Book Review: The KGB's Fascination With Potions

By Joshua Foust

It can be difficult to stand out in the somewhat crowded field of Russian scare-books. Whether arguing for the resumption of a “new cold war” or whatever conspiracy happens to be topical, recent years have seen an avalanche of books arguing that Russia is not the somewhat broken creature it is often portrayed in the West.

Boris Volodarsky, however, has a leg up. A former Captain in the GRU, he has first-hand access to many of the files, personalities, and programs one would need to discuss Russia’s international espionage activities. It is just this encyclopedic understanding that he brings to The KGB’s Poison Factory: From Lenin to Litvinenko. Though often confusing because of the sheer volumes of names, pseudonyms, shadow programs, and overlapping personalities he puts into play, Volodarsky very clearly argues that the posture of Russian intelligence is essentially the same as has been throughout the 20th century.


Volodarsky argues that Russian intelligence holds as much venom for its individual detractors as for its international opponents, And it is venom that he seems primarily concerned with. Assassinations obviously can take many forms — the U.S. prefers flying robots these days. But Volodarsky argues that Russia has a special affection for poison.

And what a poison it is: The particular hallmark of Russian poisons, besides their creativity, seems to be their relatively long kill time. A victim will languish for weeks, even months, in sheer agony before either barely surviving or dying. Volodarsky describes this tradition while tracing Soviet and Russian poisoneers (for lack of a better term) through early uses of merely unusual plant extracts to the industrial development of unique compounds. The resulting potions are engineered specifically to mimic other problems, usually some form of gastritis, so that by the time doctors eventually realize what’s happened, it’s too late to fix.

The inspiration for Volodarsky’s history is the death of Alexander Litvinenko, the KGB defector slowly poisoned with Polonium-210 in 2006. While it can be difficult to parse the complicated history that Volodarsky writes — this is a book by and for insiders — the picture that emerges is damning of Russia going back decades. This might be where the book would fit in the pantheon of anti-Russia books: Volodarsky argues that the post-USSR poisoning activities of Russian intelligence demonstrate a strong continuity between Soviet and Russian activities.

In fact, if we were to read this in the context of similar books of the Russian government’s capriciousness — those by Anna Politkovskaya, for instance — it would be easy to think that it is more dangerous to oppose Moscow today than it was, say, in the 1970s, even though there was much more concern over it back then. Since Vladimir Putin left the Kremlin, Volodarsky writes, the Sluzhba Vneshney Razvedki, or SVR, Russia’s foreign intelligence service, no longer has to report to the President — they only have to inform him, the prime minister. Given Putin’s almost legendary intolerance for dissent, and the environment he’s created, in which unofficial murders aren’t exactly approved but aren’t exactly punished, it is a pretty terrifying realm that Volodarsky explores.

Unfortunately, that exploration is a real bear to sift through. While the book is engaging as a work of espionage, I found it difficult to keep track of the tangle of personalities and operations. That is in part because Volodarsky’s footnotes aren’t exactly immaculate. Mixed with clinical discussions of operations are Volodarsky’s ideas about what constitutes good or poor tradecraft. While it’s certainly fun to see how central Vienna is to Russian-European espionage, my eyes glazed over during long expositions of place and timing. That’s not to fault Volodarsky’s writing. But for those who aren’t borderline obsessives with the mechanics of tradecraft, the endless detail can become exhausting. It is a little too inside baseball for a layman to pick up and comprehend, and Volodarsky doesn’t provide enough documentation for a layman to follow the breadcrumbs and learn more (though he does, to his credit, highlight other books for more information on individual kills.).

The KGB’s Poison Factory is still a fascinating read. As long as you can slog through. Whether you’re looking for a concise history of Russian intelligence assassinations, or even a taste of how bewildering the intelligence hall of mirrors can be, it is a pretty severe indictment of how the former Soviet capital operates.


Joshua Foust is a military analyst who blogs at registan.net

China, Russia and the Eastern Shift of Energy

The 800-pound gorilla in former Soviet energy is China. Since the late-mid 1990s, Beijing has steadily racked up oil and natural gas deals that draw more and more of Russia's and Central Asia's supplies to China. Cash-rich in a region struggling with the financial crisis, Beijing earlier this year agreed to a $25 billion loan to Moscow in exchange for a 20-year supply of oil. And later this year, a still hard-to-fathom 4,375-mile pipeline will supposedly begin pumping natural gas from Turkmenistan into China.

Now, Russian Prime Minister Vladimir Putin is on his way to Beijing, and a host of fresh energy deals are in the works. Chief among them is continued work on an important natural gas alliance between the countries that -- if completed -- would end up shipping a large portion of Russia's gas to China. It would come from the Kovykta gas field. The two countries have been working on the pact for three years but have yet to reach pricing agreement. But when they do, pressure will increase on Europe to figure out how it will satisfy its growing appetite natural gas. (Will the gas go off in Europe in the beginning of January in the annual flareup of tensions between Ukraine and Russia? The short answer is yes)

Listen this morning as my friend Jim Falk, president of the World Affairs Council in Dallas, interviews James Miles, the Economist's Beijing correspondent, who provides among the best coverage of the country out there. Sign up for it here, then listen in on this link to the live audio feed starting at 11 a.m. EST.

Religiosity and the Meaning of the Shift on Missile Defense

One is pressed to name a technology attached to as much religious-like fervor as missile defense. We of course are not talking the type of fanaticism seen in the lines around the block to buy the latest iPod, but truly mob-like anger resembling the debate over evolution. It's been that way ever since Ronald Reagan gave missile defense national prominence in 1983. A quarter century later, while the defense industry continues to work toward a breakthrough that would make the technology reliable, the news in Eastern Europe and Russia brings missile defense back front and center in all its passion and vitriol -- Obama has canceled George W. Bush's planned missile defense components in Poland and the Czech Republic, and to the technology's advocates, that means heresy.

As we have discussed previously at O&G, Obama has been bound to make just this move simply because of the irrationality of attempting to persuade Iran or anyone else that Europe is held safe by a non-working technology. In a column today in The New York times, here's how Defense Secretary Robert Gates himself describes the attacks against him since the decision: "I have found since taking this post that when it comes to missile defense, some hold a view bordering on theology that regards any change of plans or any cancellation of a program as abandonment or even breaking faith."

So what is this lathered-up debate genuinely about? It is whether or not there will be any resulting dividends from Moscow as a result. Naturally, the Obama Administration denies any link to Russia, and technically that assertion is correct -- the cancellation I think would have taken place regardless of the friction with Russia.

But payback is nevertheless an issue -- Russia remains an outlier on extremely important matters, including the troubling arc of developments in Iran. Looked through that lens, Obama can be expected to act to eliminate other irritants, too, that have no legitimate U.S. strategic value.

Hence, look next for a trade opening with Moscow -- there's no valid reason to block Russia from the World Trade Organization if it meets the criteria. But don't expect the U.S. to back down in Georgia -- among other factors, the Baku-Ceyhan pipeline continues to link Georgia strategically to the West. The U.S. will probably also continue to pursue the strategic Nabucco natural gas pipeline despite the lack of enough fuel to make it work.

