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GAZPROM vs. OPEC, WHO’S BLUFFING WHO?

MOSCOW, Russia, July 8…In a 1956 reception at the Polish Embassy, a tipsy Nikita Kruschev, then First Secretary of the Soviet Communist party, threatened the capitalist West: “History is on our side,” he said, referring to Marxist ideology. “We will bury you.”

Forty-three years later, in 1989, it was the Soviet Empire that was buried in the rubble of the Berlin Wall.

But the Empire has risen again–at least in its own mind. Only now, the weapon it intends to use to subdue the West is energy.

In remarks last week, Alexei Miller, chief executive of the Russian state-controlled gas group, said that Russia will soon overtake OPEC as the world’s dominant energy supplier.

“We think oil will reach $250 a barrel in the foreseeable future,” he said and indicated that Russia will extract maximum profit and political influence from this rise.

Russia, which is not a member of OPEC has repeatedly defied the cartel’s requests to bring its production in line with OPEC standards.

“OPEC doesn’t have any real influence on the global market nowadays,” Miller told the Financial Times. “Not a single decision has been passed of late that would really influence the global oil market.”

This, according to Africa Oil Week, “set the scene for a Cold War between Moscow and OPEC.”

Russia has surpassed Saudi Arabia as the world’s leading exporter of oil, pumping 8.6 million barrels a day to 7.96 million for Saudi Arabia. With global demand rising Russia will probably increase production to 9.2 million barrels, energy experts say.

Analysts estimate that the oil reserves of OPEC nations will be exhausted by 2050, while Russia with only 6% of the proven reserves in the world will only be beginning to use its resources.

Russia has the energy starved countries of Western Europe in a stranglehold, Miller hinted. With its new South Stream pipeline, which would take gas under the Black Sea to Bulgaria and then onto Western Europe, Russia will be able to turn the faucet on and off to extract financial and political gain.

“The sharp rise in Russian exports…raises the question: Is OPEC doomed,” said Leo Drollas of the Center for Global Energy Studies in London.

And is Russia poised to reclaim its Cold War superpower status?
“No to both of those questions,” says Igor Yopsvoyomatsky of The Gryazneezhid Think Tank in the Greenpoint section of Brooklyn.

Interviewed at Golubchiks Tavern, Yopsvoymatsky was emphatic. Raising a glass of vodka he declared: “Russia is the diseased old whore covered with face paint to hide her syphilitic scars.”

The customers cheered and the bartender slid another glass across the bar.

“For its entire history Russia has bluffed the world,” Yopsvoyomatsky, a recent immigrant from Pinsk said. “In 1787, Russian minister Potemkin had facades put up along the Dneiper River in Crimea to convince Empress Catherine that he had built villages to resettle Russians. There was nothing behind those facades but torches made to look like lamps and cooking fires.”

He dropped a lighted match on his corduroys trying to light a foot long Russian cigarette, but continued without noticing.

“In World War I Russian sent soldiers to battle with wooden rifles made to look like real thing,” he said. “They were immediately overrun by Germans…”

“Igor, your pants are burning,” the bartender said.

Yopsvoyomatsky waved irritably. “In Cold War, Russia impoverished its people trying to keep up with West. Its Army was poorly equipped with no spare parts. It could not afford to sustain nuclear program and did not have enough nuclear weapons to defend itself against attack. But frightened people in West thought it was a military juggernaut and then when it was beaten in Afghanistan they could see it was Potemkin military…”

A waitress swatted at his trousers with a wet towel, raising a cloud of smoke.

“Now in Russia you have thousands wealthy, siloviki, ex-KGB thugs, and everybody else poor or worse,” he said.

He raised a finger.

“One…Russia has lowest birth rate, 1.3 children per family, in its history, which means there will be no workers for its so-called big economic miracle…”

He managed to raise another finger…”Two…Russians alcoholism rate has tripled, according to consumer protection agency,” he said. “Russians drink three times as much as they did sixteen years ago. And now they are seeing alcoholics as young as thirteen in treatment centers…”

He tried to raise a third finger and fell over against the bar. “Three…Russian Ministry of Health says suicide rate is among highest in the world with over 60,000 suicides in 2007.”

With his head in a puddle on the bar, Yopsvoyomatsky continued. “Human Rights Watch says Russia has not ability treat rampant rise in drug addiction…Russian inflation is up to 15 per cent, Russian oil exploration and development has stalled because of corruption, inefficiency and xenophobia…”

A spark ignited Yopsvoyomatsky’s woolen socks and flames flared around his ankles. The bartender poured a pitcher of water over him and the waitress rushed in to pull off his burning pants.

“Russia rule the world?” Yopsvoyomatsky shouted. “Pfui, I say. Pfui!”

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