Energy policy of Russia
Encyclopedia
The Energy policy of Russia is contained in an Energy Strategy document, which sets out policy for the period up to 2020. In 2000 the Russian government approved the main provisions of the Russian energy strategy to 2020, and in 2003 the new Russian energy strategy was confirmed by the government. The Energy Strategy document outlines several main priorities: an increase in energy efficiency
Energy conservation
Energy conservation refers to efforts made to reduce energy consumption. Energy conservation can be achieved through increased efficient energy use, in conjunction with decreased energy consumption and/or reduced consumption from conventional energy sources...

, reducing impact on the environment
Natural environment
The natural environment encompasses all living and non-living things occurring naturally on Earth or some region thereof. It is an environment that encompasses the interaction of all living species....

, sustainable development
Sustainable development
Sustainable development is a pattern of resource use, that aims to meet human needs while preserving the environment so that these needs can be met not only in the present, but also for generations to come...

, energy development
Energy development
Energy development is the effort to provide sufficient primary energy sources and secondary energy forms for supply, cost, impact on air pollution and water pollution, mitigation of climate change with renewable energy....

 and technological development, as well as improved effectiveness and competitiveness.

Russia
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...

, one of the world's two energy superpower
Energy superpower
The term energy superpower does not have a clear definition. It has come to be used to refer to a nation that supplies large amounts of energy resources to a significant number of other states, and which therefore has the potential to influence world markets to gain a political or economic...

s, is rich in natural energy resources. It has the largest known natural gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...

 reserves of any state on earth, along with the second largest coal
Coal
Coal is a combustible black or brownish-black sedimentary rock usually occurring in rock strata in layers or veins called coal beds or coal seams. The harder forms, such as anthracite coal, can be regarded as metamorphic rock because of later exposure to elevated temperature and pressure...

 reserves, and the eighth largest oil
Petroleum
Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...

 reserves. Russia is the world's fourth largest electricity producer after the USA, China, and Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...

. Russia exports 70% of oil produced, about 7 million of 10.12 Moilbbl a day (2010), the largest net oil export of any country, as well as a major supply to the European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...

. The entire Middle East, in comparison, exports 20 Moilbbl daily.

Renewable energy in Russia
Renewable energy in Russia
Renewable energy in Russia mainly consists of hydroelectric energy. The country is the fifth largest producer of renewable energy in the world, although it is 56th when hydroelectric energy is not taken into account. Some 179 TWh of Russia's energy production comes from renewable energy...

 is largely undeveloped although there is considerable potential for renewable energy
Renewable energy
Renewable energy is energy which comes from natural resources such as sunlight, wind, rain, tides, and geothermal heat, which are renewable . About 16% of global final energy consumption comes from renewables, with 10% coming from traditional biomass, which is mainly used for heating, and 3.4% from...

 use. Geothermal energy
Geothermal power
Geothermal energy is thermal energy generated and stored in the Earth. Thermal energy is the energy that determines the temperature of matter. Earth's geothermal energy originates from the original formation of the planet and from radioactive decay of minerals...

, which is used for heating and electricity production in some regions of the Northern Caucasus
North Caucasus economic region
North Caucasus economic region tr.: Severo-Kavkazsky ekonomichesky rayon) is one of twelve economic regions of Russia.In this area, descending northward from the principal chain of the Caucasus Mountains to a level plain, are found rich deposits of oil, natural gas, and coal. The major cities are...

 and the Far East
Far Eastern economic region
Far Eastern economic region tr.: Dalnevostochny ekonomichesky rayon) is one of twelve economic regions of Russia.Bordering on the Pacific Ocean, the region has Komsomolsk-on-Amur, Khabarovsk, Yakutsk, and Vladivostok as its chief cities. Machinery is produced, and lumbering, fishing, hunting, and...

, is the most developed renewable energy source in Russia.

On July 2008 Russia's president signed a law allowing the government to allocate strategic oil and gas deposits on the continental shelf
Continental shelf
The continental shelf is the extended perimeter of each continent and associated coastal plain. Much of the shelf was exposed during glacial periods, but is now submerged under relatively shallow seas and gulfs, and was similarly submerged during other interglacial periods. The continental margin,...

 without an auction
Auction
An auction is a process of buying and selling goods or services by offering them up for bid, taking bids, and then selling the item to the highest bidder...

 procedure. On February 17, 2011, Russia signed a deal with China, stating that in return for $25 billion in Chinese loans to Russian oil companies, Russia will supply China with large quantities of crude oil via new pipelines for the next 20 years (http://english.caijing.com.cn/2009-02-18/110070270.html).

Overview

Energy in Russia
Capita Prim. energy Production Export Electricity CO2-emission
Million TWh TWh TWh TWh Mt
2004 143.9 7,461 13,473 5,943 812 1,529
2007 141.6 7,817 14,312 6,331 898 1,587
2008 141.8 7,987 14,583 6,240 814 1,594
2009 141.9 7,524 13,742 6,148 870 1,533
Change 2004-2009 -1.4 % 0.8 % 2.0 % 3.4 % 7.2 % 0.2 %
Mtoe = 11.63 TWh, Prim. energy includes energy losses that are 2/3 for nuclear power


The idea of a Russian national energy policy was approved by the government of Russia
Government of Russia
The Government of the Russian Federation exercises executive power in the Russian Federation. The members of the government are the prime minister , the deputy prime ministers, and the federal ministers...

 in 1992. At the same time government decided to develop the Energy Strategy of Russia. For this purpose the Interagency Commission was established.

In December 1994, the Energy Strategy of Russia (Major Provisions) was approved by the government
Government of Russia
The Government of the Russian Federation exercises executive power in the Russian Federation. The members of the government are the prime minister , the deputy prime ministers, and the federal ministers...

, followed by the presidential decree from 7 May 1995 confirming the first post-Soviet
Soviet Union
The Soviet Union , officially the Union of Soviet Socialist Republics , was a constitutionally socialist state that existed in Eurasia between 1922 and 1991....

 Russian energy strategy On the Main Directions of Energy Policy and Restructuring of the Fuel and Energy Industry of the Russian Federation for the Period up to the Year 2010, and the governmental decision from the 13 October 1995 approving the Main provisions for the Energy Strategy of the Russian Federation.

The strategy was changed under the presidency of Vladimir Putin
Vladimir Putin
Vladimir Vladimirovich Putin served as the second President of the Russian Federation and is the current Prime Minister of Russia, as well as chairman of United Russia and Chairman of the Council of Ministers of the Union of Russia and Belarus. He became acting President on 31 December 1999, when...

. On 23 November 2000, the Russian government approved main provisions of the Russian energy strategy to 2020. On 28 May 2002, the Russian Ministry of Energy gave an elaboration on the main provisions. Based on these documents, the new Russian energy strategy up to 2020 was approved on 23 May 2003 and confirmed by the government on 28 August 2003.

