The 'evolution' of the Russian oil and gas industry

Wind the clock back to 2022 and Russia has the biggest oil and gas infrastructure in the world: the country is sometimes referred to sarcastically as a nuclear-armed gas station.  It's fully functional, although not very sophisticated - the amount of wasteful flaring that goes on is legendary (of gas at oil production facilities, and of oil at gas producing locations); and there are few conventional sophistications such as accurate metering and non-return valves.  Nonetheless, it's the primary pillar of the Russian economy.

What a target!

Well, Ukraine started setting about it seriously in 2024.  To start with, their offensive means being rather slight at that stage, they went for plant in the neighbouring oblasts.  Right from the word go, these pinpricks revealed huge, structural vulnerabilities.

Vulnerable ...

Russia immediately realised just how serious it might be, and set about devising counter-measures.  They encouraged oil enterprises to invest in small arms (requiring a change in the law) for local defence[1], and experimented with wire cages and steel gantries to create physical barriers - an utterly futile effort because, even if a drone hits a cable ten metres away from its target, it stands a very good chance of rupturing it anyway.  We know all this because helpful Russian locals are keen on home videos and social media - and of course good old Google Earth provides astonishingly detailed coverage of most of western Russia, filmed closer to sensitive facilities than is allowed in Western countries! 

Then, there's that lack of non-return valves, meaning that a single blazing tank can burn for ten days - there's no way of cutting it off from the pipeline network which then gaily feeds the flames.   Oh, and effecting repairs ain't so easy: any component even vaguely sophisticated comes only from western manufacturers and is under embargo - meaning costly and time-consuming black market procurement. 

Other palliative measures have been tried.  Initially, officials would simply lie about the damage done.   There are strict Russian injunctions against publishing photos of these goings-on - hah!  To this day, every strike is broadcast to the www in realtime.  Then, there are missions by the Orthodox Church, variously to bless oil facilities, to pray for their safety, and to send clerics to attend upon the fire-fighting efforts[2].  Evidently this approach has its limits.[3]

Well.  As Ukraine develops ever longer-range strike capabilities, the list of potential targets gets bigger and bigger.  And of course their location is known rather exactly, and they can't be moved!  Nor, in practical terms, can they be defended.  They are being picked off, one by one - the three most noteworthy being perhaps successive raids on the main Moscow City refinery and one close to St Petersberg, plus Omsk.  The first two of these prime targets bring the war rather close to home for everyone in those cities with a pair of eyes (and a nose); the third sets distance records (getting on for 3,000 km).  And of course, there are serious fuel shortages - in Russia! - to the point where exports have been banned and very large-scale imports are being sought; but the harvest is still under threat, industry is feeling the pinch, and ordinary Russians, particularly in the south and west, are really stuck.

Notwithstanding the Deputy PM's classically euphemistic description of this, ("interruptions in the supply of fuel caused by changes in logistics") even Putin - who likes to keep his hands clean from disasters of all kinds - has been forced to pronounce.  Here are his dicta of yesterday: 

He called the difficulties with fuel "temporary" and associated, among other things, with "the enemy's attempts to disrupt the vacation season".  (Oh yes, the Russian vacation season is uppermost in Kyiv's strategic thinking.)  

"The safety margin of the Russian energy system is one of the highest in the world." (Measured by reserves in the ground, presumably.) 

"The enemy is trying to create a nervous situation in Russian society."  (Trying?) 

He called for a speedy decision to subsidize fuel purchases  (Not clear where the money will come from for that, but let's see.) 

He instructed the speedy deployment of "the capabilities of small and medium-sized businesses in the production of petroleum products". 

This last one is very interesting.  Sure enough, for a country in dire straits, it's a feasible approach to squeeze a few more drops from what's available.  We know from how ISIS conducted its affairs in the areas of Iraq and Syria it once controlled, that home-made micro-refineries are a Thing.  And of course Russians are pretty well versed in home-based distillation!  All this said, at the end of the day a big economy, and certainly one with a huge defence-industrial base on a war footing and trying to ramp up as fast as possible, needs massive quantities of high-grade fuel that only large-scale, uninterrupted, fully industrial production processes can provide - as 1944-45 Germany discovered.

However laughable micro-refineries are as a 'solution' to Russia's problem, one can't rule out a proliferation of medium-sized plant - given time.  But development of this on any scale would be a matter of years, not months, and require skills and components that "medium-size businesses" won't find readily to hand - even if their staff all manage home-made vodka stills on the side.  And it would never be able to produce high-grade product.  And there would be other vulnerable choke-points to be found in such a newly-diversified system.  And individual new targets would be even less plausibly covered by air defences.  Etc etc.  In sum: this is truly desperate stuff.

ND

[1]  As one Russian milblogger put it, "successfully" shooting down a drone with small arms directly over the target is likely to be "a posthumous achievement".  Gotta love Russian sarcasm.

[2]  In one famous incident, a posse of Orthodox clerics attending a tank blaze after three days of futile fire-fighting to assist with their very best prayers, were killed when the tank exploded.  The same fire burned on for another week.

