As Russian President Vladimir Putin's war against Ukraine sputters, he's escalating tensions. WSJ's Matthew Dalton explains how Putin's ramping up the stakes both in the ground war in Ukraine and in his economic war with the West.
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- Putin Raises Ukraine Ante as His War Fortunes Sink
- Ukraine Shifts the War With a Surprise Attack
- Europe is Turning to Coal. What Does That Mean for Climate Change?
This transcript was prepared by a transcription service. This version may not be in its final form and may be updated.
Kate Linebaugh: Seven months after the invasion of Ukraine, Russian President Vladimir Putin seems to be losing the war.
Matthew Dalton: They're on their heels. Morale seems to be very poor in the Russian military. Their soldiers are poorly equipped. People are not exactly sure what the strategy is, and so it's a very fraught time.
Kate Linebaugh: That's our colleague, Matthew Dalton, and he says, It's so fraught because Putin isn't showing any signs of retreat. Two weeks ago, he called up the reserves and he repeated veiled nuclear threats. And then last week, two things happened that suggested Putin is doubling down. First, there were major explosions on gas pipelines in the Baltic Sea that raised suspicions of Russian back sabotage, which the Kremlin denies. And then Friday, Russia annexed four regions of Ukraine, suggesting that Russia is far from giving up. Welcome to The Journal, our show about money, business, and power. I'm Kate Linebaugh. It's Tuesday, October 4th. Coming up on the show, Putin is losing the war, so he's raising the stakes. Last Monday, scientists in Northern Europe came across something strange.
Matthew Dalton: It looks like a very large jacuzzi in the Baltic Sea. It's just kind of bubbling like a big whirlpool of bubbles in the middle of the ocean.
Kate Linebaugh: This jacuzzi was natural gas bubbling up to the surface.
Matthew Dalton: Denmark and Sweden noticed that there were very large methane leaks coming out of the Baltic Sea.
Kate Linebaugh: And these leaks were coming from two pipelines that connect Russia's gas fields to Germany, they're called Nord Stream 1 and 2. Almost immediately warnings were issued for ships to avoid the area and for aircraft to fly higher in the sky.
Matthew Dalton: Governments across Europe began to increase security around their natural gas installations. Norway took that step, they've been boosting security on their fields in the North Sea. There have been steps taken to fortify other natural gas infrastructure, such as the facilities that import liquified natural gas.
Kate Linebaugh: These leaks were so alarming because the pipelines lay on the sea floor, 300 feet underwater, and they're made of strong corrosion resistant steel that's covered in concrete.
Matthew Dalton: They're meant to withstand gas at very high pressure, to move along more than 700 miles from Russia to the German coast. So yeah, it's not something that's going to just spring a leak easily. It seemed quite clear that this was due to an explosive device. The Danish officials, I've been told, estimated the size of each explosion at about the equivalent of 500 kilograms of TNT. And so it's sort of the outcomes razor, the simplest explanation is a most likely one.
Kate Linebaugh: And the simplest explanation of what happened.
Speaker 3: A deliberate act of sabotage.
Speaker 6: The Nord Stream pipeline sabotage.
Speaker 7: The apparent sabotage of the Nord Stream pipeline.
Speaker 8: Sabotage was the cause of rare gas leaks in two major pipelines, which connect Russia and Europe.
Matthew Dalton: Suspicions went very quickly to Russia. I mean, Russia is in an economic war and energy war with Europe. And so this act, which would put new upward pressure on prices, is something that potentially Europe's adversary would be interested in doing. So several countries said if this were Russia, this would be a serious escalation of the conflict and would have serious repercussions.
Kate Linebaugh: And the EU is suspicious of Russia. What are they going to do about it?
Matthew Dalton: Well, first they have to figure out what happened. They need solid evidence that it was Russia. They're not going to do anything more beyond conducting an investigation and trying to figure out it was Russia. Now, and then there's the question, Well, what can they really do in terms of retaliation? They've sanctioned Russia every which way.
