Tuesday, September 19, 2006

Pondering Russia's Role In Global Energy Markets

We've written many times now wondering about the role Russia wants to play in the global energy marketplace. Yesterday over at Energy Outlook, Geoffrey Styles issued a warning to that nation that there is a price to be paid in wielding its energy reserves like a club on the global political scene:

If Russia were trying to build up its oil and gas technology into world-class competitors, it had a great opportunity with aggressive private firms such as Yukos to take the lead, instead of semi- or re-nationalized firms such as Rosneft and Gazprom. Post-Yukos, we see a clear strategy built around firm control of the resources and their logistics, and the steady application of state power to reduce the influence that international firms gained during the Yeltsin years. That approach will keep world oil prices higher than they would otherwise be, making alternatives more attractive. But how well equipped is Russia to play the game that must eventually follow, in a more energy-efficient world dominated by electricity and liquid fuels from oil sands, coal and biofuels?
True enough. One would think that Russian attempts to leverage global energy markets for political gain would hasten that future world that Styles describes.

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