The main objective of Russian energy strategy is defined to be the determination of ways of reaching a better quality of fuel and energy mix and enhancing the competitive ability of Russian energy production and services in the world market. For this purpose the long-term energy policy should concentrate on energy safety, energy effectiveness, budget effectiveness and ecological energy security.

The energy strategy document defines the main priority of Russian energy strategy as an increase in energy efficiency
Energy conservation
Energy conservation refers to efforts made to reduce energy consumption. Energy conservation can be achieved through increased efficient energy use, in conjunction with decreased energy consumption and/or reduced consumption from conventional energy sources...

 (meaning decreasing of energy intensity
Energy intensity
]Energy intensity is a measure of the energy efficiency of a nation's economy. It is calculated as units of energy per unit of GDP.* High energy intensities indicate a high price or cost of converting energy into GDP....

 in production and energy supply expenditures), reducing impact on the environment
Natural environment
The natural environment encompasses all living and non-living things occurring naturally on Earth or some region thereof. It is an environment that encompasses the interaction of all living species....

, sustainable development
Sustainable development
Sustainable development is a pattern of resource use, that aims to meet human needs while preserving the environment so that these needs can be met not only in the present, but also for generations to come...

, energy development
Energy development
Energy development is the effort to provide sufficient primary energy sources and secondary energy forms for supply, cost, impact on air pollution and water pollution, mitigation of climate change with renewable energy....

 and technological development, as well as an improvement of effectiveness and competitiveness.

Primary energy sources

Russia is rich in energy resources. Russia has the largest known natural gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...

 reserves of any state on earth, along with the second largest coal
Coal
Coal is a combustible black or brownish-black sedimentary rock usually occurring in rock strata in layers or veins called coal beds or coal seams. The harder forms, such as anthracite coal, can be regarded as metamorphic rock because of later exposure to elevated temperature and pressure...

 reserves, and the eighth largest oil
Petroleum
Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...

 reserves. This is 32% of world proven natural gas reserves (23% of the probable reserves), 12% of the proven oil reserves (42% of the probable reserves), 10% of the explored coal reserves (14% of the estimated reserves) and 8% of the proven uranium
Uranium
Uranium is a silvery-white metallic chemical element in the actinide series of the periodic table, with atomic number 92. It is assigned the chemical symbol U. A uranium atom has 92 protons and 92 electrons, of which 6 are valence electrons...

 reserves.

Natural gas

In recent years Russia has identified the gas sector as being of key strategic importance. The share of natural gas as a primary energy source is remarkably high compared to the rest of world. Russia has the world biggest natural gas reserves, mainly owned and operated by the Russian monopoly Gazprom
Gazprom
Open Joint Stock Company Gazprom is the largest extractor of natural gas in the world and the largest Russian company. Its headquarters are in Cheryomushki District, South-Western Administrative Okrug, Moscow...

, which produces 94% of Russia's natural gas production. In global context Gazprom holds 25% of the world's known gas reserves and produces of 16% of global output. In 2006, Russia was the world's biggest natural gas producer with 22.0% of global natural gas production and also the biggest exporter with 22.9% of global natural gas export.

Gazprom has a monopoly for the natural gas pipelines and has exclusive right to export natural gas, granted by the Federal Law "On Gas Export", which came into force on 20 July 2006. Gazprom also has control over all gas pipelines leading out of Central Asia
Central Asia
Central Asia is a core region of the Asian continent from the Caspian Sea in the west, China in the east, Afghanistan in the south, and Russia in the north...

, and thus controls their access to the Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...

an market. Russia has used Central Asia's gas, primarily that from Turkmenistan
Turkmenistan
Turkmenistan , formerly also known as Turkmenia is one of the Turkic states in Central Asia. Until 1991, it was a constituent republic of the Soviet Union, the Turkmen Soviet Socialist Republic . Turkmenistan is one of the six independent Turkic states...

, on occasions where it has found itself unable to meet all its delivery obligations from its own production. Such circumstances in 2000 led to Gazprom allowing Turkmenistan to use its pipelines to supply gas to the Russian domestic market leaving Gazprom free to fulfil its obligations towards European customers. Other main natural gas producers in Russia are gas companies Novatek
Novatek
OAO Novatek is the Russia's largest independent natural gas producer, and second-largest in overall production after Gazprom. The company was originally known as OAO FIK Novafininvest...

, Itera
Itera
ITERA International Group of Companies is a Russia-based private-owned corporate group with headquarters in Moscow. Its core business primarily focuses on gas and gas processing...

, Northgas
Northgas
Northgas is a natural gas-producing company in Russia. It is a developer of the North-Urengoy gas field in the Yamalo-Nenets region. According to DeGolyer and MacNaughton, it controls a total reserves of 368 billion cubic metres of natural gas. All produced gas is acquired by...

 and Rospan, and vertically integrated oil companies Surgutneftegaz, TNK-BP
TNK-BP
TNK-BP is a major vertically integrated Russian oil company. It is Russia's third largest oil producer and among the ten largest private oil companies in the world. TNK-BP is Russia's third largest oil company in terms of reserves and crude oil production...

, Rosneft
Rosneft
Rosneft is an integrated oil company majority owned by the Government of Russia. Rosneft is headquartered in Moscow’s Balchug district near the Kremlin, across the Moskva river...

 and LUKOIL
LUKoil
Lukoil/LUKoil ; ) is Russia's second largest oil company and its second largest producer of oil. In 2009, the company produced 97.615 million tons of oil; ....

.

The main export markets of Russian natural gas are the European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...

 and the CIS
CIS
CIS usually refers to the Commonwealth of Independent States, a modern political entity consisting of eleven former Soviet Union republics.The acronym CIS may also refer to:-Organizations:...

. Russia supplies a quarter of the EU gas consumption, mainly via transit trough Ukraine
Ukraine
Ukraine is a country in Eastern Europe. It has an area of 603,628 km², making it the second largest contiguous country on the European continent, after Russia...

 (Soyuz, Brotherhood) and Belarus
Belarus
Belarus , officially the Republic of Belarus, is a landlocked country in Eastern Europe, bordered clockwise by Russia to the northeast, Ukraine to the south, Poland to the west, and Lithuania and Latvia to the northwest. Its capital is Minsk; other major cities include Brest, Grodno , Gomel ,...

 (Yamal-Europe pipeline
Yamal-Europe pipeline
The Yamal–Europe natural gas pipeline is a long pipeline connecting natural gas fields in Western Siberia and in the future on the Yamal peninsula, Russia, with Germany.-History:...

). The main importers are Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...

