The Morning Dispatch: Russia Steps Up its Energy War with Europe

Happy Wednesday*! If you have an extra $1,000 just lying around, Apple’s unveiling its brand new iPhone today. We hear it has a slightly better camera!

Quick Hits: Today’s Top Stories

• Chileans voted 62 percent to 38 percent in a referendum on Sunday to reject an updated constitution championed by the country’s new, far-left President Gabriel Boric. The document would have replaced the constitution written and adopted under Gen. Augusto Pinochet in the early 1980s with a more progressive vision for the country, dramatically expanding the role of government to allow for stepped up environmental regulation, more generous social welfare programs, a nationalized health care system, and more. Chilean voters had overwhelmingly indicated in a 2020 referendum they supported revising their constitution in some manner, so Boric pledged Sunday reformers would redouble their efforts to reach an agreement that “unites us as a country.”

• Kenya’s Supreme Court on Monday upheld William Ruto’s presidential election victory, unanimously rejecting challenges to the results from Raila Odinga, Ruto’s opponent and Kenya’s longtime opposition leader. The country’s electoral commission had declared Ruto—Kenya’s deputy president since 2013—the winner of the contest in mid-August, but four of the electoral commission’s seven members disowned the results due to “the opaque nature” of the general election’s final days. Odinga issued a statement this week expressing “vehement” disagreement with the court’s ruling but promised to respect the body’s decision as he has “always stood for the rule of law and the constitution.”

• After a two-year investigation, Ireland’s Data Protection Commission has fined Instagram 405 million euros—the second-largest privacy-related fine in European history—for allegedly mishandling teenagers’ data by allowing users under age 18 to open “business accounts” on the social media platform that many didn’t realize exposed their contact information to the world. A spokesperson for Meta, Instagram’s parent company, claimed executives “engaged fully” with the investigation but were disappointed by the size of the fine. “This inquiry focused on old settings that we updated over a year ago,” the spokesperson said. “We’ve since released many new features to help keep teens safe and their information private.”

• City officials in Jackson, Mississippi, announced Monday that water pressure has been restored citywide about a week after flooding caused a large water treatment plant to fail and left the city’s 150,000 residents without access to running water. The city’s boil-water notice remains in effect, however, as its tap water has not yet been deemed safe to drink. Jackson Mayor Chokwe Antar Lumumba has indicated the problem is structural and will likely recur. “Even when the pressure is restored, even when we’re not under a boil-water notice, it’s not a matter of if these systems will fail, but when these systems will fail,” he told ABC News over the weekend.

• Massachusetts Democratic Attorney General Maura Healey will face off against former Republican state Rep. Geoff Diehl in the general election this fall to succeed Charlie Baker, the state’s two-term Republican governor. Healey is widely expected to win the race in the deep-blue state; Diehl—who defeated a more moderate candidate, Chris Doughty, in Tuesday’s primary—was endorsed by Donald Trump and has backed the former president’s false claims about the 2020 election. 

• The U.S. Embassy in Moscow announced Sunday that John Sullivan, the United States’ ambassador to Russia since early 2020, had left his post and will retire from public service after a decades-long career that included a stint as deputy secretary of state from 2017 through 2019. Sullivan told Politico his sudden departure had to do with his wife’s health; she died on Monday after a battle with cancer.

• Gina McCarthy—President Joe Biden’s top climate adviser and the former head of the Environmental Protection Agency—will leave the White House next Friday after nearly two years in the administration. Her deputy, Ali Zaidi, is set to take over the Climate Policy Office upon her departure, and longtime Democratic operative John Podesta is joining the White House as a senior adviser for clean energy innovation and implementation.

Europe’s Energy Crisis Is No Longer Theoretical

Russian state-owned energy giant Gazprom is just having the hardest time keeping gas flowing through its Nord Stream pipeline ever since those dang Europeans started sanctioning Russia in response to its invasion of Ukraine.

Gazprom has shut down the pipeline’s operations multiple times this summer, each time blaming the decision to throttle the flow of the pipeline—previously responsible for more than a third of Russian natural gas imports to Europe—on maintenance issues. This weekend, another few days of scheduled maintenance exploded into an indefinite shutdown, with Gazprom once again blaming repair hangups. European benchmark natural-gas futures leapt by as much as 36 percent Monday on the news.

Russian officials are placing the blame squarely on the West. Gazprom on Friday said it found oil leaks on parts of a pipeline compressor that could cause fire or explosions if not tended to, but claimed repairs could only happen in a factory in Canada, which sanctions prevent.

After playing coy over the weekend, the Kremlin was explicit about its expectations on Monday. “Problems in pumping arose because of the sanctions imposed against our country and against a number of companies by Western states, including Germany and the [United Kingdom],” presidential spokesman Dmitry Peskov said, per a translation from Russian news agency Interfax. “Given that the sanctions continue to work, given that they bring absolute confusion, legal, practical, to everything related to the maintenance of all components and assemblies, now for now we can hope for this single unit that we will somehow be able to put it in order.”

