Energy policy of Russia
Russia's energy policy is presented in the government's Energy Strategy document, first approved in 2000, which sets out the government's policy to 2020. The Energy Strategy outlines several key priorities: increased energy efficiency, reducing the impact on the environment, sustainable development, energy development and technological development, as well as improved effectiveness and competitiveness. Russia's greenhouse gas emissions are large because of its energy policy. Russia is rich in natural energy resources and is one of the world's energy superpowers. Russia is the world's leading net energy exporter, and was a major supplier to the European Union until the Russian invasion of Ukraine. Russia has signed and ratified the Kyoto Protocol and Paris Agreement. Numerous scholars posit that Russia uses its energy exports as a foreign policy instrument towards other countries.
In July 2008, Russia's president signed a law allowing the government to allocate strategic oil and gas deposits on the continental shelf without an auction procedure. On 17 February 2011, Russia signed a deal with China, stating that in return for $25 billion in Chinese loans to Russian oil companies, Russia would supply China with large quantities of crude oil via new pipelines for the next 20 years.
As of 2014, oil and gas comprise over 60% of Russia's exports and account for over 30% of the country's gross domestic product. Russian energy policy of pumping 10.6 million barrels of oil a day is nearly 4 billion barrels annually.
Russia holds 54% of world reserves of gas, 46% of coal, 14% of uranium, and 13% of oil. Russian oil production and export increased significantly after 2000, and in 2006 briefly exceeded Saudi Arabia's production. Since 2016, Russia has been the top crude oil producer. Russia is also the world's largest energy exporter and fossil fuel exporter. Russia is not a member of OPEC and presents itself as an alternative to Middle Eastern energy resources, asserting that it is in fact a "reliable energy supplier and that it only seeks to use its position as an important supplier to enhance global energy security". However, in recent years it has cooperated increasingly closely with OPEC in the OPEC+ format.
The Russian economy is heavily dependent on the export of natural resources such as oil and natural gas, and Russia has used these resources to its political advantage. Meanwhile, the US and other Western countries have worked to lessen the dependency of Europe on Russia and its resources. Starting in the mid-2000s, Russia and Ukraine had several disputes in which Russia threatened to cut off the supply of gas. As a great deal of Russia's gas is exported to Europe through the pipelines crossing Ukraine, those disputes affected several other European countries as well. Under Putin, special efforts were made to gain control over the European energy sector. Russian influence played a major role in canceling the construction of the Nabucco pipeline, which would have supplied natural gas from Azerbaijan, in favor of South Stream. Russia has also sought to create a Eurasian Economic Union consisting of itself and other post-Soviet countries.
Energy strategy
The economy of the Union of Soviet Socialist Republics was based on a system of state ownership of the means of production, collective farming, industrial manufacturing and centralized administrative planning. The economy was characterized by state control of investment, and public ownership of industrial assets. The Soviet Union invested heavily into infrastructure projects including the electrification of vast areas, and the construction and maintenance of natural gas and oil pipelines that stretch out of Russia and into every constituent nations of the USSR. This type of investment set the stage for Russia to become an energy superpower.The concept of a Russian national energy policy was approved by the Russian government in 1992, and the government decided to develop the Energy Strategy. For this purpose the Interagency Commission was established.
In December 1994, the Energy Strategy of Russia was approved by the government, followed by the presidential decree of 7 May 1995 that outlined the first post-Soviet 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 government's decision of 13 October 1995 that approved the Main provisions for the Energy Strategy of the Russian Federation.
The strategy was amended under the presidency of Vladimir Putin. On 23 November 2000, the government approved the 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 the energy strategy was defined as reaching a better quality of fuel and energy mix and enhancing the competitiveness of Russian energy production and services in the world market. To that end, the long-term energy policy was to concentrate on energy safety, energy effectiveness, budget effectiveness and ecological energy security.
The Energy Strategy defines the main priority of Russian energy strategy as an increase in energy efficiency, reducing impact on the environment, sustainable development, energy development and technological development, as well as an improvement of effectiveness and competitiveness.
Natural gas
The main natural gas producers in Russia are gas companies Gazprom, Novatek, Itera, Northgas and Rospan, and vertically integrated oil and gas companies Surgutneftegaz, TNK-BP, Rosneft and LUKOIL.Majority state-owned Gazprom has a monopoly of natural gas pipelines and has the 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 out of Central Asia, and thus controls access to the European market. Russia has used Central Asia's gas, primarily that from Turkmenistan, on occasions where it has found itself unable to meet all its delivery obligations from its own production. For example, in 2000 Gazprom allowing Turkmenistan to use its pipelines to supply gas to the Russian domestic market, to enable Gazprom to fulfil its obligations to European customers.
Historically, the Medvezhye, Urengoy and Yamburg gas fields have made up the bulk of Gazprom's production. However, in the coming 10–20 years an increasing share of Gazprom's production will have to come from new fields. Recent developments such as Yen-Yakhinskoe, Yuzhno-Russkoye and West Pestsovoe in the Nadym-Pur-Taz area, which have all come on-stream since 2005, are relatively cost-efficient, being located close to the existing pipeline grid and other infrastructure. But they are not large enough to compensate for the decline in Gazprom's three core assets. Thus, the much larger Shtokman and Yamal developments will have to provide the bulk of new production capacity, by adding 70 and 200 BCM per year, respectively. Investments in the development of Shtokman and Yamal are forecast to account for over 40% of Gazprom's total expected capital expenditure over the next 20 years. Although Shtokman has been shelved at least for the time being due to relatively low gas prices and high costs, the project may still be resuscitated during the coming decades, depending on developments in unconventional gas and the supply–demand picture. Meanwhile, work on the largest field on the Yamal Peninsula, Bovanenkovo, is forging ahead. In any case, the complexity of these projects drives high field development costs, which in turn require a high gas price to be profitable.
The Energy Strategy foresees non-Gazprom production rising from a share of 17% in 2008 to 25–30% by 2030, implying growth from 114 to about 245 BCM/year.
File:Nordstream.png|thumb|Nord Stream 1 gas pipeline, running under the Baltic Sea. In 2018, Germany imported 50% to 75% of its natural gas from Russia.
Before 2022, the main export markets of Russian natural gas were the European Union and the CIS. Russia supplied a quarter of the EU gas consumption, mainly via transit through Ukraine and Belarus. The main importers are Germany.
In 2022, Turkish President Recep Tayyip Erdoğan and Russian President Vladimir Putin planned for Turkey to become an energy hub for all of Europe. According to Aura Săbăduș, a senior energy journalist focusing on the Black Sea region, "Turkey would accumulate gas from various producers — Russia, Iran and Azerbaijan, and its own Black Sea gas — and then whitewash it and relabel it as Turkish. European buyers wouldn't know the origin of the gas."
Oil
Energy was the backbone of the Soviet economy. The 1973 oil embargo marked a turning point in Soviet society. The increase in the price of oil around the world prompted the USSR to begin exporting oil in exchange for money and Western technology. Increasing Western reliance on Russian resources further bolstered the importance of Russia's energy sector to the overall economy.As the Arctic ice cap shrinks due to global warming, the prospect of oil exploration in the Arctic Ocean is thought to be an increasing possibility. On 20 December 2001, Russia submitted documents to the UN Commission on the Limits of the Continental Shelf claiming expanded limits to Russian continental shelf beyond the previous 200-mile zone 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 deposits.