No. 1, 2006

Alexander Matveichuk
Ph.D. (History), Editor-in-Chief of Oil of Russia magazine


The number-one item on the agenda of the G8 summit to be held in St. Petersburg is global energy security

According to leading political analysts, last year was quite successful for Russia's foreign policy. Significant qualitative changes occurred that made Russia's international policies more active and, at the same time, more pragmatic and more focused on national interests. To a certain extent, that has been due to Russia's full-fledged membership of G8 a factor boosting its status as a leading world power.

Remember the lessons of Rambouillet

The G8 regular summit to be held in St. Petersburg in July has been the focus of international media attention for quite some time. Russia's forthcoming presidency of the elite club has been the subject of animated discussion both in the world press and at various meetings and conferences on global challenges confronting modern civilization.

G8's weighty role in present-day politics is determined by the huge economic and military potentials of its member states. Ever since the historic meeting of the world powers' leaders held in Rambouillet, France, in 1975, the entire activities of G7 and then G8 have had to do with the imperative need to keep searching for responses to the challenges placed to the world community by globalization.

Although it has no constitution, headquarters, or even a web-site of its own, G8 is now one of the major international mechanisms for coordinating the financial, economic and political strategies of the leading powers of the world, just like the key international organizations, such as the IMF, WTO, and OECD.

Over the past few years alone, G8 adopted a number of rather effective decisions on efforts to counteract terrorism, on global security, on non-proliferation of nuclear weapons, etc. At present, G8 has a number of bodies actively working on global challenges, such as the High-Level Group on Non-Proliferation of Weapons of Mass Destruction, the Rome-Lyons Group (on combating terrorism and organized crime), the Counter-Terrorism Action Group, the Group of G8 Leaders' Africa Personal Representatives, the Group of Experts on Global Partnership, the Group of Experts on Non-Proliferation (with a Subgroup on Plutonium Disposition), the Nuclear Safety and Security Group, and some other bodies.

However, not everyone is happy about what G8 has been doing and Russia's assumption of G8 chairmanship as of January1, 2006.

In December 2005, Britain's Wilton Park Foundation hosted an international conference, with an ambiguous title: Russia: The G8 Chairmanship and Beyond. The keynote presentation at that conference, 2008 and Beyond: Is the East Wind Prevailing Over the West in Moscow? was delivered by Andrew Kutchins, Director of the Carnegie Moscow Center. In that presentation, Mr.Kutchins once again retrieved the ancient thesis to the effect that Russia's policies tend to be changeable and that they were turning toward a strategic alliance with China, which posed a new threat to Western civilization. Other speakers criticized Russia just as strongly and bitterly, on a variety of matters, even on the draft Law on Non-Governmental Organizations, then still under discussion by the State Duma. The conference was extensively covered by the media, but the speech of Special Envoy Yury Isakov of the Russian Ministry of Foreign Affairs, who strongly rebuffed the non-constructive attitudes toward Russia, did not receive any unbiased coverage in the foreign media.

St. Petersburg awaits

Russia's presidency of G8 is clearly a very important foreign-policy factor for the country. As an informal institution, G8 does not pass binding decisions, however, its communiqus certainly determine the strategic courses of international politics in the key areas.

According to Russia's President Vladimir Putin, the G8 summit in St. Petersburg will address global energy security issues, efforts to control the spread of dangerous diseases around the world, and promotion of education in developing countries.

In view of the developments of the past few years, energy issues invariably loom in the limelight of the world community's attention. According to forecasts by leading analytical centers, global energy consumption may increase by about 45% in the next 20 years. The global demand for crude oil may go up by 42% by 2025, reaching 35 million barrels a day. The annual demand for natural gas may reach 1.7 trillion m3 (growing by 60%). Asia-Pacific Region is the fastest growing energy market. According to estimates by the International Energy Agency, the demand for energy supplies in Asia has been growing faster than in the rest of the world, with crude oil consumption increasing by 3-4% and natural gas consumption growing by 4-6% a year.

Considering the current condition of the world natural gas and petroleum industry, reliable energy supply is becoming ever more pressing item for the entire world community. Therefore, the G8 summit in St. Petersburg, chaired by Russia, is to discuss the following major global energy security issues: reliable supplies of traditional hydrocarbon energy resources for the world economy at reasonable prices; diversification of energy supplies through the use of new sources of energy; enhancement of power industry safety and efficiency; development of conditions for a future shift to essentially new and environment-friendly energy sources. Obviously, long-term energy security solutions call for systemic actions by all the players at the global energy market. Therefore, Russia will probably propose setting up meaningful international extended-format mechanisms for discussion, preparation, and consistent implementation of measures to enhance energy security, involving petroleum-exporting and petroleum-consuming economies, including Asian countries.

One clear example of Russia's constructive position on global energy security issue was provided in early December of 2005, when the welding of the first joint of the North-European Gas Pipeline's (NEGP) Russian onshore segment was started in a ceremony in the Vologda Region. The pipeline will add an entirely new route for exporting Russian natural gas to Europe, to target markets in Germany, the United Kingdom, the Netherlands, France, and Denmark. The NEGP project will play a major role for meeting Europe's growing demand for natural gas. Most importantly, the NEGP does not cross any transit states, which makes it possible to eliminate any potential political risks. The NEGP will directly link Russia with the all-European natural gas network and ensure maximum reliability of gas supplies to consumers in Western Europe.

A new 917-km section of gas pipeline will be laid from Gryazovets to Vyborg, crossing the Vologda and Leningrad Regions, to connect the NEGP with Russia's Unified Gas Supply System. That pipeline will help satisfy the increasing gas demand of St. Petersburg and the Leningrad Region. The starting point of the NEPG offshore segment (1,198 long) will be an onshore compressor station to be constructed in the Portovaya Bay (near Vyborg in the Leningrad Region). The offshore section will be laid along the Baltic seabed to Greifswald in Germany, potentially with a branch to Sweden. The pipeline will then run across the territory of Germany and the Netherlands to Backton in the UK. The first line of the NEGP project is to be commissioned in 2010, to move 27.5billion m3 of natural gas a year. It is also planned to construct a second line, to double the facility's capacity, to 55 billion m3 a year. The NEGP project will follow the highest environmental standards and will not impact the ecosystem of the Baltic.

The G8 summit to be held in St. Petersburg in July 2006 will certainly see new interesting proposals for expanding cooperation in areas like energy, health care, education, and culture. There is no doubt Russia, as the president of G8, will demonstrate its capability to promote the interests of the entire international community, and its program to be presented at the summit will be acceptable and topical for all the countries of the world.

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Oil of Russia, No. 1, 2006
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