While both of Russia's leaders -- President Dmitry Medvedev and Prime Minister Vladimir Putin -- suggest that they will be more attentive now to U.S. concerns, my friend Masha Lipman at Carnegie in Moscow remarks that "anything that looks like a concession can be viewed by the Russian side as a sign of weakness."

Generally speaking, Lipman is right. But the reduction in the points of friction between Washington and Moscow is still arguably a valid approach to getting Russia on side.

Cyber-Attack Strategy: Part of Russian Attack on Georgian Pipelines, Report Finds

John Bumgarner, a former cyber-security expert for the CIA and other U.S. intelligence agencies, is attracting much attention for his report concluding that Russia's military offensive in Georgia last year was coordinated with a pre-arranged civilian cyber-attack on the country. What appears to have gone unreported is Bumgarner's conclusion that the region's oil apparatus was a strategic target of the overall conventional-and-cyber offensive.

The 100-page report, conducted for the U.S. Cyber-Consequences Unit, where Bumgarner is director of research, was distributed to U.S. officials and security experts. Bumgarner and I chatted by phone, and he emailed me the nine-page executive summary (thanks to Josh Foust for agreeing to post it at Registan.net. Incidentally, Foust has a good piece on the media war between Russia and Georgia at CJR).

Bumgarner says the report is the result of an examination of hundreds of public Internet forums, sharing of data with sources at home and abroad, and his own reporting on the attack from almost the instant it began. Others have reported that much of the findings were already known; but Bumgarner's findings appear to be the difference between barstool talk and authentic data. Nor is the report the kid-stuff such as carried out last week against 45 million Twitter users along with Facebook members, apparently by a Georgian blogger calling himself Syxymu (the blogger's attempt to Latinize the name of the Abkhazian capital, Sukhumi.).

Its chief takeaway is that the Russian cyberattack -- which disabled 54 Georgian websites in banking, communications and media with the apparent aim of reducing Georgia's capability of responding to the Russian offensive -- was prepared well in advance. Bumgarner writes:

Many of the cyber attacks were so close in time to the corresponding military operations that there had to be close cooperation between people in the Russian military and the civilian cyber attackers. When the cyber attacks began, they did not involve any reconnaissance or mapping stage, but jumped directly to the sort of packets that were best suited to jamming the websites under attack. This indicates that the necessary reconnaissance and the writing of attack scripts had to have been done in advance. Many of the actions the attackers carried out, such as registering new domain names and putting up new Web sites, were accomplished so quickly that all of the steps had to be prepared earlier.

The Russian Embassy in Washington denies any official Russian or military role in the cyber attacks. And in fact Bumgarner writes that he found no sign of official Russian participation, and concluded that no military personnel, with their distinctive fingerprints, could have carried out the attack. But he adds that there had to be complicity. "The organizers of the cyber attacks had advance notice of Russian military intentions, and they were tipped off about the timing of the Russian military operations while these operations were being carried out," Bumgarner writes.

Yet, the cyber attackers did not go in for the kill, Bumgarner told me -- they didn't attempt to cripple sites that could have caused chaos or injury, such as those linked to power stations or oil-delivery facilities, but merely those that could trigger comparative "inconvenience." "There was a political decision not to attack those critical infrastructures directly. They made the point that they could launch these attacks. They showed they have the capability to do more," Bumgarner said.

This mirrors Russian action against Georgia's paramount strategic installation -- the Baku-Ceyhan oil pipeline, by far the biggest reason why the U.S. and the West as a whole are interested in Georgia. We've discussed here how Russia bombed all around the pipeline without actually hitting it -- a clear message that it could do so if it wished, but would refrain for the moment.

Indeed the cyber attack fit into an overall Russian strategy centered on Georgia's oil infrastructure, Bumgarner concludes. It succeeded, in Bumgarner's view. "Unstable ground conditions, augmented by cyber attacks, soon made all of the Georgian pipelines seem unreliable," he writes.

Certainly that was the impact for the first weeks and months -- Russia demonstrated that the pipeline was vulnerable, not to mention dispelling the illusion that Georgia enjoyed special Western protection.

To a large degree, that remains the fact on the ground -- Georgia and the other former Soviet states of the Caucasus and Central Asia are far more deferential toward Russian wishes. Yet the oil and gas continues to flow.

As for the larger picture, most recently Russia has gotten push-back. This week, Georgia announced that it has officially withdrawn from the Commonwealth of Independent States, the grouping formed as a substitute for the Soviet Union at the same time as its 1991 collapse. (In the 1990s, Georgia's refusal to join the CIS infuriated Russia; in 1993, as Russian-backed Abkhaz troops closed in on Sukhumi, then-Georgian President Eduard Shevardnadze, standing alongside his troops, reportedly shouted, Okay, we will join the CIS! Suing for peace with Moscow, Shevardnadze did so soon after.)

And last week, it was reported that the Obama administration has decided to ignore strenuous Russian opinion and revive its training program for Georgian troops. Matthew Yglesias appears to be shocked that Washington would help Georgia through a ruse -- the U.S. claims the Georgian troops are being trained only for action in Afghanistan. Yglesias says this transparently false form of foreign policy -- obviously Georgia will use the training to rebuild its defense capability against Russia -- is "very, very, very silly."

As reasoning, Yglesias trots out the usual -- that the U.S. would blanch if China trained Mexican troops and formed a military alliance with America's southern neighbor. Therefore, Russia's furious opposition to the U.S. assistance -- and to Georgia's interest in joining NATO -- is understandable. The main weakness of this specious-but-much-used argument is that the U.S. and Mexico aren't military antagonists. More to the point, as benjamin81 comments over at The Plank, "A better analogy would be China or Russia training troops in Guatemala or Cuba. We wouldn't like it, but we probably wouldn't lose too much sleep over it either."

This summer, Russia and Georgia have resumed their usual bellicose relationship. Does this portend more war? After the drubbing he has taken since his adventurism last summer, Georgian President Mikheil Saakashvili is unlikely soon to fall for Russian bait. But Georgia will remain a flashpoint, with or without U.S. involvement.

Nabucco and Trans-Caspian: Times Change, Pipeline Politics Goes On

On one hand, Turkmenistan is in the catbird seat. Exxon, Chevron, BP and ConocoPhillips are salivating over the country's onshore natural gas fields, in particular South Yolotan-Osman, the fifth-largest natural gas field in the world. It's fawned over by the U.S., in particular Richard Morningstar, the special U.S. czar for Eurasian energy.

Yet all is not well in Ashgabad. Four months ago, there was an explosion at a natural gas line connecting the country to Russia, effectively Turkmenistan's sole natural gas customer. Since then, the line has been fixed, yet the natural gas flow has failed to resume. Why? The global financial crisis. Natural gas demand in Europe -- which had been buying up the Turkmen gas through Russia's good offices -- has plummeted. So have prices. Moscow has told the Turkmen that it wants to renegotiate the volume-and-dollar terms for the gas. The Turkmen have protested that a contract is a contract -- a favorite expression that the Turkmen perhaps have learned from Western oilmen over the years -- and so the flow remains halted. With it, Turkmenistan is losing an estimated $1 billion a month in revenue, or about $4 billion to date. That's a lot for a place like Turkmenistan.

There's another problem. It's the pipeline politics in which Turkmenistan is a player, voluntarily or not, by dint of its location in great game territory.

