2.1. State regulations and strategies
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In accordance with Russia’s Energy Strategy for the Period up to 2020, it is the Russian government’s intention to increase the production volumes of gas (by up to 10%) and oil (by 3-6%) by commissioning new fields on the Continental shelf in East and West Siberia1. This, in turn, will lead to the need to increase transport capacities: the construction of port terminals and the development of main pipeline systems.
Here’s a thought…
“Three energy strategies have been written during Russia’s brief post-Soviet history. Declaring a commitment to basic values, such as energy self-sufficiency and security of the country, energy saving and a reduction in the negative impact on the environment, each new version of the strategy changes, along with the quantitative parameters, the principles of State policy. It may be that all three documents are combined into just one - not one of them has become a guide for authorities or for business …”2
Russia’s Energy Strategy for the Period up to 2020 represents the main document which strategically defines the process for developing the oil and gas complex in Russia. In its most recent version (from 2003), the priorities in terms of developing a fuel and energy complex are as follows: increase the export potential of the oil and gas complex, denationalise this complex, and employ rational resource management. This entails ensuring identical benefits when opening up reserves which vary in terms of quality, stimulating development of reserves which are difficult to extract, and restricting the minimum and maximum levels of production.
In practice, the opposite developments are observed of those specified in the strategy. The activities of oil and gas companies are focused on oil extraction at minimal expense. The absence of economic stimulus and government regulation lead to selected extraction from the most productive reserves, a decrease in the extraction ratio of oil and irretrievable losses of a portion of the oil reserves. The absence of a culture and a framework for rational nature management in Russia leads to an increase in pressure on the environment. This confirms the discrepancy between the priorities specified for development of the oil and gas industry in the strategy and the real politics of the government and the company. Monopolisation and state intervention in the oil and gas sector only reaffirms this tendency.
For your information:
Russia’s Transport Strategy for the Period up to 2020: Transport strategy regulations form the basis for a common understanding of the modern role of transport and the prospects for its development by executive and legislative authorities. The strategy also provides guidelines for making decisions on the reform, financing, regulations and development of transport. This strategy was developed by the Ministry of Transport and adopted by the Government of Russia in 2005.
Russia’s Transport Strategy for the Period up to 2020 decides and regulates the transport infrastructure of the country’s oil and gas complex, the need to establish new export routes, the availability of а sufficient reserve for transit capacity and the possible expansion of pipeline transport.3
An analysis of regional directives adopted by The Maritime Doctrine of the Russian Federation, Russia’s national maritime policy4, shows that in the north of the country, large-scale installations which guarantee the transport of petroleum by sea are either already established, or at various stages of planning and construction. These include for example:
For your information:
The Maritime Doctrine of the Russian Federation for the Period up to 2020 was ratified by Decree of the President of the Russian Federation NoPR-1387 of July 27, 2001 and expresses the main direction of national maritime politics, including in the country’s regions.
The national maritime policy on the Arctic region is defined by the following factors: the particular importance of ensuring free access of the Russian Fleet to the Atlantic Ocean, the wealth of the exclusive economic zone and continental shelf of the Russian Federation, the decisive role of the Northern Fleet for state defence on the seas and the oceans, and the growing significance of the Northern Sea Route for the sustainable development of the Russian Federation.
The basis of national maritime policy consists of creating conditions for Russian Fleet activity in the Barents, White and other Arctic Seas, in the corridor of the Northern Sea Route, and in the northern portion of the Atlantic Ocean.
- large-scale pipeline systems: the North Europe Gas Pipeline (NEGP) (Fig. 1. Route of the North Europe Gas Pipeline), the pipeline system from the Shtockman gas condensate field, the Kharyaga-Indiga oil pipeline, the Yamal-Centre gas pipeline (Fig. 2. Route of the Yamal-Centre gas pipeline) and so on;
- tanker transport systems for ensuring the export of oil and petroleum products to international markets: the oil transhipment complex in the port of Lavna (Murmansk oblast), the terminal in the port of Indiga, the development of the Murmansk transport terminal, and so on.
For your information:
The North Europe Gas Pipeline (NEGP)
Length - 1200 km
Capacity - 55 billion cubic metres per annum
Area - the route goes overland as far as Vyborg, then along the bottom of the Baltic Sea to the coast of Germany. The NEGP traverses the territorial waters of Russia and Germany and also the exclusive economic zones of Finland, Sweden and Denmark.
