Russian Energy Policy Research Articles

Russian Foreign Energy Policy Towards the European Union

Despite a long history of cooperation, Russia's energy policy towards the European Union has recently been the subject of great consternation amongst scholars and policymakers due to the gas disputes of 2006 and 2009. In addition to European efforts aimed at liberalizing its internal energy market, the looming expiry of the latest Russia-Ukraine gas transit agreement has raised concerns about Russia's potential use of the 'energy weapon,' or more simply its ability to compel European policymakers to acquiesce to various Russian demands through the threat of shutting off gas exports to Europe. Ultimately, I find that this scenario is highly unlikely in the near future, as Russia's foreign energy policy towards the European Union is characterized by a diverse range of interests that largely revolve around achieving security of demand. As such, both the Russian state and Gazprom are significantly limited in their ability to exercise influence over the European Union through natural gas exports, as attempting to do so would jeopardize their domestic political and commercial interests. Moreover, market liberalization in both EU and Russian natural gas markets have weakened the overtly geopolitical aspects of Russia’s energy policy towards the European Union.

Исследование актуальных инструментов экономической политики в сфере возобновляемой энергетики в России и в мире (Research of Current Economic Policy Instruments in the Field of Renewable Energy in Russia and in the World)

Russian Abstract: Исследованы механизмы регулирования и поддержки ВИЭ в России и за рубежом, разработаны предложения по проведению политики в сфере ВИЭ на период с 2025 по 2035 гг., с учетом лучшего мирового опыта и особенностей российской энергетической отрасли. Результаты исследования содержат рекомендации на период до 2035 года. English Abstract: The mechanisms of regulation and support of RES in Russia and abroad have been investigated, proposals have been developed for the implementation of a policy in the field of RES for the period from 2025 to 2035, taking into account the best world experience and the characteristics of the Russian energy industry. The results of the study provide recommendations for the period up to 2035.

Introducing Norwegian Oil and Gas Model in Russia: Institutional Challenges

While the Norwegian oil and gas model is a popular reference case in Russia, one should realize that it has developed over time within a specific national, historical and institutional context. The core role in this model belongs to the Norwegian state in terms of resource management, establishing the regulatory framework, massive taxation, and actual involvement in the business, first of all through the national petroleum company Statoil/Equinor. Equinor has evolved since 1972 from a modest carried partner to a large streamlined corporation, operating in 35 countries and focusing heavily on global technological leadership. All investors, either state-owned or private, are put under the same public scrutiny and stimulated with non-fiscal incentives, such as political stability, predictable regulations and abundant geological information. This large scale government intervention relies on proactive, professional and incorrupt bureaucracy enjoying broad powers. Much of this practice is not common and may not be introduced directly in Russia, which tends to limit the role of public servants and rely on big state corporations. However, the Norwegian experience seems very relevant for the urgently needed overhaul of the Russian energy policies, both offshore and in Western Siberia

Russian Gas Companies Strategies in the Asia-Pacific and in the Arctic under Western Sanctions and Selective Government Support

The main purpose of this research is to determine whether Russia being under Western economic sanctions could significantly strengthen its presence in the Asia-Pacific with a pipeline gas and LNG supplies. Based on the study of the Russia’s current and planned gas projects in the eastern part of the country and in the Arctic, that are realized under sanctions’ pressure, the authors concluded that most probably by 2030 Moscow can reach this strategic objective. To resist Western sanctions against the Russian energy industry Moscow launched a program of accelerated import substitution, and as a result they have only partially achieved their goals. Considering Russia’s largest gas exporters, they resorted to different strategies to counter sanctions. The state company Gazprom postponed plans for offshore gas exploration in the Arctic and continues to prioritize gas pipeline projects which reinforce its dependence on China. In contrast, with the help from the RF government and foreign investors, the private company Novatek successfully creates a powerful infrastructure for producing LNG in the Arctic and for delivering it to Europe and the Asia-Pacific.