 (where links were developed as a result of Germany's Ostpolitik
Ostpolitik
Neue Ostpolitik , or Ostpolitik for short, refers to the normalization of relations between the Federal Republic of Germany and Eastern Europe, particularly the German Democratic Republic beginning in 1969...

during the 1970s, and also Ukraine, Belarus
Belarus
Belarus , officially the Republic of Belarus, is a landlocked country in Eastern Europe, bordered clockwise by Russia to the northeast, Ukraine to the south, Poland to the west, and Lithuania and Latvia to the northwest. Its capital is Minsk; other major cities include Brest, Grodno , Gomel ,...

, Italy
Italy
Italy , officially the Italian Republic languages]] under the European Charter for Regional or Minority Languages. In each of these, Italy's official name is as follows:;;;;;;;;), is a unitary parliamentary republic in South-Central Europe. To the north it borders France, Switzerland, Austria and...

, Turkey
Turkey
Turkey , known officially as the Republic of Turkey , is a Eurasian country located in Western Asia and in East Thrace in Southeastern Europe...

, France
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...

 and Hungary
Hungary
Hungary , officially the Republic of Hungary , is a landlocked country in Central Europe. It is situated in the Carpathian Basin and is bordered by Slovakia to the north, Ukraine and Romania to the east, Serbia and Croatia to the south, Slovenia to the southwest and Austria to the west. The...

.

In September 2009, Prime Minister
Prime Minister of Russia
The Chairman of the Government of the Russian Federation The use of the term "Prime Minister" is strictly informal and is not allowed for by the Russian Constitution and other laws....

 Vladimir Putin
Vladimir Putin
Vladimir Vladimirovich Putin served as the second President of the Russian Federation and is the current Prime Minister of Russia, as well as chairman of United Russia and Chairman of the Council of Ministers of the Union of Russia and Belarus. He became acting President on 31 December 1999, when...

 said Russia would try to liberalize the domestic gas market in the near future but would maintain Gazprom's export monopoly in the medium term.

Oil

Russia is the largest oil producer in the non-OPEC
OPEC
OPEC is an intergovernmental organization of twelve developing countries made up of Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. OPEC has maintained its headquarters in Vienna since 1965, and hosts regular meetings...

 countries, and second biggest in the world after Saudi Arabia
Saudi Arabia
The Kingdom of Saudi Arabia , commonly known in British English as Saudi Arabia and in Arabic as as-Sa‘ūdiyyah , is the largest state in Western Asia by land area, constituting the bulk of the Arabian Peninsula, and the second-largest in the Arab World...

, which it overtakes as the world's number one from time to time. In 2006, Russia contributed 12.1 % of global oil production and 11.6 % of global oil exports. In June 2006, Russian crude oil and condensate production reached the post-Soviet maximum of 9.7 Moilbbl per day, exceeding production in 2000 by 3.2 Moilbbl/d. Russian export consists more than 5 Moilbbl/d of oil and nearly 2 Moilbbl/d of refined products, which go mainly to the European market. The domestic demand in 2005 was 2.6 Moilbbl/d on average. Russia is also the main transit country for oil from Kazakhstan
Kazakhstan
Kazakhstan , officially the Republic of Kazakhstan, is a transcontinental country in Central Asia and Eastern Europe. Ranked as the ninth largest country in the world, it is also the world's largest landlocked country; its territory of is greater than Western Europe...

.

The biggest Russian oil company is Rosneft
Rosneft
Rosneft is an integrated oil company majority owned by the Government of Russia. Rosneft is headquartered in Moscow’s Balchug district near the Kremlin, across the Moskva river...

 followed by Lukoil
LUKoil
Lukoil/LUKoil ; ) is Russia's second largest oil company and its second largest producer of oil. In 2009, the company produced 97.615 million tons of oil; ....

, TNK-BP
TNK-BP
TNK-BP is a major vertically integrated Russian oil company. It is Russia's third largest oil producer and among the ten largest private oil companies in the world. TNK-BP is Russia's third largest oil company in terms of reserves and crude oil production...

, Surgutneftegaz, Gazprom Neft
Gazprom Neft
Gazprom Neft is the fifth largest oil producing and refining company in Russia. It's the oil arm of Gazprom, which owns 80% of Gazprom Neft's shares....

 and Tatneft
Tatneft
Tatneft is a Russian vertically-integrated oil and gas company with headquarters in the city of Almetyevsk, in the Republic of Tatarstan. It is the sixth largest oil company in Russia.The company general director is Rinat Galeyev...

. All oil trunk pipelines (except the Caspian Pipeline Consortium
Caspian Pipeline Consortium
The Caspian Pipeline Consortium is a consortium and a pipeline to transport Caspian oil from Tengiz field to the Novorossiysk-2 Marine Terminal on Russia's Black Sea coast. It is also a major export route for oil from the Kashagan and Karachaganak fields...

) are owned and operated by the state-owned monopoly Transneft
Transneft
Transneft is a Russian state-owned business responsible for the national oil pipelines. It was founded in 1993 and owns the largest oil pipeline system in the world, with a total network length of almost...

; oil products pipelines are owned and operated by its subsidiary Transnefteproduct
Transnefteproduct
Transnefteproduct is an operator of oil products pipelines in Russia. It operates more than oil pructs pipelines. On 16 April 2007, pursuant to a presidential decree signed by president of Russia Vladimir Putin, Transnefteproduct became a subsidiary of an oil pipelines operator...

. Currently, Transneft is constructing the Eastern Siberia – Pacific Ocean oil pipeline that would bring Russian oil to the Asian-Pacific markets (China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...

, Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...

, Korea
Korea
Korea ) is an East Asian geographic region that is currently divided into two separate sovereign states — North Korea and South Korea. Located on the Korean Peninsula, Korea is bordered by the People's Republic of China to the northwest, Russia to the northeast, and is separated from Japan to the...

).

As the Arctic ice cap shrinks due to global warming
Global warming
Global warming refers to the rising average temperature of Earth's atmosphere and oceans and its projected continuation. In the last 100 years, Earth's average surface temperature increased by about with about two thirds of the increase occurring over just the last three decades...

, the prospect of oil exploration in the Arctic Ocean
Arctic Ocean
The Arctic Ocean, located in the Northern Hemisphere and mostly in the Arctic north polar region, is the smallest and shallowest of the world's five major oceanic divisions...

 is thought to be an increasing possibility. On December 20, 2001, Russia submitted documents to the UN Commission on the Limits of the Continental Shelf claiming expanded limits to Russian continental shelf
Continental shelf of Russia
The continental shelf of Russia is a continental shelf adjacent to Russia. Geologically, the extent of the shelf is defined as the entirety of the continental shelves adjacent to Russia's coast...

 beyond the previous 200 mile zone
Exclusive Economic Zone
Under the law of the sea, an exclusive economic zone is a seazone over which a state has special rights over the exploration and use of marine resources, including production of energy from water and wind. It stretches from the seaward edge of the state's territorial sea out to 200 nautical...

 within the Russian Arctic sector. In 2002 the UN Commission recommended that Russia should carry out additional research, which commenced in 2007. It is thought that the area may contain 10bn tonnes of gas and oil
Oil
An oil is any substance that is liquid at ambient temperatures and does not mix with water but may mix with other oils and organic solvents. This general definition includes vegetable oils, volatile essential oils, petrochemical oils, and synthetic oils....

 deposits.

