Hello and welcome to cross town where all things are considered im Peter Lavelle crude collapse Global Energy markets are in disarray over production low demand and lots of storage has witnessed some prices go into negative territory and this is not just because of the pandemic this is the result of disastrous policies the Energy Market may never recover. To discuss this and more im joined by my guest Dmitri Bobbitt in moscow hes a political analyst and editor of you know smee media project and glenn hes an in oslo hes a professor at the university of southeastern norway as well as author of russias geo Economic Strategy for a greater eurasia original macross up rules in effect that means you can jump any time you want and i was appreciating lets go to oslo 1st glenn we have this pandemic ongoing and we have been in crisis in the Energy Markets and its easy to conflate the 2 and one in the Energy Situation in the markets has gotten worse as a result of this pandemic but they are very separate things and i would say right off the bat that this is the result of disastrous policies particularly by the United States using a series of tax breaks sanctions and really just unprincipled market behavior to try to. Support American Energy companies and its all blown up in their face and a pandemic is made even worse and i dont think theres any really any real road back i mean this is some of the most worse was poorly thought out policies i can imagine and people and average working people are going to pay for it go ahead learn. It well i agree with that assessment because polish shale revolution a serious has been very much all shared all in the us media for quite some time and indeed it has been very spectacular that its going to stay too is taken from a huge Energy Importer to become a big exporter and theyre going to trump celebrated american big game to its Energy Independence which high priority however this was achieved so many things was not just the shale taken ology the u. S. Was also able to a large extent to replace the energy or oil coming out of iran and venezuela by sanctioning them and replacing it furthermore since the russians and assad has been trying to stabilize prices by cutting production in the us especially been able to move and failed to demand so it is been able to increase. Fuel this social revolution on many aspects but one i would also. Keep in mind that americas Oil Companies have been running up huge debts. Especially since the Global Financial crisis in 2008 theyve been enjoying almost 0 percent Interest Rates and the problem with 0 percent Interest Rates is super much lending away money for free and in such you have a lot of male investments that is c. Or making investments where they shouldnt be made and i sense a lot of Consulting Companies are able to continue to operate so a lot of this a lot of observers of the shale industry been waiting for some time now to see you know when this house of cards might collapse or what is the pin that will pop it well obviously this coronavirus has been a well hell of a pin but nonetheless. Its kind of demonstrates i think yes the Current Crisis has helped to crash the Energy Markets in the us us no one is driving flying without producing this thing but at the same time its important to note that the foundation of it was already there flawed so i guess were all celebrating or at least americans were celebrating Energy Independence and this economic a miracle it is sports knowing about it it didnt have the most Stable Foundation and of course for the whole thing to fall apart now in the Current Crisis just makes it. Ok to be good now i think they were its criminal intent here ok im not going to be kind about it at all ok i mean using sanctions as a political weapon to prop up your own Energy Companies i mean that is just you know that that is just throws in the face of International Law on the entire concept of free trade here i mean this is this is an anti free trade i mean to but to a point weve never seen before ok that is what that is one of the basis of the antigun is wailin problem policies and anti rand is to support American Energy companies and the illusion the illusion of Energy Independence which is gone it probably will not come back and then you have this cascade effect where these Oil Companies are right up what glenn was saying there you know theyre going to default on these loans and its going to ricochet all the way through the Financial System hundreds of thousands if not millions of people are dependent on this thing on that part of the economy so this is that you know when that house of cards falls it falls had a stop catastrophic glee and thats what were seeing right now with the rest of the economy spiraling down as well and thats why i said in my introduction i dont see any return to coronavirus for the for the Energy Markets here go ahead. Well indeed. What it will that american conservatives was a logical follow if theyre both they sit. Creation and the article called the way to. The United States removed about 2000000 barrels a day or production. By imposing sanctions on man soil and iran since 2018 you know that i think it was by squad greta and its headlined. This is the beginning of the and only us Energy Independence. Its all b. S. You know its your business that it was a mistake to war against you know poor people are important countries with economic sanctions you know these predatory drum you know it was also adequate and by he is anti east trade war because the trade war against china decreased the demand for oil so basically that your mind has been going dahlan since 2018 and not also one of our killed it. So basically what we have in the United States now is and we want their. Industry insiders call tank tops you know when it just evolved all their Warrior Games all the possible what we want for story of the oil can be a field during the next few weeks maybe months but you know i dont think that the reasons for it excludes it really material you know the European Union which if it had been indeed representing the interests of European Countries it would be very much interested in rational oil and gas by the European Union did