Kate Linebaugh: How does Russia react?
Matthew Dalton: Well, Russia says, we had nothing to do with this. And how could this happen? Given all of the NATO facilities and equipment in the Baltic Sea. Russia, in a tactic that they're well known for, was trying to kind of play jujitsu and throw the suspicion right back at where all the criticism was coming from, which was NATO itself and the US, the most important partner of NATO.
Kate Linebaugh: A big part of the energy war between Russia and Europe is over natural gas. Russia was Europe's biggest supplier, but over the summer, Russia interrupted those supplies, and last month it turned off the main Nord Stream pipeline together. For months, European countries have been scrambling to find new sources of natural gas.
Matthew Dalton: So they've been trying like hell to buy gas from any other supplier. So that includes buying a lot more gas from Norway, which is its friendly petro state to the north. And they've been relying a lot more on liquified natural gas shipped from the United States, that has been key to supplying Europe without Russia. Without that, Europe would be in big trouble.
Kate Linebaugh: If they're relying more on gas from Norway, are those pipelines also vulnerable to sabotage?
Matthew Dalton: That's certainly the fear, that these attacks were, I think, a wake up call for the entire region about its energy infrastructure. And those pipelines are vulnerable. There's a new pipeline that is just open that brings gas from Norway to Poland. It's called Baltic Pipe, there's fears is that that is vulnerable. This infrastructure is very difficult to protect because it is stretches over hundreds and hundreds of miles, all told you've got thousands of thousands of miles of pipelines you've got to oversee, and an attack at any part in the pipeline can disable it for a long period of time. So, everybody is now more cognizant of that risk.
Kate Linebaugh: But the gas had already been turned off. So why was it such a big deal?
Matthew Dalton: So it forecloses the possibility that it can be turned on again. And you look at the prices in the European gas market, there's some priced into the market right now, or at least before the explosion happened, priced into that market was the possibility that, well, the gas could come back on relatively easily and things could sort of go back to normal at least for the European energy market. Unlikely though that was, it was a possibility that was in there. And without that possibility, the prices are going to go up.
Kate Linebaugh: If Russia did carry out this attack, how aggressive is that move in the economic war?
Matthew Dalton: It says that not only do they want to substantively not sell gas to Europe, but they also want to send the message that it's over, that it's not just we're not selling you gas anymore. We're turning off the spigot. It's also, we're not going to be able to sell you gas.
Kate Linebaugh: We're done.
Matthew Dalton: We're done. That's it.
Kate Linebaugh: As the energy war between Moscow and Europe escalates, so has the military war in Ukraine. That's coming up. Days after being accused of sabotage, Russia had a major celebration in Red Square with live performances of rock, (singing) of ballads (singing) of rap. (singing) And in the middle of the concert, Russian President Vladimir Putin came out to speak and the crowd went wild.
President Vladimir Putin: (foreign language)
Speaker 10: Dear friends, today is a special salaam and without any exaggeration, historical day. A day of truth, injustice, I can't help but remember how the USSR was formed when Russia created modern day Ukraine.
Kate Linebaugh: This event was to celebrate the annexation of four territories in Ukraine. Russia held referendums in these states and claimed voters there overwhelmingly back the annexations. But the West and Ukraine have called the referendums a sham.
Matthew Dalton: These referendum were being held at gunpoint. Nobody thinks that the people there had a free choice, a free decision on whether to vote against and people wielding weapons manning the voting stations. This is a way for the Kremlin and Vladimir Putin to draw a line in the sand.
Kate Linebaugh: How can this happen? How can one country just annex another country's land?
Matthew Dalton: Well, it's supposed to be against the United Nations charter, which respects internationally recognized borders, but you can do it at gunpoint. That's the only way that Russia could do it.
Kate Linebaugh: Russia appointed four leaders, one to each region. It also distributed Russia passports to people there and plans to use the rouble as the area's currency. How did Ukraine react to this annexation?