Coal

Russia has the world’s second largest coal reserves, with 157 billion tonnes of reserves.

Russian coal reserves are widely dispersed. The principal hard coal deposits are located in the Pechora and Kuznetsk basins. The Kansk-Achinsk basin contains huge deposits of brown coal. The Siberian Lena and Tunguska basins constitute largely unexplored resources, the commercial exploitation of which would probably be difficult.

Oil shale

Russia owns the biggest oil shale
Oil shale
Oil shale, an organic-rich fine-grained sedimentary rock, contains significant amounts of kerogen from which liquid hydrocarbons called shale oil can be produced...

 reserves in Europe equal to 35.47 billion tonnes of shale oil
Shale oil
Shale oil, known also as kerogen oil or oil-shale oil, is an unconventional oil produced from oil shale by pyrolysis, hydrogenation, or thermal dissolution. These processes convert the organic matter within the rock into synthetic oil and gas...

. More than 80 oil shale deposits have been identified. Main deposits are located in the Volga-Petchyorsk province and the Baltic Basin. Extraction of the deposits in the Volga-Petchyorsk province began in the 1930s, but was abandoned due to environmental problems. Main oil shale industry
Oil shale industry
Oil shale industry is an industry of mining and processing of oil shale—a fine-grained sedimentary rock, containing significant amounts of kerogen , from which liquid hydrocarbons can be manufactured. The industry has developed in Brazil, China, Estonia and to some extent in Germany, Israel and...

 was concentrated on the Baltic Basin in Slantsy
Slantsy
Slantsy is a town and the administrative center of Slantsevsky District of Leningrad Oblast, Russia, situated on the Plyussa River, west of St. Petersburg. Population: ....

, but at the end of the 1990s the Slantsy oil shale processing plant and oil shale-fired power station were converted to use traditional hydrocarbons and mining activities ceased before 2005. In Syzran
Syzran
Syzran is the third largest city in Samara Oblast, Russia, located on the right bank of Saratov Reservoir of the Volga River. Population: It was founded in 1683 as a fortress, and was granted town status in 1796. One tower from the 17th-century fortress still stands...

 a small processing plant continues to operate.

Natural bitumen and extra-heavy oil

Small extra-heavy oil
Heavy crude oil
Heavy crude oil or extra heavy crude oil is any type of crude oil which does not flow easily. It is referred to as "heavy" because its density or specific gravity is higher than that of light crude oil. Heavy crude oil has been defined as any liquid petroleum with an API gravity less than 20°.Extra...

 reserves have been identified in the Volga-Urals and North Caucasus-Mangyshlak basins. Large deposits of natural bitumen are located in Eastern Siberia in the Lena-Tunguska basin. Other bitumen deposits are located in the Timan-Pechora and Volga-Urals Basins, and in Tatarstan
Tatarstan
The Republic of Tatarstan is a federal subject of Russia located in the Volga Federal District. Its capital is the city of Kazan, which is one of Russia's largest and most prosperous cities. The republic borders with Kirov, Ulyanovsk, Samara, and Orenburg Oblasts, and with the Mari El, Udmurt,...

. In September 2007, Tatneft
Tatneft
Tatneft is a Russian vertically-integrated oil and gas company with headquarters in the city of Almetyevsk, in the Republic of Tatarstan. It is the sixth largest oil company in Russia.The company general director is Rinat Galeyev...

 and Royal Dutch Shell
Royal Dutch Shell
Royal Dutch Shell plc , commonly known as Shell, is a global oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the fifth-largest company in the world according to a composite measure by Forbes magazine and one of the six...

 announced a strategic partnership to develop heavy crude oil
Heavy crude oil
Heavy crude oil or extra heavy crude oil is any type of crude oil which does not flow easily. It is referred to as "heavy" because its density or specific gravity is higher than that of light crude oil. Heavy crude oil has been defined as any liquid petroleum with an API gravity less than 20°.Extra...

 production in Tatarstan
Tatarstan
The Republic of Tatarstan is a federal subject of Russia located in the Volga Federal District. Its capital is the city of Kazan, which is one of Russia's largest and most prosperous cities. The republic borders with Kirov, Ulyanovsk, Samara, and Orenburg Oblasts, and with the Mari El, Udmurt,...

, where Tatneft already has pilot production of bitumen.

Uranium

Uranium exploration and development activities have been largely concentrated on three east-of-Urals uranium districts (Transural, West Siberia and Vitim). The most important uranium producing area has been the Streltsovsky region near Krasnokamensk in the Chitinskaya Oblast
Chita Oblast
Chita Oblast was a federal subject of Russia in southeast Siberia, Russia. Its administrative center was the city of Chita. It had extensive international borders with China and Mongolia and internal borders with Irkutsk and Amur Oblasts, as well as with the Buryat and the Sakha Republics. Its...

. In 2005, the Russian Federation was the world’s fourth largest producer of uranium, accounting for 8.2% of global output.

Electricity production

Russia is the world's fourth largest electricity producer after the USA, China, and Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...

. In 2005, Russia produced 951 TWh and exported 23 TWh of electricity. Roughly 63% of Russia's electricity is generated by thermal plants, 21% by hydropower
Hydroelectricity
Hydroelectricity is the term referring to electricity generated by hydropower; the production of electrical power through the use of the gravitational force of falling or flowing water. It is the most widely used form of renewable energy...

 and 16% comes from nuclear reactor
Nuclear power plant
A nuclear power plant is a thermal power station in which the heat source is one or more nuclear reactors. As in a conventional thermal power station the heat is used to generate steam which drives a steam turbine connected to a generator which produces electricity.Nuclear power plants are usually...

s. Russia exports electricity to the CIS
Commonwealth of Independent States
The Commonwealth of Independent States is a regional organization whose participating countries are former Soviet Republics, formed during the breakup of the Soviet Union....

 countries, Latvia
Latvia
Latvia , officially the Republic of Latvia , is a country in the Baltic region of Northern Europe. It is bordered to the north by Estonia , to the south by Lithuania , to the east by the Russian Federation , to the southeast by Belarus and shares maritime borders to the west with Sweden...

, Lithuania
Lithuania
Lithuania , officially the Republic of Lithuania is a country in Northern Europe, the biggest of the three Baltic states. It is situated along the southeastern shore of the Baltic Sea, whereby to the west lie Sweden and Denmark...

