Political Information
Russia: a global energy powerhouse that's much more than a petro-state
By Scott L Montgomery with comments by Ron
Apr 16, 2016 - 9:10:01 PM

Russia: a global energy powerhouse that's much more than a petro-state

By Scott L. Montgomery, University of Washington   |   April 14, 2016 at 11:36 AM

The collapse in oil prices, combined with sanctions on the oil/gas industry because of aggression in Ukraine, has been very hard on the Russian economy and has postponed many new oil/gas projects. File Photo by Igor Golovniov/Shutterstock

April 14 (UPI) -- Russia is not what you think. Most discussion about its energy influence has focused on oil and gas, particularly gas. Russia can be described, and is routinely described, as a petro-state. This is only partly accurate.

In truth, Russia has been building an altogether new kind of energy state, one with more global influence than even OPEC. A fundamental reason is Russian prominence in multiple energy domains, especially oil, gas, coal and nuclear power.

This multi-pronged energy strategy – from fossil fuels to a reinvigorated nuclear power program – has geopolitical and economic implications that stretch from its neighbors in Europe to developing countries around the world.

Full steam ahead on oil and gas

Let us begin with Russian oil and gas. For several years now, the country has been the world's largest exporter of hydrocarbons (oil and gas combined). Despite many predictions that this would never last, including those from the Russian Academy of Sciences, it shows no sign of changing.

An important point is that this includes not only crude oil and natural gas but also refined petroleum products (gasoline, diesel, jet fuel, etc.), which are exported to Europe and Asia. Russia has been the leading exporter in this key category for nearly a decade and supplies more than all of OPEC combined (only the United States comes close, due to its shale oil expansion).

The collapse in oil prices, combined with sanctions on the oil/gas industry because of aggression in Ukraine, has been very hard on the Russian economy and has postponed many new oil/gas projects. At the same time, use of advanced recovery technologies has given Russia the ability to offset decline in older fields, while new production from the East Siberian Basin and Sakhalin Island has helped support a slow but continued rise in output.

There remain the vast resources in Russia's Arctic to be explored, plus future potential in the Caspian Sea, North Caucasus and parts of East Siberia and Sakhalin. This does not include the enormous shale oil/gas potential in the West Siberian Basin.

Like it or not, we must accept that the country is far richer in hydrocarbon resources than previously thought. Though prices for both oil and gas have fallen considerably since 2014, Russia has little choice but to continue producing at high rates given the importance of these exports to its economy and government income.

Thus, the long-term outlook for Russian hydrocarbons remains both uncertain and strong at the same time – there are vast resources waiting for a better price before they're drilled. This is especially true for natural gas, which the country is now estimated to possess in immense volumes.

But here's what's not widely understood: Russia's current export clients are in Europe, yet they are increasingly in East Asia, specifically China, Japan, and South Korea. European nations depend on Russia for an average of 30 percent of their hydrocarbons, especially gas. Nearly half these nations (including Germany) are in the range of 40 percent to 100 percent.

Official claims that such dependence will be cut and vaporized have proven hollow, countered by the reality of increased imports. Europe's weak economic situation has forced it to choose cheaper pipeline gas from Russia over more expensive LNG (liquefied natural gas) from abroad.

East Asia, we might say, is at an earlier but still significant stage of dependence (Japan, world's largest LNG importer, now gets 10 percent of its total from Russia), but has been eager for new deals. In this region of needy hydrocarbon importers, Russia bestrides the energy landscape as a supply colossus with a helping hand and large promises.

The upshot is this: Russian oil and gas have become vital commodities in a majority of the world's most advanced economies. If the forecasts of the International Energy Agency and other such organizations run true, the demand for natural gas will surge over the next few decades, due both to the growing need for more electricity and, in the wake of COP21, expanded use of low-carbon fuels. It would be a circumstance much favored by the Great Bear. Even so, this is only half the story.

King coal and nuclear

To this we should add Russia's huge coal reserves, second only to those in the United States. Its exports here, too, though well below those of oil/gas in value and significance, have also been steadily rising.

Since 2000, they have tripled from about 45 million tons to more than 150 tons, third in the world after Indonesia and Australia. As with oil and gas, these exports go to Europe and East Asia, but in this case the volume going to China, Japan and South Korea is over 40 percent and growing. Where import demand in China has fallen, it has been rising in India, South Korea, Turkey and a number of countries in Southeast Asia.

It is worth pointing out that Russia is geographically positioned very well to deliver its exports both by sea and rail to major customers west and east. Lower coal prices therefore have partly aided the Russian industry in competitiveness.