Matthew Dalton: Well, Ukraine, among other things, condemned it and said it would be applying to join NATO. Which is something that has been kind of at the heart of the conflict between Russia and Ukraine for the past decade.
Kate Linebaugh: And what has the reaction from the West been?
Matthew Dalton: The reaction of the West is to condemn it universally. They've said that they will never recognize the validity of these referenda, that the territories in question are part of Ukraine, the internationally recognized borders of Ukraine, and that that's the way it's going to be. And Russia's attempt to legitimize its military operation is not going to work.
Kate Linebaugh: The Kremlin has dismissed criticism of its seizure of Ukrainian land, and Putin has indicated that the military campaign will continue until its goals are met. What is the state of the conflict there?
Matthew Dalton: Russia is on its heels. Ukrainian forces are advancing rapidly. They appear to have taken control of Lyman, which is a key city in the region. Russia's forces are under equipped. They can't match up with the sophisticated weaponry that the Ukraine military is getting principally from the US, but also a number of European countries. So you can see this as a somewhat desperate act along with Putin's decision to start a mobilization of the Russian armed forces that will bring in a lot of people with more limited or no military experience to go and fight in Ukraine.
Kate Linebaugh: Calling up the reservists.
Kate Linebaugh: Where do we go from here?
Matthew Dalton: I think this will only fortify the spines of the Europeans and the US to continue supporting the Ukrainian military. They've seen that Ukraine, given the proper equipment and advanced weapons, is very capable of fighting back against Russia. That's maybe the most important takeaway militarily from the last few months. This is not just kind of throwing weapons down a black hole and wasting a whole bunch of money. The West support of Ukraine is really working, and so I think these events they're probably going to stiffen the spine of countries to continue doing that.
Kate Linebaugh: But there's one major caveat, in recent speeches Putin has repeatedly made a veiled threat to go nuclear.
Matthew Dalton: And that's sort of the awful threat looming over the annexations in particular, is that Russia is probably, all things being equal, more likely to go nuclear now.
Kate Linebaugh: That seems incredibly frightening.
Matthew Dalton: It's just hard to get inside the black box and through this whole thing has always been Vladimir Putin's head and what is going on in that head. Trying to predict where he's going to go next with this has always been the most difficult thing in terms of the strategy and the planning of how to deal with Russia.
Kate Linebaugh: How do these two events, this potential Russian back sabotage of the pipeline and the annexation of these territories fit together, if at all?
Matthew Dalton: One can only speculate, those two potential actions are both very, very hard line responses. Now, we don't know if that's coming from the same place, but it is concerning.
Kate Linebaugh: That's all for today, Tuesday, October 4th. The Journal is a co-production of Gimlet and the Wall Street Journal. Additional reporting in this episode by Dan Michaels and Simmons and Marcus Walker. Thanks for listening, see you tomorrow.
Kate Linebaugh is the co-host of The Journal. She has worked at The Wall Street Journal for 15 years, most recently as the deputy U.S. news coverage chief. Kate started at the Journal in Hong Kong, stopping in Detroit and coming to New York in 2011. As a reporter, she covered everything from post-9/11 Afghanistan to the 2004 Asian tsunami, from Toyota's sudden acceleration recall to General Electric. She holds a bachelor degree from the University of Michigan in Ann Arbor and went back to campus in 2007 for a Knight-Wallace fellowship.
Ryan Knutson is the co-host of The Journal. Previously, he spent more than four years in the newsroom covering the wireless industry, and was responsible for a string of scoops including Verizon's $130 billion buyout of Vodafone's stake in their joint venture, Sprint and T-Mobile's never ending courtship and a hack of the 911 emergency system that spread virally on Twitter. He was also a regular author of A-heds, including one about millennials discovering TV antennas. Previously, he reported for ProPublica, PBS Frontline and OPB, the NPR affiliate station in Portland, Ore. He grew up in Beaverton, Ore. and graduated from the University of Oregon.