The (Ex) Washington Realist

Scandal is fun, salacious, and great to write and blog about. Everyone deserves levity from time to time. And this past week has been great for this--more scandal over campaign advisors and their ill-advised remarks, a "Mr. Clean" governor taken down by a prostitution scandal, and so on ... Fine. But pushed down the headlines are the explosions in Pakistan and Iraq, and other real world issues that have a direct impact on your bottom line.

And meanwhile, more bricks are being laid in the foundation of what seems to be a pretty audacious energy strategy on the part of Russia that will mean that any future President Obama, McCain or Clinton won't have as much freedom of action when that supposed 3 AM phone rings.

Gazprom's strategy of making different European states key stakeholders in its success--either by routing pipelines across their territories or creating vast gas-storage depots--has paid off by effectively killing once and for all the "NABUCCO" pipeline that was supposed to be an alternate way to bring Central Asian gas to Europe without it having to pass via Russian territory or a Russian-controlled pipeline. Gazprom's alternative projects were more lucrative.

Now, Russia seems to have reached a deal with the Central Asians that by 2009 they will get full market price for their natural gas. Works well for Russia which is in the process of increasing its electricity production from nuclear and coal, with less need for natural gas--remember, Gazprom now owns a major Russian coal company too.

Bad luck for Ukrainian P.M. Tymoshenko because Ukraine was still counting on getting cheap Central Asian gas since Ukraine hasn't moved on increasing its own energy efficiency or on developing more of its own indigenous gas fields. What's Washington going to argue, that Uzbekistan, Kazakhstan or Turkmenistan ought to subsidize Ukraine with cheap gas?

And this pre-emptive move lessens the likelihood the Central Asians will divert more gas for the Chinese and Asian market--and increases the chances that China will secure new sources of supply from Iran--making Beijing more unwilling to countenance any sort of destructive pressure on Iran. And if China locks up more Iranian supply, that erodes Europe's great white hope of eventually using Iranian gas as a way to lessen dependence on Russia and on Russia's control of the transport routes from Central Asia.

Also on Iran, the latest polls: "Support for tough measures against Iran's nuclear program has fallen in 13 out of 21 countries according to a new BBC World Service Poll."

And those latest state election results in India--perhaps the nuclear deal is postponed a bit longer.

Just a little of what's going on behind the headlines. Oh, but a critical report--Britney's lawyers say K-Fed can pay his own legal bills.