[3]  But clerical efforts continue.  The Church has been ordered to organise a pilgrimage, starting out at the Omsk facility, Russia's largest (now closed following this week's bombardment), and proceeding to join the dots of refineries all along a route ending in Crimea.  Reportedly, the Church has refused to carry out the last bit because Crimea is too dangerous for clerics just now.  But the Church has renewed its demands for the raising of tithes, priority for priests in gasoline allocations, and the banning of abortion and neo-paganism.  See?  Russia is a different world.  

Farage takes The Initiative. Hmm.

So: seeing himself increasingly caught up in a thorny thicket of unwanted and very awkward controversy, Nigel Farage has Taken The Initiative.  Well, an initiative.  

Long-time readers will know that I place great store on proactive, creative initiative-taking.  It's not as common a trait as you'd expect or hope, and that includes most of our "leaders", the vast majority of whom are governed strictly by whatever rulebook and conventions they were brought up with.  It's a pretty poor show when Peter Mandelson is the prime example of a relentlessness initiative-taker - always aware of the very many levers that are within grasp, and using them imaginatively.  Elon Musk is another.

In its rarity and political importance, initiative-taking shares aspects in common with the ability to strategise.  Again, you'll know my views on this and the example I often cite, George "Boy Genius" Osborne.  Clearly, the man is a natural strategiser - of the inveterate student-politics kind; and we could add Dominic Cummings and Morgan McSweeney to the short list of UK political thinkers - but that's not enough.  What's needed, of course, is good strategy, and Osborne wasn't great at that (never ideal in a Chancellor of the Exchequer).  Any old strategy taken from some well-thumbed playbook isn't always enough; and military history is replete with fatally bad strategisers.

And so it is with initiative: Farage needed a good one, and it's not at all clear this is it.  What do we reckon?

ND

Desperate bluffing by Putin

This post will come replete with major caveats in due course, but let's start with the headline.  Vladimir Putin is bluffing like crazy over the inevitability of his victory, and will continue doing so for the next three months (until after the upcoming "elections") against the seemingly slender hope that Trump will somehow ride to his rescue and force Ukraine to accept something that can be portrayed as "victory" for Russia.  Given that use of nukes is off the table, bluffing plus outright airborne slaughter in Kyiv are practically all he has left.

To sum up:

• the Russian 2026 "spring-summer offensive" has yielded miniscule net[1] territorial gains at the cost of phenomenal Russian casualties.  All objectives remain unmet.
• counting from the front line to St Petersburg and beyond, the Ukrainian medium- and deep-strike campaign, notably on oil and logistics assets, has: seriously incommoded Russian forces at the front (supplies must be brought up by drone and on foot); paralysed transport on major roads in the occupied territories, with critical shortages of fuel - & water - in Donetsk, and Crimea almost under siege; made significant dents in manufacturing facilities of the Russian industrial-military complex across a very wide swathe of the country; seriously hampered telecomms and air movements across western Russia; wreaked colossal damage on the oil industry, with severe shortages resulting (and forcing large-scale imports from Belarus, India and other nations) that must soon have significant inflationary, industrial and food-production consequences; via vast palls of black smoke over Moscow and St Petersburg, demonstrated vividly and demeaningly to the populace that nowhere is safe from highly accurate drone and missile bombardment.
• having thus far failed miserably in the planned effort to censor the internet in Chinese style, Putin faces a populace that can see all this quite clearly.  Not withstanding the existence of some loyalist diehards that will cling to Putin's infallibility as they did to Stalin's, the greater part of the people, realistic cynics as most Russians are, have clocked it all as being at the very least, not at all what they were sold back in 2022, but in fact starting to impinge on them directly.  To call this "unrest" would be to misunderstand how Russia has always been: but it's a near equivalent.
• the economy is in a bad way, and short term relief from Iran-war oil prices has been overtaken by those prices falling back again PLUS the abovementioned actual shortage of oil products.

There are very big decisions pending for after those elections, in two categories:

1. the economy: if nothing changes, really deep measures will be needed;
2. manpower: if Putin decides to soldier on, even just to the extent of trying to capture the rest of the Donbass (and his stated territorial goals extend a lot further than that), he'll need a very large intake of new conscripts - perhaps a million.

So: given that's all 3 months away, during which time Putin doubtless feels he can (just about) maintain a facade of BAU, he sees little downside to giving the Trump card one last play.  Look, we're advancing on all fronts - let me lend you this magnifying glass - and can carry on like this forever!  Get that clown to surrender, now - and cash in your Nobel Prize voucher!!  Yeah, right.  Even Witless-Dumkopf, even Trump himself, have probably spotted the flaws in that line of reasoning.

One other thing, before the caveats.  L'il Volodya also shows signs of losing it a bit.  It's always necessary to enter notes of caution here because he's been written off as a dying man for years.  But in a very high-profile set-piece "interview" he gave recently, he dropped a real Biden of a clanger and declared Ukrainian troops in a town deep inside Russia were only 2 km away from being totally surrounded.  He was obviously mistaking it for some tiny Ukrainian settlement he'd been briefed about but forgotten the name of - commentators have made various guesses because it's not entirely obvious which.  But this in the full glare of prime time Russian TV.  Not a helpful incident.