Operator - the joint Russo-German company NEGPC, although the controlling interest lies with the state controlled company “Gazprom”
Raw materials base - the oil and gas fields from the southern regions of Russia. In the longer term, extraction from fields on the Yamal Peninsula, in the Bays of Obsk and Tazov, and the Shtockman field, are proposed for additional raw materials.
Timeframes for commissioning – stage one, 2010; stage two, 2013
Special features: the route taken by the NEGP passes along the bottom of the Baltic Sea, which is notable for its complex relief and blocked by chemical munitions and conventional ammunition dumped during the Second World War. This significantly raises the ecological risks when constructing and operating the gas pipeline.
Here’s a thought…
According to the Chairman of the Committee of natural resources and environmental protection in Murmansk oblast, Nikolai Bichuk, the volume of oil transported in the region will grow to 20-50 million tonnes per annum by 2010. 5
In addition, the Russian Government is planning to adopt a General Plan for Developing Pipeline Transport for the period up to 2020. According to this plan, the main strategic objective will be an increase in the capacity of the pipeline system6. However, in practice, the low growth rate in reserves of oil and gas, and the implementation of the already existing large-scale oil and gas projects, raises doubt about the possibility of ensuring such abundant shipment capacity with necessary raw materials. This in turn raises the question about the rational expansion of conducting capacity in the pipeline system in the absence of clear prospects for real filling of oil pipes.
For your information:
The European Energy Charter was adopted by EU States in the Hague December 17, 1991. The purpose was to develop an efficient energy market throughout Europe. The parties which are signatories to the Charter must undertake activities to ensure co-ordination of their energy policies, collaboration and exchange of opinions. Access to energy resources and their development must be made easier for interested operator developers. Foreign investment must be stimulated and protected.
According to agreements between Russia and EU, European investors are to have the same access to the Russian energy market that Russian companies have to Europe’s market, as well as the ability to export any gas and oil they produce in Russia. However, Federal Law No. 177 “regarding gas exports” assigns to Gazprom (or its wholly owned subsidiary) the exclusive right to export all forms of gas from all Russian fields. “This law sums up the controversy regarding ratification of the Energy Charter and the transit protocol - There is no sense in it continuing”, argues Oleg Zhilin, Vice-President of the Russian Gas Committee.[1] Thus, “Russia will not waive Gazprom’s monopoly to transport gas but will ensure that independent producers have access”, declared V. Putin. These questions will further intensify the contradictions in the energy sphere between Russia and the EU. Russia has so far failed to ratify the charter. According to euobserver.com MEPS in the European Parliament’s foreign affairs committee said in early September 2007 that the EU should only support Russian membership of the World Trade Organisation (WTO) if it adheres to the Energy Charter Treaty.
Comments by a legal expert:
Russia participates in the following international conventions regulating transportation of oil and gas:
• The 1954 International Convention on the Prevention of Pollution of the Sea by Oil. This convention entered into force in Russia on 03.12.1969.
• The 1969 International Convention on Civil Liability for Oil Pollution. This convention entered into force in Russia on 22.09.1975.
• The 1969 International Convention Relating to Intervention on the High Seas in Cases of Oil Pollution Casualties. This convention entered into force in Russia on 06.05.1975.
• The 1992 Convention on the Transboundary Effects of Industrial Accidents. This convention entered into force in Russia on 19.04.2000.
• The Law of the Sea Convention, 1982. This convention entered into force in Russia on 11.04.1997.
• The 1992 Convention on Biological Diversity. This convention entered into force in Russia on 29.12.1993.
• The 1991 Convention on the Environmental Impact Assessment in a Transboundary Context (The Espoo Convention).
This convention came into force 10.09.1997.
• International Convention for the Prevention of Pollution from Ships. (MARPOL 1973 AND 1978)
Footnotes:
[1] “Neftegazovaya vertikal” - No. 18/2005 - “Energy strategies: blurred lines of reference” Back
[2] “Energy strategies: blurred lines of reference”,”Neftegazovaya vertikal” - No. 18/2005 Back
[3] “Russia’s transport strategy for the period up to 2020”, approved at the sitting of the State Council of the Russian Federation on 29 September 2003 Back
[4]S P. Alexeev, A.N Dobrotvorskiy, S.V. Yaitsenko “Regional integrated system for guaranteeing safe maritime activities” Back
[5] http://www.aviafond.ru/oil.php?day=2006-02-27&number=10 (2006 year) Back
[6] www.rusenergy.ru (2006 year) Back
