George Eliason: Ukraine lies about Russian attack being prepared to hide dying economy

Beginning the day after Joe Biden’s inauguration, Ukraine has been complaining of Russia’s troop buildup of over 90,000 men on its border. According to Ukraine’s Zelensky, Russia was prepared to attack at any moment. In response to this, Ukraine mobilized over ½ its army or over 170,000 troops to the frontline with all the heavy weapons at its disposal accompanying them. This force was a supposed counter to the Russian invasion army, which again, was just over the border. In reality, the Russian army staged planned war games near the city of Yelnya, 160 miles (257 kilometers) from the Ukrainian border. You read that right, the Russian army was160 miles away from the Ukrainian border even though every major western publication made it sound like they were already in Kiev, George Eliason, an American journalist who lives and works in Donbass, writes for Modern Diplomacy. 

For the average modern army, that means over a day’s travel just to get to the Ukrainian border. Then another 4-5 hours travel on top of that to where the Ukrainian army is. So much for a surprise attack. So what is it that Ukraine’s President Zelensky finds so threatening about Russia?

Ukraine’s President Zelensky told visiting US Senators in early June that the country’s military defense against Russia and the completion of the Nord Stream 2 pipeline are inextricably intertwined. Once the project is completed, Ukraine will be deprived of the funds required to fund defense spending and defend Europe’s eastern border. “Nord Stream 2 will cut Ukraine off from gas supplies, which will cost us at least USD 3 billion per year.” Zelensky wants Russia to pay $3 billion per year so he personally can defend Europe from Russia who is paying him.

In reality, Ukraine has about one month’s worth of diesel if Kiev ignores Ukraine’s responsibility to its own people to provide a safety net or at least access to necessities like bread or shelter in below-zero weather that’s on its way next month by heavily subsidizing gas and electric costs.

The only thing the government in Kiev is concerned about is losing the $3 billion in transit fees from the country they accuse of attacking them. Zelensky’s government went as far as demanding fees from Germany and Russia when Nordstream II took over the transit game. Zelensky’s Ukraine is shuffling Europe, NATO, and the US closer and closer to the line where one mistake in diplomacy, one stupid move by any of Ukraine’s infamous nationalist volunteers, and bang!  Joe “Brandon” and club RINO are sleepwalking America right into this level of catastrophe by coddling his pet kleptocracy who’s already stolen billions of US dollars meant as aid.

And why? 

Ukraine is using the supposed Russian attack to renegotiate its unsolvable gas situation. It’s either this or tells Ukrainians; Oops! We screwed the pooch guys! You’re gonna freeze because we can’t afford gas. Russia won’t invade because then Russia will be responsible for providing a total civil safety net including gas and electricity for Ukrainian people who otherwise can’t afford it. Ukraine’s economy is dying. Russia doesn’t plan to foot the bill.

According to Oleg Popenko, the head of the Union of Consumers of Utilities (UCU), high gas costs will prevent most small and medium-sized firms from operating and will force them to close. According to him, small business owners will be unable to “pull” the payment of 7,000 hryvnias (22,000 rubles) for heating. As a result, we can anticipate a reduction in the activities of hairdressing salons, bakers, dry cleaners, dental offices, and so on. They will either have to include the higher-priced communal unit in the pricing of their services, or they will have to close. All types of businesses, from small dry cleaners to big agricultural holdings, use gas to some extent. The only ones who benefit from the price increase are Ukrainian gas-producing businesses, which are now raising the price for their users’ dozens of times, resulting in massive profits.

In a recent interview, former President’s Office head Andriy Bogdan forecast a total economic collapse by February of next year. “Here we still have December – this is the pre-New Year’s, joyous month, when everyone spends money, and somehow with hope:” We’ll pluck something out of the egg-box and live.” However, this will not be the case in January and February. “With a further rise in gas prices, the chemical industry and the production of fertilizers are at risk of dying altogether, predicts energy expert Valentin Zemlyansky. “Industry will die. I am not kidding. The impact of energy prices on the business situation is an inertial process. The business will not close immediately, it will happen in stages. The beginning will be in March 2022, we will see the peak by May-June,”the expert says.  Zemlyansky also emphasizes that this happens with a favorable market environment – mineral fertilizers are in demand, they are actively purchased by India, Pakistan, and China, but Ukrainian enterprises cannot afford their production. This was confirmed by the recent suspension of the specialized work of the Odessa Port Plant.

Thus, Ukrainian exporters are squeezed out of world markets. Many of Ukraine’s neighbors that produce similar products (for example, nitrogen fertilizers) receive gas at fixed low prices. In Turkey, for example, the government regulates gas prices for such businesses. It will also be difficult to sell the products that have risen in price on the domestic market due to the falling purchasing power.

Economic analyst Igor Deysan also warns that an increase in fertilizer prices will lead to the abandonment of sowing of many crops and an increase in the price of agricultural products, especially wheat in the 2022-2023 season. “The cost of gas is largely carried over to the cost of wheat and other crops. If gas prices remain high for a long time, the rise in gas prices can make a significant contribution to the price of wheat,” the expert predicts. Farmers still need to dry the harvested wheat crop, which also implies significant gas consumption. The next in the cycle of its processing are millers and bakers, who are also going bankrupt due to high gas prices.”

The breadbasket of Europe is empty. Ukraine hasn’t seen this scarcity since the 1932-33 famine they are constantly enshrining. The difference between then and now is this time the government is responsible for all of it. Bakeries will close down because Ukraine oversold wheat to Turkey and its stocks are empty. Now, the breadbasket nation needs to purchase flour from Turkey. Even if the grain was there, the gas needed to furnish the bakeries, cities, businesses, homes, hospitals, and government buildings with heat and electricity is not.