, China, Poland
Poland
Poland , officially the Republic of Poland , is a country in Central Europe bordered by Germany to the west; the Czech Republic and Slovakia to the south; Ukraine, Belarus and Lithuania to the east; and the Baltic Sea and Kaliningrad Oblast, a Russian exclave, to the north...

, Turkey and Finland
Finland
Finland , officially the Republic of Finland, is a Nordic country situated in the Fennoscandian region of Northern Europe. It is bordered by Sweden in the west, Norway in the north and Russia in the east, while Estonia lies to its south across the Gulf of Finland.Around 5.4 million people reside...

.

The Russian electricity market is dominated by Inter RAO and Gazprom Energoholding. While production and sale will be opened up to competition, transmission and distribution remain under state control.

In recent years there were several blackouts
Power outage
A power outage is a short- or long-term loss of the electric power to an area.There are many causes of power failures in an electricity network...

, notably the 2005 Moscow power blackouts
2005 Moscow power blackouts
On 25 May 2005, Moscow's power supplies were the centre of a major incident, which resulted in the supply being outed for several hours in many of City of Moscow districts, as well as Moscow, Tula, Kaluga and Ryazan provinces...

.

Hydropower

Gross theoretical potential of the Russian hydro resource base is 2,295 TWh per year, of which 852 TWh is regarded as economically feasible. Most of this potential is located in Siberia and the Far East. Hydro generation (including pumped-storage output) in 2005 was 175 TWh, which represents 5.8% of world hydroelectricity generation. Russia ranks as the fifth largest hydroelectricity producer in the world. At the end of 2005 installed hydroelectric generating capacity was 45.7 GW.

Nuclear energy

In 2005 nuclear energy supply in Russia amounted to 149 TWh, which is 15.7 % of total Russian electricity output and 5.4 % of global nuclear energy production. The total installed capacity of nuclear reactors is 21,244MW. There are plans to increase the number of commercial reactors from thirty one to fifty nine.

From 2001 all Russian civil reactors were operated by Energoatom. On 19 January 2007 Russian Parliament adopted legislation which created Atomenergoprom
Atomenergoprom
Atomenergoprom is a 100% state-owned holding company that unites Russian civil nuclear industry. It is a part of the Rosatom State corporation.-History:...

 - a holding company for all Russian civil nuclear industry, including Energoatom, the nuclear fuel producer and supplier TVEL
TVEL
TVEL is a Russian nuclear fuel cycle company headquartered in Moscow. It belongs to the Atomenergoprom holding company. Chairman of the board of directors is Alexander Lokshin. The acting President is Yuri Olenin.-Activities:...

, the uranium trader Tekhsnabexport
Tekhsnabexport
Tekhsnabexport is a state owned Russian company founded in 1963 which trades uranium fuel and fuel processing services abroad .It carries out export of goods and services, produced by enterprises of the Atomenergoprom, including nuclear materials, and technological, medical and other equipment...

 (Tenex) and nuclear facilities constructor Atomstroyexport
Atomstroyexport
Atomstroyexport is the Russian Federation's nuclear power equipment and service export monopoly. It belongs to Atomenergoprom holding with 49.8% of shares owned by Gazprombank...

.

Renewable energy

Renewable energy
Renewable energy
Renewable energy is energy which comes from natural resources such as sunlight, wind, rain, tides, and geothermal heat, which are renewable . About 16% of global final energy consumption comes from renewables, with 10% coming from traditional biomass, which is mainly used for heating, and 3.4% from...

 in Russia is largely undeveloped although Russia has many potential renewable energy resources.

Geothermal energy

Geothermal energy
Geothermal power
Geothermal energy is thermal energy generated and stored in the Earth. Thermal energy is the energy that determines the temperature of matter. Earth's geothermal energy originates from the original formation of the planet and from radioactive decay of minerals...

, which is used for heating and electricity production in some regions of the Northern Caucasus
North Caucasus economic region
North Caucasus economic region tr.: Severo-Kavkazsky ekonomichesky rayon) is one of twelve economic regions of Russia.In this area, descending northward from the principal chain of the Caucasus Mountains to a level plain, are found rich deposits of oil, natural gas, and coal. The major cities are...

 and the Far East
Far Eastern economic region
Far Eastern economic region tr.: Dalnevostochny ekonomichesky rayon) is one of twelve economic regions of Russia.Bordering on the Pacific Ocean, the region has Komsomolsk-on-Amur, Khabarovsk, Yakutsk, and Vladivostok as its chief cities. Machinery is produced, and lumbering, fishing, hunting, and...

, is the most developed renewable energy source in Russia. Geothermal resources have been identified in the Northern Caucasus, Western Siberia, Lake Baikal, and in Kamchatka and the Kuril Islands. In 1966 a 4 MWe single-flash plant was commissioned at Pauzhetka (currently 11 MWe) followed by a 12 MWe geothermal power plant at Verkhne Mutnovsky, and 50 MWe Mutnovsky geothermal power plant. At the end of 2005 installed capacity for direct use amounted to more than 307 MWt.

Peat

Principal peat deposits are located in the north-western parts of Russia, in West Siberia, near the western coast of Kamchatka and in several other far-eastern regions. The Siberian peatlands account for nearly 75 % of Russia's total reserves of 186 billion tonnes, second only to Canada’s. Approximately 5 % of exploitable peat (1.5 million tonnes per annum) is used for fuel production. Although peat was used as industrial fuel for power generation in Russia for a long period, its share has been in long-term decline, and since 1980 has amounted to less than 1 %.

Solar energy

It has been estimated that Russia's gross potential for solar energy is 2.3 trillion tce. The regions with the best solar radiation potential are the North Caucasus, the Black Sea and the Caspian Sea areas, and southern parts of Siberia and the Far East. This potential is largely unused, although the possibilities for off-grid solar energy or hybrid applications in remote areas are huge. However, the construction of a single solar power plant Kislovodskaya SPP (1.5 MW) has been delayed.

Wind energy

Russia has high quality wind resources on the Pacific and Arctic coasts and in vast steppe and mountain areas. Large-scale wind energy systems are suitable in Siberia and the Far East (east of Sakhalin Island, the south of Kamchatka, the Chukotka Peninsula, Vladivostok), the steppes along the Volga river, the northern Caucasus steppes and mountains and on the Kola Peninsula, where power infrastructure and major industrial consumers are in place. At the end of 2006, total installed wind capacity was 15 MW. Major wind power stations operate at Kalmytskaya (2 MW), Zapolyarnaya (1.5 MW), Kulikovskaya (5.1 MW), Tyupkildi (2.2 MW) and Observation Cape (2.5 MW). Feasibility studies are being carried out on the Kaliningradskaya (50 MW) and the Leningradskaya (75 MW) wind farms. There are about 100 MW of wind projects in Kalmykia
Kalmykia
The Republic of Kalmykia is a federal subject of Russia . Population: It is the only Buddhist region in Europe. It has also become well-known as an international chess mecca because its former President, Kirsan Ilyumzhinov, is the head of the International Chess Federation .-Geography:*Area:...

 and in Krasnodar Krai
Krasnodar Krai
-External links:* **...