everything to wreck the brought all solid steam and it didnt do any deal save north stream so when they were that the states went. Just. In the north when the u. Was basically illegal pretty big legal sanctions on any companies that will help russia finish their project basically of the e. U. And doing anything to stop the United States from doing that dont need any money to be pushed a little bit the germans did push back and they made it very clear their position there would be dictated by washington but on the whole i agree with you here you know from the same article as scott ritter that demon was bringing up here and i love this theres a line that really stuck out to me or Oil Contracts come in go big bad policy is for ever and a big thing that thats really well would not i mean you know im the one hand its perfectly fine you want to have competitive management in advantage in the marketplace i get there and that there are consumers there and predictable others here but those are the predatory nature of this its all its like karma coming back in a hard way because that these distortions of the market has made it even worse and again of course we have to recognize we have the pen demick on top. But were demand is just flat lining all over the place so bad policy is forever in this case got headline. Its worth noting when we talk about policy because a lot of the problems behind this are physical in nature that is minus Interest Rates to be helping to set up a lot of this say well this house of cards which is not collapsing if you dont mind at all not just in the u. S. But around the world now you see many countries moving in to minus Interest Rates or you know paying money to companies to borrow and spend and that we have of course dipping into minus. Sign they can to boil prices in which its quite remarkable now actually having Oil Companies have to pay. People to take the oil off their hands now this is quite quite an interesting thing because. The among mentioned theres no storage and more tankers are you know just hanging around the ports looking for somewhere to live. What sorry theres no demand theres no demand and then does a problem so again in the economy of supply and demand theres no demand in the more. The 1st thing of course deathstar stop pumping out but the problem with a lot of oil wells especially when shale is you cant just simply turn off the well studies often have to fill it up with various chemicals its if you want to reopen them later on you might not to get the same profitability out of it if you can at all so its hard to just stop the pumps especially if they think its short term then its easier just to continue to rack up and sell it at a loss but i think the problem now is what will what will be the be the american solution to this i mean in a capitalist system what you really have is you allow a lot of these Oil Companies in the u. S. Hundreds of them to go bankrupt by having less supply the demand the prices will increase and other Oil Companies can survive but it seems. For a United States for everything to stay seems to be simply be build them up print more money see if you can keep the party going on a little bit longer. Because horse but what youre saying glenn is on the one hand the cynic in me and you should be cynical in these days is that youre bailing out shareholders of these companies that have been underwritten by the taxpayer i mean the moment when is enough enough ok because this was a big get i get going to have Energy Independence i mean i believe in sovereignty here but the means of by the way they went through this process here is a as i said earlier is going to have a cascade effect all the way through the economy just to keep your friends that have shares in these companies that its very expensive you have to have High Oil Prices but at the same time you know you you have this tendency to want to. Not tendency to this drive to put your own oil on the market and demanding other people not participate in it again the most kind of anticapitalistic antitrade process you can imagine go ahead dean well i think its not their only market its and they nature of i mean they fear that theyre in that that states should not be using the oil from being a so our you know where by the will of what you know there was a lot of tropical forests in there and sometimes and theres a lot of oil in venice so it just makes sense to use it in the United States this a year is simply a nature of the same story with the European Union and the or ratio which is mostly basically russia you know they year they have the European Union which is basically a big you know stretch in the southwest and direction of being eurasia that they gear they have these peninsular is not to go into you that well and the gas from the rest of the corner. An ant is absurd its a ludicrous its against their their their laws of nature so when they hear this award Energy Independence its not about independence its about discrimination it against other countries its a lot yes you are right bailing out your friends who are producing where you see in this very very controversial acknowledge your freaking hold hold that thought were going to go to were short break and after that short break well continue our discussion on the oil markets with r. P. As the u. S. Economy was booming growing numbers of people were made homeless. You can work 40 hours d in a week and still not have enough to get housing everybody believes america still is the land of opportunity the reality of were not financially equality and the lack of Affordable Housing for a living minimum wage give many people no choice though thats been a problem with the city and all those turn their backs on and told to stay away oh miss colton its worth it if there is no answer because yes that requires resources the most vulnerable were abandoned on the streets to become the invisible cops. Welcome back to cross talk were all things are considered im peter about to mind you were discussing the Global Energy markets. Ok lets go back to that glen in in our slow week and the 1st part of the program we put all our focus on whats going on with the oil price and demand and