Deputy from the “Opposition Platform – For Life” Yuriy Boyko said on the air the other day that high gas prices are ruining bakeries. “I came to a bakery in the Kiev region. A modern enterprise. The bakery today pays for gas seven times more than a year ago. And for electricity twice. And energy carriers play a very significant role in the cost of bread, about 20%. That is, in reality, already today they are forced to either increase the cost of bread, or there will be no bread," the deputy said.

The short-term gas forecast for Ukraine looks bleak even though Ukraine has the second-largest proven gas reserves in Europe right behind Russia. Former Ukrainian Prime Minister Yulia Tymoshenko, now the leader of the Batkivshchyna party, stated on the Nash TV station on December 22 that Ukraine could furnish itself with gas in three years, but only under particular conditions. Earlier, the politician said that Ukraine should not wait to purchase Russian gas supplies until the end of the heating season, because there is nowhere else to get it. According to Tymoshenko, “To enhance gas production in Ukraine, the president’s will is required first and foremost because this should become a strategic and critical program for the development of the state’s energy sector.” Today, there is no such political will. “Licenses are dispersed on the right and left,” she explained. Secondly, according to Tymoshenko, non-budget banking investment resources must be directed to Ukrgazvydobuvannya, which also needs to be licensed for all explored deposits. In this case, the ex-prime minister is sure that Ukraine will provide its own gas in 3 years.            

Gas firms promise to reinvest revenues in increased production and modernization, but in the meantime, all other industries and small businesses can relocate across the world. The Association of Gas Production Companies (AGKU) vehemently rejected proposals to impose state regulation of Ukrainian gas pricing in October, citing the fact that it would “inflict a blow on Ukraine’s image in the world arena and severely harm the European Union.” integration processes”. Only those Ukrainian oligarchs’ enterprises like those of Rinat Akhmetov, Igor Kolomoisky, and Viktor Pinchuk, who control gas production companies and can send natural gas to their enterprises are affected in this situation.

If Ukraine could produce enough gas tomorrow, its citizens can’t afford high-priced Ukrainian gas and hydrocarbon products. The reserves are 5000 ft. below the surface and the costs of drilling and extraction are quite high. The only way Biden’s Ukraine can become energy independent is if fuel prices perpetually soar from now on. Ukraine will be able to pay financial obligations like World Bank loans and investors like Hunter Biden.

According to Yuriy Vitrenko, the newly appointed CEO of Ukraine’s energy behemoth Naftogaz, Nord Stream 2 will give Gazprom a dominant position in Europe, giving it significant leverage over Germany and other EU countries. The only option to avert this scenario is for Ukraine to gain access to gas from other gas-producing countries like Turkmenistan, Kazakhstan, or Azerbaijan, which would gladly use Ukraine’s transit system to sell gas to Europe. “Germany should ensure that Gazprom cannot obstruct us,” Vitrenko argues. “They must do so before Nord Stream 2 is completed, while Germany retains the essential leverage.”  The Germans must impose a moratorium until this type of competitive solution is implemented.”

If Russia refuses to cooperate, it will show that Nord Stream 2 is simply a geopolitical weapon aimed at harming Ukraine and monopolizing Europe’s energy markets, according to Vitrenko.”We have a transit system in Ukraine.” Let us compete to bring other gas providers into Europe,” we argue. Vitrenko believes that once Nord Stream 2 is completed and the present five-year contract expires in 2025, Russian gas will no longer flow via Ukraine.

Arsen Avakov, Ukraine’s Interior Minister, has claimed that Russia may not even complete the current contract. He warned that Moscow may disrupt Ukraine’s pipeline network to hinder gas transit across the nation and boost the argument for Nord Stream 2. What’s interesting about this is it brings us right back to a graft-investor scenario reminiscent of Biden-Burisma. The companies feed profits to investors instead of reinvestment into equipment and permitting. Secondly, Vitrenko wants the most expensive gas in Europe to materialize in his Ukrainian pipe. Caspian Sea gas, like Ukrainian fracked gas, is extremely costly to produce. The average Ukrainian won’t be able to afford it even if it was a possibility.

It’s only now that we get to the part that will make Americans and Europeans equally appalled. Biden is using gas and oil cost spikes due to his mandated production cuts and the attempt to shutter Nordstream II to support Ukraine. The more hydrocarbon product costs spike, the less dependent the EU and Ukraine are on Russian gas. This means fewer Russian gas transits to the EU. As a consequence, Ukraine can profitably frack hydrocarbons and pay oligarchs, political grafts, and international loans. The gas is too expensive for Ukrainian people but investors like Hunter Biden or Amos Hochstein make out like bandits.

The more profitable the expensive EU oil and gas production rigs become, the more diverse gas purchases are and short-term energy diversification and security is achieved through extremely high price energy products. If energy costs are through the roof, Joe “Brandon” has a clear runway to dismantle the US economy and Democrats will do what Democrats are doing. Why should this infuriate you? What’s the difference between $1.80 per gallon and $4.00 per gallon gasoline in the US when it’s coming out of your pocket? The difference is Ukraine’s ability to pay its bills. The difference is Ukrainian politicians dealing with their own problems like grownups. The difference is Ukraine starts acting like a partner and less like a petulant child throwing temper tantrums. How do higher fuel costs transfer to high retail off-the-shelf product costs? Do high energy costs contribute to runaway inflation? Now you know.

It is a hard enough choice to bear the cost of lives. Ukraine’s Zelensky doesn’t want Donbass back in the fold. Just a few weeks ago, Zelensky described the citizens he claims to want back as “subhuman.” The Ukrainians, as of January 2022, are not good partners or friends to America. They are unworthy of American support.  Do we want to give them the opportunity to send American kids to war so their oligarchs and our politicians can steal more?