К ВОПРОСУ О ВОЗМОЖНОСТИ ДЛЯ РОССИИ УЧАСТВОВАТЬ В ТУРЕЦКОМ ПРОЕКТЕ «КАНАЛ “СТАМБУЛ”»

On January 14, 2020 Ankara University of Social Sciences hosted a conference entitled “Energy Policy of Russia: Turkish Stream and Regional Balances”. The speakers outlined the main goal, which is to involve Russia in Turkish energy projects, including the Istanbul channel. In this regard, the author tried to research possibilities of Russia’s participation in the main Turkish megaproject. For Turkey to attract Russia as a co-investor means to allow the Russian Federation to regulate cargo flows in the Istanbul Canal, which seems completely impossible. In addition, the impossibility of the Russian-Turkish partnership is evidenced by the policy of Turkey itself. Despite financial difficulties, the question of attracting Russian investment has never been raised in Ankara, despite the fact that the Turks are seeking funds for their project everywhere — from Qatar and China to the Benelux countries. One should not forget that starting from 2013, Turkey has consistently put into operation all previously announced projects, and the decision to freeze some of them due to financial difficulties did not affect the Istanbul Canal. The exhaustion of the ideological concept (postponement of its launch until 2025) means that from now on the implementation of the project has moved into a more productive business phase, and the annual construction of canal sections means firm decision to complete the grand plan. At the same time, Russia will not be able to neutralize possible negative consequences by participating in the construction of the canal; it is necessary to look for other ways for cooperation.

The Eastern Vector of Russia's Energy Policy

The Eastern Vector of Russia's Energy Policy

PRIORITIES OF RUSSIAN ENERGY POLICY IN RUSSIAN-CHINESE RELATIONS

The priorities of Russian energy policy on the basis of Russian energy strategy until 2035 are proposed. Having narrowed the changes in Russia's energy policy, the article notes that the main priorities are strengthening the participation of China Development Bank in energy deals, building LNG and Pipelines in the context of energy cooperation, increasing the trust in Russia-China energy relations. The main limiting factor is not so much the limited resources as the costs of fuel production and the possibility of increasing the volume of energy exports to China, as well as low levels of energy efficiency and energy saving. In this situation, the possibility of progressive development of relations between China and Russia can be achieved only through fundamental changes in the industry. Expanding the field of cooperation energy investments is worth mentioning.

Arctic oil and the eastern direction of Russia's energy policy

The article describes the main features of Russia’s position in the traditional and promising oil markets of Europe and China in the context of the importance of oil and gas income in the country’s economy in the formation of the Federal budget of the Russian Federation. The resource base of the eastern direction of oil transportation “Polar region - Eastern Siberia - Pacific Ocean” is evaluated and the geo-economic feasibility of increasing oil supplies to China is justified. At the same time, the developed resource base the West Siberian oil and gas province will not be enough to ensure growing supplies in the east while maintaining the level of oil exports to Europe. Therefore, the task is to develop oil energy resources in the Arctic.

Human Capital in Russian Power Generating Corporations

The Russian energy industry is on the verge of major changes. The potential of existing technologies has been exhausted, and to ensure economic growth, the development and implementation of new approaches in the field of electricity generation is necessary. The human capital of enterprises is the most important driver of changes in the energy sector. The purpose of the article is to analyze the influence of factors characterizing human capital on the effectiveness of Russian power generating corporations. The study found that the efficiency of power generating corporations is most strongly influenced by the share of managers in the structure of employment and labor productivity. Such indicators as the share of specialists with higher education and staff turnover did not significantly affect the efficiency of power generating corporations.

