as Americans have shown for the last several months these are costs that the consumer can keep up with–demand remains strong, especially for non-essentials: flights, restaurants, and screenings of the new Minions movie are all apparently quite full.

The End of Germany’s World

Germany shut down the Nord Stream 1 Pipeline today for a pre-scheduled 10-day maintenance period. Whether or not Russian natural gas will resume westward flows to Germany after repairs are made is anybody’s guess. 

The 55 bcm/yr pipeline is a key component of the energy détente forged between Germany–the economic and manufacturing heart of Europe–and post-Cold War Russia. It has also inculcated a German dependency on Russian gas that has shaped German economic and security policy (and, by extension, Europe’s) since the project first entered the planning phase over 20 years ago.

For more information on the nature of Russian and German energy codependence, and the future of both, I would suggest the agriculture and manufacturing chapters of my newest book The End of the World is Just the Beginning as well as the Russia and Germany chapters of the last one, Disunited Nations.

In Japan, An Assassination Amid an Inflection Point

Japanese society is reeling from the news that former Prime Minister Abe Shinzo had been assassinated. Political violence of this type is exceedingly rare in modern Japan, as are gun-related deaths. I will leave the particulars of the attack to those who are experts on personal/event security, but the shooter was arrested on site and appears to have used either a home-made or heavily modified gun. That the suspected shooter was allowed to walk up and fire not once, but twice, before Prime Minster Abe’s protective team was able to apprehend him is a scene that I am sure will be studied and replayed by protective service teams across the world. 

While the motivations of Abe’s assassin are not yet clear, what we do know is that the former Prime Minister represented a powerful faction of Japan’s ruling Liberal Democratic Party (LDP) that wanted to see Japan take a more assertive role on the global stage. The Liberal Democratic Party, despite its name, is a broad coalition of several center-right-to-right wing political elements, including those with strong Monarchist, fascist and militarist ideologies. (In 1990, a far-right ideologue tried unsuccessfully to assassinate the then-mayor of Nagasaki for a criticizing former Emperor Hirohito’s actions during World War II. Incidentally, another mayor of Nagasaki was assassinated in 2007, though the culprits were local Yakuza.)

Prime Minister Abe was a key proponent of expanding Japan’s armed forces and strengthening ties across the broader Indo-Pacific–particularly between India and Japan. These moves required a… flexible understanding of Japan’s constitution and the kind of socio-cultural shift that has historically been difficult to implement across Japan, but popular within his faction of the LDP. Countries like Japan–resource poor and lacking internal geographic cohesion–require an incredible amount of time and energy to unite into a functioning nation state, assuming they ever can. But once they do, stability generates its own inertia, and change–especially one that threatens to upend prosperity or social cohesions–can be near impossible to inculcate. 

Japan has managed such changes multiple times–consolidation under the shogunate, the Meiji restoration, Imperial Japan’s expansionism, surviving the post-War occupation, the economic boom times of the 1960s, 70s, and 80s, and arguably the extended economic plateau of the last two decades. The late former Prime Minister Abe and his allies seek to push Japan into another period of transformation–and this time, in an era of deglobalization, the Japanese are poised to bring the rest of the world along with them for the ride.

NB: At 5:08 in the video below I should have said Japan, not China. We regret the error.

The End of the World Goes International

I am happy to report that we have an update for those of you who have inquired about purchasing The End of the World is Just the Beginning internationally: it is now available in over a dozen countries outside of the US. Link to that information in the button below, and we will continue to update the website as distribution widens. 

These are copies of the book in English. What about translations? They’re underway. The book is slated to be released in Korean, Spanish, Italian, and more. More info on the translated editions as it comes. Which brings me to my next update…

The End of the World is currently on its third week on the New York Times’ bestseller list. I am truly humbled and grateful for everyone’s continued support. Three weeks is not a fluke! I appreciate everyone recommending friends and family to pick up a copy.

INTERNATIONAL VENDORS FOR PETER’S NEW BOOK: THE END OF THE WORLD IS JUST THE BEGINNING

The Russian Coup Question 

A question I am often asked after presentations, or on Twitter, is one on the subject of Russian President Vladimir Putin’s removal. Is it a question of when or if? Why hasn’t it happened yet? Who would do it? 

No less than sitting United States Senators have voiced their opinions on this topic publicly. And Major General Kyrylo Budanov, of Ukraine’s Intelligence service, has not been shy of mentioning his views that such a move in Moscow is imminent. (For what it’s worth, it seems he’s been happy to share this story every few weeks to whomever will listen. Broken clocks, I guess…) Western outlets speculate on a whole host of issues affecting Putin: blood cancer. Parkinson’s disease. Degenerative bone or neurological symptoms. Is Putin a lizard person?

My two cents? it doesn’t matter. Russian aggression against Ukraine is not unique to President Putin. The weakness of Russian geography shapes Russian geopolitical imperatives. The Soviet Union had no shortage of horrors it was willing to inflict on Ukrainians to keep them close and subjugated. Imperial Russia’s leaders had similar expansionist tendencies as Putin today. The desire to control Ukraine is not Putin’s particular bit of fancy; it’s been a part of Russian regional strategy for centuries.

Global Agriculture at the End of the World

Few industries are going to see as much upheaval in coming years as global agriculture. The Russian invasion of Ukraine, the volatility of global fertilizer and fuel markets, shipping and transport challenges and more are complicating every step of the process from planting crops to the delivery of food to grocery stores and ultimately our plates. To say nothing of inflation. While the outlook for global food supply remains bleak, there are a few bright spots. Namely, the United States.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
 
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
 
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
 
And then there’s you.
 
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY