Michael Hudson: The Fracking/World Bank/IMF/Hunter Biden Dismantling Plan for Ukraine

Richard Smith was early to take a dim view of R. Hunter Biden becoming a director of a Ukraine’s biggest private gas producer, Burisma Holdings:

This has to be a hoax, right?

It’s so bizarre that you almost have to assume it’s a hoax. It sounds more like a cliched movie plot — a shady foreign oil company co-opts the vice president’s son in order to capture lucrative foreign investment contracts — than something that would actually happen in real life. But the indications as of this afternoon are that the board appointments actually happened, and that a Ukrainian energy company has retained the counsel of the vice president’s son and the Secretary of State’s close family friend and top campaign bundler.

Michael Hudson reports in a Real News Network interview that the commercial and geopolitical logic behind the Biden role, and the bigger US and World Bank/IMF program, is to push fracking onto a decidedly unreceptive population in Eastern Ukraine.

More at The Real News

JESSICA DESVARIEUX, TRNN PRODUCER: Welcome to The Real News Network. I’m Jessica Desvarieux in Baltimore. And welcome to this edition of The Hudson Report.
Now joining us is Michael Hudson. Michael is a distinguished research professor of economics at the University of Missouri-Kansas City.

Thanks for joining us, Michael.

MICHAEL HUDSON, PROF. ECONOMICS, UMKC: Good to be here, Jessica.

DESVARIEUX: So, Michael, we’ve been covering Ukraine quite extensively. And I know you’ve been keeping track of things on the economic front. What’s the latest?

HUDSON: Well, one of the things that has not been in the news is that a recent Senate bill, 2277, directed the U.S. Agency for International Development to begin guaranteeing loans for the fracking of oil and gas in the Ukraine. And Vice President Biden’s son has become the head of the biggest fracking company in the Ukraine. And what’s not usually known is that the armies from Kiev that are marching into the Eastern of Ukraine have been basically protecting the fracking equipment.

Now, for the last nine months, local cities in the east in Ukraine have said, wait a minute, we want local control over the fracking. The people in the city of Sloviansk wanted to oppose the shale gas field from being developed, ’cause they said, look, this is going to destroy our water supply and our land. And essentially what Kiev is doing is saying, well, you’re terrorists if you’re opposing the oil drilling.

Now, just imagine in this country if President Obama and Vice President Biden were to send troops into upstate New York, which has opposed oil/gas drilling, and bombed Rochester, bombed Buffalo, and began just bombing the cities and shooting the opponents of the fracking. That’s exactly what’s happening in the Ukraine. And they’re doing this supported by the World Bank. The whole attempt is to make Ukraine independent from having to get the gas imports from Russia. And yet already the neighboring Czech Republic, the Netherlands, France, Germany, they’ve all–Germany’s halted the shale gas drilling for seven years because they worry it’s going to destroy the groundwater.

Now, in the Eastern Ukraine, where the fighting is now, all of the groundwater under Dnieper and the other major water flows flow into Yalta and into the Crimea. They’ve turned off the water, most of the water, to Crimea, trying to starve it. So there’s a diversion of water away from agriculture towards the fracking.

Meanwhile, in the Western Ukraine, the World Bank has been supporting essentially the large-scale alienation of agricultural land to foreign investors. The World Bank is a wonderful index. It’s the index of screwing labor and destroying the environment. They call it the ease of doing business index. But the index for agriculture, they have a special index just for ease of doing business in agriculture. And that means getting rid of rules against pesticides, getting rid of rules against labeling food, against additives, and against everything. And it’s very much like the Trans-Pacific Partnership proposal and the Transatlantic partnership proposal. The problem is that Europe is actually opposing all of these pesticides and all the laboring. So you may have the irony of the Ukraine following the World Bank’s directions and getting rid of the restrictions on agriculture and making it impossible to export its crops to Europe.

The good thing is that in the past the World Bank has always opposed a country growing food crops. The aim of the World Bank in the past, since 1945, has been to make Latin America and Africa and other countries as export plantation crops and by their food on America from the U.S. farms. This is almost the first time that the World Bank has supported grain production, because that’s what the Western Ukraine used to be, the bread basket of Western Europe. But in this case, the World Bank has said, we’re going to support you only if you sell out your land to foreigners.

So the intention is to make the Western Ukraine look something like Ireland in the 19th century, when the British landlords owned much of the Irish land, put sheep on it, getting rid of the people on the land. And even in the midst of the Irish potato famine, Ireland was still exporting grain to England, because the grain lands were owned by the British landlords. In this case, for the Ukraine what you’re going to have is foreign ownership of Ukrainian agriculture exporting food that Ukrainians aren’t able to buy because of the dismantling of the Ukrainian economy that you’re seeing today as they’re fighting the war there.