storage which plays a very Important Role in all this but how does this change american hegemony in the as we enter the post corona. Virus pandemic i mean theres a lot of people saying that that had to monic presence has been declining ever since its peak at the end of the cold war but now we have this because because energy has been a very key element in the in the unit polar moment for for the washington consensus then and now thats been pretty much blown out of the water i mean we have no idea where the Global Economy is going to go and anyone that says they know that they dont know what theyre talking about because we dont have and that data points i mean every country isnt going in a different direction in trying to find solutions to a different a rate of problems and theyre all intermingled right now but i mean this is something thats been going on ever since the peak of the universe coal or moment and if energy is not going to be such a powerful tool in the strategic tool box how does that change the trajectory. Of the unit polar moment that the the americans are so proud of which seems to be a berry very much illusory today. Well. Youre right a lot of the problems we have today is largely about this competition for for global hegemony or primacy and Energy Always has a key. A key role and its not well the main problem for the United States is that its a power in relative decline and it bases its security on privacy that its global hegemony no days it could do you could make an argument for it probably wouldnt do the main argument was from the early 1990 s. That if the u. S. Was simply dominates the world this could lead to more peace because you know it destroyed this way large powers from competing against each other especially having this concentration of power now from the early 1990 s. The u. S. Oladi indicated this would be its main Security Strategy that is security through dominance and it was formalised and its a curious strategy in 2002 no problem obviously the rising power stay they will have to be pushed back in order to maintain or to preserve. The problem over the last few years or decades has been done to us in relative decline so this makes the us a big threat to countries from china russia iran and though you know the European Union and the rising power is seen as a threat to this model of privacy so really the u. S. Only has to mean. One could begin to accommodate the other large powers and the censorship the way in Strategy Global dominance or privacy and start to call it a more multipolar system or you can keep the party going a bit longer by suppressing the rising power stuff means more investment in military force and this actually pushing back anyone who doesnt hold the line now. The problem with this strategy and always the latter is what appears to americas been following in its thing and if we keep things going a little bit longer but not only. Are there exhausting all their resources but you still have a multicolor d world forming the only difference now is countries like china russia iran this initially formed multiple or system in opposition to the United States because they all see the us their main threat tried to prevent their eyes now again obviously people be looking at the work in a country. Predict how it will play out after this crisis but the crisis will probably put the us in a very difficult Economic Situation so far the chinese appear to be able possibly to benefit to some extent. You know the information coming out about russia and the west is worth noting that over the past 23 decades russia has been while today kate its just been working to fix its financial house in order. That all is dead and is actually put in a very good situation to you know. To get through such a storm you can even argue that all this attention has also put the u. S. Russia in a position where it can handle a very difficult situation as opposed to for example in the u. S. Where they made everything deficient to such an extent that they count there really such a sharp. Well ive always been a big fan of sanctions ok important substantive work its worked really well ok all right the breach ease and calm bear wasnt so good but now theyve got it up to speed ok i mean it just took a little bit of time ok in the capital across the economy and you know de mint one of the interesting things here is that when we look at how. The International System is changing is that it seems really interesting is that in the 1st part of the program we discussed energy and that that tool in the in the tool box is tool boxes is spent are being spent the Financial System is in chaos right now the dollar decline but theres only one thing that hasnt decline and thats military spending at the expense i would argue strenuously at the expense of infrastructure and what is what needs to be done in the us itself because because with the lacking a Health Care System that accommodates the entire population that deals actually with help and profit the u. S. Is going to suffer from that for a long time to come and so you have all of this holds a rate of issues coming to a head at home but at the same time you have enormous defense spending and that seems to be the card that washington wants to play is that maybe they cant be the same kind of financial powerhouse. Not the energy hedge im on but they have the military it seems to me that is the most brittle and probably the least forward looking i mean the International System is so complex now involving very quickly in ways that we dont even understand as we get through this pandemic relying upon the military seems like. A primitive way of looking at the International System it means were going to use force not International Law. Well youre exactly right and this is what russia has in other and against the in the. Our foreign minister Sergey Lavrov several sower time said that we want to talk about International War and the United States and the European Union they want to talk about what they call rules based order which happens to be the saw called International Liberal Order. And theyre talking about hegemony and there was a very will die because of gaining their american conservative called please tell the establishment that us hegemony is all were where theyre off there then you know larry some basically said theyre doing that the states least its dominance you know its claim to dominance during the last 3 decades on the idea that they and what one can protect these International Liberal Order you know with out there this order would collapse well it is already a collapse in without the heads of states you know doing anything dramatic simply because it is order is unsustainable and what you describe very directly you know they fear there you are just mining your may give our stupid people a shoe knew you spent 2 trillion dollars to fix you know although the damage done by the coronavirus and at the same damn you borel whining about you will keep spending about 700000000000. 