Since the mid-1990s, Washington has pressed Turkmenistan to agree to an extension of the region's new East-West natural gas network that would connect the country with Azerbaijan, and onward with Europe. The rationale was that, in the same way that Azerbaijan and Georgia have ostensibly won some political breathing space from Russia because of the construction of the Baku-Ceyhan oil line, Central Asia and in particular Turkmenistan and Kazakhstan would benefit through the proposed trans-Caspian natural gas line.

Demands for bribes, Russian protests, war in Afghanistan, and gaffes of various sorts have confounded the trans-Caspian. But now it turns out that events may have wholly overtaken the linkup of Central Asia to the balleyhooed East-West Corridor in any case.

First, in its latest iteration, the trans-Caspian was ultimately supposed to feed Nabucco, a natural gas pipeline to Europe, which has ended up at the butt end of continued utility bill spats between Russia and Ukraine. But now it seems that Europe may very well become awash in natural gas from shale deposits within Europe itself, and liquified natural gas shipments from Qatar and elsewhere. In other words, the need for Nabucco -- and natural gas supplies all the way from Central Asia -- has diminished.

But what of Turkmenistan's gas? In terms of Russia's rivals, it turns out that the Chinese have gotten there first. I personally thought the notion was far-fetched, but the Chinese are actually on the verge of finishing the first phase of the Turkmen-China natural gas pipeline, which looks like it will begin flowing by the beginning of next year. Since South Yolotan-Osman are situated in far eastern Turkmenistan, even if one of the western Big Oil companies gets a piece of these fields -- still only a remote possibility -- they will ship east, not west.

In other words, there appears to be little reason for the U.S. to focus on the trans-Caspian any longer, either, except for its own, parochial sake, and not for any larger policy reason, such as how Baku-Ceyhan broke Russia's monopoly over energy transport in the Caucasus.

We'll keep hearing about these lines. And we'll write about them in this space. But their time has passed.

As for Turkmenistan -- it will find its own way.

Russia and Bending: What Biden Didn't Say

Last Friday, O&G wrote of U.S. Vice President Joe Biden's strong grasp of reality in the former Soviet Union, as expressed in his actions in Ukraine and Georgia. But yesterday, Secretary of State Hillary Clinton tried to sweep up in the wake of a later, widely remarked-upon Wall Street Journal interview with the vice president, headlined, "Biden Says Weakened Russia Will Bend to U.S." Clinton's remarks on a Sunday talk show came after a senior adviser to President Dmitri Medvedev asked, "Who is shaping the U.S. foreign policy, the president or respectable members of his team?"

The Russian official, Sergei Prikhodko, said he found the Journal story "perplexing." I do too, but for different reasons: Unless Biden said something more than is in the story and the excerpts posted on the Journal website, he didn't suggest that Russia will accede to U.S. wishes.

This is important because, bluntly speaking, the Journal headline and the follow-on reporting by The New York Times make Biden look wholly misinformed. This isn't nuance -- if Biden truly meant what the Journal reports he did, Mike McFaul, the National Security Council's Russia hand, needs to get over to the Executive Office Building and have a little chat with him.

The Journal story, written by Peter Spiegel, synthesizes Biden's remarks as such: The seriously weakened Russian economy will "force the country to make accommodations to the West on a wide range of national security issues, including loosening its grip on former Soviet republics and shrinking its vast nuclear arsenal."

Within the story, we get this quote: "I think we vastly underestimate the hand that we hold." The story goes on with this Biden quote: "Russia has to make some very difficult, calculated decisions. They have a shrinking population base, they have a withering economy, they have a banking sector and structure that is not likely to be able to withstand the next 15 years. They're in a situation where the world is changing before them and they're clinging to something in the past that is not sustainable."

To summarize, Biden thinks that the Obama administration has underplayed its leverage as Russia suffers from a profoundly weak economy and disastrous demographics. On the merits of the assertion, I'd argue that the U.S. has not underestimated its leverage -- to suggest that the U.S. can parlay Russian impoverishment into changed Kremlin policy on Iran, on missile defense, on European gas policy, and so on, is simply a misread of Russia. But this is beside the point. Biden does not predict Russian capitulation. It's not in the quotes.

Now to the Journal's second point -- that Biden suggested that Russia will loosen its grip on former Soviet states such as Georgia and Ukraine.

Biden says the following: "I don't expect the Russians to embrace -- particularly this government, particularly Putin -- to embrace the notion that [they should] reject a sphere of influence. But I do expect them to understand we don't accept a sphere of influence."

Fair enough -- Moscow ought to recognize that Washington won't shift a position on Central Asia, on the Caucasus, and on the other Slavic states that's existed since George H.W. Bush's administration. But where is the prediction of a Russian accommodation to the West's position? It doesn't appear in the quotes as far as I can see.

This isn't Biden's finest moment. But it's a problem of a different order from what one would conclude from the Journal headline and lead.

What Biden in Ukraine and Georgia Shows: Making Up (With Russia) Is Hard to Do

In a two-day swoop, Vice President Joe Biden has single-handedly signaled something about the reset button: While the idea of rapprochement with Russia that he ostentatiously suggested five months ago is romantic, getting back together usually isn't a good idea for divorced couples. They tend to go back to the same old aggravating habits.

In this case, Biden first went to Ukraine, which he assured that Washington isn't recognizing Russia's claimed entitlement to influence over its neighbors. He said that if Ukraine decides to join NATO, the U.S. is behind it. (Thanks to RealClearPolitics for posting the transcript.)

Then today, Biden flew south to Georgia, where he said the same thing: "We understand that Georgia aspires to join NATO. We fully support that aspiration," Biden said.



Almost nothing is guaranteed to raise the hackles of Russian Prime Minister Vladimir Putin more than the suggestion that Georgia should be permitted to join NATO; a close second would be the same formulation for Ukraine. Russia regards both nations as its own. Indeed, Russian Deputy Foreign Minister Grigory Karasin responded by saying that Georgia is "remilitarizing" after being pummeled by Russia in a five-day war last August, and saying that Moscow might move to stop it.

So why did the Obama administration choose to put irritating language into Biden's mouth? The answer is realpolitik. Washington truly does want calmer, more constructive relations with Russia. It knows that neither Ukraine nor Georgia are capable of meeting NATO requirements; it also knows that the two aren't welcome as members by much of Europe, which -- there is no delicate way of putting it -- allows Russia to call the shots on issues including further NATO enlargement and the direction of new natural gas pipelines.

Yet, putting aside for now the question of whether NATO in fact should expand further, for reasons of politics and appearances, Washington cannot be seen to be acceding to Russia's wishes. So you have speeches like Biden's in Ukraine and Georgia.

It's true that Biden tried to soften the sting by also suggesting that both Ukraine and Georgia could improve their political systems. Biden also refrained from agreeing to Saakashvili's request for a replenishment of armored weapons, which Georgia all-but exhausted in the August war.

Some of the blogosphere is alight with accusations that Washington threw "another ally under the bus," as Pamela Geller over at Atlas Shrugs put it. Others, such as Robert Antonio Hussain, go the other way. "Why must VP Joe Biden stir up the pot all over again about Georgia, Russia, NATO and Georgian Pres. Saakashvili?" wrote Hussain.