International Dimension of Contemporary U.S. Energy Policy: Challenges for Russia and the World

Since the mid-2000s, the American energy industry has undergone profound changes. Having made the so-called shale revolution and achieved impressive results in the field of energy efficiency and renewable energy, the United States of America has not only radically reduced its dependence on imported hydrocarbons, but has begun to increase exports of these commodities. Given the economic weight of the U.S., such changes have significantly transformed the global energy market, requiring leading oil and gas exporters (including Russia) to take non-standard steps (for example, the OPEC+ deal). They also created serious prerequisites for Washington’s revision of its traditional energy policy in the international arena. The author makes a conclusion that the United States has not yet come out of the paradigm of net oil importer, which was formed after the first world oil crisis of 1973-1974. This means that Washington is still committed to the traditional principles of it’s foreign energy policy: diversification of oil import sources; promotion of free trade in world energy; special relations with oil exporters in the Persian Gulf and the strategic importance of the Middle East; reliance on energy suppliers from the Western hemisphere, etc. However, having radically reduced oil and gas imports and having got the opportunity to export them, the United States could not help but bring something new to its energy policy. While still prioritizing security of energy supply, the U.S. under B. Obama has started talking about the American energy independence, and D. Trump has proclaimed the global energy dominance as a new key American goal. The author assumes that global energy dominance implies Washington’s aggressive promotion of the American energy exporters, as well as its intention to turn the U.S. into a technological leader and a key regulator in the global energy market. Moreover, the U.S. has become freer in the matter of sanctions and other pressure on major oil and gas exporters, guided by its geopolitical and economic interests. Due to the growth of the American oil and gas export potential, the confrontation between Moscow and Washington in the energy sector, which began during the Cold war, has now acquired an additional economic dimension. Previously, the United States has tried to restrain the development of the Soviet, later Russian energy industry, but acted purely in the logic of political rivalry, not economic competition. Thus, in the foreseeable future the United States is unlikely to abandon its attempts to politicize and discredit Russia as an energy supplier to Europe and other regions of the world.

A CRITICAL REVIEW OF RUSSIA’S ENERGY STRATEGY IN THE PERIOD UNTIL 2035

Noting the enormous importance of the Russian and energy complex for international and domestic energy policies, the paper critically reviews the Energy Strategy of Russia until 2035, focusing on the state, challenges, and development trends of the global and Russian energy. We devote a lot of attention to the internal problems and export opportunities, the key aspects of the Russian energy policy in long-term perspectives, as well as review the development scenarios and stages of implementation. While conducting a critical review, we focus on how well the Strategy captures the current situation in international energy markets and trends in the development of the Russian energy and fuel complex. We also look into how comprehensively the Strategy addresses the identified challenges and possible prospects, as well as discuss which provisions could strengthen the Strategy. Our analysis clearly demonstrates that the Strategy adequately addresses both international and domestic processes leading to the current state of the Russian fuel and energy complex. However, we also point out to a number of shortcomings. First, it still supports the export-oriented model of energy development in Russia, but it would be much promising to focus on building a model of resource-innovative development. Second, there is no comprehensive strategy of working on the European energy market and the markets of the Asia-Pacific region, and the proposed scenarios do not take into account the shrinking export demand in the future. Third, it primary focuses on the carbon resources, not providing sufficient attention to the increasing role of renewable energy. Fourth, the outlined ambitious plans of technological modernization of the refinery sector appear hard to implement in the current conditions of protracted technological development and technological sanctions. These identified drawbacks could be used for developing policy recommendations.Keywords: Energy Policy, Energy Strategy, Fuel and Energy Complex, RussiaJEL Classifications: Q2, Q3, Q4DOI: https://doi.org/10.32479/ijeep.8263

Energy transition in Russia

This article provides an overview of Russian energy policy in the context of the global energy transition. Russia, ranking fourth in the world in primary energy consumption and carbon dioxide emissions, adheres to the strategy of “business as usual” and relies on fossil fuels. Decarbonization of the energy sector is not yet on the horizon: a skeptical attitude towards the problem of global climate change prevails among stakeholders. GDP energy intensity remains high, supported by relatively low energy prices and high cost of capital. The share of solar and wind energy in the energy balance is insignificant and is not expected to exceed 1% by 2040. The challenge for Russia in the coming years is to develop a new strategy for the development of its energy sector, which enters a zone of high turbulence—even in the absence of the influence of the climate change agenda—due to increasing global competition, growing technological isolation, and financial constraints.