00 on us defense every year well sort of that the minds of the British Empire thats how Great Britain went down in the middle of the plane that century and they didnt do this any battles actually won the war against germany but the military machine that they have already before the war it was sustained all only thanks to all forms they had to war all money to keep their military machine worn and it could not be sustained for a long time you know it was not the fault of individual put it to chanson it was a need tools brought us that Great Britain basically is ceased to be a war power. So the question is not a ball of us can gemini whether it will continue or not it rolled continue or it will shrink the problem is how will their magic and the wall that large how will we manage these decline you know you elaborate if you suggests some logic like the i mean demon you bring up something that is its very difficult because if youre weaned on american exceptionalism its almost like a cold you cant imagine the world otherwise and then its going to be a its a huge psychological problem that the Political Class has and and if they dont they cant come to terms with it its going to be its going to get messy and tragic unfortunately glenn i mean defending the liberal International Order i dont see whats particularly liberal about it and i and actually this is just a code word for american hegemony ok you know i believe you could have a liberal order but it doesnt necessarily mean you need a hedge of mine. No and you can argue that the rules based order having this liberal are rules based order its. Actually contradictory to have to moan cause if youve got to maintain the press or among it leads to a lot of. Well a lot of rule breaking and furthermore the whole idea of a multilateral rules based system yes if you dont mind if one disorder is central about his death whole idea that they were able to. To uphold this liberal order but it depends on western solidarity so its a western led liberal order though the problem with this is if you go to western and order their 1st principle then will be that we need in unity internal unity within the west but then it became because theyre a difficult question how can you actually have a rules based order and i think for countries like russia especially especially recognize that whenever theres a tension in the International System lets say russia or worse hole in the russia versus the u. K. It will be any possible scenario where russia is not in the wrong where russia is not the bad guy because if you get if you get a rules based system but it depends on western unity they were the west will always hold together and russia will always be in there also this whole idea that. Theres a lot of internal contradictions within this liberal International Order and as the International Distribution of power has been shifting away from the west and towards the rest of the world i guess upholding pension money relies more and more on the course of its power that its not just military power that everybody can only sign it and nothing else important i mean that means. A liberal order as defined by the washington consensus means you have to use coercion i mean what value is that in itself violence of a demon rapidly running out of time then. Well there was a book published recently on this issue of the author saw Alexander Cooley and then next and there the title of the book is exit from hegemony and revel in all their magic and all that and the 2 office arguing that this socalled liberal international or that is maintained by some very illiberal ringback means i mean pressure on china demonizing russia basically alienating the country or so like iran when youre so al and a lot of other important independent countries and the biggest question is legalize the sleeper or there is International War there is the organization of United Nations what else do we need to have a system based on justice thats why russia and china insist on their return to even if it will have to end on this no you cant have meaningful International Law if you have a hedge a man that doesnt recognize the value of International Law it is deemed quote unquote against their interest thats all the time we have gentlemen i want to thank my guests in moscow and in oslo and i want to thank our viewers for watching us here in our teeth so you next time remember. Who do wish to appear sort of in the group of force and pursue a supreme being or go before we can prove. Each. Other churches that are. Just going to do it or. Youre definitely walking into the word Dollar General we not going no where were working until i can see march. Which what she needs to break shes. Not. Well. Live from the World Headquarters of r t america in our Nations Capital this is the news with rick sanchez fan hi once again im rick sanchez to all of you who are watching us from all over the world whether youre watching us on regular t. V. Or on portable t. V. The we are so glad that you are here with us tonight we have to begin by asking a very important question one thats really dictated to us by by history and here it is with both the president s approval numbers and the u. S. Economy in a freefall is it time for us to wonder about a wag the dog scenario wag the dog you know is where u. S. Leaders or really any leader from the
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