The answer to Geller: No he didn't.

The answer to Hussain: Because he must.

The Oil and Glory Interview: U.S. Eurasian Energy Czar Richard Morningstar

Richard Morningstar talks much about déjà vu. In the late 1990s, then-President Clinton appointed him as Washington’s first special envoy for the Caspian Sea. Against strong headwinds, he attempted to persuade, cajole and muscle Big Oil into building the Baku-Ceyhan pipeline. A hostile BP, Exxon and other companies declared that they would love to build the line, but that there simply wasn’t enough oil. Russia said it might fire on any installations built in the sea. Time and new turmoil within the oil industry changed BP’s attitude, and the geostrategic pipeline became a fact in 2006. Today, after a decade teaching law at Harvard and Stanford, Morningstar is back in the same job. The task? To persuade not just companies, but also several countries to build yet another pipeline – a much-troubled natural gas line called Nabucco. He just attended a signing ceremony among five of the proposed transit countries in Ankara. O&G caught up with Morningstar by cellphone as he passed through the Frankfurt Airport on the way back to Washington.


O&G: Nabucco supporters argue that the pipeline is necessary because Russia uses or will use its dominance of the natural gas supply in Europe for political leverage. Is the argument valid?

Morningstar: That gets into why Russia does what it does. Does Russia play commercial hardball to get the best deal it can, or as a political weapon? I think that Russia does want to maximize its commercial benefit. The result is that sometimes it has political implications. The benefit of Nabucco is that it does provide diversity of gas supply to Europe. It does develop the Caucasus and Central Asia. Though Nabucco won’t cure Europe’s energy security, it will provide a natural gas source, especially for countries that were cut off during the disputes between Russia and Ukraine.

Q: Some people including me thought that, had events turned out differently in Iran, it might have become the needed source of natural gas for Nabucco. Are the post-election events in Iran a setback for Nabucco?

A: It had not been anticipated that Iran gas would be part of Nabucco. Our policy has been clear – we don’t think that Iran should participate in Nabucco now. We’ve reached out, but it takes two to go to the prom. I don’t know what impact events of the last few weeks in Iran will have. If we can resolve our nuclear issues, we might be able to resume normalized relations.

Q: There is as yet insufficient natural gas to support Nabucco. Are the Europeans getting the cart before the horse in terms of emphasizing the pipeline before having the gas?

A: This reminds me of the talk in 1998 and 1999. At that time, the talk was that there wasn’t enough oil for Baku-Ceyhan. Sure enough, BTC is up and going. The supply issue needs to be dealt with, but this agreement [in Ankara] will help push those issues.

Q: But BTC started off with a supply of oil in Baku. Nabucco starts off with none.

A: But there was also a lot of concern in the early years that there wouldn’t be enough oil out of the western Caspian. That “you are on a fool’s errand.” We stuck to policy, and it ended up working out. The Ankara ceremony is similar to those early days.

Q: Is Nabucco getting away from its original reason for existence, which was to provide Turkmenistan and the rest of Central Asia with a non-Russian transportation corridor?

A: If Iraqi gas can be part of the project, that would be great. Azeri gas will be absolutely critical to this project. Turkmen gas will also be important. It may come after Azeri gas.

Q: You speak as though you are confident that Turkmen gas will supply Nabucco.

A: There are going to have to be steps. I was in Ashgabad on Friday, and the president stated strongly and publicly that Turkmenistan wants to contribute gas to Nabucco.

Q: Is Nabucco more of a European issue than a U.S. issue?

A: It’s clearly a European issue. I think we have significant interests as well. They are, one, increasing overall production; two, creating diversity in the European supply and enhancing energy security. We want to see a strong Europe. And three, helping the development of the Caucasus and Central Asia.

Q: What about shale gas, which has been discovered in Europe. Isn’t that something that can help to substitute for gas from a Nabucco line?

A: The Europeans think that shale gas will be much more successful in the U.S. than in Europe.

Q: And LNG from Qatar and elsewhere? Can’t that serve Europe?

A: LNG will be part of it. We are strongly supporting the southern corridor. But it is still only one part of a puzzle. Alternative technology and LNG will both be part of the puzzle. Also the natural gas interconnections between the countries. It may be possible to get the pipeline sanctioned on the basis of Azeri gas.

Q: You are saying that the pipeline is financeable just on the basis of gas from Azerbaijan?

A: The companies and governments say the project is financeable. They are confident they will have enough gas. I am not in a position to say that the pipeline is financeable just on Azeri gas. The European Union has some money – 5% -- and the EBRD is also willing to get involved.

Q: What do you think about the addition of Joschka Fisher, the former German foreign minister, to the Nabucco team?

A: He’s a tremendously dynamic person. He’ll add a lot of vigor to Nabucco. It’s fascinating given the role that [former German Chancellor and Nord Stream Chairman Gerhard] Schroeder is playing. He has a tremendous reputation and lots of influence in Europe. He can help to unify Europe’s position.

Murder and Ramzan Kadyrov

The Washington Post's Philip Pan puts today's murder of Russian activist Natalya Estemirova within the context of a string of slayings of the foes of Chechen President Ramzan Kadyrov. Estemirova was among many who accused Kadyrov of running an exceptionally brutal and murderous regime.

For hours, the blogosphere has been replete with reports on Estemirova's kidnapping and murder, so all we do here is attempt some context. Just three days ago, O&G used the occasion of the five-year anniversary of another Russian slaying -- that of American reporter Paul Klebnikov -- to note the multiple forces in Russia that conspire to keep killers safe from justice. President Dmitry Medvedev has ordered a priority investigation into Estemirova's killing, but until now the Kremlin has been among the forces protecting murderers. Simply put, no major slaying that I can think of has been solved in Russia since the Soviet breakup.

The highest-profile critic of Kadyrov to be murdered was reporter Anna Politkovskaya, who was slain in 2006. Here are a few victims of just the last year: Umar Israilov, a former Kadyrov bodyguard, was shot down in Vienna on January 13. Six days later, Stanley Markelov, a lawyer who represented the family of a woman murdered in Chechnya, was shot dead in Moscow. Two months later, Sulim Yamadayev, a former commander in Chechnya, was killed in Dubai. Yamadayev's brother, Ruslan, a political rival of Kadyrov's, had been shot dead in Moscow the previous September.

That's a good start for any genuine investigation.

Pipeline Politics: Europe's Stubbornness, and the Virtues of Shale

On the heels of the Obama-Medvedev-Putin summit, five nations will sign what they are calling a breakthrough agreement for a long-troubled natural gas pipeline meant to change the energy equation in Europe. That's code language for reducing a perceived threat of increased Russian influence on the continent.

As Sylvia Westall and Orhan Coskun at Reuters suggest, don’t crack the champagne yet.

The background is this: Washington and the EU are troubled by Russia's domination of Europe's natural gas market; Gazprom provides some 25% of the gas supply, and the West perceives that Moscow will use that market power for political advantage. Russia denies any such intention. Yet the West's persistent concerns are the logic behind Nabucco, a proposed pipeline that would help to diversify Europe's gas supply.