DESVARIEUX: Alright. Michael Hudson, thank you so much for joining us.

HUDSON: Good to be here.

DESVARIEUX: And thank you for joining us on The Real News Network.

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  1. John

    The EU is not as pristine as Mr Hudosn points out. Food processing is largely a self-policing industry where the government sets standards on the amount of tolerable pesticide in crops. Food manufacturers are required to send samples out to external labs to verify content. If a sample comes back positive — pesticides above threshold — then the ‘batch’ is suppose to be discarded. Quality control procedures at food plants is entirely dependent on rigourous management — being ethical — and being smart. Sometimes these areas fall apart.

    Keep in mind the race to the bottom is in full swing here in the EU.

    1. mellon

      Ukraine is not the EU. In the EU, they have for a long time, had the precautionary principle, which simply means that when a new chemical comes out, they need to prove that its safe, before its used. In the US, we have thousands of chemicals which are known to be unsafe which are being used and to get any of them removed, its almost impossible because not only does it need to be proven, huge armies of lobbyists are there preventing it. So the default is just to keep things as they are even when new discoveries are made as they have been a lot recently. Meanwhile, the EPA is basically in some kind of holding mode pending the huge changes which they are pushing for in TTIP which want to basically gut the Precautionary Principle in the EU, and bring the EU down to the lower US non-standard. So, the EU with their REACH process, is really quite a bit ahead of where the US is right now in terms of food safety and the only intelligent thing if they really do want to “harmonize” would be for the US to hamonize upward to the EU standard, not for them to harmonize downward to the lack of them here. Fracking waste water is often contaminated with chemicals known to be endocrine disruptors, (they are used to extract the gas) heavy metals (they are released in colloid form from the Earth) and natural radiation from radioactive elements inside the ground. (the fracking pricess concentrates radiation in wherever waste water is dumped, leading to serious but unknown radiation problems. If one lives in fracking country, you would be wise to get a high quality radiation survey device with logging, an alarm, and a GPS embedded in it, and carry it with you to allow you to check any place you spend a lot of time. Cost, around $700)

      Sources, Endocrine Society, EHP, endocrinedisruption.org, CIEL.org

      If global warming brings drought in an area, it seems obvious to me that the falling water table has the potential to concentrate any pollutants substantially in the future, rendering local well water completely undrinkable. So the cost of a few years of fracking now could be permanently undrinkable aquifer in the future for hundreds of years or more. (Nobody knows)

      Fracking is not a bridge – unless you mean a bridge to nowhere.

      1. Fiver

        I support a far more rigorous application of the precautionary principle, but would like to point out it doesn’t work if not enforced. Take the example of the massive environmental disaster that constitutes the die-off of a very substantial portion of the honey bees in North America.

        There are 19 peer-reviewed studies indicating the culprit is neonicotinoids in a product developed by German chemical giant, Bayer. The original study done for Bayer at an agricultural chemical-friendly University in Canada has been ordered re-done as part of a 3-year review and extension at the Federal level, i.e., Health Canada. Somehow Bayer got around whatever EU requirements in order to produce and sell in overseas developed markets.

        Meanwhile, in the US, many separate single studies point to a scary ‘witches brew’ so complex, it is argued, accountability evaporates – the idea that any of us eat food so heavily laced with toxins is in my mind the result of the criminal breakdown of the entire process within the US, then by de facto globalization of US standards. TPP and Atlantic twin will make it all legal.


  2. wbgonne

    The Republicans invade countries to get conventional oil while the Democrats destabilize countries to get shale oil. Who says there’s no difference between the parties?

  3. timbers

    Dick Cheney has hid energy cabal running our government and starting wars (Iraq). Looks like Joe Biden does too, and Obama seems out front of Biden on ginning up war with Russia.

    Will be interesting to see how this plays out with Russia having Nukes, and USA in decline while China and Russia perhaps ascending.

    1. participant-observer-observed

      Next: check how many arms manufacturers/MIC boards Biden sits on.
      There’s the Hades trifecta of MIC, TBTF, and BigOil. Kudos to whoever can find board members sitting on all three.

  4. Abe, NYC

    So the conflict in East Ukraine is all about shale gas. Well then, I have another explanation for current events: Russia has fueled and supported the rebellion to keep Ukraine and Europe at large dependent on its gas, as well as to eliminate a competitor to Gazprom and protect Crimea water supply, while Ukraine has to defend itself against external aggression. Fits the same evidence just fine if not better.