The various architects of Western sanctions could interpret this as a backhanded compliment, as the restrictions are, after all, intended to make the Russian war effort unsustainable. Hobbling Russia’s ability to rake in energy revenue would be a solid step in that direction. But Europe—already reeling from energy price shocks—has a strong incentive to keep the pipeline open as it prepares for winter. 

Officials from Germany’s Siemens Energy company—which works with Gazprom to keep Nord Stream fueling Germany—have insisted that Gazprom’s explanation for the cutoff doesn’t hold water. Asked when Nord Stream would resume flow, Gazprom executive Vitaly Markelov told Reuters Tuesday, “You should ask Siemens. They have to repair equipment first.”

“We cannot comprehend this new representation based on the information provided to us over the weekend,” Siemens responded. “The finding communicated to us does not represent a technical reason for stopping operation. Such leaks do not normally affect the operation of a turbine and can be sealed on site.” The company has expressed its willingness to make repairs but said Gazprom hasn’t contracted it to do so.

Gazprom said it intended to increase the flow of fuel to Europe through Ukraine after last week’s Nord Stream shutdown, but a slight bump so far doesn’t come close to replacing the pipeline’s previous flow—although it was already reduced to about 20 percent of capacity before the shutdown. Equipment difficulties evidently haven’t stopped Russia from arranging to sell China fuel for rubles and yuan instead of the dollars and euros that the West has frozen. Turkey has also agreed to start paying partially in rubles in a bid to keep the so-far uninterrupted TurkStream pipeline open. A European Union spokesman argued to Reuters that Russia could mitigate genuine technical problems impeding flow by increasing delivery through other pipelines. “That’s something we’re not seeing happening,” the spokesman said. 

Meanwhile, Peskov warned that citizens of Western countries would have “more and more questions for their leaders” as price shocks continued and that “when it gets colder, the situation will become even worse.” Gazprom released a video featuring iced-over cities set to mournful music about the cold, dramatizing the outcome for Europe if the shutoffs continue.

European leaders have grown increasingly willing to call out this economic warfare. “Russia is blackmailing us,” European Commission President Ursula von der Leyen said at a news conference in July. “Russia is using energy as a weapon. And therefore in any event, whether a partial major cutoff of Russian gas or a total cutoff of Russian gas, Europe needs to be ready.”

That’s easier said than done, of course: Russia supplied about 40 percent of the EU’s gas in 2021, and Europe’s natural gas prices have nearly tripled since the war began. European countries have been inking deals with other fuel producers, including  the United Arab Emirates and Azerbaijan, and plotting to increase their own output while boosting energy sources—such as coal and nuclear power—that they’ve been trying to phase out. They’ve also been buying up Russian fuel to prepare for possible shutdowns and their own increasing sanctions. The EU has already filled more than 80 percent of its gas storage capacity—a goal it planned to reach by November 1—though the full shutdown could force countries to dip into those supplies.

Leaders are still hashing out plans to control prices and manage lower fuel supplies. Together, European countries have pledged some $375 billion in tax cuts, subsidies, and cash payments to help households pay higher heating bills. The Group of 7 wealthy democracies have agreed to move forward on a plan to cap the price they pay for Russian oil—but the idea will need broader buy-in from countries like China and India to fully depress Russian profits and global oil prices.

Amid subsidy plans, European leaders are increasingly acknowledging they may need to ration fuel and cut use to make it through the winter. Italy’s outgoing Prime Minister Mario Draghi has outlined a plan to cut the nation’s gas consumption by 7 percent, and French President Emmanuel Macron on Monday called for a 10 percent drop in French energy use to avoid rationing and cuts this winter, warning of rolling power cuts to households. “Cuts will happen as a last resort,” Macron said. “The best energy is that which we don’t consume.”

Some Naples News

In yesterday’s TMD, we promised we’d begin unveiling some details about our upcoming What’s Next summit. After years of pandemic-induced delays and adaptations, we’re thrilled to finally be hosting our first in-person, post-election event November 10-13 at the Ritz-Carlton in Naples, Florida. Rooms in our hotel block are going fast, so we encourage you to reserve your spot today if you’re interested. But we also understand wanting to know a little bit more about the structure and agenda of the conference before signing up.

As we note on the conference website, this year’s event is going to focus on November’s elections—and what they portend for the future of the conservative movement, the Republican Party, and the country. The midterms will have wrapped up just days earlier, and the country is going to be entering a new political moment. Whether we’re entering an era of divided government or Democrats manage to hang onto their narrow congressional majorities, lessons will have been learned and narratives will have taken hold. 

• Did the long-promised Red Wave materialize? Why or why not?

• Does Joe Biden have enough political capital left to mount another bid for the White House? Do Democrats want him?

• Did Trump-backed Republicans perform better or worse than more independent-minded ones?

• Were there any signs of foreign election interference or meddling?

• Who will be the first Republican candidate to launch a presidential exploratory committee?

Those are just a handful of the questions we’ll be asking after Americans go to the polls and weigh in on the last two years. We’re really excited about the roster we’ve assembled to help answer them.