Turkey, Bulgaria, Romania, Hungary and Austria – countries through which Nabucco would pass – will be the signatories to the agreement Monday. Though Nabucco’s devisers have been struggling for years, the formula for building a pipeline is actually quite simple: If you have a sufficiently large reserve of natural gas, financiers will probably pay for the construction of a pipeline to sell it. Conversely, if you lack that gas, bankers will tell you to come back when you get some.

The latter is the situation for the European Union and Washington, Nabucco’s primary backers.

Turkmenistan – originally, Nabucco was meant to build on U.S. efforts to provide Central Asia with an alternative transport route to Russia – has balked at contracting with any serious western players for any fields on-shore, where the large volumes of natural gas are situated. Azerbaijan -- a possible backup player until Turkmenistan possibly changes its mind – last week signed a deal with Russia for its volumes from the super-giant Shah Deniz field.

The re-election of Mahmoud Ahmadinejad, and the bloody crackdown that has followed, suspends hopes for the medium term at least for Iran becoming that source of natural gas. Iraq is also mentioned, but that’s only a reality in the event of a deal between the Kurds and the central government, a long-shot indeed. The question is why the pro-Nabucco forces persist in pushing on a proverbial wet noodle. While the physics of inertia carry them forward, they might pay attention to other developments acting to diversify Europe’s natural gas.

As No Hot Air blogs, one is new technology that makes shale gas possible and economical to extract from convenient places like Germany, Hungary and Poland. Closer at hand in terms of availability is liquefied natural gas, which has come on stream in large volumes out of Qatar; but Europe must build the infrastructure to handle it.

Will Europe and the U.S. shift their focus to these very real alternatives?

Obama in Moscow: A Cool Reception, and a Dose of Putin

President Barack Obama employed his signature moves -- the candid town hall address; the glamorous wife and daughters -- and to be sure Russian President Dmitry Medvedev seemed to lap it up. But in the end Russia is not Cairo, nor Berlin. This is not 1994, when then-President Bill Clinton led some Moscow women to swoon. In place of the intrigued, still-fascinated eyes of the 1990s, Obama was met largely with disinterest from the Russian public, and the wagging finger of Prime Minister Vladimir Putin in private. In short, he fell flat.

That's a dose of reality. In the best of times, on most topics, the best that can be expected in a U.S.-Russia relationship is probably respectful disagreement.

“We don’t really understand why Obama is such a star,” 25-year-old Kirill Zagorodnov, a student at Moscow's New Economic School, told Clifford Levy and Ellen Barry of The New York Times. “It’s a question of trust, how he behaves, how he positions himself, that typical charisma, which in Russia is often parodied. Russians really are not accustomed to it. It is like he is trying to manipulate the public.”

Stefan Wagstyl of the Financial Times heard the same story from the students he collared after Obama's speech at the school yesterday. But Nikolai Petrov of Moscow's Carnegie Center also cautioned Wagstyl not to go too far with his analysis: "These students are not typical. They are mostly mathematics specialists," Petrov said.

While this slap of reality was telling, probably the most important meeting of Obama's Moscow trip was his two-hour breakfast with Putin. By Wagstyl's description, it appears that Putin put on one of his bravura performances. Putin has been wowing Westerners for years with his three-hour, no-notes discourses on Russian affairs at the annual Valdai Discussion Club. Now Obama got a taste of Putin's presence of mind.

Obama's takeaway? Putin is "tough, smart, shrewd, very unsentimental, very pragmatic." And also in charge.

Putin, Sakhalin, and The Lion's Purr

A narrative familiar to all oilmen with long exposure to Russia is under way: With cash reserves running down and insufficient economic relief in sight, Prime Minister Vladimir Putin, his growl turned into a purr, is welcoming back Western oil companies to work Russia's natural gas fields.

So how should Shell and Total -- both of them the recipients of Putin's renewed niceness -- respond? Are Putin's past revocations of deals, expulsions from fields at knock-down rates, and ho-hum attitude toward shakedowns reason not to do business with him now that Russia is trouble?

Specifically, Shell is being offered an unspecified role in the highly complex, offshore Sakhalin 3 and Sakhalin 4 natural gas projects (BP walked away from the latter last month after drilling dry holes). Total signed a smallish, $900 million deal to work with Russia's independent Novatek on the Termokarstovoye natural gas field, and Putin says it's "entirely possible" that the French company will be permitted to work on future stages of the supergiant Shtokman natural gas field.

The subtext is a World Bank projection last week that Russia's economy won't recover to pre-crisis growth until at least 2012; and an International Energy Agency forecast this week that any global oil supply shortage -- and thus a possible return to $100-plus-a-barrel prices -- isn't likely before 2013.

The necessity for the involvement of foreigners who still have access to credit -- such as Big Oil -- seems plain: Shtokman's developers said in December that the global credit crisis may delay field development.

In other words, for Russia there's little noticeable light at the end of the tunnel. And Moscow needs to be sure that Gazprom can remain the country's most powerful economic driver.

More subtext: O&G readers recall that in 2006, Russia unleashed environmental regulators onto Shell in order to persuade it to relinquish its majority stake in Sakhalin-2 to Gazprom for what many analysts at the time regarded as a comparative firesale price of $7.6 billion. The same year, Total had a similar experience when Rosneft canceled a $3 billion partnership in the Vankor oilfield. Exxon Mobil has been forced to sell the natural gas from its Sakhalin I project at cut-rate prices within Russia rather than as it had planned in higher-paying China, as Paul Ausick reports at 24/7 Wall Street. And then there's long-suffering BP, which, in a series of fresh indignities this year while the Kremlin has stood by, has been powerless as its Russian partners in TNK-BP have steadily swallowed control of the oil-rich venture.

David Lee Smith at Motley Fool suggests that Shell's apparent agreement to let bygones be bygones and embrace the extended hand is "goofy." But Tim Newman, a Briton who lives on Sakhalin and blogs at White Sun of the Desert, writes that Shell will be wise to demand international bank guarantees in exchange for fresh investment. Short of that, Newman says, expect "another round of blubbering and hurt feelings in five years time." Over at TPRR, Tim Pendry argues that the totality of events reflects Russia's "complex gamble on events."

Pendry and Newman are both right. While seeking foreign investment at home, and failing to arrest serious depletion of its domestic fields, Gazprom still hasn't abandoned its geopolitically driven global dealmaking. In addition to continuing to promise to build new multi-billion-dollar gas pipelines into Europe, it signed a deal with Nigeria last week promising $2.5 billion in exploration investment there.

Meanwhile, another natural gas row is on the near horizon between Russia and Ukraine. Ukraine has a $4.2 billion bill coming due to Gazprom on July 7th, and lacks the money to pay. As Carl Mortished at The Times of London reports, the European Union is attempting to get some emergency money for the Ukrainians from the International Monetary Fund or the European Bank for Reconstruction and Development. The good news is that the latest dust-up is not occurring in the dead of winter.



Whether or not another jump in the deep end is wise, in the end Russia is a prime example of Big Oil's history of returning for more to the scene of its greatest debacles. The reason is the usual one: These behemoths need to book fresh reserves, and they are hard to come by.

In Total's case, for instance, the French company capitalized on an alliance not only with Gazprom, which owns 19% of Novatek, its local partner, but with oil-trading king Gennady Timchenko, a favored old KGB friend of Putin's, who owns 18% of the company.

