The Peter Zeihan Podcast Series - Economic Warfare in Siberia: Destroying Rail Infrastructure || Peter Zeihan

Episode Date: December 6, 2023

There's been a series of explosions along one of the main lines of the Trans-Siberian rail network. To fully understand the significance of these attacks, we must look at Russian exports, alternative options, and what maintenance looks like. Full Newsletter: https://mailchi.mp/zeihan/economic-warfare-in-siberia

Hey, everyone, Peter Zeyn here coming to you from Chile, Colorado. The news is that last week on Tuesday the 28th, I believe, a series of explosions hit a couple of pieces of Russian infrastructure in the far east and southeastern Siberia, specifically the Saramoski Tunnel, which is part of the trans-Siberian network, specifically on the Balco-Iomir main line, were hit, and then a few hours slash a day later, details are a little fuzzy, a similar line in the vicinity of the tunnel is also hit, which serves as the backup for the tunnel, a place that they call the doubles bridge. Some anonymous Ukrainian security officials have claimed responsibility for the attack.

I can't tell you if that is true or not. What I can say is that we've got three things going on here. Export, options, and maintenance. So first exports. Since the Ukraine war began, the Russians have had it more and more difficult to get their product to market. The Europeans were the natural market. They were the closest for most oil and gas, even a lot of the minerals. And so when they decided for whatever reason to stop buying it, a lot of this stuff ended up in China.

And for that, the Trans-Siberian Rail System is critical. It provides probably 80% of the cargo capacity for land-based stuff, and more stuff is going on land than ever before. Also, all of these lines, of which there are basically five. If you've got one that's the least important and kind of goes down into Kazakhstan before going over, into Ermerchian, Zhigang, that's the least used and the most Frankenstein. The other four are all parts of the Trans-Siberian system that just cross over the mountains and the passes into China at different places. But all of them collectively are the only way to get things to China. And they've all been running at more than 100% capacity, which, you know, we've been kind of waiting for a safety situation to boil up to knock things offline.

and now it's been done at least in part by an attack. And when a blind is being used at more than 100%. Capacity, that means you can't just ship it to alternatives, even if you're willing to turn your train around. Well, you really can't. You back up the train until you have to a depot. Anyway, point is that one of the four lines, at least for the moment, is offline completely.

Second, options. You've got these four lines, one that crosses through Mongolia, two that go into northeastern China, and one that goes all the way over to the Russian Far East where things can be kind of repackaged and put on ships. No one lives in Siberia because they want to. I mean, there's a reason why this is where all the prison colonies were. Some of the more stable lines like the BAM line that was hit are on permafrost,

which is not particularly stable. If something happens to the permafrost, the whole thing just kind of sinks in. And it looks like at least on one of these attacks, a rail car that was full of fuel was hit. So we've seen another part. of the conflict in Ukraine, how that can go bad really, really quickly. Because of this, there are not a lot of population centers along this entire route. In fact, less than 10% of Russia's population lives along this line.

Everybody else is on the Western Russia where it's, you know, warm. And because of that, finding repair crews in the first place might be really difficult. You're dealing with a lot of tunnels, a lot of bridges, a lot of canyons, a lot of permafrost, a lot of territory where if there is damage, you don't just slap down some fresh line and start up. No, no, no, it takes years. When this line was built back in the 70s and 80s,

the Russians wouldn't even allow any foreign observers to see it because it was so shoddily put together and it could only operate reliably over about a third of its length. And this was when the Soviets actually had engineers. Post-Soviet Russia really doesn't. And as we've seen

with the Kerch Bridge, which connects the Russian mainland to Crimea, you know, that was hit over a year ago, now, and it's still not running at full capacity. So doing repairs in this area is no minor issue. Of course, getting information out of this area is no minor issue as well. Anyway, third maintenance. The Russian educational system collapsed 30, 35 years ago, and so there aren't a lot of people who are, I would consider, to be fully capable of claiming the term engineer. In fact, the younger of them turned mid-60s this year. Also, everyone that the Russians have who can

repair physical infrastructure is in the Ukraine theater right now because the Ukrainians have been blowing up rail depots and rail lines and bridges and roads and everything for a year and a half now. So there just isn't a lot left that the Russians can use if all of a sudden they're getting hit on a very, very exposed, vulnerable place, 4,000 miles east of Moscow. If this was the Ukrainians or really if this was anyone who really means the Russians ill will, this is an excellent strategy because the Russians barely have the military capacity to patrol their own lands

in Western Russia but in Ukraine much less 4,000 miles the other direction 5,000 miles the other direction this is something that can really hit to the heart of their economic plans in a post-war scenario because if they can't get the stuff to the Chinese the Chinese aren't going to pay for it

and there's really only three other lines now that this stuff can be shipped in so if this is real We're going to find out about it really, really fast because there's just so many points of exposure and so many failure points throughout this part of the Russian system. It would be an easy way to take down the Russian economy far more effective than anything we've seen with sanctions so far. All right, that's it. Stay warm.