This brings us to the nuclear domain. In addition to Rosnet and Gazprom, Moscow's state-run oil/gas firms, there is its nuclear entity, Rosatom. Since 2010, Rosatom has signed contracts and cooperative agreements with more than two dozen nations to build first-time nuclear power plants, supply fuel for them and operate them, too.

These nations are not the world's wealthiest, most of which already have nuclear programs. Rather, they include Vietnam, Myanmar, Indonesia, Bangladesh, Armenia, Turkey, Jordan, Saudi Arabia and Egypt, among others, none of whom are yet members of the nuclear power club.

Developing countries are interested in nuclear power for several big reasons: soaring electricity demand, desire for zero-carbon generation and concerns about energy security. It is now clear, in other words, that while NP may stagnate or decline in Western nations, it will expand greatly in the developing world.

In March of this year, the World Nuclear Association reported 65 reactors under construction and 173 more on order or planned. A majority of these were in China, India and Russia itself.

But beyond these numbers, which will more than replace all reactors that might be retired over the next few decades, there were 337 more new reactors proposed. These are divided among 50 nations (31 presently have nuclear power programs) and include most of those noted above having contracts or agreements with Russia. But there are others in Africa, Southeast Asia and South America who have expressed interest and might well join the new nuclear era later on.

The point is that Russia has proven itself able to compete for a large share of this new, expanding global market. Globalizing NP has given Russia the opportunity to compete successfully against firms from Japan, South Korea, France, the United States and soon China and the U.K., as well.

Russia's success here is far from monolithic. Saudi Arabia, for instance, has plans to build 16 reactors by 2035 and has entertained proposals from Russia, Japan and South Korea for both large-scale plants and small modular reactors. Turkey now has plans in place for a minimum of three reactors, the first to be built by Rosatom, the second by a Franco-Japanese consortium, the third by a group from China.

Nonetheless, the importance of Russia as a provider of both nuclear technology and fuel will only grow, giving Moscow a robust presence in many parts of the developing world that the Soviet Union never achieved.

New nuclear empire?

Many, even most, of the energy relationships discussed have a primary commercial intent. It isn't clear how many of those regarding oil and gas may play out in the long run, particularly if the low-price environment remains in place.

But for the time being, and probably for the next decade at minimum, Putin's Russia presents the world with a new species of energy state, historically speaking, one with potential influence far beyond economics.

What the long-term meaning of this influence might be is not yet clear, but must be considered in cool-headed terms. Talk about a Russian "nuclear empire" is premature and probably unhelpful.

Yet we can't ignore the possibility that some form of influence will be wielded, if not with the aggression of Moscow's use of natural gas as a tool in its conflicts with Ukraine and, more recently, Turkey, then perhaps more quietly. Either way, Russia must be understood as a state whose interests and reach extend far beyond its near abroad.

Ron's Comments:

Apparently there is a place in our world and universe for large scale nuclear power generating plants and as with all positive, God ordained outcomes, Russia is leading the way for humanity on this planet.
Russia's Rosatom is operating a ‘Breakthrough’ energy project [that] enables closed a nuclear fuel cycle and a future without radioactive waste. The first batch of MOX nuclear fuel has been manufactured for the world’s only NPP industrially power generating breeder reactors. The first ten kilograms of the mixed-oxide fuel (MOX) - a mixture of plutonium and uranium dioxides (UO2 and PuO2), was industrially produced by Russia’s nuclear monopoly, Rosatom, at the Mining & Chemical Combine (GKhK) in the Krasnoyarsk region.A world first, tablets of the fuel of the future have been put on serial production and are destined for Russia’s next generation BN-800 breeder reactor (880 megawatts), currently undergoing tests at the Beloyarskaya nuclear power plant.The production line was assembled in a mine 200 meters underground and was to become fully operational by the end of 2014. See:

As regards compact plasma power generators, Mehran Keshe and the Keshe Foundation appearently achieved development of usuable small power units some years ago. See eg: M T Keshe - USB Stick files release by Taiwanese KF group.- And: audio recording of the March 14 interview on the Mike Harris show of Dr. Mehren T. Keshe -

The Council of Nine and its Judaic global enforcers have been inhibiting the production and distribution of Keshe plasma energy technologies for many years. Also, global availability of Tesla related energy technologies have been prevented for over a century. Presumably Universe Management is also inhibiting the proliferation of Keshe plasma energy devices now because humanity is still too spiritually immature to use and share that technology appropriately.The Conversation



Scott L Montgomery is a lecturer in the Jackson School of International Studies at the University of Washington.

This article was originally published on The Conversation. Read the original article.

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