In perhaps a touch of irony, Total CEO Christophe de Margerie said after the signing, "I don't think it's difficult to work in Russia. One only needs to learn to work efficiently with Gazprom, Novatek and Rosneft."

Iran's Election, and the Tehran-Moscow Alliance

Would a new Iranian president change the complexion of relations with the United States?

That’s the conventional wisdom. It’s also the hope in Washington and elsewhere. With Mahmoud Ahmadinejad in another term as president after the June 12th elections, the thinking goes, there will simply be more nationalist and anti-Semitic bombast; in contrast, a new president will doubtlessly continue to embrace uranium enrichment, but will be less reliant politically on an antagonistic relationship with the U.S.

Whatever the case, the president ultimately is not Iran’s principal power. That position in society is held by Ayatollah Ali Khameini, who ultimately balances Iran’s various religious, commercial and political forces, and forms the consensus that we see as Iranian policy. He is whom President Barack Obama is directing his diplomacy.

That’s more or less what was laid out today by Trita Parsi, president of the National Iranian-American Council and author of the award-winning Treacherous Alliance: The Secret Dealings of Iran, Israel and the United States.

Parsi addressed a small group at the National Foreign Trade Council in Washington, where he argued against any further hardening of economic sanctions against Iran (there is a push to block refined oil products from Iran, whose refineries product far less fuel than the country requires). Parsi argued that such a move would work against U.S. interests, driving Iran away from the negotiating table, while doing nothing to loosen its resolve to go its own way on nuclear development, Hezbollah and so on.

I filmed a clip of Parsi’s reply to a question on Iran and Russia’s tactical alliance. While he didn’t predict the disintegration of the alliance, he did note that it’s built on soft sand, given the two nations’ long and deep distrust.

The Balance of Power in the Former Soviet Union

Moscow's envoy to NATO has signaled that Russia is ready to resume the thaw in relations triggered last month in the G20 meeting in London between presidents Barack Obama and Dmitry Medvedev. Russia had been miffed by NATO exercises going on in Georgia, and canceled a planned meeting with NATO this month. But now Dmitry Rogozin, Russia's envoy to NATO, says, "We will go ahead with restoring relations." Russian Foreign Minister Sergei Lavrov said much the same when he met with Obama and Secretary of State Hillary Clinton in Washington last week.

Yet Rogozin and Lavrov can behave statesmanlike because in a big way recent events have gone Russia's way.

NATO proceeded with the exercises despite Russia's objections, thus ostensibly demonstrating that no country will determine who can join the military alliance, and where it will act. But look under the hood. One of the nations missing from the games is Kazakhstan -- President Nursultan Nazarbayev declined to send troops to the month-long games. Why did this deft balancer of great powers go along with Russia's wishes on NATO? Perhaps he would have declined even if there had been no Russia-Georgia war last summer, when Russian troops overran large parts of Georgia in anger over Tbilisi's violence in South Ossetia (or perhaps Kazakhstan simply didn't want to go, as the country itself explained.). Yet, Russia's former colonies are behaving with more circumspection than, say, a year ago, and one suspects that the August war is much responsible for that.

A super-smart former senior U.S. diplomat to the former Soviet Union told me yesterday over coffee that the U.S. has not yet lost its influence in the Caucasus and Central Asia; the August events, he said, were "a shot over the bow." But an actual "diplomatic disaster," he said, would come only if Russia actually overran all of Georgia, and seized control of the Baku-Ceyhan pipeline, along with some of the financial benefits accruing to such a move. In this former envoy's view, possession of the "economic rent" would be "qualitatively different" from the current state of affairs, because it would amount to effective Russian reconquest of the Caucasus and Central Asian states.

Possession of the economic benefits -- meaning the pipeline transportation tariffs -- would be different. But I don't see Russia making such a move, one reason being that it doesn't have to: Actual occupation of Georgia isn't necessary; rather, with the August war, Russia signaled that it is prepared to go to any lengths -- in this case military -- to enforce its will. The outcome has been one 'Stan after another falling into line.

Kazakhstan's non-participation in the NATO exercises is just one sign of that. In another, just two days ago, the European Union signed an agreement that Dan Bilefsky of the NYT describes as intended to speed up the Nabucco natural gas pipeline, the western-backed effort to reduce Russia's energy influence in Europe; Kazakhstan, Turkmenistan and Uzbekistan -- the current biggest sources of natural gas for the line -- declined to sign. Diplomats told Bilefsky that the three countries did so "because of pressure from Russia." Moreover, after meeting with Medvedev, Azerbaijan President Ilham Aliyev suggested that he will sell his country's natural gas to Russia, at the same time that Europe and Washington have all-but begged him to commit his gas to Nabucco. There has been a mood shift recently in the U.S. on whether Nabucco is singularly important; yet it's one thing determining that in the West, and quite another doing so in Moscow.

Meanwhile, on the military front, there is the U.S. ejection from its military base in Kyrgyzstan in favor of Russia.

Current and former U.S. officials with whom I've spoken in the last week or two hew to the belief that the August events were strategically meaningless to the U.S. That is, that the U.S. retains roughly the same influence across the Caucasus and Central Asia as it did prior to the war.

The truth is that U.S. energy policy in the region is a shambles. A U.S.-Iran rapprochment could change that (there is a genuine chance, for starters, that Mahmoud Ahmadinejad will lose the presidential election next month. His three major rivals, while perhaps not differing substantively from Ahmadinejad, are distinctive from him in tone and approach. Talks with the U.S. could be much smoother.).

The State Department has a super-skilled diplomat on Eurasian energy in the form of Dick Morningstar. At the National Security Council, my former Stanford colleague Mike McFaul is clear-eyed on Russia; and, with the Obama administration fixated on alternative energy and climate change to the exclusion of any expertise in oil and natural gas, NSC Adviser Jim Jones is seeking a much-needed senior director for global energy, I'm told.

Washington has no equivalent in this sphere to the roles played in South Asia by Richard Holbrooke and in the Middle East by George Mitchell. Perhaps the combination of talent in State and on the NSC will be sufficient to handle the complex brief straddling the lines of Russia, the 'Stans, Iran, nuclear proliferation and energy.

A New Age in Pipeline Politics?

For the last decade and a half, the main theater for U.S.-Russian fireworks has been pipeline politics. Washington won the first battle with the construction of the Baku-Ceyhan oil pipeline, which broke Russia's monopoly on energy exports from the Caspian Sea. But Moscow zoomed ahead in the second round, winning overwhelming backing for its proposed new natural gas pipelines to Europe. Then came the global financial crisis, and the plunge in world energy prices. Suddenly pipelines have seemed passe, and the rivalry instead turned to who controls what military base in Central Asia.

Scroll forward to a European energy summit last weekend in the Bulgarian capital of Sofia. While Washington's new Eurasian energy czar, Richard Morningstar, seemed almost blase about the West's preferred pipeline plan, called Nabucco, he also appeared to re-open the energy contest.

Morningstar's predecessor, Steven Mann, had dubbed the West's promotion of the pipeline as "Nabucco hucksterism." He was describing what he thought was an invalid elevation of the value of a Nabucco line, and its chances for materialization, all the while putting much U.S. prestige at risk in pushing to get it built. Indeed, as recently as three weeks ago, for instance, Deputy Assistant Secretary of State Matt Bryza was still talking up the virtues of Nabucco.