DIGITALIZATION OF THE RUSSIAN ENERGY SECTOR: STATE-OF-THE-ART AND POTENTIAL FOR FUTURE RESEARCH

In this paper, we review forty seven best papers on digitalization of the Russian fuel and energy complex. All the papers are written in Russian and published in a number of Russian academic journals that are mostly distributed via closed national library systems and, consequently, are not available for foreign scholars interested in studying Russia's energy policies. Our review identifies a total of five research directions in the Russian scholarship: (i) general trends in digitalization of the Russian fuel and energy complex; (ii) concepts and approaches used by the Russian scholars; (iii) government policies; (iv) digital technologies; and (v) security concerns. Each research direction is carefully covered and analyzed. Then, we identify gaps in the Russian scholarship and propose three potential research areas.Keywords: Digitalization, Energy Industries, Russia, Contemporary ScholarshipJEL Classifications: Q2, Q3, Q4DOI: https://doi.org/10.32479/ijeep.7673

The Annexation of Crimea: A Realist Look from the Energy Resources Perspective

AbstractThe article studies the role of energy resources in the annexation of Crimea by the Russian government. Russian justification that this action was taken to protect Russian ethnicity, as declared with the “referendum”, can be challenged in the light of the realist balance of power concept. According to the research, Russia considered Ukraine’s improving relations with the West as a threat and tried to eliminate it with preemptive action, in order to reestablish regional balance of power with the West. The article finds that the energy factor had a significant role in this consideration but in a subtractive approach. More precisely, there were no major incentives for Russia to capture the Black Sea resources intrinsically, but these reserves were recognized as part of the main Ukrainian economic empowerment plan, particularly on the EU’s future energy market. Thus, Russia tried to block Ukraine’s access to them in line with a wedge strategy. Hence, the annexation can be considered as one part of Russian energy policy towards the EU and Russia’s goal to emasculate Ukraine’s natural gas transit role by constructing new pipelines such as Nord Stream and Turkish Stream, as the other part.The study exemplifies how Ukraine’s strategic position has been significantly diminished from the energy perspective.

Vested interests as driver of the clean energy transition: Evidence from Russia's solar energy policy

By contrast to the common objective of decarbonization of electricity production, the main driver of Russia's renewable energy policy is to achieve the economic benefits related to the manufacturing of green equipment. The focus on industrial development rather than the decarbonization of the power sector clearly appears from the decision of the Russian government to tie renewable energy subsidies to stringent local content requirements. In particular, solar energy benefits from a subsidy regime that is favourable to local manufacturers. Based on a detailed analysis of Russian renewable energy regulation, this paper studies the benefits for solar generation and explains this favourable treatment based on the vested interests of influential industrial groups in the solar PV manufacturing sector. These vested interests helped to overcome the resistance to renewable energy in an economy heavily dependent on oil and gas. More fundamentally, the influence of the local solar energy industry enabled the development of a support scheme that eventually stimulated the deployment of renewable energy technologies in general.

The Soviet and Russian Energy Industry as Objects of Western Sanctions: Political Rivalry or Economic Competition

Since the late 1940s Western countries have regularly used sanctions, embargoes and other similar instruments to counter the development of the Soviet and, after 1991, the Russian energy industry. The author tries to answer two research questions: what provokes such a policy of the West: political rivalry or economic competition? Has the West changed its attitude to the Russian energy industry after the end of the Cold war? The first part of the study covers the years of the Cold war; the second part is devoted to the period following the collapse of the USSR. The article deals with generic approaches of Western countries to the Soviet and Russian energy industry, as well as their stances on major oil and gas pipelines, including the «Druzhba» (or the «Friendship») oil pipeline, the Soyuz gas pipeline, The «Urengoy – Pomary – Uzhhorod» (or the West-Siberian) gas pipeline, the Nord Stream 1,2 gas pipelines. The author came to the following conclusions. The main inspirer of sanctions and other restrictive measures of the West against the Soviet and Russian energy industry has always been the United States of America. The core motive of such behavior has been political rivalry, although in certain periods (for example, in the 1950s-1960s, 2010-ies) the United States may also be driven by economic competition or the desire to ensure the interests of its energy companies. Western European countries have often been in solidarity with the American actions against the Soviet or Russian energy complex. However, when their strategic interests are affected (for example, in case of construction of the Urengoy – Pomary – Uzhgorod and Nord stream 2 gas pipelines), they can resist the dictates of Washington. This is due both to pressure from Western European business interested in cooperation with the USSR or Russia in the energy field, and a strong desire of Western European countries to diversify oil and gas supplies from the Middle East and to solve some other energy problems, for instance, to mitigate transit risks associated with Ukraine. Overall, the end of the Cold war has not radically changed the policy of the West towards the Russian energy industry.