 Throughout the weekend, you’ll hear from members of the Dispatch team—Steve, Jonah, David, Sarah, Chris, Klon, Haley, and more—and have an opportunity to ask questions of leading politicians, strategists, journalists and thinkers. Among them: Arizona Gov. Doug Ducey, New Hampshire Gov. Chris Sununu, ex-CIA operative and former Rep. Will Hurd of Texas, and Fox News host and former Rep. Trey Gowdy of South Carolina.  We’ll have more announcements in the coming days as we put the finishing touches on the agenda. It’s going to be a great opportunity to discuss What’s Next for the country—and it’s not a bad spot to spend a weekend in November, either! We hope  you’ll join us. 

Worth Your Time

• The Oz campaign’s approach to John Fetterman’s recent stroke has been unnecessarily cruel, but that doesn’t mean Pennsylvanians shouldn’t weigh the issue when deciding whether to support the Democratic nominee for U.S. Senate. “If Mr. Oz would like to suggest his opponent is not being straightforward about his health—a serious but legitimate charge when competing for the intense and important work of a U.S. senator—he can do so without sandbox bullying,” the Pittsburgh Post-Gazette’s editorial board argues. “That said, Mr. Oz has raised legitimate concerns. If Mr. Fetterman’s communication skills have not yet recovered sufficiently to effectively debate his opponent, many voters will have concerns about his ability to represent them effectively in Washington. While he has gamely undertaken more campaign events and media interviews in recent weeks, Mr. Fetterman still speaks haltingly and relies on closed captioning to fully understand his conversation partners. Mr. Fetterman’s campaign asserts confidently that he will make a full recovery, and that he is doing the hard work—including speech therapy—to accelerate that recovery. That is hopeful and laudable, but stroke recovery is notoriously unpredictable.”

• Republicans know they’re against Anthony Fauci and the public health bureaucracy he represents, but in general, GOP leaders have yet to really articulate an alternative path forward. “Republicans have spent the past two years berating the public health establishment for its failings, but they have no apparent plan to reform the agencies. With a handful of exceptions, they are stuck at the level of schoolyard insults and koozie catchphrases,” Peter Suderman writes for Reason. “If anything, the CDC seems more likely to reform itself than most of its loudest GOP critics seem likely to reform the agency: officials recently announced an internal overhaul focused on faster data analysis and clearer public communications, though the agency has not yet spelled out its reform plan in detail. Sadly, bureaucratic inertia is a powerful force, and the CDC’s centralized processes and gatekeeper mentality won’t be fixed by more capable communications. At heart, the agency’s problem … is that it has strayed from its core mission of fighting infectious disease, becoming a broader ‘public health’ agency concerned with social issues like obesity and gun violence when what’s needed is a narrower and more discrete focus on viral pathogens.”

• Even before NASA scrubbed the Artemis Space Launch System for the second time in a week, Adam Minter had considered the project—designed to eventually return Americans to the moon—a “gigantic waste” of time and money. “It sounds groundbreaking, but the reality is that private-sector space companies have been pushing boundaries for more than a decade while the SLS lingered through delays and blown budgets,” he writes for Bloomberg. “Overall costs are tipping $23 billion. That’s a far cry from what NASA promised Congress, and Congress promised the American people, when the program was conceived. ‘If we can’t do a rocket for $11.5 billion, we ought to close up shop,’ said Senator Bill Nelson of Florida in 2010, when he was a major sponsor of the program. These days, he serves as NASA’s administrator. It’s possible to do better. For example, the fully reusable engines that power SpaceX’s Falcon 9 cost around $1 million.”

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Toeing the Company Line

• Members of Congress are beginning to trickle back into Washington after their August recess, and in Tuesday’s Uphill, Haley provides an update on all they hope/need to accomplish before getting out of town again: funding the government, codifying legal protections for same-sex marriages, reforming the Electoral Count Act, and providing a pathway to permanent residency for tens of thousands of Afghan refugees.

• David’s latest French Press (🔒)—sent via carrier pigeon from a cruise ship en route to Alaska—focuses on human nature and how our environments shape who we are. “More people form their convictions from their communities than form their communities from their convictions,” he writes. “We like to think of ourselves as freestanding critical thinkers who study issues, reach conclusions, and then join parties as a result. We’re not.”

• On Tuesday’s episode of Dispatch Live (🔒), Steve, Sarah, and Declan were joined by GOP strategist David Kochel for a discussion of the 2022 midterms as we move into the home stretch of the campaign. Plus: Explaining the latest news out of Mar-a-Lago, and executive editor Adam O’Neal’s primetime debut! Dispatch members who missed the conversation can catch a rerun—either video or audio-only—by clicking here.

• On the site today, Jonah argues that Republican prospects in the midterm elections are dimming because of former President Donald Trump. Plus, Andrew Fink details how Russia started out using the Zaporizhia nuclear plant in Ukraine as a shield but is now using it as a weapon.

Let Us Know

Who else would you like to see as a What’s Next speaker or panelist?

Correction, September 7, 2022: An earlier version of this newsletter identified today as Tuesday—it’s Wednesday. Happy Wednesday!