Against that backdrop, Morningstar fell in with Mann's line of thinking: "Pipelines are just part of the puzzle," Morningstar said in Sofia. "Nabucco is not the Holy Grail that will solve the problem."

Morningstar's aim seemed to be to take down the temperature. After all, as much as Nabucco is a politically driven project targeted against Gazprom dominance of Europe, South Stream is an equally political response to Nabucco. So if the imperative for Nabucco is removed, what is the place for South Stream?

Hence, Morningstar also said: "Our feeling is that the financing of South Stream will be costly, and it is not clear how the material will come."

Along the same lines, last week U.S. Deputy Undersecretary of State George Krol was even more dramatic. In the Turkmen capital of Ashgabat, Krol opened the door to shipping Turkmen gas via Iran, according to a piece by Dierdre Tynan at Eurasianet. If that happens, it is truly a new age in pipeline politics.

Labyrinth Out in Paperback

The updated version of Putin's Labyrinth is out today. It brings events in Russia up to date, including the collapse of the economic miracle with the plunge in oil prices and the global financial crisis, and the January natural gas stand-off with Ukraine. This version is also indexed. Your comments are welcomed.

A Front-Row Seat to Momentous Events. The Oil and Glory Interview: Albanian Prime Minister Sali Berisha

Albania has had a prime view of some of the most dramatic events in Europe of the last decade and more. Most recently, they have included the West's showdown with Russia over Kosovo's independence, which led directly to Moscow's effective absorption of the Georgian regions of Abkhazia and South Ossetia. In addition, while Russia has opposed further expansion of NATO, Albania along with Croatia became the alliance's newest members three weeks ago.

When I was last in Albania – during NATO’s 1999 bombing of Serbian troops in Kosovo – I had a great time, but the country was overrun with criminal gangs. There were Mercedeses everywhere – all of them absent license plates since Albania served as the way-station for stolen vehicles traversing Europe. It also was a smuggling route for people of all sorts seeking to migrate illegally to Europe; I watched a couple of boatloads of these migrants traveling fast late one evening on to Italy. Today, with the country a NATO member and seeking to join the EU, those old days seem largely gone.

Albanian Prime Minister Sali Berisha has traversed this entire period. A 65-year-old trained cardiologist, he was Albanian president for five years during the 1990s, before losing the post in a huge investment scandal. After ten years in the opposition, he returned to power in 2005. I called Berisha in his Tirana office. The edited interview:

O&G – The International Monetary Fund calls Albania “highly vulnerable.” Yet it is one of the few economies in the world expected not to shrink this year. How is the country withstanding the financial crisis? How are remittances from Albanians abroad holding up?

Berisha – I have high esteem for the IMF. But it should not [encourage] a panic. It’s not helpful, in my view. I told them, ‘Look, you’re a very, very crucial institution. I’m glad that the G20 provided you with a new role.’ But many governments are hesitant to work with them because their scheme at a time of social unrest could create more problems than it solves. I don’t consider the [Albanian] economy as highly vulnerable. It’s a real economy. Remittances are not coming [to the same degree] because of the loss of jobs in Greece and Italy. But we are encouraging tourism.

Q – Is NATO membership a right? Russia, while opposing Kosovo independence, for instance, has vigorously opposed NATO membership for Georgia and Ukraine, and made that a benchmark for good relations with the West.

A – For my country, NATO membership was the most important achievement since independence day. Albania suffered more than any country from security problems. It suffered from isolation and self-isolation. It was an orphan nation. Now it’s part of an alliance. We have all the potential to build freedom. It means high credibility for Albania in the world. It is high credibility for investors. Albania will never walk alone.

Q – Is NATO membership a right?

A – For a free nation, yes. NATO proved to be a shield of nations. NATO has faced no difficulty adapting to the new situation. It has brought freedom everywhere.

Q – Is it valid for Russia to make good relations with it contingent on opposing NATO membership for Georgia and Ukraine?

A – I know no country that is afraid of Russia. I know only countries that are willing to work with Russia. Based on some imperial heritage, if you go into their history, expansion is in their psychology. What effect would Georgia or Ukraine have on Russia? What effect would NATO expansion have on Russia? [The assertion of a NATO threat to Russia] is nonsense. It will take time, but with realism [Georgian and Ukrainian membership] will happen.

Q – The decisive factor in deciding who should be a member of NATO is whether it would send troops to defend that country, Article V of the NATO charter. Would NATO defend Ukraine or Georgia if need be?

A – Is Russia intending to attack Ukraine or Georgia? If Russia intends to partake an aggression, NATO must firmly stand, because that would mean the new Russification of Europe.

Q – What is your view of the August war between Russia and Georgia?

A – Who attacked first is unclear. But a [Russian] scenario was there to invade Georgia. The Russians moved not only into Ossetia. They moved into Abkhazia, and toward Tbilisi. Russia probably wanted to occupy Georgia. The stand of the international community worked.

Q – How will Albania respond to President Obama’s call for more NATO troops in Afghanistan?

A – Albania is sending a new company, doubling our current number of troops. We also sent 20 nurses and doctors.

Q – Is Afghanistan a threat for NATO countries?

A – Afghanistan and Pakistan must both be helped. It is difficult terrain. Politics at home aren’t easy. But I think the strategy will be effective. The U.S. sent a man over there who is highly skilled in negotiations.

Q – [Richard] Holbrooke?

A – Yes. Holbrooke. It’s very important to promote peace there.

Q – Unlike elsewhere in Europe, President Bush seemed highly popular when he visited Albania in 2007. Can you explain why?

A – First, he was the first U.S. president to visit my country. Second, we suffered more than any country from dictatorship. So we definitely support toppling dictators, including Saddam Hussain and [Taliban leader] Mullah Omar. Third, he came with great messages here – support for Kosovo independence, and NATO membership for us.

Medvedev's Signal: Don't Kill Novaya Gazeta Reporters

Dmitry Medvedev has noted in the past that Russians tend to look for signals from their leaders. But, since the Russian president doesn't come from the siloviki -- he is a former law professor, not a retired KGB or military officer -- nor from politics, he is not as noted as his predecessors for skillfully communicating through gesture.

So what was today all about? Why did Medvedev give Novaya Gazeta editor Dmitry Muratov bragging rights for publishing his first Russian newspaper interview (English version)?

My own thinking is that Medvedev is right -- to some degree, ruling in Russia is about signals, often informing a power group or an individual to watch its or his step. And one signal that's been clear over the last several years is that certain murders can take place with impunity -- killers somehow have correctly understood that they will not be held to account.

Novaya Gazeta, long the fiercest critic of Vladimir Putin's rule, wears its bloody past on its sleeve. To this day, the home page of its English-language web site is a full-page tribute to its fallen. They include Igor Domnikov, killed in 2000, Yuri Shchekochikhin, who died in 2003 from a mysterious illness, and, most dramatically, Anna Politkovskaya, slain in 2006.