.

Tidal energy

A small pilot tidal power plant with a capacity of 400 kW was constructed at Kislaya Guba
Kislaya Guba Tidal Power Station
The Kislaya Guba Tidal Power Station is an experimental project in Kislaya Guba, Russia.The station is the world's 4th largest tidal power plant with the output capacity of 1.7 MW. Construction on the project began in 1968, but was later suspended for 10 years until December 2004, when...

 near Murmansk
Murmansk
Murmansk is a city and the administrative center of Murmansk Oblast, Russia. It serves as a seaport and is located in the extreme northwest part of Russia, on the Kola Bay, from the Barents Sea on the northern shore of the Kola Peninsula, not far from Russia's borders with Norway and Finland...

 in 1968. In 2007, Gidro OGK, a subsidiary of the Unified Energy System (UES) began the installation of a 1.5 MW experimental orthogonal turbine at Kislaya Guba. If it proves successful, UES plans to continue with Mezen Bay
Mezen Bay
The Mezen Bay is located in Arkhangelsk Oblast and Nenets Autonomous Okrug in Northwestern Russia. It is one of four large bays and gulfs of the White Sea, the others being the Dvina Bay, the Onega Bay, and the Kandalaksha Gulf. The Mezen Bay is the easternmost of these, as it lies to the south of...

 (15,000 MW) and Tugur Bay (7,980 MW) projects.

Climate change

Vladimir Putin
Vladimir Putin
Vladimir Vladimirovich Putin served as the second President of the Russian Federation and is the current Prime Minister of Russia, as well as chairman of United Russia and Chairman of the Council of Ministers of the Union of Russia and Belarus. He became acting President on 31 December 1999, when...

 approved the Kyoto Protocol
Kyoto Protocol
The Kyoto Protocol is a protocol to the United Nations Framework Convention on Climate Change , aimed at fighting global warming...

 on November 4, 2004 and Russia officially notified the United Nations of its ratification on November 18, 2004. The issue of Russian ratification was particularly closely watched in the international community, as the accord was brought into force 90 days after Russian ratification (February 16, 2005).

President Putin had earlier decided in favour of the protocol in September 2004, along with the Russian cabinet, against the opinion of the Russian Academy of Sciences, of the Ministry for Industry and Energy and of the then president's economic advisor, Andrey Illarionov
Andrey Illarionov
Andrey Nikolayevich Illarionov is a Russian libertarian economist and former economic policy advisor to the President of Russia, Vladimir Putin...

, and in exchange to EU's support for the Russia's admission in the WTO. As anticipated after this, ratification by the lower (October 22, 2004) and upper house of parliament did not encounter any obstacles.

The Kyoto Protocol limits emissions to a percentage increase or decrease from their 1990 levels. Russia did not face mandatory cuts since its greenhouse-gas emissions fell well below the 1990 baseline due to a drop in economic output after the breakup of the Soviet Union. Because of this, despite its growing economy, by 2012 Russia will by no means exceed the level of emissions in 1990, which is the Kyoto Protocol's year of departure.

It is debatable whether Russia will benefit from selling emissions credits to other countries in the Kyoto Protocol, although Gazprom has already entered the market. "Russia is the Saudi Arabia
Saudi Arabia
The Kingdom of Saudi Arabia , commonly known in British English as Saudi Arabia and in Arabic as as-Sa‘ūdiyyah , is the largest state in Western Asia by land area, constituting the bulk of the Arabian Peninsula, and the second-largest in the Arab World...

 of carbon [carbon emissions credits]," said its representative. "There is a tremendous bank there".

Energy usage

In terms of the Russian energy demand structure, domestic production greatly exceeds domestic demand, making Russia the world’s leading net energy exporter.

Energy in foreign policy

Russia's energy superpower
Energy superpower
The term energy superpower does not have a clear definition. It has come to be used to refer to a nation that supplies large amounts of energy resources to a significant number of other states, and which therefore has the potential to influence world markets to gain a political or economic...

 status has recently become a hot topic in the European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...

. Russia's overwhelmingly large reserves of natural gas have helped give it the title without much debate.

Energy disputes

Russia has recently been accused in the West (i.e. Europe and the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...

) of using its natural resources as a policy tool to be wielded against offending states like Georgia
Georgia (country)
Georgia is a sovereign state in the Caucasus region of Eurasia. Located at the crossroads of Western Asia and Eastern Europe, it is bounded to the west by the Black Sea, to the north by Russia, to the southwest by Turkey, to the south by Armenia, and to the southeast by Azerbaijan. The capital of...

, Ukraine
Ukraine
Ukraine is a country in Eastern Europe. It has an area of 603,628 km², making it the second largest contiguous country on the European continent, after Russia...

, and other states it perceives as hindrances to its power. According to one estimate, since 1991 there were more than 55 energy incidents, of which more than 30 had political underpinnings. Only 11 incidents had no political connections. On the other hand, Russian officials like to remind their Western partners that even at the height of the Cold War
Cold War
The Cold War was the continuing state from roughly 1946 to 1991 of political conflict, military tension, proxy wars, and economic competition between the Communist World—primarily the Soviet Union and its satellite states and allies—and the powers of the Western world, primarily the United States...

 the Soviet Union never disrupted energy supplies to the West.

Russia, in turn, accuses the West of applying double-standards relating to market principles, pointing out that it has been supplying gas to the states in question at prices that were significantly below world market levels, and in some cases remain so even after the increases. Russia argues that it is not obligated to effectively subsidize
Subsidy
A subsidy is an assistance paid to a business or economic sector. Most subsidies are made by the government to producers or distributors in an industry to prevent the decline of that industry or an increase in the prices of its products or simply to encourage it to hire more labor A subsidy (also...

 the economies of post-Soviet states by offering them resources at below-market prices.

Azerbaijan and Armenia

Starting January 1, 2007 Gazprom increased the price of natural gas for Azerbaijan to 235 USD
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....

 per thousand cubic metres. Azerbaijan refused to pay this price and the gas export to Azerbaijan
Azerbaijan
Azerbaijan , officially the Republic of Azerbaijan is the largest country in the Caucasus region of Eurasia. Located at the crossroads of Western Asia and Eastern Europe, it is bounded by the Caspian Sea to the east, Russia to the north, Georgia to the northwest, Armenia to the west, and Iran to...

 stopped. On its side, Azerbaijan stopped oil export to and via Russia. A year earlier, pro-Russian Armenia
Armenia
Armenia , officially the Republic of Armenia , is a landlocked mountainous country in the Caucasus region of Eurasia...

 was hit with the same 100% price hike as Western-oriented Georgia, Vladimir Socor
Vladimir Socor
Vladimir Socor is a political analyst of East European affairs for the Jamestown Foundation and its Eurasia Daily Monitor, currently residing in Munich, Germany...

 has observed.

