Soviet Energy Dilemma and Prospects

Abstract

The USSR is the largest energy producer and the second largest energy consumer in the world. Its share in global energy demand reached 1 7% in 1988. The USSR's higher energy intensity than in other industrialized coun­ tries can be partially justified by such factors as the climate, poor in­ frastructure, and vast territory; however, the low energy efficiency and high per capita energy consumption are also explained by an inefficient economic structure, a high level of material intensity, along with enormous wastes and losses, a backward technological level, and a large stock of obsolete, old equipment used in all sectors of the national economy, especially in the energy sector. Presently, the energy savings potential is approximately equal to half of domestic energy consumption. Improvement in energy efficiency at all levels of the national economy is the primary goal of the national energy policy for the next two decades. Though short-term energy prospects for the 1990s are quite uncertain, some fundamental ideas concerning long-term energy projections have emerged. Several long-term scenarios of energy development, among them a stabiliza­ tion of energy consumption after 2000-2005 and a 20% reduction of CO2 emissions by 2030, are investigated in this paper. Expected improvements in the Soviet energy system will require changes in energy management, includ­ ing reduction of centralized planning, decentralization and privatization of energy-producing enterprises, energy price reforms, reshaping of investment patterns, and persistence in conversion from military to civilian production.