There had been something of an interregnum since the November 2006 nuclear poisoning murder of Alexander Litvinenko. But in January, that apparent intermission ended. Human rights lawyer Stanislaw Markelov was shot in the back of the head by a killer on a crowded Moscow street in daylight, along with Anastasia Baburova, a Novaya Gazeta reporter who tried to intervene. Being abroad still doesn't make one safe. Last month, Chechen Sulim Yamadayev was shot dead in Dubai.

Medvedev is saying that he's a break from the past -- at a minimum, he doesn't support the targeting of Muratov's reporters. Indeed, this was Medvedev's second such signal -- he met with Muratov in January to mourn the Markelov-Baburina murders.

It's unclear that Russia's killers will honor the signal, nor whether Medvedev is yet a leader whose signals are generally respected. After all, the system of unpunished murder has seemed larger than even ultra-powerful Putin, who publicly mourned the death of Forbes editor Paul Klebnikov, whose murder nonetheless was never solved.

Yet, the gesture was clear.

In the post-Machiavellian World, Economics, Not War, Rule

The outlines of the Obama administration's foreign policy are becoming plain. And they are as audacious as his domestic policies.

Among the interconnected aims so far are: Engineer fully normalized relations with Syria and a strategic partnership with Russia, paving the way to a rapprochement with Iran, and shaking up the power equation in the Middle East.

You can be forgiven for rolling your eyes, but wait. We've discussed previously how the financial crisis potentially changes the chessboard in numerous ways. But there's also something qualitatively different in the administration's approach from its predecessors' -- how far it appears willing to go.

Among ideas under consideration, last Friday the Financial Times's Daniel Dombey reported that Washington could allow Iran to enrich uranium as long as it's under strict observation; and it's been clear that the administration is willing to delay or even cancel the George W. Bush-era plan to station missile defense positions in Poland and the Czech Republic, as long as Russia offers up something equivalent in exchange (according to a report by the Washington Post's Craig Whitlock, the Czechs may pull out of the plan unilaterally in any case). In terms of Syria, read Seymour Hersh's exhaustive account of American diplomacy and what it could bring in last week's New Yorker.

Interestingly, helpful offers are coming from elsewhere to ease this process. Kazakhstan's Nursultan Nazarbayev, for instance, is offering to host a "nuclear bank" of fissile material that nations such as Iran could tap in order to feed nuclear reactors without having to develop their own enriched uranium, report the Wall Street Journal's Jonathan Weisman and Marc Champion. According to the WSJ story, President Obama is seriously considering the offer, which seems reasonable: Kazakhstan is a stable country, and the offer is part of its continuing efforts to get back in the West's good graces after its years of pummeling on political rights grounds. Over at Registan, Josh Foust rightly says the jury is out on whether the bank will actually be created. Yet the fact that it's even getting such consideration demonstrates the administration's will to wedge into a thaw with Iran.

Against this backdrop, Leslie Gelb, the uber-analyst who formerly ran the Council on Foreign Relations, weighs in with a new book, Power Rules: How Common Sense Can Rescue American Foreign Policy. The book, which has been reviewed well elsewhere, is written as a letter to Obama.

Gelb's narrative explicitly jumps off from Machiavelli's The Prince, arguing that for much of five centuries, a national leader's main power has ultimately rested on fear of what he might and could do militarily. Yet Gelb is at heart a pragmatist. Gelb -- last week, I attended a talk by him before a small group of think-tank types and reporters over at the Council's Washington office -- has no time for ideologues or idealists who "ensnare our leaders into thinking about what they 'must' do, rather than about what they can do." He skillfully weaves the current tapestry of global events into the history of what brought us here.

Yet what I found most interesting in the book was Gelb's steady description of how power in the world has changed fundamentally since Machiavelli wrote his job application to Lorenzo de' Medici. Today, economics, and not warmaking, are at the center of power, a point that we discussed last week with Paul Kennedy.

Over at The National Interest, Daniel Drezner writes that this is a problem with the book. Drezner says Gelb fails to handle the economics portion well. I disagree. While Gelb is obviously more comfortable with the politics, the message on economics is clear and, more important, spot on.

I have my own problems with the book, primarily that Gelb seems not to consider that a nation's power can stem not only from its basic military or economic strength, but also from its capacity to muck up the works. In the talk, Gelb called Iran "a third-rate power," verging on fourth-rate, suggesting that it thus shouldn't be looked at as a central player in the Middle East or elsewhere. But what about Iran-supported Hezbollah and Hamas, and their threat to Israel and stability in Lebanon? Iran does occupy a pivotal place, specifically because of its nuisance value.

Conversely, both Iran and Russia -- another nation that delights in confounding U.S. initiatives abroad -- showed in the wake of 9/11 that they are willing and able to work within the construct of international consensus. Both nations played crucial roles in the U.S. dislodging of the Taliban in October 2002.

Russia's Vladimir Putin intuitively grasps the shift in global affairs. That's demonstrated in his energy policy, which despite the financial crisis continues to work to shift Russian power into Europe through the construction of natural gas pipelines and the purchase of energy infrastructure.

But, as Gelb suggests, the U.S. still seems locked into Machiavelli's world:

The linking of trade, investments, and resources to foreign policy and military affairs has been second nature to most nations for centuries. But this has not been the case in America, where principle and politics unite to 'protect' economics and business from government intrusion (except where needed), where the departments of State and Treasury still avoid collaborating on policy, and where intellectual apartheid separates economics and politics departments at universities.

Power Rules gets the new rules right.

The Khodorkovsky Rule

Before you slink away for the weekend given the wonderful weather, take a look at a piece today by the FT's Charles Clover, my former Almaty roommate. In it, Clover weighs in along with a couple of colleagues on the tectonic shift under way in the great game in Central Asia: The U.S. is out, and Russia is in.

The August events in Georgia triggered this shift -- the countries along Russia's western and southern borders learned that friendship with Washington is worth only so much when Moscow is willing to use actual troops in defense of its sphere of influence.

The most interesting part of the long piece is a quote from Dimitri Simes, the head of the Nixon Center in Washington. In Simes' view, Russia has conveyed the following message for neighbors that want to remain on friendly terms:

Number one: you can't join a military alliance with an outside power. Number two: do not deploy third-party military forces without Russia's consent. Number three: do not move third-party military forces through your country without Russia's consent."

I don't doubt that Simes is right. In more than one way, those rules bear a striking resemblance to those set out by Vladimir Putin in 2000 for Yeltsin-era oligarchs. The popular version of the story is that Putin presented the oligarchs a choice -- get out of politics, or lose your fortunes. But the truth is probably that the oligarchs themselves, seeing the writing on the wall, sought the deal. As I wrote in Putin's Labyrinth, the oligarchs, including Yukos owner Mikhail Khodorkovsky, Russia's richest man, did so

to head off a Putin attack on all of them. One oligarch, Mikhail Fridman, told [John] Lloyd, the Financial Times writer, that he and the other billionaires deserved Putin’s wrath. In an interview at the time, Fridman said they asked only that past wrongs be forgotten. “I think the best plan would be if Putin were to declare an amnesty on everything that happened in the past,” Fridman said.

As Central Asia's leaders are all cognizant, Khodorkovsky refused the deal, and consequently has languished in prison. It will be difficult if not impossible for the U.S. or anyone else to again break the region from a similar fear.