Trends and regularities of energy development in Russia’s eastern regions: methods and results of research

Russia’s energy sector is the basis for the national economic development. At present, the importance of the eastern direction in the energy policy of Russia is growing. A computer simulation of energy development processes in the eastern regions of Russia (Siberian and Far Eastern Federal Districts (SFD, FEFD)) is of great theoretical and practical value as an effective method for studying complex systems. The study is concerned with the energy sector of the eastern regions of Russia, energy saving and energy efficiency. The aim of the research is to identify the most significant factors affecting the energy efficiency of the economy of the eastern regions of Russia and quantify their impact by an energy-economic analysis. The study uses the methods of economic-mathematical modelling, systems-, and statistical analysis, balance and indicative methods. The most significant factors affecting the energy efficiency of the economy in the eastern regions of Russia are reduction in specific fuel consumption; reduction of energy losses; rational consumption of fuel and energy resources. Measures to improve the fuel and energy balance of the eastern regions of Russia will improve the energy efficiency of the economy, which will improve the quality of life of the population.

Tren dalam Kerja Sama Keamanan Energi Rusia-Tiongkok: Perspektif Negara Produsen

This article aims to explain the important situations and significant changes that show several trends which affect Russian energy cooperation with China. It focused on Vladimir Putin's administration when Russia-China energy cooperation reached significant agreement after being stalled and hampered for years. It was only in his period that Russia made a big decision by showing a soft policy towards China's interests. On the other hand, Russia also showed an aggressive and strong motivation to expand gas cooperation with China. Findings of this article about four significant trends on Russian side: trend on energy policy reform, trend on Gazprom`s role, trend of market expansion to China and Asia, and trend of geographic consideration and border issues. This article is based on Russia perspective by using concept of energy security and the theory of foreign policy making. It uses qualitative explanatory research and concludes that the energy trends underlie the consideration of Russia's energy policy choices toward China. The importance of this article is to understand the perspective of energy producer and as scientific insight into issues of global energy security, specifically about cross border gas pipeline between two giant countries in the world, Russia and China.

Legal regulation of subsoil use when placing and constructing facilities for development of subsoil sites

Energy Strategy of Russia for the period until 2035 contains a note that Russian Energy Industry is one of the main sources of environmental pollution. More than 50 per cent of polluted matter emissions into the atmosphere, more than 20 per cent of dirty discharge into surface water reservoirs and more than 70 per cent of total emissions of greenhouse gases account for this industry. Issues of environmental safety of the subsoil use are always under consideration in the academic community. However, huge amount of problems concerning this area still remain unresolved. For instance, bankrupt subsoil users often do not satisfy requirements set by the government on mothballing or removing facilities aimed at development or reclamation of used land parcels when the land leasehold is over. This indicates the need to enshrine additional measures in the Russian legislation on ensuring compliance with certain requirements. The authors mention that providing the regeneration of raw material base and its reasonable using for the benefit of current and next generations of nations inhabiting the Russian Federation are among the primary tasks of governmental regulation of relations on the subsoil use. The government should ensure the most efficient and consistent usage of resources obtained from already provided land parcels, complete development of mineral deposits and compliance with appropriate terms of subsoil use.

Russian Energy Policy in the Caspian Region between 1991-2018

Russian Energy Policy in the Caspian Region between 1991-2018