And the caveats?  It's basically the usual one, with a specific twist.  It's always wise to assume that there is no limit to the suffering that can be imposed on the Russian people, however cynical they may be.  That's one manifestation of "the mysterious Russian soul"[2] that they are so proud of.  And I doubt there are any moral limits to the extent Putin is willing to exploit that, even if there might be some political constraints in an internet age.  So my opening list of how bad things are in Russia needs to be considered in that light.  BUT it cuts both ways: Ukrainians are equally able to take it, as they've proved heroically for over four years in defiance of almost all expectations.  Are they crumbling in the next 3 months?  No, they ain't.  And of course they have the tremendous backstop of EU / UK funding, without which it would have all been up for them some while ago.

The special twist is this: all the evidence points to Putin not knowing in detail what's actually happening.  He uses neither mobile phone nor laptop.  The military accounts he receives are just the icing on the mighty traditional Russian layer-cake of filing "beautiful reports" at every stage along the chain; and we can probably assume the economic and industrial reports he gets are similarly sugared.  It's only occasionally that hard facts seem to get through to him.  This all makes it even more likely that he'll play the game of attrition by infinite suffering.  Scary stuff.

There is one last fallback for Putin - China: because we all assume Xi won't let him "actually lose the war".  But Xi also serves as a restraining influence: he's ruled out nukes in no uncertain terms; and note how the 2024 experiment using 10,000 North Korean troops in front-line roles quietly came to an end without being scaled up, or even just continued. 

And "actually losing the war" may not be a relevant criterion: look how badly things have become for Putin with China notionally having his back!  I don't think he'll be getting any change from the Donald either just now: a(nother) failed "peace process" is the last thing Trump needs before the mid-terms.  

ND

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[1] 'Net', because Ukraine has been successfully counter-attacking on a couple of fronts and re-seized territory of its own.

[2] Here's some more of my attempts to illuminate these big cultural differences. 

"Manchesterism" - seems like we've been here before

 ... and it didn't end well.

"Manchesterism" - not to be confused with Manchester Liberalism - is intended to mean something easily grasped for political purposes: greater interventionism at the civic level.  This is supposed, a priori, to have obvious benefits yielding excellent results.  Well, maybe, sometimes.  The ideal degree of devolution is as long as a piece of string: how many Scots feel their once vaunted education system, or the Welsh their vaunted health service, have benefitted from greater devolved control?  Objectively, the results suggest otherwise.  And the ludicrous Rebecca Long-Bailey's equally ludicrous 2019 Labour manifesto plans for ultra-devolution of the energy industry (down to the level of units of "around 200 households" owning their own local energy infrastructure) provide the reductio ad absurdum of 

And there are reasons to think that Burnham's model isn't what it's thought to be: that he's basically encouraged commercial property development on a significant scale, which can't easily be replicated across the nations.  A glance at the pages of every issue of Private Eye and its years-long revelations of naked, industrial-scale corruption on Teesside for the personal benefit of a very small number of individuals, shows that local devolved powers can end up being shockingly abused. 

But there's another factor.  Remember how Neville Chamberlain came to Westminster as the dynastic hereditary king of Birmingham, with municipalism in that other great city as his calling card.  He didn't do so well in the corridors of Whitehall - or of Bad Godersberg and Munich (notwithstanding some recent revisionist versions of events there).  Maybe in other nations there is a wothwhile tradition of fine presidents and prime ministers coming up the local government / Big City Mayoral route.  But not around these parts. 

Do we see any signs that Andy is up to the bigger job?  Municipalism is not enough, Mr Burnham.  

ND

Starmer goes "with good grace"? We'll be the judges ...

And so it came to pass.  Suddenly, all the fight went out of him.

"I have heard the answer of my parliamentary party ... and I accept that answer with good grace."

Oh, really?  Let us be the judges of that.  If I were a gullible Labour leftie who'd had higher hopes back in 2020, I'd be fairly bitter.  Andy "novelty factor" Burnham will be having all those hopes projected on him now.  Good luck with that.  I guess he's at least got the advantage that hopes will be set rather lower now.  "Hope he doesn't accept too many freebies ...";  "Maybe he believes in something ...".

Spare a thought for Sadiq Khan, who "paid tribute to Sir Keir Starmer as 'a man of great integrity' ".  Well, it takes one to know one: pardon me while I mop up this pool of spilled tea.  Oh, tragedy: this moment should surely have been Sadiq's - how he's been trying to figure out how he could do a Burnham before Burnham himself pulled it off.  So now he'll have to wait for another mainstream Labour meltdown.  If the Tories are the model for modern British politics, that'll be along as soon as the latest lettuce wilts.  Early GE, anyone?

That said, I'm not sure Khan looks terribly well just now.  Let's charitably blame the new haircut.  Now, about that critical upcoming NATO summit next month ... what's your foreign policy, Andy?  And defence spending?  They are all looking at you.

ND