Belarus

The Russia-Belarus energy dispute began when Russia
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...

n state-owned gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...

 supplier Gazprom
Gazprom
Open Joint Stock Company Gazprom is the largest extractor of natural gas in the world and the largest Russian company. Its headquarters are in Cheryomushki District, South-Western Administrative Okrug, Moscow...

 demanded an increase in gas prices paid by Belarus
Belarus
Belarus , officially the Republic of Belarus, is a landlocked country in Eastern Europe, bordered clockwise by Russia to the northeast, Ukraine to the south, Poland to the west, and Lithuania and Latvia to the northwest. Its capital is Minsk; other major cities include Brest, Grodno , Gomel ,...

, which has been closely allied with Moscow and forms a loose union state with Russia. It escalated on January 8, 2007, when the Russian state-owned pipeline company Transneft
Transneft
Transneft is a Russian state-owned business responsible for the national oil pipelines. It was founded in 1993 and owns the largest oil pipeline system in the world, with a total network length of almost...

 stopped pumping oil
Petroleum
Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...

 into the Druzhba pipeline
Druzhba pipeline
The Druzhba pipeline is the world's longest oil pipeline and in fact one of the biggest oil pipeline networks in the world. It carries oil some from the eastern part of the European Russia to points in Ukraine, Belarus, Poland, Hungary, Slovakia, Czech Republic, and Germany...

 which runs through Belarus
Belarus
Belarus , officially the Republic of Belarus, is a landlocked country in Eastern Europe, bordered clockwise by Russia to the northeast, Ukraine to the south, Poland to the west, and Lithuania and Latvia to the northwest. Its capital is Minsk; other major cities include Brest, Grodno , Gomel ,...

.
Transneft has accused Belarus of forcing the shutdown by stealing oil from the pipeline and halted the oil transport.
On January 10, Transneft resumed oil exports through the pipeline after Belarus ended the tariff that sparked the shutdown, despite differing messages from the parties on the state of negotiations.

Czech Republic

On 9 July 2008, after signing an agreement between the United States and the Czech Republic to host a tracking radar for an antiballistic missile system, the flow of Russian oil through the Druzhba pipeline to the Czech Republic started to reduce. Although officially the linkage between reduction of oil supplies and the radar agreement was not claimed, it was suspected. Transneft denied any connections with radar agreement, saying that reduction was purely commercial as Tatneft and Bashneft
Bashneft
Bashneft is a Russian oil company. It is one of the largest producer of oil products in the country. The company operates 140 oil and natural gas fields in Russia and has an annual oil production of 16 million tonnes. Bashneft owns three oil refineries located in Ufa with a combined capacity of ...

 started to refine more oil at their own refineries. Although Prime Minister Putin asked Deputy Prime Minister Igor Sechin
Igor Sechin
Igor Ivanovich Sechin is a Russian official, considered a close ally of Vladimir Putin. Sechin is often described as one of Putin's most conservative counselors and the leader of the Kremlin's Siloviki faction, a statist lobby gathering former security services agents...

 to 'work with all partners to make sure there are no disruptions', in reality the supplies were reduced to 50%.

Georgia

In the January 2006 alleged North Ossetia sabotage
2006 North Ossetia sabotages
The 2006 North Ossetia pipeline explosions consisted of two explosions on the Mozdok–Tbilisi pipeline in North Ossetia on January 22, 2006.The explosions suspended gas supply to Georgia and Armenia, at a time when the weather conditions were particularly severe...

, two simultaneous explosions occurred on the main branch and a reserve branch of the Mozdok-Tbilisi pipeline in the Russian border region of North Ossetia. The electricity transmission line in Russia's southern region of Karachayevo-Cherkessiya near the Georgian
Georgia (country)
Georgia is a sovereign state in the Caucasus region of Eurasia. Located at the crossroads of Western Asia and Eastern Europe, it is bounded to the west by the Black Sea, to the north by Russia, to the southwest by Turkey, to the south by Armenia, and to the southeast by Azerbaijan. The capital of...

 border was brought down by an explosion just hours later. Georgian president Mikhail Saakashvili blamed Russia for putting pressure on Georgia's energy system at the time of the coldest weather.

On November 1, 2006 Gazprom announced that it will construct a direct gas pipeline to Georgia's breakaway region of South Ossetia
South Ossetia
South Ossetia or Tskhinvali Region is a disputed region and partly recognized state in the South Caucasus, located in the territory of the South Ossetian Autonomous Oblast within the former Georgian Soviet Socialist Republic....

. The work on the pipeline started just before South Ossetia's November 12 referendum on separating from Georgia.
Starting January 1, 2007 Gazprom increased natural gas prices to Georgia following an international incident in an alleged effort to strongly influence the Georgian leadership's defiance of Moscow. The current price is 235 USD per thousand cubic metre, which is the highest among the CIS countries.

The August 2008 military conflict between Georgia and Russia over the autonomous region of South Ossetia, which has been de-facto independent from Georgia since the early 1990s, is likely to shift the balance of power between the main players involved in the formation of the future of the Caspian and Central Asian energy sector, including:

• Producer and transit countries: Azerbaijan, Georgia, Kazakhstan, Turkmenistan, Uzbekistan, Turkey and Iran;

• Foreign corporations operating in the region's hydrocarbon sector;

• Major external players: China, Russia, the European Union and the United States.

The volatility of these transit routes is likely to shape investment decisions of international oil companies involved in the development of Central Asian and Caspian hydrocarbons and their transportation to global markets. Governments of these resource rich countries are bound to have serious concerns about the safety of BTC, WREP and BTE pipelines, the railway networks and the oil terminals at the Georgian Black Sea ports of Batumi, Kulevi and Poti, all of which were halted by the Georgian-Russian hostilities. Although, the pipelines were only temporarily shut down for security reasons and were not targeted or damaged in the conflict, their future expansion and the construction of related new pipeline projects, such as the Kazakh-Caspian Transportation System, the Trans-Caspian gas pipeline and Nabucco are now uncertain. In this situation, Central Asian and Caspian producers may opt for traditional exports via Russia (providing Moscow successfully expands the capacity of its oil and gas export routes) and the new export pipelines to China.