    1. mellon

      It seems to me that Russia is not fracking, is that correct?

      Is the reason they don’t seem to need to frack or do tar sands in Russia because the reserves are not almost at their end like here?

      1. Abe, NYC

        Russia has huge natural gas resources and the infrastructure to deliver it Europe. It doesn’t need to develop shale. However, it obviously wants to keep Europe dependent on its gas and prevent it from diversifying.

        1. mellon

          I think the US would be nuts to think the shale gas will last more than just a few years, of our own consumption. We certainly cannot afford this TTIP forcing the US into a role as an oil exporter, irreversibly (thats what ISDS does).

          As it will run out fairly soon.

          Also, fracking uses toxic chemicals that cause endocrine disruption. In drought conditions, the contaminants in the groundwater get stronger. What will people in those areas do without drinkable water.

    2. MtnLife

      The outside aggression leveled at Ukraine came from the US supporting the Maidan overthrow of the former government because they smelled energy. The Maidan are a bunch of fascist neo-Nazis with a serious hatred of ethnic Russians. Those Russians are quite aware of what happened to the Jews last time the Nazis had power and very aware they are the new target. Ukraine was the buffer between NATO and Russia that both sides had agreed not to occupy/coerce in order to keep the peace. US/NATO comes in so Russia takes Crimea back in response. Crimea has almost always been Russian (gives them a warm water port) and Ukraine is a relatively recent construct (I’m Ukrainian). Putin publicly told the other republics not to break away because Russia wouldn’t take them. Privately I’m sure he told them to break and he’d support them because they would provide that “neutral” buffer zone now that eastern Ukraine is NATO’s lap dog. I’m willing to bet that while the separatists are fighting for clean water, some of those weapons are being paid for by that water reaching Crimea. It may be in part to keep Ukraine dependent but, if they even decide to frack, it won’t be a competitor (too small) or subsidiary of Gazprom (to keep interests/conflicts separate). Not saying there won’t be any cooperation or assistance. BTW, it helps if you take the blinders off regarding your own country otherwise you only get half the picture.

    3. OIFVet

      I didn’t realize that Russia forced all these EU nations to ban fracking. I always thought they banned it because they didn’t want to contaminate their water supply. Silly me, I should have guessed that the evil Russkies were behind the environmentalists who forced several nations to ban fracking. Brilliantly evil move!

      Interesting thing is, it is the US lapdog UK, and the Eastern Neocolonies like Poland and Romania that allow fracking. Soon to be joined by the Ukie neocolony apparently. Goes to show that the EU truly has a class system: the rich northern countries that want their environment to be clean, and the resource colonies in the south and in the east that destroy theirs so that the Germans and the Dutch can enjoy the enviro-friendly image they have created for themselves.

    4. Fiver

      “Fits the same evidence just fine if not better.”

      No. It doesn’t. The conflict is not all about shale gas in the first instance, it is secondly not about Russia keeping Ukraine and Europe as dependents, but as customers, nor thirdly the elimination of a Gazprom competitor. It’s also quite pathetic at this point, after Kiev’s months-long, hysterical, belligerent, murderous ‘total surrender’ tactics with their eastern countrymen and civilians, and in its negotiating stance vis a vis Russia, to blather on about ‘foreign aggression’ as if the needle of history skipped over all the events from the coup forward.

  5. Jim Haygood

    Landowners and tenants in Ukraine have an incentive to fight fracking, since they bear all the costs (traffic, noise, pollution) but get no royalty payments:

    As with most of Europe but unlike North America, mineral rights in Poland and Ukraine are by default owned by the state rather than the land owner.

    In Europe when farmland is drilled and gas is produced, instead of farmers getting royalty payments and local municipalities getting increased budgets, regional or federal bureaucrats would manage the royalty income from the energy companies. Such a structure is less conducive to farmers and communities inviting in drilling and production operations as happens in parts of the U.S.



    Smash the state; steal its shale oil.

  6. Pepsi Girl

    I’m not sure our elites even realize that you can make money without shock doctrine style chaos and looting. Those two circles of knowledge don’t touch. I pray for the people of Novorossiya.

    1. hunkerdown

      Why would you ever think they’re after money? Money doesn’t bring the food in and keep them safe. They want a secure, stable underclass that won’t give them lip, and that comes about not by accumulating capital, but by destroying or neutralizing the ability of others to do so.

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