Britannia Radio

TELEGRAPH  1.9.08
There is no need to fight Russia - just harness an alternative to oil.
By Ambrose Evans-Pritchard

NATO is no longer part of my beat as a journalist, but let me remind 
those breezily pushing for an extension of the North Atlantic pact to 
Georgia and Ukraine what this actually means.

It exposes Britain and other Western powers to a high risk of war 
with Russia. It entangles us in ethnic disputes of enormous 
complexity deep inside the Kremlin sphere of influence, against a 
formidable military power, along supply lines that we cannot possibly 
defend.

Nato is not a golf club, or the plaything of neo-con adventurers. 
Article 5 obliges us to fight and die for the alliance. "The Parties 
agree that an armed attack against one or more of them in Europe or 
North America shall be considered an attack against them all."

The Bush administration wants to extend this guarantee to both 
Georgia and Ukraine. So does John McCain, with even greater 
vehemence. Britain has gone along, against the better judgment of the 
Foreign Office. Fortunately for all Britons of military age, this 
foolish demarche was stalled by Germany and France in April.

We can argue back and forth about the conduct of the Georgians. Was 
it wise to strip South Ossetia of its historic autonomy, or shut down 
the sole Abkhaz university in Sukhumi? Was it necessary to shell 
Russian passport holders? But to enter the debate is to see the folly 
of letting such an immature democracy hold us hostage to war with 
Russia.

Such a commitment is not credible, and is therefore dangerous. It 
invites Russia to call Nato's bluff. The West will not risk conflict 
to rescue President Saakashvili from his misadventures, if push comes 
to shove. The inevitable climbdown would emasculate the alliance at 
the moment when it was most needed.

The credible Nato line in Eastern Europe runs along the borders of 
the European Union, from the Baltics to Romania. This pits Russia 
against a unified bloc of 505m people. Any attempt by Moscow to peel 
off Estonia or Latvia by stirring up Sudeten-style irredentism among 
their Russian minorities would be deemed a mortal challenge by the 
EU's elites. The "soft-power" muscles of the world's biggest economy 
would flex in earnest. Russia's bluff would be called.

This is not to criticise David Miliband's impassioned plea in Kiev. 
Russia's "unilateral attempt to redraw the map" is indeed a grave 
matter. The alleged parallel with Kosovo is so facile it does not 
deserve a response. "We need to raise the costs to Russia for 
disregarding its responsibility," he said. Quite so. But Nato 
membership for Ukraine is playing with fire. Some 30pc of the 
population are native-Russian speakers. The Donetsk and Luhansk 
oblasts are uprisings-in-waiting along Russia's border.

Yet again, the Bush administration has misjudged events. Moscow has 
drawn a line in the sand over Georgia and Ukraine. To push this issue 
is to poke the world's biggest energy producer in the eye.

Washington is lucky that China is not taking advantage of this crisis 
to help Russia inflict a crippling lesson. Russia holds $580bn of 
foreign reserves. China holds $1,800bn. Together they own a third of 
the $1.5 trillion stock of Fannie Mae, Freddie Mac and other US 
agency bonds. They are holding a gun to the head of the US Treasury, 
and the US financial system.

So how should we handle the bad-tempered bear? Data from the 
International Energy Agency suggests that oil prices will fall back 
for a couple of years as the global downturn squeezes demand, and new 
deliveries come on-stream from Brazil, Africa, Central Asia and the 
US itself.

Russia's leverage as supplier of 6.5m barrels per day of crude 
exports will slip, but not for long. But oil may well climb to a new 
equilibrium price above $150 a barrel once the next global cycle 
starts in earnest.

If so, Russia will become an even bigger headache. It is willing to 
use the oil weapon. It cut off 50pc of crude deliveries to the Czech 
Republic in July after Prague signed a deal with the US on the 
missile shield.

Obviously, we must cut our reliance on oil and gas even faster than 
we are already doing. Nuclear and clean power stations must be built 
with more urgency than we have seen so far. Tide and wave power 
technology should be given the same strategic priority as aircraft 
carriers.

If I were an American citizen, I would expect Washington to sponsor a 
Manhattan Project to harness the solar power on a mass scale. My 
apologies to the CIA/Pentagon if such a blitz is under way. Jim 
Woolsey, the former CIA director, told me last week that the US will 
end its strategic dependence on oil much more quickly than people 
realise. "We can defeat oil as a transport fuel. Russia won't be able 
to push us around any more within a decade," he said.

He is counting on electric cars. His Toyota Prius can already run for 
two cents a mile when recharged overnight. The engine reverts to fuel 
after 20 miles. This will soon change. The new lithium-ion batteries 
are advancing by leaps and bounds.

There is no need to confront the Kremlin in the Caucasus or on the 
Dnieper. All we need to do is to chip away at its energy wealth. If 
we can drive oil back down to $70 a barrel, and keep it there, Russia 
will be reduced to a middling power of 141m people, with a deformed 
industry, in the grip of an acute demographic decline. We may even do 
the country a favour.

Oil is a double curse: it incubates the "Dutch Disease", and fosters 
autocracy. The Russian people would do better without it.