Lithuania

On July 29, 2006 Russia shut down oil export to Mažeikių oil refinery
Mažeikiu Nafta
ORLEN Lietuva is a company centered around the Mažeikiai oil refinery and oil-processing plant in Lithuania. It includes the only refinery in the Baltic States.- Refinery :...

 in Lithuania
Lithuania
Lithuania , officially the Republic of Lithuania is a country in Northern Europe, the biggest of the three Baltic states. It is situated along the southeastern shore of the Baltic Sea, whereby to the west lie Sweden and Denmark...

 after an oil spill on the Druzhba pipeline system occurred in Russia’s Bryansk oblast
Bryansk Oblast
Bryansk Oblast is a federal subject of Russia . Its administrative center is the city of Bryansk. Population: 1,278,087 .-History:...

, near the point where a line to Belarus and Lithuania branches off the main export pipeline. Transneft said it would need one year and nine months to repair the damaged section. Although Russia cited technical reasons for stopping oil deliveries to Lithuania, Lithuania claims that the oil supply was stopped because Lithuania sold the Mažeikių refinery to Polish company PKN Orlen
PKN Orlen
PKN Orlen is a major European oil refiner, and petrol retailer. The company is Poland's and Central Europe's largest publicly traded firm with major operations in Poland, Czech Republic, Germany, and the Baltic States...

 in an effort to avoid the refinery and infrastructure being bought out by Russian interests. Russian crude oil is now being transshipped via the Būtingė Marine Terminal.

Poland

There has been rapprochement with Mr Tusk's government in Warsaw, after two years of tensions with the conservative government of Mr Kaczynski. The cooperation on the Yamal-Europe pipeline is continued without serious problems. Nevertheless, some disagreements concerning control of Yamal-Europe pipeline and transit pricing remain. Despite attempts to relive tensions, consecutive Polish governments strongly oppose the Nord Stream project bypassing Poland and favour further development of overland alternatives. It remains a contentious issue that as a result of Russian-Ukrainian gas dispute in 2009, Polish PGNIG gas company did not receive contracted supplies of Russian gas from Ukraine.

Ukraine

At the beginning of 2006 Russia greatly increased the price of gas for Ukraine
Ukraine
Ukraine is a country in Eastern Europe. It has an area of 603,628 km², making it the second largest contiguous country on the European continent, after Russia...

 to bring it inline with market values. The dispute between Russian state-owned gas supplier Gazprom and Ukraine over natural gas prices started in March 2005 (over the price of natural gas and prices for the transition of Gazprom's gas to Europe). The two parties were unable to reach an agreement to resolve the dispute, and Russia cut gas exports to Ukraine on January 1, 2006 at 10:00 MSK. The supply was restored on January 4, when a preliminary agreement between two gas companies was settled. Other disputes arose in October 2007 and in January 2009, this dispute again resulted in 18 European countries reporting major falls or cut-offs of their gas supplies from Russia transported through Ukraine. Gas supplies restarted on 20 January 2009 and were fully restored on 21 January 2009.

EU-Russia Energy Dialogue

The EU-Russia Energy Dialogue was launched at the EU-Russia Summit in Paris in October 2000. François Lamoureux, Director general for Energy and Transport at the European Commission and Viktor Khristenko, Vice-Prime Minister of the Russian Federation took up the responsibility as sole interlocutors. Christian Cleutinx, then Head of Unit at the European Commission was designated as the Coordinator of the dialogue. At the working level the Energy Dialogue consists three thematic working groups. The Energy Dialogue involves the EU Member States, energy industry and the international financial institutions.
Projected gas pipelines originating in Russia and supplying Europe.

Ratification of the Energy Charter Treaty

Russia signed the Energy Charter Treaty
Energy Charter Treaty
The Energy Charter Treaty is an international agreement which provides a multilateral framework for energy trade, transit and investments...

 in 1994, but flatly refused to ratify its current revision. Russia's main objections to the ratification revolve around the proviso about the third party access to the pipelines and transit fees. Notwithstanding the fact that Russia didn't ratify the treaty, Ivan Materov, State Secretary and Deputy Minister of Industry and Energy of the Russian Federation, serves as the vice-chairman of the Energy Charter Conference, and Andrei Konoplyanik as the Deputy Secretary General.

Russia and the European Union have also failed to finalize the negotiations on the Energy Charter Protocol on Transit. The main issue remain open is how, and to what extent, the Protocol will include mechanisms for establishment long term transit arrangements. Also the third party access to its pipeline infrastructure has remained Russia's main objection to the Protocol.

Corruption

Swedish economist Anders Åslund, who has long experience in Russia, estimates that 50 percent of the state-owned Gazprom's investments are lost through corrupt practices. For instance, the Russian section of Blue Stream pipeline was three times more expensive to construct per kilometer than the Turkish section of the pipeline.

Experts believe William Browder
William Browder
William Felix Browder is the Chief Executive Officer and co-founder of the investment fund Hermitage Capital Management.-Hermitage Capital:...

's "visa problem" is related to that he made questions about Gazprom's murky intermediates which receive money from Gazprom.

Oil-for-Food Programme

The Russian government and Russian energy companies were beneficiaries in the Oil-for-Food Programme
Oil-for-Food Programme
The Oil-for-Food Programme , established by the United Nations in 1995 was established with the stated intent to allow Iraq to sell oil on the world market in exchange for food, medicine, and other humanitarian needs for ordinary Iraqi citizens without allowing Iraq to boost its military...

.

See also

  • Economy of Russia
    Economy of Russia
    The economy of Russia is the eleventh largest economy in the world by nominal value and the sixth largest by purchasing power parity . Russia has an abundance of natural gas, oil, coal, and precious metals...

  • Energy policy
    Energy policy
    Energy policy is the manner in which a given entity has decided to address issues of energy development including energy production, distribution and consumption...

    • Energy policy of the European Union
      Energy policy of the European Union
      Although the European Union has legislated in the area of energy policy for many years, and evolved out of the European Coal and Steel Community, the concept of introducing a mandatory and comprehensive European energy policy was only approved at the meeting of the European Council on 27 October...

  • Energy superpower
    Energy superpower
    The term energy superpower does not have a clear definition. It has come to be used to refer to a nation that supplies large amounts of energy resources to a significant number of other states, and which therefore has the potential to influence world markets to gain a political or economic...

  • Russia in the European energy sector
    Russia in the European energy sector
    Russia has a significant role in the European energy sector as the largest exporter of oil and natural gas to the European Union. In 2007, the European Union imported from Russia 185 million tonnes of crude oil, which accounted for 32.6% of total oil import, and 100.7 million tonnes of...

  • Russie.NEI.Visions in English
    Russie.NEI.Visions in English
    Russie.NEI.Visions is an online collection of policy papers each in French, English and Russian produced by the Russia/New Independent States Centre of the French Institute of International Relations , a think tank...

  • EU-Russia Centre
    EU-Russia Centre
    The EU-Russia Centre is an independent information and expertise resource for anyone interested in modern Russia, its democratic status and the future of EU-Russia relations.- Mission :...


External links

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