The Conflicts about Russian Energy Policy Christoph Gross Nina Jentl Martin Steindl

1 Primary Energy Sources global player of primary energy sources in the world largest reserves of natural gas and oil significant part of worldwide demand covered by Russia also big sources Coal Uranium

1.1 Oil (I) after the collapse of the Soviet Union  decrease in the production to 50% Peak  575 million tons per year Last years increase oil price more investments in technology increase in production oil production 70% export 30% refined locally

1.1 Oil (II) export routs Druzhba pipeline to Central and Eastern Europe Primorsk port via Black Sea Transneft-controlled pipelines Majority of Russia’s oil exports non-transneft-controlled Around 0,3 million tonns Via other sea routes or via rail

1.1 Oil (III) proposed oil pipeline routes and pipeline expansion projects Russia plans to build and extend their pipeline system all over the world Adria Reversal Project Baltic Pipeline System (BPS) Expansion Caspian Pipeline Consortium Expansion Kharyaga Indiga Murmansk Eastern Pipeline

1.2 Natural Gas (I) largest known natural gas reserves of any state on earth gas sector  key strategic importance 2006 World‘s biggest gas producer 22% of global natural gas production world‘s biggest exporter

1.2 Natural Gas (II)

1.2 Natural Gas (III) Gazprom Russian gas monopolist produces the whole natural gas for Russia needs to boost its production to fulfil longterm aim of increasing European sales to secure more reliable export routes Gazprom‘s production is expected to decline in the next for years

1.3 Coal Russia has the world‘s second largest recoverable coal reserves behind the US 2006 Production  321 million short tonnes Consumption  260 million short tonnes Export  61 million short tonnes Russian government‘s strategy Increase coal production and build more coal-fired plants to reduce demand for natural gas Increase exports of natural gas

2 Electricity Production (I) Russia  fourth largest generator of electricity behind the U.S., China and Japan generator capacity 68% thermal 21% hydro 10% nuclear 1% renewables actual generation 16% hydro, 16% nuclear last decade privatization de-monopolization

2.1 Hydropower (I) Large potential for medium hydro power projects Most of the potential hydropower resources are located in Central and Eastern Siberia in the Far East North Caucasus Western part of the Urals

2.1 Hydropower (II)

2.2 Nuclear Energy Russia  first country to have an operating nuclear energy plant currently  31% operating nuclear plants with almost 22GW of capacity half of them are based on the same designs as the Chernobyl plant many are nearing their working lifetime outlook double nuclear output by 2020 an additional 28GW is planned

2.3 Renewable Energy geothermal potential very high theoretical resource estimates oh high temperature steam, water and brine at greater then MWe solar power is reasonable despite countrey‘s location Highest potential in the southern regions bad development of renewable energy projects because of Lack of a legislative mandate Low electric and heat tariffs Low public demand Overall lack of investment capital due to economic instability

3 Energy in foreign policy Russia has recently been accused of using ist natural resources as a policy tool to act against offending countries More than 55 energy incidents since 1991 More than 30 had political unterdpinnings During the Cold War Russia never disrupted energy supplies to the West Russian officials like to remind the West of that fact

3.1 Georgia (I) January 2006  alleged North Ossetia sabotage two simultaneous explosions occurred on the Mozdok-Tbilisi pipeline electricity transmission line in Karachayevo- Cherkessiya also brought down by an explosion October  Several wrangels between Moscow and Tbilisi with action like arrests of four Russians accused of being spies boykott of Georgian spirits

3.1 Georgia (II) November 2006  Gazprom announced the construction of a direct gas pipeline to South Ossetia work on the pipeline started just before South Ossetia‘s referendum on separating from Georgia (Nov. 12) Gazprom doubled price of gas to $235 per cubic meters highest among CIS countries forced Georgia to search for alternative energy supplies Tbilisi aggread to buy enough Azeri gas from Turkey to help meet its energy needs für 2007

3.1 Georgia (III) August 2008  military conflict between Russia and Georgia over the Autonomous region of South Ossetia had been independent from Georgia since early 199s is likely to shift the balance of power between the main players influences the formation of future Caspian and Russian energy sector

3.2 Ukraine (I) March 2005  start of Russian Gazprom and Ukraine over natural gas prices much of the gas delivered to Ukraine originates in Turkmenistan is cheaper but must transit through Gazprom-controlled pipelines beginning of 2006  Russia greatly increased the price of gas for Ukraine to bring it in line with market values Kiew and Moscow settled on a five year deal shoud raise the price of Ukraine‘s gas to $95 per 1000 cubic meters Russia has accused Ukraine of siphoning off its Europe- bound gas in the past

3.2 Ukraine (II) Russia and Ukraine were unable to reach an agreement January 1, 2006  Russia cut gas exports to Ukraine supply was restored on January 4 preliminary agreement was settled other disputes October 2007 and January 2009 Disputes resulted in 18 European countries reporting major falls or cut-offs of their gas supplies from Russia transported through Ukraine Supply restarted on 20 January 2009, fully restored on 21 January 2009